Southwestern Power Administration - Tulsa, Oklahoma

157th Committee Meeting
Oct. 30-November 1, 2007
Branson, Missouri

Agency Background

Southwestern Power Administration (Southwestern) was established in 1943 by the Secretary of the Interior. On October I, 1977, pursuant to the Department of Energy Organization Act, 42 U.S.C., section 7101, Southwestern was transferred from the Interior Department to the Department of Energy. Southwestern operates under the direction of an Administrator with delegated authority to carry out responsibilities of the Secretary under Section 5 of the Flood Control Act of 1944, 16 U.S.C., section 825s, to market power generated at multiple purpose reservoir projects constructed in the Southwest by the Corps of Engineers of the Department of the Army.

Power Marketing

Southwestern currently markets power from 24 hydroelectric projects located in the states of Arkansas, Missouri, Oklahoma and Texas. Power is marketed in those four states, plus Kansas and Louisiana, to cooperatives, government agencies and municipalities. Southwestern operates transmission facilities, substations, and other facilities to fulfill its obligations. When adverse water conditions prevent Southwestern from meeting its contracts for delivery of power and energy from its own resources, then Southwestern purchases energy from other suppliers and has integrated its facilities with those of its suppliers in order to efficiently receive, transmit, and deliver power and energy.

Recent Activities and Conditions

A regional drought began in early 2005 and continued into 2006. During this 17-month period inflows to the reservoirs were less than 25 percent of median on numerous occasions. The cumulative effect of this situation was reduced reservoir storage that prompted Southwestern to begin purchasing replacement power for a total cost of approximately $70 million. Purchased power is a planned strategy to cope with drought conditions. Regardless, the unknown duration and magnitude of any drought creates much uncertainty toward future operations and plans.

Fortunately, reservoir storage began the slow process of recovery in late 2006. Record flooding in southern Kansas, Oklahoma and Texas during the summer of 2007 marked a vast improvement in hydrologic conditions from the preceding summer. While a dramatic hydrologic recovery occurred overall, the White River projects continue even now, to generally experience below median inflow which is clearly related to the significant drought now seen in the Tennessee Valley area and beyond. Storages have been largely preserved in the White River Projects by shifting some generation to the projects with better hydrologic conditions whenever possible.

Competing Uses

This drought, or any drought for that matter, magnified the fact that Corps' lakes are generally multipurpose. These purposes are sometimes "competing" uses and occasionally complementing uses. Corps of Engineer lake purposes are determined by Congress during authorization. Where hydropower is one of the dedicated purposes, the Corps manages a balance of the various purposes to comply with the intent of the authorizing authorities. Southwestern's ability to continue to market clean, renewable energy is affected by competing uses such as water storage reallocations to other purposes and other restrictions which may favor one purpose over another. Therefore Southwestern strives to preserve the hydropower purpose, create awareness of hydropower benefits, and participate fully in committees, advisory councils and any studies affecting the hydropower purpose while complying with all legitimate processes and changes. Note that revenue from hydropower marketing fully repays the original cost share of dam construction with interest and continues to pay operations and maintenance costs with any excess revenues going to the treasury.

Point of contract

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