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Show Western Resoyrcc-r- Colorado River Storage Project power rate hassle By Helene C. Monberg hinfiton A rate case on Colorado ,efsforage Project (CRST) power before a government agency here tf16 ,:zes some of the latest tensions !n Upper Colorado River Basin er proj' backeis and Basin-Wde er users. A,, rate case before the Federal I Regulatory Commission rfRC) indicates that CRSP power ' dakea dim view of being cliarged wit Department of Energy (DOE) ";iits marketing agent, Western Area Administration (WAPA) for the is of unbuilt Upper Colorado water Ejects in their power rate base. They Ufly oppose this practice by WAPA ' jpoE which claim it is based on the fgt Colorado River Storage Project , i ill (PL 84-485). Ifthenew rate prevails in FERC, it is nnarent that at least some of the ! ft power users will push for a ; wjsiative determination on some ; fier Colorado water projects never gfly to be built. It is common pledge within the Western water eanmunity, for example, that the 5avery-Pot Hook project in Colroado snd Wyoming and the Fruitland Mesa pioject in Colorado are in the deep, tipfreeze if not already dead. If that's ie case, the CRSP power users ask, Ihv include their cost in the CRSP rate tee? II is also unlikely that the states with inbuilt Upper Colorado projects-Colorado, projects-Colorado, New Mexico, Utah and H'voming would want to have authorized projects deauthorized lilhout having other projects lined up in the same areas. This is particularly , Me of Colorado with its immense oil I1 R shale deposits and no water project presently in place to provide storage apacity for oil shale development. J STIFF STAND AGAINST CRSP RATE BOOST The Colorado River Energy Distributors Association (CREDA), . r, faded by New Mexico's Stanley Sazant, manager of Plains Electric m Generating and Transmission ni (operative of Albuquerque, is taking a wry stiff stand against a 20.5 percent te rile increase for CRSP power which Ja DOE put into effect on an interim basis M Jan. 23. " i(!rM;. avis-'-'rthtinAslilslAt ' . . fergy " Secretary ' ' for 1 Resource Ap-mt Ap-mt (fcations, 'on Dec. 23, 1980, asked f4 FERC to confirm and approve the new 7 ale lor a five-year period, from Jan. " B, 1981, thru Jan. 22, 1986, "with the aderstanding that the rates can be adjusted at an earlier date if needed to s " comply with cost recovery criteria" Bl developed by DOE. ire Jr CREDA and the city of Provo, Utah, jli, Jan.22fileda suit in theU.S. District Cflirth of the District of Columbia to , enjoin DOE from putting the tem-lrary tem-lrary rate into, effect. U.S. District p Judge Barrington D. Parker on March x' Mruledagainst the plaintiffs, all CRSP powerusers. So the new rate went into j 1 on a temporary basis retroactive w. " Jan. 23. The CRSP power users ", stimated the new rate would cost them "additional $18,600 per day for CRSP , Per, they told the court. . CREDA on Feb. 9 filed a petition to i rvene in the rate case before FERC j- J''ve-yearrate increase proposed ' DOE. FERC gave DOE and WAPA ""months to comment on the CREDA Mtion. DOE-WAPA's comments st t be filed with FERC by April 20. d', DE source told Western p TmKs Wfap-up (WRW) on April 7 ! t expected FERC would act "in a jj, Pje of months." But the Washington jji prirmf Duncan, Allen and Mitchell. which represents CREDA, I 5pWthat FERC "runs on its own jtatus report on DOE rate orders g nng FERC approval updated to ui I! ''indicated six -cases were pen- ppL0 for about 20 months or more. ie io . mn has ranged from ruling on f fimaff mnths t0 aCase StiU I; j after 25 months. FERC's '"gtodate favor the DOE rate boost "LSP -power. ' iCFERC was delegated the ,. ty t0 confirm, approve or - Pprove of rate orders by DOE's . marketing agencies on Jan. 1, !I !?"eceived 19 cases, approved hau b mre information on two, Weta " action vet on six- Tne i5ori?tlpnergy dele8ated final u iw l on these rate cases ember 1978. nunuembrs Pchase about 90 it a wh ', e Power produced by CRSP ofCm ate- They represent r.tities s Powe'"ful public power Colorado n 'he states 01 Arizona, iKl Wvom Vada' New Mexico, Utah -HaDm ' They successfully beat Ner frTsed rate increase on CRSP onA, ,38 percent Proposed by !:jo Aprils, 1979, to about half that i se th e,January interim rate e boosts ' r 1)6611 only two smaI1 Colr"!i Power since the ' ?ppved p Storage Project was briber 7 Longress in 1956. The ' nti0J?mposite rate 'a' a 58.2 oad factor) was 6.55 mills per A. ti!aUi10Ur (KWH); il is 7-89 mills KWH under the interim