Notice2021-24217
Salt Lake City Area Integrated Projects-Rate Order No. WAPA-199
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
November 5, 2021
Effective
December 1, 2021
Issuing agencies
Energy DepartmentWestern Area Power Administration
Abstract
The fixed firm power rates for the Salt Lake City Area Integrated Projects (SLCA/IP) (Provisional Rates) have been confirmed, approved, and placed into effect on an interim basis. Based on the FY 2021 financial toll on the Upper Colorado River Basin Fund (Basin Fund) and the drought-impacted purchased power projections from the Bureau of Reclamation (Reclamation) August 2021 24-Month Study for FY 2022 and FY 2023 and the August 2021 Colorado River Simulation System (CRSS) traces for FY 2024 through FY 2026, existing rates will not sustain a balance in the Basin Fund capable of supporting operations. The Colorado River Storage Project Management Center (CRSP MC) of the Western Area Power Administration (WAPA) is implementing a new SLCA/IP firm power rate, effective December 1, 2021, through December 31, 2023.
Full Text
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[Federal Register Volume 86, Number 212 (Friday, November 5, 2021)]
[Notices]
[Pages 61211-61219]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-24217]
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DEPARTMENT OF ENERGY
Western Area Power Administration
Salt Lake City Area Integrated Projects--Rate Order No. WAPA-199
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of rate order concerning fixed firm power rates.
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SUMMARY: The fixed firm power rates for the Salt Lake City Area
Integrated Projects (SLCA/IP) (Provisional Rates) have been confirmed,
approved, and placed into effect on an interim basis. Based on the FY
2021 financial toll on the Upper Colorado River Basin Fund (Basin Fund)
and the drought-impacted purchased power projections from the Bureau of
Reclamation (Reclamation) August 2021 24-Month Study for FY 2022 and FY
2023 and the August 2021 Colorado River Simulation System (CRSS) traces
for FY 2024 through FY 2026, existing rates will not sustain a balance
in the Basin Fund capable of supporting operations. The Colorado River
Storage Project Management Center (CRSP MC) of the Western Area Power
Administration (WAPA) is implementing a new SLCA/IP firm power rate,
effective December 1, 2021, through December 31, 2023.
DATES: The Provisional Rates under Rate Schedule SLIP-F12 are effective
on the first day of the first full billing period beginning on or after
December 1, 2021, and will remain in effect through December 31, 2023,
pending confirmation and approval by the Federal Energy Regulatory
Commission (FERC) on a final basis or until superseded.
FOR FURTHER INFORMATION CONTACT: Tim Vigil, 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#6526373635282648170411004804010f4825120415044b020a13"><span class="__cf_email__" data-cfemail="5d1e0f0e0d101e702f3c2938703c3937701d2a3c2d3c733a322b">[email protected]</span></a>, or Thomas Hackett, Rates Manager,
801-524-5503, or email: <a href="/cdn-cgi/l/email-protection#bdfeefeeedf0fe90cfdcc9d890dcd9d7fdcadccddc93dad2cb"><span class="__cf_email__" data-cfemail="d2918081829f91ffa0b3a6b7ffb3b6b892a5b3a2b3fcb5bda4">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: On December 17, 2020, FERC confirmed and
approved Rate Schedules SLIP-F11 (SLCA/IP Firm Power), SP-NW5 (Network
Integration Transmission Service), SP-PTP9 (Firm Point-to-Point
Transmission Service), SP-NFT8 (Non-Firm Point-to-Point Transmission
Service), SP-UU2 (Unreserved Use Penalties), SP-EI5 (Energy and
Generator Imbalance Services), SP-SSR5 (Operating Reserves--Spinning
and Supplemental Reserve Services), and SP-SS1 (Sale of Surplus
Products) under Rate Order No. WAPA-190 (WAPA-190) on a final basis
through September 30, 2025.\1\
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\1\ 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 published a Federal Register notice (Proposed FRN) on June 28,
2021 (86 FR 34002), proposing modifications to only the firm power rate
schedule (SLIP-F11) established under WAPA-190. CRSP MC did not propose
any changes to the transmission and ancillary services rate schedules
established under WAPA-190, and they remain effective under WAPA-190
through September 30, 2025. The Proposed FRN also initiated a public
consultation and comment period and set forth the date and location of
the public information and public comment forums.
WAPA is implementing the firm power rate under Rate Schedule SLIP-
F12 to address worsening drought conditions in the southwestern United
States and volatile purchased power costs. The rates will 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
CRSP MC is only implementing the rate for 25 months to continue
collaborative conversations with customers and interested parties on
the most effective use of available generation and long-term strategies
for managing the cost of purchased power. CRSP MC is basing FY 2022 and
FY 2023 energy sales in the rate-setting Power Repayment Study (PRS) on
the Reclamation August 2021 24-month Study, and FY 2024 through FY 2026
sales on the CRSS traces and is forgoing purchased power in the rates.
Forgoing purchased power decreased the projected rate increase from 50
percent to 11 percent. CRSP MC will not be purchasing firming power to
meet Sustainable Hydropower (SHP) levels as it has in the past.
Calculated sales for the effective period of the rate will be limited
to forecasted generation, referred to as the Deliverable Sales Amount
(DSA). The DSA levels will be updated quarterly and provided to
customers for power scheduling and billing purposes. These quarterly
updates do not impact the rates. CRSP MC will firm to the DSA level if
necessary. For those customers who elect, CRSP MC will offer Western
Replacement Firming (WRF) purchased power to customers, as a pass-
through cost at market rates, to firm to SHP levels. Customers electing
not to take WRF will receive the DSA.
