[Federal Register: October 11, 2006 (Volume 71, Number 196)]
[Notices]
[Page 59770-59771]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11oc06-76]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
[Docket No. AD07-1-000]
Billing Procedures for Annual Charges for the Costs for
Administering Part I of the Federal Power Act; Notice Reporting
Increase in Municipal Costs for FY 2005 Actual and FY 2006 Estimated
Hydropower Administrative Annual Charges
October 3, 2006.
1. Municipal licensees have expressed concerns regarding the
substantial increases they have observed in their Statement of Annual
Charges issued on August 4, 2006. Specifically, licensees are concerned
with the amounts assessed for the current year's Administrative Charge
and the prior year's Adjustment of FERC Administrative Charge. The
increase in these charges is primarily attributable to a substantial
increase in the proportion of direct labor hours staff charged to
municipal projects in FY 2005. The purpose of this notice is to provide
licensees with information regarding the Commission's process for
assessing these charges and how this increase in direct labor
applicable to municipal projects resulted in the increases observed on
the August 4, 2004 billing statements.
Components of Administrative Annual Charges
2. The Federal Power Act requires the Federal Energy Regulatory
Commission to assess annual charges against licensees to reimburse the
United States for the costs of administration of the Commission's
hydropower regulatory program.\1\ The Omnibus Budget Reconciliation Act
of 1986 provided FERC with the authority to ``assess and collect fees
and annual charges in any fiscal year in amounts equal to all of the
costs incurred by the Commission in that fiscal year.'' \2\ Each fiscal
year the Commission estimates the total costs of its operations for the
current year. These estimates are the basis for the current year's
Administrative Charge which is reflected on the annual billing
statements as such. In addition, the Commission determines the actual
operating costs for the prior fiscal year, and the prior year's
Administrative Charge is adjusted either upward or downward for the
difference between the prior year's actual costs and the prior year's
estimates. These adjustments to the prior year's costs are then
reflected as the Adjustment to FERC Administrative Charge on the annual
billing statements.
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\1\ 16 U.S.C 794-823b.
\2\ Pub. L. 99-509 Sec. 3401, 100 Stat. 1874, 1890-91 (1986)
(codified at 42 U.S.C. 7178).
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Allocation Methodology for Hydropower Projects
3. The total costs for the hydropower regulatory program consist of
both direct and indirect costs. Once the Commission calculates
estimated and actual program costs, it allocates these costs based on
direct time charged by Commission staff to designated time and labor
codes for municipal and non-municipal projects.\3\ Annually the
Commission allocates current year estimated costs and prior year actual
costs based on the direct labor proportions of staff time recorded
against municipal and non-municipal projects in the prior fiscal year.
Applying this methodology allows the Commission to utilize credible
historical information for the allocation of current year estimated
costs and provides the relevant data needed to appropriately affect the
prior year downward or upward adjustment when allocating the prior
year's actual costs.
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\3\ The Commission has implemented within its time and
attendance system designated codes which segregate staff hours spent
on municipal projects from staff hours spent on non-municipal
projects. In calculating direct labor proportions, the Commission
aggregates the hours recorded against municipal and non-municipal
time codes. The number of hours charged to municipal codes is
divided by this aggregate total to derive the municipal proportion
used to allocate hydropower program costs. The number of hours
charged to non-municipal projects is treated similarly to derive the
non-municipal proportion.
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4. With regard to the August 4, 2006 statements, the Commission
allocated the cost bases for the current year's Administrative Charge
and the prior year's Adjustment to FERC
[[Page 59771]]
Administrative Charge using FY 2005 direct labor proportions. In FY
2005, Commission staff spent 25% of the total hours charged to
licensing of hydropower projects on municipal projects. Conversely, 75%
of the total hours charged to project licensing were attributable to
work on non-municipal projects.
Impact of FY 2005 Direct Labor Allocation
5. The significant increase in municipal project costs for the FY
2006 Administrative Charge and the FY 2005 Adjustment to FERC
Administrative Charge was the result of more direct time charged to
hydropower municipal time and labor codes in FY 2005 then in FY 2004.
Since the Commission used the FY 2005 municipal allocation of 25% to
allocate its FY 2006 Administrative Annual Charges, licensees will
likely notice an increase to their current year Administrative Charge
when compared to previous years. Additionally, since the Commission
used the FY 2004 municipal allocation of 11% to allocate its FY 2005
Administrative Charge, the FY 2005 Adjustment to FERC Administrative
Charge reflects both a significant adjustment resulting from a 14%
increase in the proportion of direct labor allocated and a minor upward
adjustment related to the difference in actual and estimated costs
previously assessed in FY 2005.
Review of Hydropower Program Costs
6. After calculating the annual charges, the Commission reviewed
the total FY 2005 and FY 2006 hydropower costs and the applicable time
and labor categories for the hydropower program which clearly
differentiates between municipal and non-municipal activities. Overall,
total costs for the hydropower program were found to have only small
increases between the fiscal years. There were no new programs added in
the hydropower area in FY 2005 or FY 2006 that would have contributed
to this increase, thus the small increase in total hydropower program
costs. However, since there was more direct time charged to municipal
time and labor codes in FY 2005 than in FY 2004, municipal licensees
received a larger proportion of the total hydropower program costs.
7. The Commission's hydropower program workload depends on how many
hydropower applications or inspections are pending before the
Commission in any given year. The Commission can not predict with exact
certainty which licensees will file each year. In addition, the
complexity of the projects under review and the length of time it takes
to process a hydropower application could impact the workload
proportions. hydropower program workload is cyclical, so in some years
there may be more municipal projects pending versus non-municipal
projects. While this increase does represent a large swing between
municipal and non-municipal direct-labor hours, our review did show a
history of cyclical fluctuations in this split.
8. For questions concerning this notice or any other annual charges
issues, please direct inquiries via e-mail to annualcharges@ferc.gov or
call Troy Cole at (202) 502-6161.
Magalie R. Salas,
Secretary.
[FR Doc. E6-16785 Filed 10-10-06; 8:45 am]
BILLING CODE 6717-01-P