rate that went into effect in January. The December demand charge was $1.34 per kilowatt month; it is $1,655 under the interim rate now in effect The December energy charge was 3 4 mills KWH; it is 4 mills under the interim in-terim rate. The new rate would boost CRSP power costs annually $8 3 million. . Even the CREDA power users note in their brief sent to FERC with their petition to intervene that 6 mills power is generally regarded as a bargain today. They cite WAPA Administrator Robert L. McPhail in a presentation he made before the Mid-West Electric Consumers Association in Denver on Dec. 12, 1979; "One, of course, should note that while the increase (in CRSP rates) may be significant, in terms of percentages, the rate is still about one-third one-third to one-half the cost of wholesale power from alternate sources." But they correctly note also six mill power was no bargain when the Bureau of Reclamation started marketing the CRSP power in the late 1950's and early 1960's, and they claim that the Bureau gave no notice in the early years of the project that the rate would ever change. Now with another agency doing the marketing, they are concerned con-cerned it will skyrocket. They are concerned about the delays which have stretched out the entire project, for a variety of reasons, so that inflation in cost of water projects is resulting in inflation in their power rate. "CREDA assumes many believe now the CRSP rate can be raised with no risk of depressing revenues for lack of power sales," the CREDA position observed. QUESTIONS WAPA RATE STUDY AND METHOD CREDA's brief questions the entire methodology of WAPA and the rate study that it used in arriving at the new rate. It undoubtedly hits both so hard because this is the first CRSP rate case ever handled by FERC, and if it can shake the premises of the proposed rat;CREQA. might, get FERC. to feipproyjl, At.XhisUiniJsquiie literally. -a case offirst impression for all parties Concerned," CREDA stated. Three points that it raised are of particular concern to the Upper Basin generally. First, CREDA claims that "Congress guaranteed CRSP power users that they would not have to pay for irrigation projects before such projects were built." DOE could not disagree more. The DOE rate submission to FERC states flatly that "it is clear from the provision of the (1956 Upper Colroado) Act, the legislative history of PL 84-485 which established CRSP, and from the first repayment study. ..that it was the intent of Congress that current rates be based on the inclusion of all authorized participating projects in CRSP repayment studies. WAPA's Office ai i ,; ... Counsel has iv-w.'. memorandum supportive .i , rate-making moihoiirl, elusion of all authors; .! j projects in CRSP 're,avm, WAPA's Office of Counsel has issue! memorandum supportive r.; rate-making methodolr.r. . elusion of all auihoiiz...! ,f;:. .. projects is legisU-Tivt!-. . ministratively prorw- m . v- ,., DOE told FERC, even . . methodology differs stiljoia,; that used ordinarily to ; r..v' ; (! private utility sector. WAt'-v 1 include costs' of the Pi.e . , tension project, -., n deauthorized, nor did it ;,; ! .! than sunk costs for ih. I.ai.!;.r; e in Wyoming, which hys ia-.-i. ' definitely defered. DOC said. But six projects -arc ineh.i1 .:; study which have not el Leva i . i including the Ani mas-La P!.' in. Colorado and New , Savery-Pot Hook pro '.-a :n j-..., : , , and Wyoming; the Uinta!! i: .1 , . Units in the Central Utah i': .-:, . ;':. Upalco is on the launching . ;o ' the Fruitland Mesa. Sa.i .u:; West Divide projects in ("ok..!, ... , Secondly, CREDA que.-' i.i,. ' .. way that the WAPA reswyou-ii distributed revenues in i;-.e Colorado River Basin it ,. irrigation assistance. . , n :i.. "this results in a credit to s ;n.-in ;n.-in excess of that required to;- eon authorized participating prr.K c-b, ; i.--1956 Act requires that ti;e r'v -.:. from thefund be distributed txi- . Colorado 46 percent ; Utah 21. , a: Wyoming, 17 percent and New ; a 15.5 percent. This was of sum,- a:a ... to WAPA and DOE loo, so ' , ... ; 1 wtih the four Upper-Basin a,a en .. , ; v, discuss the matter in mid no a. -, they subsequently adopted a j --." i i ;:! upholding the Act's appin-li-i.w.e.;, revenues for the fund. Dfoiii a .id a possible in the future thai a .-aia- a surpluses might lend then; 1.1 .t. state, but the law "does prck-.!-use of such a possibility in i!a c, -rate adjustments." ' Finally,. the CREDA p..U:i.,f derestimated the amount t:i ,.- -c available for sale thru line :. . . system. |