Legal Authority
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 the WAPA Administrator; (2) the authority to
confirm, approve, and place such rates into effect on an interim basis
to the
[[Page 61212]]
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.
This rate action is issued under Redelegation Order No. 00-002.10-05
and Department of Energy procedures for public participation in rate
adjustments set forth at 10 CFR part 903.\1\
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\1\ 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
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Following review of CRSP MC's proposal, I hereby confirm, approve,
and place Rate Order No. WAPA-199, which provides the fixed rates for
firm power, into effect on an interim basis. WAPA will submit Rate
Order No. WAPA-199 to FERC for confirmation and approval on a final
basis.
Department of Energy
Administrator, Western Area Power Administration
In the Matter of:
Western Area Power Administration, Colorado River Storage Project
Management Center, Rate Adjustment for the Salt Lake City Area,
Integrated Projects Fixed Firm Power Rates
Rate Order No. WAPA-199
Order Confirming, Approving, and Placing the Salt Lake City Area
Integrated Projects Fixed Firm Power Rates Into Effect on an Interim
Basis
The fixed rates in Rate Order No. WAPA-199 are established
following section 302 of the Department of Energy (DOE) Organization
Act (42 U.S.C. 7152).\1\
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\1\ 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
(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 project(s)
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 the Western Area Power Administration's
(WAPA) 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 on a final basis,
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 delegated 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.
This rate action is issued under Redelegation Order No. 00-002.10-05
and DOE procedures for public participation in rate adjustments set
forth at 10 CFR part 903.\1\
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\1\ 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
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Acronyms, Terms, and Definitions
As used in this Rate Order No. WAPA-199, the following acronyms,
terms, and definitions apply:
Basin Fund: Upper Colorado River Basin Fund.
Capacity: The electric capability of a generator, transformer,
transmission circuit, or other equipment. It is expressed in kilowatts
(kW) or megawatts (MW).
Capacity Rate: The rate which sets forth the charges for capacity.
It is expressed in dollars per kilowatt-month and applied to each
kilowatt delivered to each Customer.
CDP: Customer Displacement Power.
Composite Rate: The Power Repayment Study (PRS) rate for commercial
firm power, which is the total annual revenue requirement for capacity
and energy divided by the total annual energy sales. It is expressed in
mills per kilowatt-hour and used only for comparison purposes.
CRC: Cost Recovery Charge.
CROD: Contract Rate of Delivery. The maximum amount of capacity
made available to a preference Customer for a period specified under a
contract.
Customer: Firm electric service customer(s) contractually receiving
SLCA/IP power and energy.
CY: Calendar Year. When used in the CRC it is the 12-month period
the CRC is in effect.
DSA: Deliverable Sales Amount--marketable generation level, above
which WAPA will forgo purchased power.
Energy Rate: The rate which sets forth the charges for energy. It
is expressed in mills/kWh and applied to each DSA kWh delivered to each
Customer.
Firm: A type of product or service available at the time requested
by the Customer.
FY: Fiscal Year, October 1 to September 30.
GWh: Gigawatt-hour--the electrical unit of energy that equals 1
billion watthours or 1 million kWh.
Integrated Projects: The resources and revenue requirements of the
Collbran, Dolores, Rio Grande, and Seedskadee projects blended with the
CRSP to create the SLCA/IP resources and rate.
kW: Kilowatt--the electrical unit of capacity that equals 1,000
watts.
kWh: Kilowatt-hour--the electrical unit of energy that equals 1,000
watts in 1 hour.
kWmonth: Kilowatt-month--the electrical unit of the monthly amount
of capacity.
MAF: Million Acre-Feet. The amount of gallons of water required to
cover 1 million acres, 1 foot in depth.
Mill: A monetary denomination of the United States that equals one
tenth of a cent or one thousandth of a dollar.
Mills/kWh: Mills per kilowatt-hour--the unit of charge for energy.
MW: Megawatt--the electrical unit of capacity that equals 1 million
watts or 1,000 kilowatts.
MWh: One million watt-hours of electric energy. A unit of
electrical energy which equals 1 megawatt of power used for 1 hour.
NEPA: National Environmental Policy Act of 1969, as amended.
OASIS: Open Access Same-Time Information System--An electronic
posting system that a service provider maintains for transmission
access data that allows all Customers to view information
simultaneously.
O&M: Operations and Maintenance.
OM&R: Operations, Maintenance and Replacements.
[[Page 61213]]
Power: Capacity and energy.
Project Use: Power used to operate SLCA/IP and CRSP facilities
under Reclamation Law.
Provisional Rate: A rate confirmed, approved, and placed into
effect on an interim basis by the Secretary or his/her designee.
Rate Brochure: A document prepared for public distribution
explaining the rationale and background for the information contained
in this rate order.
Ratesetting PRS: The Power Repayment Study (PRS) used for the rate
adjustment period.
Revenue Requirement: The revenue required to recover O&M expenses,
purchased power and transmission service expenses, interest, deferred
expenses, and repayment of Federal investments, or other assigned
costs.
SHP: Sustainable Hydropower (long-term SLCA/IP hydro capacity with
energy).
SLCA/IP: Salt Lake City Area Integrated Projects.
WL: Waiver Level.
Work Plan: An estimate of costs that are expected to become the
Congressional Budget for WAPA and Reclamation. Also known as a Work
Program.
