Notice2021-13645
Proposed Salt Lake City Area Integrated Projects Firm Power Rate and Colorado River Storage Project Transmission and Ancillary Services Rates-Rate Order No. WAPA-199
Primary source
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Published
June 28, 2021
Effective
December 1, 2021
Issuing agencies
Energy DepartmentWestern Area Power Administration
Abstract
The Colorado River Storage Project Management Center (CRSP MC) of the Western Area Power Administration (WAPA) proposes a new Salt Lake City Area Integrated Projects (SLCA/IP) fixed firm power rates for use December 1, 2021, through December 31, 2023. The existing rates for these services are not set to expire until September 30, 2025; however, CRSP MC is initiating this rate action in response to a 35-percent projected increase to the firm power composite rate caused by a large increase in purchased power costs due to on-going drought conditions and a small increase to Operation, Maintenance, and Replacement (OM&R) expenses. Based on the FY 2021 toll on the Upper Colorado River Basin Fund (Basin Fund) and the drought-induced purchased power projections from the Reclamation May 24-Month Study, existing rates will not sustain a balance in the Basin Fund capable of supporting operations. CRSP MC proposes modifying how purchased power is calculated, and purchased power costs would be assessed on a pass-through-cost basis charged to each customer. CRSP MC proposes modifying language to implement the Cost Recovery Charge (CRC) throughout the year, if warranted, and would be able to implement a CRC if water levels drop below the intake structures at Glen Canyon Dam. Additionally, updated Colorado River Storage Project (CRSP) transmission and ancillary services rate schedules are proposed for use December 1, 2021, through December 31, 2023, with no material change proposed other than updating effective dates.
Full Text
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<title>Federal Register, Volume 86 Issue 121 (Monday, June 28, 2021)</title>
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[Federal Register Volume 86, Number 121 (Monday, June 28, 2021)]
[Notices]
[Pages 34002-34005]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-13645]
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DEPARTMENT OF ENERGY
Western Area Power Administration
Proposed Salt Lake City Area Integrated Projects Firm Power Rate
and Colorado River Storage Project Transmission and Ancillary Services
Rates--Rate Order No. WAPA--199
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of proposed firm power fixed rate and transmission and
ancillary services formula rates.
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SUMMARY: The Colorado River Storage Project Management Center (CRSP MC)
of the Western Area Power Administration (WAPA) proposes a new Salt
Lake City Area Integrated Projects (SLCA/IP) fixed firm power rates for
use December 1, 2021, through December 31, 2023. The existing rates for
these services are not set to expire until September 30, 2025; however,
CRSP MC is initiating this rate action in response to a 35-percent
projected increase to the firm power composite rate caused by a large
increase in purchased power costs due to on-going drought conditions
and a small increase to Operation, Maintenance, and Replacement (OM&R)
expenses. Based on the FY 2021 toll on the Upper Colorado River Basin
Fund (Basin Fund) and the drought-induced purchased power projections
from the Reclamation May 24-Month Study, existing rates will not
sustain a balance in the Basin Fund capable of supporting operations.
CRSP MC proposes modifying how purchased power is calculated, and
purchased power costs would be assessed on a pass-through-cost basis
charged to each customer. CRSP MC proposes modifying language to
implement the Cost Recovery Charge (CRC) throughout the year, if
warranted, and would be able to implement a CRC if water levels drop
below the intake structures at Glen Canyon Dam. Additionally, updated
Colorado River Storage Project (CRSP) transmission and ancillary
services rate schedules are proposed for use December 1, 2021, through
December 31, 2023, with no material change proposed other than updating
effective dates.
