Notice2021-18172
Boulder Canyon Project
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
August 24, 2021
Effective
October 1, 2021
Issuing agencies
Energy DepartmentWestern Area Power Administration
Abstract
The Assistant Secretary for Electricity confirms, approves, and places into effect on a final basis the Boulder Canyon Project (BCP) base charge and rates for fiscal year (FY) 2022 under Rate Schedule BCP-F10. The base charge increased 2.9 percent from $65.4 million in FY 2021 to $67.4 million in FY 2022. The change is primarily the result of an increase in the Bureau of Reclamation's (Reclamation) replacement costs, an increase in the Western Area Power Administration's (WAPA) operations and maintenance (O&M) expenses and replacement costs, and a decrease in prior year carryover funds from FY 2021.
Full Text
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<title>Federal Register, Volume 86 Issue 161 (Tuesday, August 24, 2021)</title>
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[Federal Register Volume 86, Number 161 (Tuesday, August 24, 2021)]
[Notices]
[Pages 47304-47306]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-18172]
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DEPARTMENT OF ENERGY
Western Area Power Administration
Boulder Canyon Project
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice concerning fiscal year 2022 Boulder Canyon Project base
charge and rates for electric service.
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SUMMARY: The Assistant Secretary for Electricity confirms, approves,
and places into effect on a final basis the Boulder Canyon Project
(BCP) base charge and rates for fiscal year (FY) 2022 under Rate
Schedule BCP-F10. The base charge increased 2.9 percent from $65.4
million in FY 2021 to $67.4 million in FY 2022. The change is primarily
the result of an increase in the Bureau of Reclamation's (Reclamation)
replacement costs, an increase in the Western Area Power
Administration's (WAPA) operations and maintenance (O&M) expenses and
replacement costs, and a decrease in prior year carryover funds from FY
2021.
DATES: The FY 2022 base charge and rates will be effective October 1,
2021 and will remain in effect through September 30, 2022.
FOR FURTHER INFORMATION CONTACT: Jack D. Murray, Acting Regional
Manager, Desert Southwest Region, Western Area Power Administration,
P.O. Box 6457, Phoenix, AZ 85005-6457, (602) 605-2525, or
<a href="/cdn-cgi/l/email-protection#98fcebefe8efeaf5eaf3d8eff9e8f9b6fff7ee"><span class="__cf_email__" data-cfemail="b7d3c4c0c7c0c5dac5dcf7c0d6c7d699d0d8c1">[email protected]</span></a>; or Tina Ramsey, Rates Manager, Desert Southwest
Region, Western Area Power Administration, (602) 605-2565, or
<a href="/cdn-cgi/l/email-protection#fd8f9c908e9884bd8a9c8d9cd39a928b"><span class="__cf_email__" data-cfemail="dba9bab6a8bea29bacbaabbaf5bcb4ad">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: On June 6, 2018, the Federal Energy
Regulatory Commission (FERC) confirmed and approved Rate Schedule BCP-
F10 under Rate Order No. WAPA-178 on a final basis through September
30, 2022.\1\ The rate-setting methodology for BCP calculates an annual
base charge rather than a unit rate for Hoover Dam hydropower. The base
charge recovers an annual revenue requirement that includes WAPA and
Reclamation projected costs of investment repayment, interest, O&M,
replacements, payments to states, and Hoover Dam visitor services. Non-
power revenue projections such as water sales, Hoover Dam visitor
center revenue, ancillary services, and late fees help offset these
projected costs. Customers are billed a percentage of the base charge
in proportion to their Hoover power allocation. Rates are calculated
for comparative purposes but are not used to determine the charges for
service.
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\1\ Order Confirming and Approving Rate Schedule on a Final
Basis, FERC Docket No. EF18-1-000, 163 FERC ] 62,154 (2018).
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Rate Schedule BCP-F10 and the BCP Electric Service Contract require
WAPA to determine the annual base charge and rates for the next FY
before October 1 of each year. The FY 2021 BCP base charge and rates
expire on September 30, 2021.
Comparison of Base Charge and Rates
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FY 2021 FY 2022 Amount change Percent change
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Base Charge ($)......................... $65,443,462 $67,355,778 $1,912,316 2.9
Composite Rate (mills/kWh).............. 18.10 20.63 2.53 14.0
Energy Rate (mills/kWh)................. 9.05 10.32 1.27 14.0
Capacity Rate ($/kW-Mo)................. $1.69 $2.03 $0.34 20.1
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[[Page 47305]]
Reclamation's FY 2022 budget is increasing by $1.6 million to $81.7
million, a 2 percent increase from FY 2021. While O&M costs are
decreasing by $4.4 million compared to FY 2021, there was a minimal
increase of $44,000 for post-retirement benefits and replacement costs
are increasing by $4.4 million due to the addition of new projects and
the inclusion of projects that were previously deferred due to the
COVID-19 pandemic. Visitor services costs are also increasing by $1.5
million in FY 2022, primarily due to a $1 million reallocation of
expenses from administrative and general expenses in O&M to visitor
services expenses. Higher labor projections in salaries, overtime,
overhead, and benefits also contribute to the visitor services
increase.
WAPA's FY 2022 budget is increasing by $762,000 to $9.2 million, a
9.1 percent increase from FY 2021. A $247,000 increase in WAPA's
replacement budget for communication equipment and higher O&M expenses
of $520,000 account for this increase. The increase in O&M expenses is
primarily due to the following: The Hoover-Mead transmission line lease
costs, which were not budgeted in FY 2021; an updated distribution of
labor costs resulting from the closure of the Navajo Generating Station
near Page, Arizona; and higher labor projections for salaries,
overtime, overhead, and benefits in power operations. The increase in
replacements and O&M costs is offset by a modest decrease in facility
expenses and post-retirement benefits.