WRF: Western Replacement Firming.
WRP: Western Replacement Power.
Effective Date
The Provisional Rate Schedule SLIP-F12 will take effect on the
first day of the first full billing period beginning on or after
December 1, 2021, and will remain in effect through December 31, 2023,
pending approval by FERC on a final basis or until superseded.
Public Notice and Comment
The CRSP MC followed the Procedures for Public Participation in
Power and Transmission Rate Adjustments and Extensions, 10 CFR part
903, in developing these fixed rates. Following are the steps CRSP MC
took to involve interested parties in the rate process:
1. On June 28, 2021, a Federal Register notice (86 FR 34002)
(Proposal FRN) announced the proposed rates and launched the 65-day
public consultation and comment period. The comment period was reduced
from the customary 90-day period due to the $20 million financial
impact of not implementing the rate by December 1, 2021.
2. On June 28, 2021, CRSP MC notified Customers and interested
parties of the proposed rates and provided a copy of the published
Proposal FRN.
3. On July 7, 2021, CRSP MC held a virtual public information
forum. CRSP MC representatives explained the proposed fixed rates,
answered questions, and gave notice that more information was available
in the Rate Brochure.
4. On July 28, 2021, CRSP MC held a virtual public information
forum on purchased power and WRF. CRSP MC representatives explained the
process used to project purchase power, how WRF will be implemented,
answered questions, and gave notice that more information would be
available in a subsequent version of the Rate Brochure and provided
points of contact for additional questions on WRF implementation.
5. On July 29, 2021, CRSP MC held a virtual public information
forum on the CRC. CRSP MC representatives explained the purpose of the
CRC, the need for changes, how it is calculated and implemented,
answered questions, and gave notice that more information was available
in the Rate Brochure.
6. On August 11, 2021, CRSP MC held a virtual public comment forum.
This provided Customers and other interested parties an opportunity to
provide official comments for the record.
7. On August 13, 2021, CRSP MC posted responses to questions asked
during the August 11, 2021, virtual public comment forum on the rate
action website and notified the Customers and interested parties via
email.
8. CRSP MC provided a website that contains all dates, Customer
letters, presentations, FRNs, Rate Brochure, and other information
about this rate process. The rate action website is located at
<a href="http://www.wapa.gov/regions/CRSP/rates/Pages/rate-order-199.aspx">www.wapa.gov/regions/CRSP/rates/Pages/rate-order-199.aspx</a>.
9. During the 65-day consultation and comment period, which ended
on August 31, 2021, CRSP MC received 10 oral comments at the August 11,
2021, virtual public comment forum, and seven comment letters. All
comments from the virtual public comment forum were addressed by WAPA
via email and/or responses were posted to the rate action website on
August 13, 2021. The comments and CRSP MC responses are addressed in
the Comments section and have been considered in the preparation of
this Rate Order No. WAPA-199.
Oral comments were received from the following organizations:
Colorado River Energy Distributors Association (CREDA)
Utah Associated Municipal Power Systems (UAMPS)
Arizona Electric Power Cooperative (AEPCO)
Written comments were received from the following organizations:
Colorado River Energy Distributors Association (CREDA)
Arizona Electric Power Cooperative (AEPCO)
Municipal Energy Agency of Nebraska (MEAN/NMPP)
Platte River Power Authority (PRPA)
Tri-State Generation and Transmission Association, Inc. (TRI-STATE)
Utah Rural Electric Cooperative Association (URECA)
Utah Municipal Power Agency (UMPA)
10. CRSP MC received comments on the original Rate Brochure.
Comments were addressed in subsequent versions of the Rate Brochure.
11. CRSP MC provided a second consultation and comment period from
September 22 through October 6, 2021. This comment period facilitated
Customer feedback in reference to purchased power and generation
updates. The comments and CRSP MC responses are addressed in the
Comments section, and all comments have been considered in the
preparation of this Rate Order No. WAPA-199.
Written comments were received from the following organizations:
Colorado River Energy Distributors Association (CREDA)
Platte River Power Authority (PRPA)
Power Repayment Study--Firm Power Service Rate Discussion
CRSP MC prepares PRSs each FY to determine if revenues will be
sufficient to repay, within the required time, all costs assigned to
the SLCA/IP. Repayment criteria are based on applicable laws and
legislation, as well as policies including DOE Order RA 6120.2. To meet
the cost recovery criteria outlined in DOE Order RA 6120.2, a revised
PRS and rate adjustment have been developed to demonstrate that
sufficient revenues will be collected under the Provisional Rate to
meet future obligations. The revenue requirement and composite rate for
SLCA/IP firm power service are being increased, as indicated in Table
1:
[[Page 61214]]
Table 1--Comparison of Revenue Requirements and Composite Rates
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Provisional
Firm power service Existing requirements requirements (December Percent change
(October 1, 2020) 1, 2021)
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Revenue Requirement (million $)............... $173.511 $181,197 +4.4
Composite Rate (mills/kWh).................... 27.45 30.51 +11.1
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Under the existing rate methodology, rates for firm power service
are designed to recover an annual revenue requirement that includes
power investment repayment, aid to irrigation repayment, interest, O&M,
replacements, and other expenses within the allowable period.
Firm Power Service--Existing and Provisional Rates
CRSP MC is implementing this rate action primarily in response to a
large increase in purchased power costs due to worsening drought
conditions in the southwestern United States and an increase to OM&R
expenses.