DATES: A consultation and comment period will begin June 28, 2021 and
end August 31, 2021. This provides approximately 65 days for public
comment, in accordance with WAPA's authority under 10 CFR 903.14 to
shorten the otherwise 90-day comment period for good cause. Concluding
the comment period by August 31, 2021, will enable CRSP MC to implement
the rates by the effective date of December 1, 2021. Further delaying
implementation to January 1, 2022, given projected costs of purchased
power, would reduce the Basin Fund by a further $10 million due to the
deficiency of current rates in light of escalating purchased power
costs. CRSP MC will present a detailed explanation of the proposed
rates and other modifications at a public information forum on July 7,
2021, 12 p.m. to 2 p.m. Mountain Daylight Time (MDT). CRSP MC will
present a purchased-power-specific public information forum on July 28,
2021, 12 p.m. to 2 p.m. MDT. CRSP MC will present a CRC-specific public
information forum on July 29, 2021, 12 p.m. to 2 p.m. MDT. CRSP MC will
accept oral and written comments at a public comment forum on August
11, 2021, 12 p.m. to no later than 2 p.m. MDT. CRSP MC will accept
written comments any time during the consultation and comment period.
CRSP MC will provide a 14-day consultation and comment period
specifically for purchased power after the CRSP MC posts the final
purchased power amounts to its website at: <a href="https://www.wapa.gov/regions/CRSP/rates/Pages/rates.aspx">https://www.wapa.gov/regions/CRSP/rates/Pages/rates.aspx</a>.
ADDRESSES: Written comments and requests for information about Federal
Energy Regulatory Commission (FERC) actions concerning the proposed
rates submitted by WAPA to FERC for approval should be sent to: Mr.
Rodney Bailey, Acting CRSP Manager, Colorado River Storage Project
Management Center, Western Area Power Administration, 1800 South Rio
Grande Avenue, Montrose, CO 81401, or email: <a href="/cdn-cgi/l/email-protection#43001110130e006e312237266e2227296e03342233226d242c35"><span class="__cf_email__" data-cfemail="63203130332e204e110217064e0207094e23140213024d040c15">[email protected]</span></a>.
CRSP MC will post information about the proposed rates and written
comments received to its website at: <a href="https://www.wapa.gov/regions/CRSP/rates/Pages/rates.aspx">https://www.wapa.gov/regions/CRSP/rates/Pages/rates.aspx</a>.
The public information and comment forums will be conducted online.
CRSP MC will post webinar and call-in information a week before each
respective forum to its website at: <a href="https://www.wapa.gov/regions/CRSP/rates/Pages/rates.aspx">https://www.wapa.gov/regions/CRSP/rates/Pages/rates.aspx</a>.
FOR FURTHER INFORMATION CONTACT: Mr. Thomas Hackett, Rates Manager,
Colorado River Storage Project Management Center, Western Area Power
Administration, (801) 524-5503, or email: <a href="/cdn-cgi/l/email-protection#4b0819181b060866392a3f2e662a2f210b3c2a3b2a652c243d"><span class="__cf_email__" data-cfemail="5516070605181678273421307834313f15223425347b323a23">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: On August 17, 2020, under Rate Order No.
WAPA-190, WAPA's Administrator placed the following rate schedules into
effect on an interim basis, effective October 1, 2020, and through
September 30, 2025, pending confirmation and final approval by FERC:\1\
SLIP-F11 for SLCA/IP Firm Power, SP-NW5 for Network Integration
Transmission Service, SP-PTP9 for Firm Point-to-Point Transmission
Service, SP-NFT8 for Non-Firm Point-to-Point Transmission Service, SP-
UU2 for Unreserved Use Penalties, SP-EI5 for Energy and Generator
Imbalance Service, SP-SSR5 for Operating Reserves--Spinning and
Supplemental Reserve Services, and SP-SS1 for Sale of Surplus Products.
On December 17, 2020, FERC approved and
[[Page 34003]]
confirmed the rate schedules on a final basis through September 30,
2025.\2\
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\1\ 85 FR 52115 (Aug. 24, 2020).
\2\ Order Confirming and Approving Rate Schedules on a Final
Basis, FERC Docket No. EF20-7-000, 173 FERC ] 61,230 (2020).
