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Notice2022-07864

Boulder Canyon Project-Rate Order No. WAPA-204

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Published
April 13, 2022

Issuing agencies

Energy DepartmentWestern Area Power Administration

Abstract

The Desert Southwest Region (DSW) of the Western Area Power Administration (WAPA) is proposing to renew the Boulder Canyon Project (BCP) formula rates for electric service and to calculate the fiscal year (FY) 2023 base charge and rates under proposed Rate Schedule BCP-F11. The existing formula rates under Rate Schedule BCP-F10 and the current base charge and rates expire on September 30, 2022. The proposed formula rates under Rate Schedule BCP- F11 would be effective October 1, 2022 through September 30, 2027. WAPA proposes no changes to the existing formula rates, which are set forth in the governing terms of the BCP Electric Service Contract (ESC). The FY 2023 proposed base charge for BCP electric service is projected to increase from $67.4 million in FY 2022 to $69.9 million in FY 2023, a 3.7 percent increase. The change is primarily the result of cost increases in Bureau of Reclamation's (Reclamation) Operations and Maintenance (O&M) and visitor services expenses. Publication of this Federal Register notice will initiate the public process to put into place the proposed formula rates for electric service and the proposed FY 2023 base charge and rates.

Full Text

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<title>Federal Register, Volume 87 Issue 71 (Wednesday, April 13, 2022)</title>
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[Federal Register Volume 87, Number 71 (Wednesday, April 13, 2022)]
[Notices]
[Pages 21881-21883]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-07864]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Boulder Canyon Project--Rate Order No. WAPA-204

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of proposed Boulder Canyon Project formula rates for 
electric service and proposed fiscal year 2023 base charge and rates.

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SUMMARY: The Desert Southwest Region (DSW) of the Western Area Power 
Administration (WAPA) is proposing to renew the Boulder Canyon Project 
(BCP) formula rates for electric service and to

[[Page 21882]]

calculate the fiscal year (FY) 2023 base charge and rates under 
proposed Rate Schedule BCP-F11. The existing formula rates under Rate 
Schedule BCP-F10 and the current base charge and rates expire on 
September 30, 2022. The proposed formula rates under Rate Schedule BCP-
F11 would be effective October 1, 2022 through September 30, 2027. WAPA 
proposes no changes to the existing formula rates, which are set forth 
in the governing terms of the BCP Electric Service Contract (ESC). The 
FY 2023 proposed base charge for BCP electric service is projected to 
increase from $67.4 million in FY 2022 to $69.9 million in FY 2023, a 
3.7 percent increase. The change is primarily the result of cost 
increases in Bureau of Reclamation's (Reclamation) Operations and 
Maintenance (O&M) and visitor services expenses. Publication of this 
Federal Register notice will initiate the public process to put into 
place the proposed formula rates for electric service and the proposed 
FY 2023 base charge and rates.

DATES: A consultation and comment period begins today and will end July 
12, 2022. DSW will present a detailed explanation of the proposed 
formula rates for electric service and the proposed FY 2023 base charge 
and rates at a public information forum that will be held on May 13, 
2022, from 10 a.m. to 12 p.m. Mountain Standard Time. DSW will also 
host a public comment forum that will be held on June 13, 2022, from 10 
a.m. to 12 p.m. Mountain Standard Time. DSW will conduct both the 
public information forum and the public comment forum via Webex. 
Instructions for participating in the forums will be posted on DSW's 
website at least 14 days prior to the public information and comment 
forums at: <a href="http://www.wapa.gov/regions/DSW/Rates/Pages/boulder-canyon-rates.aspx">www.wapa.gov/regions/DSW/Rates/Pages/boulder-canyon-rates.aspx</a>. DSW will accept written comments any time during the 
consultation and comment period.

ADDRESSES: Written comments and requests to be informed of Federal 
Energy Regulatory Commission (FERC) actions concerning the proposed 
formula rates and calculated base charge and rates should be sent to: 
Scott R. Lund, Acting Regional Manager, Desert Southwest Region, 
Western Area Power Administration, P.O. Box 6457, Phoenix, Arizona 
85005-6457, or <a href="/cdn-cgi/l/email-protection#533720242324213e213813243223327d343c25"><span class="__cf_email__" data-cfemail="4b2f383c3b3c392639200b3c2a3b2a652c243d">[email&#160;protected]</span></a>. DSW will post information concerning 
the rate process and written comments received to its website at: 
<a href="http://www.wapa.gov/regions/DSW/Rates/Pages/boulder-canyon-rates.aspx">www.wapa.gov/regions/DSW/Rates/Pages/boulder-canyon-rates.aspx</a>.