CRSP MC is basing sales in the rate on forecasted generation in
Reclamation's August 2021 24-month Study for the effective period of
the rate and is subsequently forgoing purchased power in the
Ratesetting PRS. Forgoing purchased power mitigates the projected rate
increase from 50-percent down to 11-percent. CRSP MC will not
automatically purchase firming power to SHP levels. For those Customers
who elect, CRSP MC will purchase WRF power as a pass-through cost, at
market rates, up to SHP levels. CRSP MC will purchase power to firm to
the forecasted generation level, referred to as the DSA. The DSA will
be updated quarterly as shown in Table 2. Customers will have at least
14 days to affirmatively select WRF for each quarter. Quarterly notices
provide flexibility in responding to changes in hydrology and will not
impact the rates. Customers can elect the full quarter or specific
months within the quarter.
Table 2--Quarterly DSA Adjustment Schedule
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Reclamation 24- Notify customers
Quarter impacted month study by:
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December 2021................... August 2021....... mid-October 2021.
January-March 2022.............. November 2021..... Est: November 20,
2021.
April-June 2022................. February 2022..... Est: February 20,
2022.
July-September 2022............. May 2022.......... Est: May 20, 2022.
October-December 2022........... August 2022....... Est: August 20,
2022.
January-March 2023.............. November 2022..... Est: November 20,
2022.
April-June 2023................. February 2023..... Est: February 20,
2023.
July-September 2023............. May 2023.......... Est: May 20, 2023.
October-December 2023........... August 2023....... Est: August 20,
2023.
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CRSP MC provided information on the implementation process of the
WRF and DSA in the Rate Brochure, at the virtual public information
forum, at a virtual purchased power forum, and replied to questions
from the virtual public comment forum via email. This information was
published on the rate action website at: <a href="http://www.wapa.gov/regions/CRSP/rates/Pages/rates.aspx">www.wapa.gov/regions/CRSP/rates/Pages/rates.aspx</a>.
A comparison of the existing and provisional rates for firm power
service is listed in Table 3. The Provisional Rate is a fixed rate that
will go into effect December 1, 2021, and remain in effect through
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.
Table 3--Comparison of Existing and Provisional Rate
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Existing charges Provisional
under rate charges under rate
Firm power service schedule SLIP-F11 schedule SLIP-F12 Percent change
as of October 1, as of December 1,
2020 2021
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Firm Energy Rate (mills/kWh)........................ 11.43 12.36 +8.1
Firm Capacity Rate ($/kWmonth)...................... 4.85 5.25 +8.3
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Statement of Revenue and Related Expenses
Table 4 provides a comparison of the average annual expense data
for the firm power service revenue requirement through the rate-setting
period. The purchase power shown in the table reflects purchase power
costs for October and November 2021 that fall under the SLIP F11 rates.
There is no projected purchase power amount included in the rate for
service from December 2021 through December 2026.
Table 4--Annual Revenue Requirements and Firm Power Rates Comparison Table
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Existing rate Provisional rate Difference
($000) ($000) ($000)
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Rate Setting Period....................................... 2021-2038 2022-2045
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[[Page 61215]]
Revenue Distribution:
Expenses:
O&M............................................... $97,352 $103,095 $5,743
Purchase Power.................................... 1,119 833 (286)
Transmission...................................... 8,998 8,984 (14)
Integrated Projects requirements.................. 6,485 7,043 558
Interest.......................................... 6,066 6,207 141
Other............................................. 17,909 13,547 (4,362)
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Total Expenses................................ 137,928 139,709 1,781
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Principal Payments:
Capitalized Expenses (deficits)................... 0 838 838
Replacements...................................... 26,918 29,581 2,663
Original Project and Additions.................... 2,484 1,846 (638)
Irrigation........................................ 6,181 9,223 3,042
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Total Principal Payments...................... 35,583 41,488 5,905
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Annual Revenue Requirement.................... 173,511 181,197 7,686
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The rates would provide sufficient revenue to recover annual O&M
expenses, replacement 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.
Purchased power required to supplement hydropower deliveries up to
contractual levels will be passed through to Customers under a separate
charge, WRF, which would be in addition to the rate for hydropower
deliveries. Any Customer not receiving WRF will not be charged the
purchased power charge and would receive its proportionate amount of
the DSA capacity and energy from WAPA each month.
SLCA/IP Firm Power Rate
The revenue requirement for Rate Schedule SLIP-F12 is based on
current data available, specifically the FY 2020 historical financial
data, FY 2022 Work Plan for WAPA, FY 2023 Work Plan for Reclamation,
and Reclamation's August 2021 24-Month Study (24-month Study) and
Colorado River Simulation System (CRSS) traces.
Under rate schedule SLIP-F12, WAPA will use the Reclamation August
2021 24-Month Study to determine generation and projected sales for the
2 rate years (FYs 22-23) and CRSS for FYs 24-26 of the rate-setting
period. Additionally, the rate schedule includes actions WAPA will take
should Lake Powell's water level drop below the level at which power
can be generated.
Cost Recovery Charge
WAPA will retain the CRC as a mechanism to use, if necessary, 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 that operates using CRSP
MC power revenues without annual appropriations. The CRC is an
additional surcharge on all long-term energy sales provided under the
WAPA SLCA/IP firm electric service contracts. The CRC may be
implemented when, among other things, the Basin Fund cash balance is at
risk due to low hydropower generation, high prices for firming power,
or emergency capitalized investment funding. The CRC is independent of
the SLCA/IP PRS calculations.