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WAPA is proposing a 2-year rate to address worsening drought
conditions in the southwestern United States and volatile purchased
power costs. The proposed firm power rate is a fixed rate; the proposed
transmission and ancillary services rates continue to use the formula-
based methodology that includes an annual update to the financial and
load data in the rate formulas. The proposed rates would go into effect
December 1, 2021, and remain in effect until December 31, 2023, or
until WAPA supersedes or changes the rates through another public rate
process pursuant to 10 CFR part 903, whichever occurs first.
The proposed base rates would provide sufficient revenue to recover
annual OM&R expenses, interest expense, irrigation assistance, and
capital repayment requirements within the cost recovery criteria set
forth in Department of Energy (DOE) Order No. RA 6120.2.
WAPA proposes that purchased power required to supplement
hydropower deliveries up to contractual levels would be passed through
to firm power customers under a separate charge, which would be in
addition to the base rate for hydropower deliveries. Any customer not
wanting to receive its share of the purchased power costs would not be
charged the purchased power charge and would receive a proportionate
amount of capacity and energy from WAPA each month, charged at the base
rate, reflecting actual hydropower generation levels. If WAPA
identifies a viable proposal to reduce the total purchased power
expenses in the power rate and provide additional flexibility to the
customers, it will be set forth during a public information forum. WAPA
will develop a rate schedule to pass through the purchased power costs.
A draft of the new rate schedule will be included in the brochure.
SLCA/IP Firm Power Rate
Under the current Rate Schedule SLIP-11, the energy rate is 11.43
mills per kilowatthour (mills/kWh), and the capacity rate is $4.85 per
kilowattmonth ($/kWmonth). The composite rate of all charges, used for
reference only as a comparison against other wholesale power rates, is
27.45 mills/kWh.
The revenue requirement for the proposed rate is based upon the
most current data available, specifically the fiscal year (FY) 2020
historical financial data and the FY 2023 work plans for WAPA and the
Bureau of Reclamation (Reclamation), and the May 24-Month Study. Table
1 shows a comparison of costs of the existing rate structures, without
the additional purchased power expenses.
Table 1--Comparison Of Existing And Proposed Firm Power Rates
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Existing rate Proposed rate
under rate under rate
Rate schedule schedule SLIP-F11 schedule SLIP-F12 Change (%)
effective October effective December
1, 2020 1, 2021
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Base Rate:
Firm Energy: (mills/kWh)................................ 11.43 12.70 +11.11
Firm Capacity: ($kW/month).............................. 4.85 5.40 +11.25
Composite Rate: (mills/kWh)............................. 27.45 30.44 +10.89
Purchased Power Rate: Average Monthly Purchase Energy N/A Market Price
(mills/kWh)............................................
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Currently, WAPA uses Reclamation's most-probable monthly water
releases and end-of-month elevations as reported in Reclamation's
August 24-Month Study (24-month Study), provided by Reclamation--Upper
Colorado Basin, to determine the first year of firming-energy-purchase
projections. For energy-purchase projections in subsequent years, WAPA
uses a subset of Reclamation's annual August Colorado River Simulation
System (CRSS) model traces to estimate energy purchase projections,
using a rolling average value to minimize fluctuations. WAPA continues
to evaluate methodologies used to forecast purchased power. Under rate
schedule SLIP-F12, WAPA will use the August 24-Month Study to determine
generation and projected sales for the two rate years. WAPA will
propose actions to be implemented when Lake Powell's water level drops
below the level at which its turbines cannot generate power. These
actions will be included in the new rate schedule. Any additional
changes to methodologies will be posted in the rate brochure and
presented at the public information forum for purchased power. WAPA
will update the rate brochure throughout the rate process as data and
processes are updated or added.
Cost Recovery Charge
WAPA will continue to use a Cost Recovery Charge (CRC), if
necessary, as a mechanism to adequately recover and maintain a
sufficient balance in the Basin Fund in the event projected expenses
significantly exceed projected revenue estimates. The Basin Fund is a
revolving fund and operates without annual appropriations. The CRC is
an additional surcharge on all Sustainable Hydro Power (SHP) energy
deliveries, which are long-term energy sales provided under WAPA's
SLCA/IP firm electric service contracts. The CRC may be implemented
when, among other things, the Basin Fund's cash balance is at risk due
to low hydropower generation, high prices for firming power, or
emergency capitalized investment funding. The CRC is based only on
Basin Fund cash analysis and is independent of the SLCA/IP Power
Repayment Study calculations.