The cost increase for both Reclamation and WAPA is offset by a $2.1
million increase in non-power revenue projections due to the added
commercial use authorization for road-based tours. Prior year carryover
is estimated to be $2.7 million, a $1.7 million decrease from FY 2021.
While the base charge is increasing 2.9 percent, the composite and
energy rates are both increasing 14 percent and the capacity rate is
increasing 20.1 percent from FY 2021. Projections of energy and
capacity are decreasing in FY 2022 due to the ongoing drought in the
Lower Colorado River Basin. Reclamation and WAPA work collaboratively
each year to minimize budget increases to moderate the financial impact
of the drought to the rates. For FY 2022, Reclamation and WAPA were
able to reduce previously formulated budgets and defer projects to
decrease costs by $4 million. Without this decrease in costs, the base
charge would have increased approximately $5.9 million instead of $1.9
million.
Public Notice and Comment
The notice of the proposed FY 2022 base charge and rates for
electric service was published consistent with procedures set forth in
10 CFR part 903 and 10 CFR part 904. WAPA took the following steps to
involve customers and interested parties in the rate process:
1. On April 15, 2021, a Federal Register notice (86 FR 19881)
announced the proposed base charge and rates and initiated the 90-day
public consultation and comment period.
2. On May 17, 2021, WAPA held a public information forum by web
conference. WAPA and Reclamation representatives explained the proposed
base charge and rates and answered questions. Presentation materials
and supplemental information requested by customers were posted to
WAPA's website.
3. On June 14, 2021, WAPA held a public comment forum by web
conference to provide customers and interested parties an opportunity
to comment for the record. WAPA received no comments during this forum.
4. On July 14, 2021, the public consultation and comment period
ended with WAPA receiving no comments.
Certification of Rates
WAPA's Administrator certified that the FY 2022 base charge and
rates under Rate Schedule BCP-F10 are the lowest possible rates
consistent with sound business principles. The base charge and rates
were developed following administrative policies and applicable laws.
Availability of Information
Information about the rate process to establish the FY 2022 base
charge and rates was made available on WAPA's website at <a href="https://www.wapa.gov/regions/DSW/Rates/Pages/boulder-canyon-rates.aspx">https://www.wapa.gov/regions/DSW/Rates/Pages/boulder-canyon-rates.aspx</a>.
Legal Authority
10 CFR 904.7(e) requires annual review of the BCP base charge and
an ``adjust[ment], either upward or downward, when necessary and
administratively feasible, to assure sufficient revenues to effect
payment of all costs and financial obligations associated with the
[p]roject.'' WAPA's Administrator provided all BCP contractors an
opportunity to comment on the proposed base charge adjustment
consistent with the procedures for public participation in rate
adjustments as required under 10 CFR 904.7(e) and the BCP Electric
Service Contract. The BCP Electric Service Contract states that for
years other than the first year and each fifth year thereafter, when
the rate schedule is approved by the Deputy Secretary on a provisional
basis and by FERC on a final basis, adjustments to the base charge
``shall become effective upon approval by the Deputy Secretary of
Energy.'' Under the DOE Organization Act, the Secretary of Energy holds
plenary authority over DOE affairs with respect to the Power Marketing
Administrations, and the Secretary of Energy may therefore exercise the
Deputy Secretary's contractual authority in this context. By Delegation
Order No. S1-DEL-S4-2021, effective February 25, 2021, the Acting
Secretary of Energy delegated ``to the Under Secretary for Science (and
Energy) the authority vested in [the Secretary] with respect to the . .
. Western Area Power Administration.'' By Redelegation Order No. S4-
DEL-OE1-2021, effective March 25, 2021, the Acting Under Secretary for
Science (and Energy) redelegated the same authority to the Assistant
Secretary for Electricity. Based upon the governing terms of the
existing BCP Electric Service Contract, the Acting Assistant Secretary
for Electricity is approving the FY 2022 base charge and rates for BCP
electric service. This rate action is issued under the Redelegation
Orders and DOE's procedures for public participation in rate
adjustments as set forth at 10 CFR part 903 and 10 CFR part 904.\2\
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\2\ 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
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Following DOE's review of WAPA's proposal, and as authorized by
applicable provisions of the BCP Electric Service Contract, I hereby
confirm, approve, and place the FY 2022 base charge and rates for BCP
electric service, under Rate Schedule BCP-F10, into effect on a final
basis through September 30, 2022.
Ratemaking Procedure Requirements
Environmental Compliance
WAPA has determined this action fits within the following
categorical exclusions listed in appendix B to subpart D of 10 CFR
1021: B4.3 (Electric power marketing rate changes) and B4.4 (Power
marketing services and activities). Categorically excluded projects and
activities do not require preparation of either an environmental impact
statement (EIS) or an environmental assessment (EA).\3\ A
[[Page 47306]]
copy of the categorical exclusion determination is available on WAPA's
website at <a href="https://www.wapa.gov/regions/DSW/Environment/Pages/environment.aspx">https://www.wapa.gov/regions/DSW/Environment/Pages/environment.aspx</a>.
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\3\ The determination was done in compliance with the National
Environmental Policy Act (NEPA) of 1969, as amended, 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 August 18,
2021, by Patricia A. Hoffman, Acting Assistant Secretary, Office of
Electricity, 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 August 19, 2021.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2021-18172 Filed 8-23-21; 8:45 am]
BILLING CODE 6450-01-P
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