WAPA reserves the right to implement a CRC at any point throughout
the year using guidance from the existing implementation criteria in
Table 5 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 will 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.
Table 5--CRC Implementation Tiers
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Criteria, if the basin fund beginning balance
Tier is: Notification
----------------------------------------------------------------------------------------------------------------
i................... Greater than $150 million with an expected Annually (July).
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 greater than $60 Semi-Annual (July/January).
million with an expected 25-percent decrease
in the next CY.
v................... Less than $60 million but greater than $40 Monthly.
million with an expected decrease to below
$40 million in the next CY.
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[[Page 61216]]
WAPA reserves the right to implement a CRC throughout the year if
annual water releases from Glen Canyon Dam fall below 8.23 MAF,
regardless of the Basin Fund balance.
If a CRC is implemented, CRSP MC will 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.
If, in any month, the annual water release volumes from Glen Canyon
Dam return to 8.23 MAF or higher while a CRC is in place, a new CRC
will be calculated for the next month, and each Customer will be
notified of the recalculated CRC results.
CRC sample calculations, narratives, and schedules are located on
the CRC web page: <a href="http://www.wapa.gov/regions/CRSP/rates/Pages/cost-recovery-charge.aspx">www.wapa.gov/regions/CRSP/rates/Pages/cost-recovery-charge.aspx</a>.
Comments
CRSP MC received 52 oral or written comments during the public
consultation and comment period. The comments expressed have been
paraphrased or consolidated, where appropriate, without compromising
the meaning of the comments.
Comments on Firm Power Rates
A. Comment: Commentor urged WAPA to continue to refine elements
other than purchased power in the PRS to result in the lowest possible
rate, consistent with sound business principles.
Response: CRSP MC analyzed data including O&M work plans, 10-year
plans for capital investment, and Customer agreements, as well as
Customer input, to ensure rates are the lowest possible consistent with
sound business principles.
B. Comment: Commentor requested that WAPA continue to reflect
``expense reductions to the work plans as they become available,''
until the latest possible date, as those work plan-related discussions
are still underway.
Response: CRSP MC incorporated changes to the Reclamation and WAPA
work plan reviews into the power repayment study as the information was
made available including using WAPA's FY 22 Work Plan instead of the FY
23 Work Plan. CRSP MC updated supporting data documents and posted them
to the rate action website and included the results in the Rate
Brochure updates.
C. Comment: Multiple commentors asked about the availability of
firm transmission for Customers who do not elect WRF and what CRSP MC
will do with surplus transmission.
Response: The CROD capacity will not be reduced. Available capacity
up to the CROD is available for Customer use as WRP and CDP as provided
in the Customers' SLCA/IP firm electric service contracts. Surplus
transmission, if any, would be made available through the OASIS based
on existing policy and procedures.
D. Comment: Commentor expressed concerns over ``rate shock'' for
small Customers and stated the rate process provides very little time
for Customers to design and implement retail rate adjustments that
account for these changes. Commentor believes WAPA must consider this
rate shock and what (if any) new value WAPA can provide to help offset
this significant increase.
Response: CRSP MC understands that increasing rates impacts its
Customers. CRSP MC operates on a cost-basis and must establish rates to
collect sufficient revenue to meet operational expense and repayment
obligations. Significant increases in purchase power costs warrant the
need for the rate action. CRSP MC followed public notice requirements
of the Administrative Procedure Act in setting forth this proposed rate
change. CRSP MC implemented this short rate period so collaborative
conversations with interested parties could occur over the next 2 years
on the most effective use of available generation and long-term
strategies for managing the cost of purchased power.
Comments on Services
A. Comment: Commentor believes WAPA's Customers must have the
ability to convert some of their allocation into ancillary services to
offset the financial impacts of the rate increase.
Response: All available energy is committed to firm power service
deliveries.
B. Comment: One commentor asked WAPA to clarify whether the firm
capacity and energy will be restored to Customers in the event the
Colorado River Basin's hydrological conditions revert to historical
levels.
Response: Should forecasted hydrological conditions improve, the
DSA levels will rise providing additional energy allocations for
Customers. AHP as defined in the SLCA/IP firm electric service contract
will also be offered if hydrological conditions improve significantly
within an established quarter.
C. Comment: One commentor does not agree with WAPA's position that
the ``Tribe under the benefit crediting contract would need to decide
whether to receive WRF and communicate that decision to its benefit
crediting utility.'' Commentor's position is the election of WRF should
be that of the benefit crediting utility, not the Tribe.
Response: CRSP MC has clarified this issue. WRF may be selected by
the utility providing the benefit crediting service. This is like the
existing treatment under the WRP program. The benefit crediting amount
provided to a Tribe is to be calculated on the Tribe's hydropower
delivery amounts.
D. Comment: Commentor asked that WAPA ensure participants retain
the option to independently purchase replacement power to cover
shortfalls in CRSP production. The proposed opt-in process should be,
at most, seasonal (every 6 months) to prevent adverse selection issues
or last-minute decisions by individual members that change market
conditions for all project participants.
Response: Customers can independently use their own resources or
purchase their own firming power under the CDP program. To provide
greater flexibility in responding to hydrology, CRSP MC has enhanced
the DSA and WRF programs by using quarterly notices to the Customers.
Although 6-month periods were originally proposed, Customers requested
additional flexibility in determining which months to potentially
purchase WRF. Quarterly notices will provide Customers additional
flexibility in meeting their resource needs and provide CRSP MC more
certainty about water releases and hydropower generation availability.