WAPA proposes to reserve the right to implement a CRC throughout
the year using guidance from the existing implementation tiers and the
latest 24-month Study from Reclamation. An established CRC would be in
effect for 12 months from the date implemented. If circumstances
dictate the need to reassess an established CRC, the updated CRC would
supersede the previous CRC and remain in effect for 12 months. The CRC
is implemented at WAPA's discretion based on the balance of the Basin
Fund and WAPA's ability to meet contractual requirements.
The minimum Basin Fund carryover balance is $40 million.
[[Page 34004]]
Table 3--CRC Implementation Tiers
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Criteria, if the Basin Fund
Tier beginning balance is: Notification
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i............................. Greater than $150 million Annually.
with an expected decrease to
below $75 million.
ii............................ Less than $150 million but
greater than $120 million
with an expected 50-percent
decrease in the next CY.
iii........................... Less than $120 million but
greater than $90 million
with an expected 40-percent
decrease in the next CY.
iv............................ Less than $90 million but Semi-Annual (May/November).
greater than $60 million
with an expected 25-percent
decrease in the next CY.
v............................. Less than $60 million but Monthly.
greater than $40 million
with an expected decrease to
below $40 million in the
next CY.
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Under this proposal, WAPA reserves the right to implement a CRC
throughout the year using the criteria in Table 3 if annual water
releases from Glen Canyon Dam fall below 8.23 million acre-feet
regardless of the Basin Fund balance.
WAPA would establish an energy waiver level (WL) using the CRC
formula. Customers could accept either the CRC or WL. The WL provides
WAPA the ability to reduce purchase power expenses by delivering less
energy than its contractual obligations. For those customers who agree
to schedule no more energy than their proportionate share of the WL,
WAPA would waive the CRC for that year.
WAPA continues to refine the CRC process and the details of the CRC
calculations. Any recommended changes will be provided in the customer
rate brochure and set forth at the public information forum for the
CRC.
Transmission Services
Annual Transmission Revenue Requirement (ATRR)
WAPA does not propose any changes to the existing formula rate for
calculating ATRR, applicable to both Network Integration and Point-to-
Point transmission service rates. The ATRR is the annual cost of the
CRSP Transmission System adjusted for Non-Firm Point-to-Point revenue
credits, other miscellaneous charges or credits, and the prior year
true-up.
Unreserved Use Penalties
WAPA proposes no changes to the Unreserved Use penalty rate.
Ancillary Services
Energy Imbalance and Generator Imbalance Services
WAPA proposes no changes to the Energy Imbalance and Generator
Imbalance Rate Schedule. These services are provided to CRSP, as a
Transmission Service Provider, by the Western Area Colorado Missouri
Balancing Authority under Rate Schedule L-AS9.
Spinning and Supplemental Reserves
WAPA proposes no changes to the Operating Reserves--Spinning and
Supplemental Reserves Services formula rate.
Sale of Surplus Products
WAPA proposes no changes to the rate schedule for the sale of the
following surplus energy and capacity products: Energy, regulation,
reserves, and frequency response.
Joint Dispatch Transmission Service
Joint Dispatch Transmission Service is currently being added, in a
separate parallel process, to WAPA's rates under Rate Order No. WAPA-
195 \3\ and is proposed to be effective October 1, 2021. This Rate
Order would supersede WAPA-195 for the purpose of aligning expiration
dates. No other changes are proposed.
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\3\ 86 FR 21726 (Apr 23, 2021).
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Legal Authority
Existing DOE procedures for public participation in power and
transmission rate adjustments (10 CFR part 903) were published on
September 18, 1985, and February 21, 2019.\4\ The proposed action is a
major rate adjustment, as defined by 10 CFR 903.2(e). In accordance
with 10 CFR 903.15(a) and 10 CFR 903.16(a), CRSP MC will hold public
information and public comment forums for this rate adjustment. CRSP MC
will review and consider all timely public comments at the conclusion
of the consultation and comment period and adjust the proposal, as
appropriate. The rates will then be approved on an interim basis.
