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r I. ~UMMARY Western Area Power Administration (Western) is distributing this brochure to provide information on the proposed adjustment of the Rio Grande Project (RGP) power rate. Published procedures for public involvement in proposed power rate adjustments will be followed. An informal public meeting will be held to provide additional information and to hear from interested persons. There will be a 3D-day consultation and comment period during which interested persons may consult with, obtain information from, or make written comments to Western representatives. Following the review of oral and written comments, the Deputy Secretary of the Department of Energy (ODE) will announce a rate decision. If the decision is to adjust the rate, the new rate will be placed in effect on an interim basis and will be submitted to the Federal Energy Regulatory Commission (FERC) for a final decision. Under the Rio Grande Reclamation Project Act of February 25, 1905, ch. 798, 33 Stat. 814, the RGP was authorized as an irrigation project on the Rio Grande River. The Elephant Butte Dam located 125 miles north of El Paso, Texas, was completed in fiscal year (FY) 1916. The Interior Department Appropriations Act of August 9, 1937, ch. 570, 50 Stat. 564, at 593, authorized the construction, operation and maintenance of a powerplant at the Elephant Butte Dam and the related transmission system. The Elephant Butte Powerplant and a 115 kV transmission line to Las Cruces, New Mexico, were constructed between FY 1938 and FY 1940. Additional transmission features were added between FY 1941 and FY 1952. In FY 1973 the Deming-Central Transmission Line and Central Substation near Central, New Mexico, were sold. In FY 1979 the remaining 115 kV transmission system and substations were sold, with the exception of the Hot Springs Substation which was sold in March 1983. The present system consists of the Elephant Butte Powerplant, rated at 24.3 MW capacity, and the Elephant Butte Switchyard. The project is operated primarily as an irrigation water supply project, and power generation is secondary in priority. Power revenues are required to pay annual power operations and maintenance (O&M) expenses, pay replacement costs of power facilities with interest within the service lives of the facilities, repay power investment costs with interest within 50 years, and repay within 60 years the irrigation investment costs which were assigned to power to repay. For the period FY 1941 through FY 1970, the interest rate on investments and deficits was 3 percent. Since FY 1970, the interest rate for new investments in both replacements and additions and for any deficits is the current rate, i.e., the interest rate applicable to the year in which the obligation occurs as determined pursuant to DOE guidelines. ,