E. Comment: Commentor asked that WAPA protect preference Customers'
firm transmission rights, so Customers can use their transmission
rights for power delivered to make up for power WAPA cannot provide.
Commentor asked that WAPA maintain the current practice for firm
transmission for power delivered in lieu of WAPA power, which was
implemented earlier in this ongoing drought.
Response: Available capacity up to the CROD is still available for
Customer use as WRP and CDP.
Comments in Support
A. Comment: Multiple commentors provided favorable comments
thanking WAPA for its willingness to collaborate through rate,
resource, and work plan processes; inclusion of two topical
[[Page 61217]]
virtual public forums to assist in Customer review and understanding of
the WAPA-199 rate; appreciation for WAPA's Customer notification of
materials being posted on the rate website; appreciation for WAPA's
willingness to work with them to improve the capability and
accessibility of the modeling tools used to analyze and produce CRSP
rate scenarios in a timely manner; appreciation for WAPA's flexibility
in providing a 14-day consultation and comment period after ``final
purchased power amounts'' have been posted to its website; appreciation
towards WAPA, CRSP staff, and Reclamation's work with Customers during
this rate process and through the process referred to as the ``work
program review'' process.
Response: CRSP MC appreciates the feedback and recognizes the
benefits of collaborating with Customers and interested parties.
B. Comment: Two commentors expressed appreciation for CRSP MC's and
Upper Colorado Region of Reclamation's approach to mitigating drought
impacts and ensuring that the Basin Fund remains viable through the new
rate components and continuation of the WRP and CDP processes, as well
as the PRS and rates.
Response: CRSP MC appreciates the feedback.
C. Comment: Commentor expressed support for the revisions made to
the CRC described in the Rate Brochure.
Response: CRSP MC appreciates the feedback on the CRC revisions.
Comments on Customer Communications
A. Comment: Two commentors requested WAPA continue timely
communication, collaboration, and transparency with CRSP Customers on
decisions, ongoing concerns, and potential impacts of recent Senate
infrastructure funding.
Response: While the Senate infrastructure funding is out of scope
for this rate action, CRSP MC understands the benefits of
communication, collaboration, and transparency with its Customers in
addressing potential rate impacts.
B. Comment: One commentor requested WAPA incorporate information/
adjustments from pending Reclamation and WAPA reviews into the final
proposed/provisional rate, and the results of that inclusion be
provided to them.
Response: CRSP MC incorporated changes tied to the Reclamation and
WAPA work plan reviews into the PRS as the information was made
available. CRSP MC updated supporting data documents, posted them to
the rate action website, and included the results in the Rate Brochure
updates.
C. Comment: One commentor requested WAPA ensure Customers are
notified of the Provisional Rate under this rate order prior to the
issuance of Customer Notification of the DSA Season Update for Winter
2022 Season.
Response: CRSP MC provided the projected final rate on September
22, 2021, when it opened the Customer Comment Period on Purchased Power
and Generation. The rate was subsequently decreased based on changes to
project use power and CRSP MC's decision to use the FY 2022 work plan
for the rate-setting period to reduce costs.
D. Comment: Commenter requested their most recent correspondence be
included in the WAPA-199 record.
Response: CRSP MC filed all received comments in the decision of
record for this rate process.
E. Comment: One commentor asked WAPA to continue its practice of
collaboration and transparency for future decisions that affect CRSP
Customers, such as costs for shaping and firming services as additional
power is needed to maintain reliable supply.
Response: CRSP MC will continue its practice of collaboration and
transparency.
Comments on Other
A. Comment: Commentor expressed recognition of the significance of
the current drought conditions in the Colorado River Basin and the
challenges that are being presented to WAPA and the CRSP Customers.
Response: CRSP MC appreciates the feedback.
B. Comment: One commentor expressed appreciation that the current
scope of this rate order does not propose changes to ancillary
services. Commentor wants any future changes to ancillary services to
be part of a separate rulemaking.
Response: The current transmission and ancillary service formula
rates established under Rate Order WAPA-190 required no modifications
and continue to be effective under Rate Order WAPA-190 through
September 30, 2025.
Second Comment Period Comments
A. Comment: Commenters expressed that it does not make sense to
apply the CRC to all SHP and DSA because DSA is a subset of SHP.
Response: CRSP MC concurs. Since CRSP MC is only purchasing firming
power to the DSA level, instances of SHP in the CRC will be replaced
with DSA in the FRN and supporting documentation.
B. Comment: Commenters expressed that the CRC does not belong in
the WRF cost recovery equation.
Response: CRSP MC concurs that WRF is exempt from the CRC
calculation. The CRC only applies to the firming purchases up to the
DSA level.
C. Comment: Commenter said, ``Because any portion of a customer's
SHP above DSA will necessarily be WRF, the CRC should not apply to the
above-DSA amount.''
Response: CRSP MC concurs that the CRC only applies to firming
purchases up to the DSA level and made conforming changes within the
FRN and supporting documentation.
D. Comment: Commenter thanks WAPA for the additional comment period
to respond to updated elements of its CRSP rate proposal, and for its
continuing commitment to transparency and collaboration in the rate-
setting process.
Response: WAPA appreciates the feedback.
E. Comment: Commenter supports WAPA making ``additional changes to
the work plan'' . . . and including them in the final rate package
without ``an additional comment period for Customer review.''