FOR FURTHER INFORMATION CONTACT: Tina Ramsey, Rates Manager, Desert 
Southwest Region, Western Area Power Administration, (602) 605-2565, or 
<a href="/cdn-cgi/l/email-protection#6a0e191d1a1d180718012a1d0b1a0b440d051c"><span class="__cf_email__" data-cfemail="bbdfc8cccbccc9d6c9d0fbccdacbda95dcd4cd">[email&#160;protected]</span></a>.

SUPPLEMENTARY INFORMATION: Hoover Dam,\1\ authorized by the Boulder 
Canyon Project Act of 1928, as amended (43 U.S.C. 617 et seq.), sits on 
the Colorado River along the Arizona-Nevada border. The Hoover Dam 
power plant has 19 generating units (two for plant use) and an 
installed capacity of 2,078.8 megawatts (4,800 kilowatts for plant 
use). In collaboration with Reclamation, WAPA markets and delivers 
hydropower from the Hoover Dam power plant through high-voltage 
transmission lines and substations to Arizona, Southern California, and 
Southern Nevada.
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    \1\ Hoover Dam was known as Boulder Dam from 1933 to 1947, but 
was renamed Hoover Dam by an April 30, 1947, joint resolution of 
Congress. See Act of April 30, 1947, H.J. Res. 140, ch. 46, 61 Stat. 
56-57.
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    On June 6, 2018, FERC approved and confirmed Rate Schedule BCP-F10, 
under Rate Order No. WAPA-178, on a final basis through September 30, 
2022.\2\ Rate Schedule BCP-F10 and the BCP ESC require WAPA to 
calculate the annual base charge and rates for the next fiscal year 
before October 1 of each year based on formulas that are set for a 
five-year period. Rate Schedule BCP-F10 expires on September 30, 2022. 
Consistent with the formulas set forth in the BCP ESC, WAPA is 
proposing to renew the formula rates for electric service under Rate 
Schedule BCP-F11, which would be effective October 1, 2022, through 
September 30, 2027. The formula rates will continue to provide 
sufficient revenue to recover all annual costs, including interest 
expense.
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    \2\ 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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    Pursuant to proposed Rate Schedule BCP-F11, the formula-based 
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 projected costs of investment 
repayment, interest, operations, maintenance, replacements, payments to 
States, and Hoover Dam visitor services. Non-power revenue projections 
such as water sales, Hoover Dam visitor revenue, ancillary services, 
and late fees help offset these projected costs. Hoover power customers 
are billed a percentage of the base charge in proportion to their power 
allocation. Unit rates are calculated for comparative purposes but are 
not used to determine the charges for service.

                                       Comparison of Base Charge and Rates
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                                                      FY 2022         FY 2023      Amount change  Percent change
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Base Charge ($).................................     $67,355,778     $69,861,560      $2,505,782             3.7
Composite Rate (mills/kWh)......................           20.63           22.51            1.88             9.1
Energy Rate (mills/kWh).........................           10.32           11.25             .93             9.0
Capacity Rate ($/kW-Mo).........................           $2.03           $2.24            0.21            10.3
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    While the proposed formula rates are unchanged from FY 2022, the 
proposed FY 2023 base charge for BCP electric service is projected to 
increase from $67.4 million in FY 2022 to $69.9 million in FY 2023, a 
3.7 percent increase.
    Reclamation's FY 2023 budget is increasing $3.2 million from $81.7 
million to $84.9 million, a 3.9 percent increase from FY 2022. 
Reflected in this budget, operations and maintenance (O&M) costs are 
increasing $3.4 million primarily due to a higher overhead rate for 
salaries attributed to a reorganization and increased staffing needs to 
improve cybersecurity; an increase in services for IT support and 
equipment; trash disposal contract costs; fabrication of elevator 
doors; ammunition for security forces; and anticipated costs for the 
Workman's Compensation Program. Visitor services costs are increasing 
by $490,000 due to higher projected contract costs for janitorial, 
memorabilia, ticketing, and trash disposal services. The increase for 
Reclamation is offset by a $790,000 decrease in replacement costs 
primarily due to Relamation's effort to level