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\4\ 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
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CRSP MC is proposing the SLCA/IP firm power rate and revised CRSP
transmission and ancillary services formula rates in accordance with
section 302 of the DOE Organization Act (42 U.S.C. 7152).\5\
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\5\ This Act transferred to, and vested in, the Secretary of
Energy the power marketing functions of the Secretary of the
Department of the Interior and the Bureau of Reclamation under the
Reclamation Act of 1902 (ch. 1093, 32 Stat. 388), as amended and
supplemented by subsequent laws, particularly section 9(c) of the
Reclamation Project Act of 1939 (43 U.S.C. 485h(c)); and other acts
that specifically apply to the projects involved.
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By Delegation Order No. 00-037.00B, effective November 19, 2016,
the Secretary of Energy delegated: (1) The authority to develop power
and transmission rates to WAPA's Administrator; (2) the authority to
confirm, approve, and place such rates into effect on an interim basis
to the Deputy Secretary of Energy; and (3) the authority to confirm,
approve, and place into effect on a final basis, or to remand or
disapprove such rates, to FERC. By Delegation Order No. S1-DEL-S4-2021,
effective February 25, 2021, the Acting Secretary of Energy also
delegated the authority to confirm, approve, and place such rates into
effect on an interim basis to the Under Secretary for Science (and
Energy). By Redelegation Order No. S4-DEL-OE1-2021, effective March 25,
2021, the Acting Under Secretary for Science (and Energy) redelegated
the authority to confirm, approve, and place such rates into effect on
an interim basis to the Assistant Secretary for Electricity. By
Redelegation Order No. 00-002.10-05, effective July 8, 2020, the
Assistant Secretary for Electricity further redelegated the authority
to confirm, approve, and place such rates into effect on an interim
basis to WAPA's Administrator. This redelegation order, despite
predating the February 2021 and March 2021 delegations, remains valid.
Availability of Information
All brochures, studies, comments, letters, memoranda, or other
documents that the CRSP MC initiates or uses to develop the proposed
rates are available for inspection and copying at the Colorado River
Storage Project Management Center, 1800 South Rio Grande Avenue,
Montrose, Colorado.
[[Page 34005]]
Many of these documents and supporting information are also available
on WAPA's website at: <a href="https://www.wapa.gov/regions/CRSP/rates/Pages/rates.aspx">https://www.wapa.gov/regions/CRSP/rates/Pages/rates.aspx</a>.
Ratemaking Procedure Requirements
Environmental Compliance
WAPA is in the process of determining whether an environmental
assessment or an environmental impact statement should be prepared or
if this action can be categorically excluded from those
requirements.\6\
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\6\ In compliance with the National Environmental Policy Act
(NEPA) of 1969 (42 U.S.C. 4321-4347); the Council on Environmental
Quality Regulations for implementing NEPA (40 CFR parts 1500-1508);
and DOE NEPA Implementing Procedures and Guidelines (10 CFR part
1021).
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Determination Under Executive Order 12866
WAPA has an exemption from centralized regulatory review under
Executive Order 12866; accordingly, no clearance of this notice by the
Office of Management and Budget is required.
Signing Authority
This document of the Department of Energy was signed on June 21,
2021, by Tracey A. LeBeau, Interim Administrator, Western Area Power
Administration, pursuant to delegated authority from the Secretary of
Energy. That document, with the original signature and date, is
maintained by DOE. For administrative purposes only, and in compliance
with requirements of the Office of the Federal Register, the
undersigned DOE Federal Register Liaison Officer has been authorized to
sign and submit the document in electronic format for publication, as
an official document of the Department of Energy. This administrative
process in no way alters the legal effect of this document upon
publication in the Federal Register.
Signed in Washington, DC, on June 22, 2021.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2021-13645 Filed 6-25-21; 8:45 am]
BILLING CODE 6450-01-P
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