Response: The WAPA decision not to initiate an additional comment
period was due to the changes decreasing the proposed rate. Had the
recent update to the workplan increased the proposed rate, WAPA would
have considered an additional comment period or delayed implementation
of the change until the next rate action.
F. Comment: Commenter supports the change in the DSA and WRF to
quarterly time frames, and the addition that Customers may elect
specific months within the quarter, to receive WRF.
Response: CRSP MC appreciates the feedback.
G. Comment: Commenter urges ongoing customer collaboration to
address hydrologic conditions and forecasts, Basin Fund targets
(including any methodology changes which may be made), MOA transfer
timing, non-power program and non-reimbursable funding and
Congressional action.
Response: CRSP MC recognizes the benefits of customer collaboration
in dealing with the drought and impacts on generation and the energy
rates. CRSP MC will continue its practice of transparency by providing
information as it becomes available.
H. Comment: Commenter supports the collaborative effort WAPA has
made
[[Page 61218]]
with Customers to develop long-term solutions to manage revenue
requirements and cash flow.
Response: WAPA appreciates the feedback and recognizes the benefits
of customer collaboration.
Certification of Rates
I have certified that the Provisional Rates for SLCA/IP Firm Power
under Rate Schedule SLIP-F12 are the lowest possible rates, consistent
with sound business principles. The Provisional Rates were developed
following administrative policies and applicable laws.
Availability of Information
Information about this rate adjustment, including the Rate
Brochure, PRSs, comments, letters, memoranda, and other supporting
materials that were used to develop the Provisional Rates, is available
for inspection and copying at the Colorado River Storage Project
Management Center Office, 1800 South Rio Grande Avenue, Montrose, CO.
Many of these documents are also available on WAPA's website at
<a href="http://www.wapa.gov/regions/CRSP/rates/Pages/rates.aspx">www.wapa.gov/regions/CRSP/rates/Pages/rates.aspx</a>, or email; <a href="/cdn-cgi/l/email-protection#3e7d6c6d6e737d134c5f4a5b135f5a547e495f4e5f10595148"><span class="__cf_email__" data-cfemail="d99a8b8a89949af4abb8adbcf4b8bdb399aeb8a9b8f7beb6af">[email protected]</span></a>.
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 part
1021.410: 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 or an environmental assessment.\1\ Specifically, WAPA has
determined that this rulemaking is consistent with activities
identified in B4, Categorical Exclusions Applicable to Specific Agency
Actions (see 10 CFR part 1021, appendix B to subpart D, part B4). A
copy of the categorical exclusion determination is available on WAPA's
website at: <a href="http://www.wapa.gov/regions/CRSP/environment/Pages/environment.aspx">www.wapa.gov/regions/CRSP/environment/Pages/environment.aspx</a>.
---------------------------------------------------------------------------
\1\ The determination was done in compliance with NEPA (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).
---------------------------------------------------------------------------
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.
Submission to the Federal Energy Regulatory Commission
The Provisional Rate herein confirmed, approved, and placed into
effect on an interim basis, together with supporting documents, will be
submitted to FERC for confirmation and final approval.
Order
In view of the above, and under the authority delegated to me, I
hereby confirm, approve, and place into effect, on an interim basis,
Rate Order No. WAPA-199. The rates will remain in effect on an interim
basis until: (1) FERC confirms and approves them on a final basis; (2)
subsequent rates are confirmed and approved; or (3) such rates are
superseded.
Signing Authority
This document of the Department of Energy was signed on October 28,
2021, by Tracey LeBeau, 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 November 2, 2021.
Treena V. Garrett
Federal Register Liaison Officer, U.S. Department of Energy.
Rate Schedule SLIP-F12
(Supersedes Rate Schedule SLIP-F11)
United States Department of Energy
Western Area Power Administration
Colorado River Storage Project Management Center Salt Lake City Area
Integrated Projects
Schedule of Rates for Firm Power Service (Approved Under Rate Order No.
WAPA-199)
Effective: The first day of the first full billing period beginning
on or after December 1, 2021, and extending through December 31, 2023,
or until superseded by another rate schedule, whichever occurs earlier.
Available: In the area served by the Salt Lake City Area Integrated
Projects.
Applicable: To the wholesale power Customer for firm power service
supplied through one meter at one point of delivery or as otherwise
established by contract.
Character: Alternating current, 60 hertz, three-phase, delivered
and metered at the voltages and points established by contract.
Monthly Rate: Demand Charge: $5.25 per kilowatt of billing demand.
Energy Charge: $12.36 mills per kilowatthour of use of Deliverable
Sales Amount (DSA) energy.
Modification of Purchased Power: WAPA will not automatically
provide purchased power to firm to SHP energy allocations, nor will
there be any purchased power costs under Rate Order WAPA-199 in the
rate setting period in the power repayment study under Rate Order WAPA-
199. WAPA will establish the rates using the projected DSA data in the
Bureau of Reclamation's (Reclamation) August 2021 24-month Study and
Reclamation's August 2021 Colorado River Simulation System traces.
Western Replacement Firming (WRF): WRF applies to pass-through
purchased power costs for energy provided between the DSA level and SHP
energy allocation. WRF is an optional product. Customers must elect
quarterly, and may elect specific months within the quarter, to receive
WRF. The charge for this purchased power will be determined at the time
of the purchase based on market rates. There are no losses or an
administrative fee charged to WRF. A schedule for the quarterly updates
is in the rate brochure on the rate action website: <a href="http://www.wapa.gov/regions/CRSP/rates/Pages/rates.aspx">www.wapa.gov/regions/CRSP/rates/Pages/rates.aspx</a>.