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extraordinary maintenance project expenses. This results in reduced 
annual costs for the control center renovation project and the 
replacement of the A9 wicket gates, visitors center escalator, and 
wastewater treatment facility.
    WAPA's FY 2023 budget is decreasing $438,000 from $9.2 million to 
$8.7 million, a 4.8 percent decrease from FY 2022. Reflected in this 
budget, WAPA's O&M costs are decreasing by $842,000 due to a shift from 
O&M to capital work. The decreasing O&M costs are offset primarily by a 
$380,000 increase in WAPA's replacement budget for breaker and relay 
replacements in the Mead 69-kV yard.
    Costs for Reclamation and WAPA are offset by a slight increase of 
$68,000 in non-power revenue projections, due to a higher estimate for 
ancillary services revenues. Prior year carryover is projected to be 
$2.8 million, a $186,000 increase from FY 2022.
    The composite rate is increasing 9.1 percent; the energy rate is 
increasing 9 percent; and the capacity rate is increasing 10.3 percent 
from FY 2022. These unit rate calculations use forecasted energy and 
capacity values, which have been decreasing due to the ongoing drought 
in the Lower Colorado River Basin. Forecasted energy and capacity 
values may be updated when determining the final base charge and rates 
if hydrological conditions change. With the uncertainty of hydrological 
conditions, Reclamation and WAPA will work with customers to develop a 
threshold for prompt consultation should hydrological conditions worsen 
after the base charge is placed into effect.
    WAPA's proposed base charge and rates for FY 2023, which would be 
effective October 1, 2022, are preliminary and subject to change based 
on modifications to forecasts before publication of the final base 
charge and rates.

Legal Authority

    Department of Energy (DOE) procedures for public participation in 
power and transmission rate adjustments are set forth in 10 CFR part 
903. Additional requirements and procedures for promulgating the BCP 
base charge are set forth in 10 CFR part 904. WAPA's proposals to renew 
the formula rates under BCP-F11 and calculate the base charge and rates 
for FY 2023 constitute a major rate adjustment, as defined by 10 CFR 
903.2(d). In accordance with 10 CFR 903.15, 10 CFR 903.16, and 10 CFR 
904.7(e), DSW will hold public information and public comment forums 
for this rate adjustment. DSW will review and consider all timely 
public comments at the conclusion of the consultation and comment 
period and adjust the proposals as appropriate. The formula rates and 
FY 2023 base charge and rates will then be approved on a provisional 
basis.
    WAPA is establishing rates for BCP electric service in accordance 
with section 302 of the DOE Organization Act (42 U.S.C. 7152). This 
provision transferred to, and vested in, the Secretary of Energy 
certain functions of the Secretary of the Interior, along with the 
power marketing functions of Reclamation. Those functions include 
actions that specifically apply to the BCP.
    Pursuant to the BCP ESC, the renewed rate methodology under BCP-F11 
and calculated rates for FY 2023 shall become effective, provisionally, 
upon approval by the Deputy Secretary of Energy subject to final 
approval by FERC. 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-S4-2021-2, effective December 
8, 2021, the Secretary of Energy delegated to the Under Secretary for 
Science (and Energy) the authority vested in the Secretary with respect 
to WAPA. By Redelegation Order No. S4-DEL-OE1-2021-2, also effective 
December 8, 2021, the 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 ESC, 
the Assistant Secretary for Electricity will provisionally approve the 
formula rates and FY 2023 base charge and rates for BCP electric 
service, subject to final approval by FERC.

Availability of Information

    All brochures, studies, comments, letters, memorandums, or other 
documents that DSW initiates or uses to develop the proposed formula 
rates for electric service and the base charge and rates are available 
for inspection and copying at the Desert Southwest Customer Service 
Regional Office, located at 615 South 43rd Avenue, Phoenix, Arizona. 
Many of these documents and supporting information are also available 
on WAPA's website at <a href="http://www.wapa.gov/regions/DSW/Rates/Pages/boulder-canyon-rates.aspx">www.wapa.gov/regions/DSW/Rates/Pages/boulder-canyon-rates.aspx</a>.

Ratemaking Procedure Requirements

Environmental Compliance

    WAPA has determined that this proposed action fits within the 
following categorical exclusions listed in appendix B to subpart D of 
10 CFR 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.\3\ 
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="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 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).
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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 March 31, 
2022, by Tracey A. 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 April 8, 2022.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2022-07864 Filed 4-12-22; 8:45 am]
BILLING CODE 6450-01-P


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