Billing Demand: The billing demand will be the greater of:
1. The highest 30-minute integrated demand measured during the
month up to, but not more than, the delivery obligation under the power
sales contract, or,
2. The Contract Rate of Delivery.
Billing Energy: The billing energy will be the energy measured
during the month up to, but not more than, the delivery obligation
under the power sales contract.
Adjustment for Transformer Losses: If delivery is made at
transmission voltage but metered on the low-voltage side of the
substation, the meter readings will be increased to compensate for
transformer losses as provided in the contract.
Adjustment for Power Factor: The Customer will be required to
maintain a power factor at all points of
[[Page 61219]]
measurement between 95 percent lagging and 95 percent leading.
Adjustment for Western Replacement Power (WRP): Pursuant to the
Customer's Firm Electric Service Contract, as amended, WAPA will bill
the Customer for its proportionate share of the costs of WRP within a
given time. WAPA will include in the monthly power bill the cost of the
WRP, and the incremental administrative costs associated with WRP.
Adjustment for Customer Displacement Power (CDP) Administrative
Charges: WAPA will include in the Customer's regular monthly power bill
the incremental administrative costs associated with CDP.
Adjustment for Minimum Power Pool: If Lake Powell drops below
``minimum power pool'' and power cannot be generated, WAPA will provide
30 days' notice to the Customers prior to reducing the DSA.
Cost Recovery Charge (CRC): To adequately recover and maintain a
sufficient balance in the Basin Fund, WAPA uses a cost recovery
mechanism, called a CRC. The CRC is a charge on all long-term energy
sales provided under WAPA's SLCA/IP firm electric service contracts.
This charge will be, at a minimum, recalculated before July 1 of
each year, and WAPA will provide notification to the Customers
consistent with the procedures in 10 CFR 903. WAPA has the discretion
to implement the CRC at any point throughout the year using the
criteria in Table 1. The charge, if needed, will be placed into effect
on the first day of the first full-billing period beginning on or after
the first day of the month the CRC is implemented. For the purposes of
the CRC, the 12-month period of a CRC will be described as a calendar
year (CY). The CRC will be calculated as follows:
Table 1--CRC Tiers
----------------------------------------------------------------------------------------------------------------
Criteria, if the basin fund beginning balance
Tier (BFBB) is: Notification
----------------------------------------------------------------------------------------------------------------
i.................................... Greater than $150 million, with an expected Annually (July).
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 greater than $60 Semi-Annual (July/
million, with an expected 25 percent decrease January).
in the next CY.
v.................................... Less than $60 million but greater than $40 Monthly.
million with an expected decrease to below $40
million in the next CY.
----------------------------------------------------------------------------------------------------------------
CRC sample calculations, narratives, and schedules showing the
dates for implementing a CRC throughout the year are located at the CRC
web page: <a href="http://www.wapa.gov/regions/CRSP/rates/Pages/cost-recovery-charge.aspx">www.wapa.gov/regions/CRSP/rates/Pages/cost-recovery-charge.aspx</a>.
Waiver Level (WL)
WAPA will establish a WL that provides WAPA the ability to reduce
purchased power expenses by scheduling less energy than what is
contractually required. Therefore, for those Customers who voluntarily
schedule no more energy than their proportionate share of the WL, WAPA
will waive the CRC for that year. After the Funds Available have been
determined, the WL will be set at the sum of the energy that can be
provided through hydro generation and purchased with Funds Available.
The WL will not be less than the forecasted Hydro Energy.
Trigger for Water Release Criteria: In the event that Reclamation's
24-month study projects Glen Canyon Dam water releases will drop below
8.23 million acre feet (MAF) in a water year (October through
September), WAPA will recalculate the CRC to include those lower
estimates of hydropower generation. WAPA, as in the yearly projection
for the CRC, will give the Customers a 45-day notice to request a
waiver of the CRC if they do not want to have the CRC charge added to
their energy bills. This recalculation will remain in effect for the
remainder of the CY.
If the annual water release volumes from Glen Canyon Dam return to
8.23 MAF or higher during the trigger implementation, a new CRC will be
calculated for the next month, and the Customer will be notified.
Trigger for New Rate Criteria
WAPA would reassess an implemented CRC when a new rate goes into
effect to determine if the implemented CRC should be continued,
superseded, or terminated.
Prior Year Adjustment for CRC: Since the annual determination of
the CRC is based upon estimates, an annual, prior-year adjustment (PYA)
will be calculated for those who did not elect the waiver level. The
PYA will be based on the 12-month period the CRC was in effect.
The Customers' PYA will be based on their prior 12-months' energy
multiplied by the PYA mills/kWh to determine the dollar value that will
be assessed. The Customer will be charged or credited for this dollar
amount equally in the remaining months of the next 12-month billing
cycle. WAPA will complete this calculation within 2 months of the end
of the CRC. Therefore, if the PYA is calculated in June, the charge/
credit will be spread over the remaining 9 months of the CY (July
through March).
Adjustment for CRC Waiver: Customers can choose not to take the
full DSA energy supplied as determined in the attached formulas for CRC
and will be billed the Energy and Capacity rates listed above, but not
the CRC.
[FR Doc. 2021-24217 Filed 11-4-21; 8:45 am]
BILLING CODE 6450-01-P
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</html>Indexed from Federal Register on November 5, 2021.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.