Notice2022-11029
Loveland Area Projects-Rate Order No. WAPA-202
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
May 25, 2022
Issuing agencies
Energy DepartmentWestern Area Power Administration
Abstract
The Rocky Mountain Region (RMR) of the Western Area Power Administration (WAPA) proposes revised formula rates for the Loveland Area Projects (LAP) firm electric service and sale of surplus products. LAP consists of the Fryingpan-Arkansas Project (Fry-Ark) and the Pick- Sloan Missouri Basin Program (P-SMBP)--Western Division (WD), which were integrated for marketing and rate-making purposes in 1989. The existing formula rates for these services, under Rate Schedules L-F11 and L-M2, expire on December 31, 2022. RMR is proposing to update the formula rates for firm electric service under Rate Schedule L-F12 and sale of surplus products under Rate Schedule L-M3, effective January 1, 2023, through December 31, 2027.
Full Text
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<title>Federal Register, Volume 87 Issue 101 (Wednesday, May 25, 2022)</title>
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[Federal Register Volume 87, Number 101 (Wednesday, May 25, 2022)]
[Notices]
[Pages 31876-31878]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-11029]
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DEPARTMENT OF ENERGY
Western Area Power Administration
Loveland Area Projects-Rate Order No. WAPA-202
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of proposed firm electric service and sale of surplus
products formula rates.
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SUMMARY: The Rocky Mountain Region (RMR) of the Western Area Power
Administration (WAPA) proposes revised formula rates for the Loveland
Area Projects (LAP) firm electric service and sale of surplus products.
LAP consists of the Fryingpan-Arkansas Project (Fry-Ark) and the Pick-
Sloan Missouri Basin Program (P-SMBP)--Western Division (WD), which
were integrated for marketing and rate-making purposes in 1989. The
existing formula rates for these services, under Rate Schedules L-F11
and L-M2, expire on December 31, 2022. RMR is proposing to update the
formula rates for firm electric service under Rate Schedule L-F12 and
sale of surplus products under Rate Schedule L-M3, effective January 1,
2023, through December 31, 2027.
DATES: A consultation and comment period will begin May 25, 2022 and
end August 23, 2022. RMR will present a detailed explanation of the
proposed LAP formula rates and other modifications at a public
information forum that will be held on June 15, 2022, at 8:30 a.m. MDT
to no later than 10:30 a.m. MDT. RMR will host a public comment forum
on June 29, 2022, at 11:00 a.m. MDT to no later than noon MDT.
The public information forum and the public comment forum will be
conducted via WebEx. Instructions for participating in the forums will
be posted on RMR's website at least 14 days prior to the public
information and comment forums at: www.wapa.gov/regions/RM/rates/Pages/
2023-Rate-Adjustment_-Firm-Power.aspx.
RMR will accept 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 submitted by RMR to FERC for approval should be sent to:
Barton V. Barnhart, Regional Manager, Rocky Mountain Region, Western
Area Power Administration, 5555 East Crossroads Boulevard, Loveland, CO
80538-8986, or email <a href="/cdn-cgi/l/email-protection#0a666b7a6c6378676b6e604a7d6b7a6b246d657c"><span class="__cf_email__" data-cfemail="b7dbd6c7d1dec5dad6d3ddf7c0d6c7d699d0d8c1">[email protected]</span></a>. RMR will post information
about the proposed formula rates and written comments received to its
website at: www.wapa.gov/regions/RM/rates/Pages/2023-Rate-Adjustment_-
Firm-Power.aspx.
FOR FURTHER INFORMATION CONTACT: Sheila D. Cook, Rates Manager, Rocky
Mountain Region, Western Area Power Administration, 5555 East
Crossroads Boulevard, Loveland, CO 80538-8986, telephone (970) 685-9562
or email <a href="/cdn-cgi/l/email-protection#37445458585c774056475619505841"><span class="__cf_email__" data-cfemail="2251414d4d4962554352430c454d54">[email protected]</span></a> or <a href="/cdn-cgi/l/email-protection#7b171a0b1d1209161a1f113b0c1a0b1a551c140d"><span class="__cf_email__" data-cfemail="fc909d8c9a958e919d9896bc8b9d8c9dd29b938a">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: On May 24, 2018, FERC confirmed and approved
Rate Schedule L-F11 and Rate Schedule L-M2, under Rate Order No. WAPA-
179, on a final basis through December 31, 2022.\1\ These schedules
apply to firm electric service and the sale of surplus products.
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\1\ Order Confirming and Approving Rate Schedules on a Final
Basis, FERC Docket No. EF18-3-000, 163 FERC ] 62,115 (2018).
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RMR intends the proposed formula rates to go into effect January 1,
2023. The proposed formula rates would remain in effect until December
31, 2027, or until WAPA supersedes or changes the formula rates through
another public rate process pursuant to 10 CFR part 903, whichever
occurs first.
The proposed formula rates would provide sufficient revenue to
recover annual operation, maintenance, and replacement (OM&R) expenses,
interest expense, irrigation assistance, and capital repayment
requirements while ensuring repayment of the project within the cost
recovery criteria set forth in Department of Energy (DOE) Order RA
6120.2. For more information on the proposed rates, please see the
customer brochure located on RMR's website at: www.wapa.gov/regions/RM/
rates/Pages/2023-Rate-Adjustment_-Firm-Power.aspx.
[[Page 31877]]
Firm Electric Service
The P-SMBP and the Fry-Ark Fiscal Year 2021 Power Repayment Studies
(PRSs) revenue requirements and current water conditions are the
determining factors for this proposed rate adjustment.
The base component costs for the P-SMBP have increased primarily
due to: (1) Increased OM&R from WAPA and the generating agencies; (2)
increased purchase power, including during the severe winter weather
event in February 2021 (Winter Storm Uri); (3) pricing volatility; and
(4) the loss of certain balancing authority revenues for services that
WAPA no longer provides after joining the Western Energy Imbalance
Service Market. Winter Storm Uri was not a water or generation issue;
therefore, its costs only impact the base component.
The base component costs for the Fry-Ark have increased primarily
due to: (1) Increased OM&R from both WAPA and the Bureau of Reclamation
(Reclamation); (2) increased transmission and ancillary services costs;
and (3) changes in costs related to Reclamation's Mount Elbert
Rehabilitation project. Increased purchase power and price volatility
are also causing upward pressure.
The driver behind the P-SMBP drought adder component increase is
the Army Corps of Engineers Annual Operating Plan projecting less than
average generation for the next several years in the P-SMBP mainstem
dams. Uncertainties with water inflows, hydro generation, and
replacement energy prices continue to pose potential risks for meeting
firm power contractual commitments.
The net effect of these adjustments to the base and drought adder
components results in an overall increase to the LAP rate. A comparison
of the current and proposed revenue requirements is shown in Table 1:
Table 1--Summary of Current and Proposed Revenue Requirements
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Current under Proposed under
L-F11 as of L-F12 as of
Firm electric service January 1, January 1, Percent change
2018 (in 2023 (in
million $) million $)
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LAP Revenue Requirement......................................... 64.1 74.7 16.5
Pick-Sloan--WD \1\.............................................. 50.8 58.6 15.4
Fry-Ark......................................................... 13.3 16.1 21.1
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\1\ Additional information on the overall P-SMBP PRS and charge components can be found under Rate Order No.
WAPA-203 and on WAPA's Upper Great Plains Region's website at: <a href="http://www.wapa.gov/regions/UGP/Rates/Pages/2023-firm-rate-adjustment.aspx">www.wapa.gov/regions/UGP/Rates/Pages/2023-firm-rate-adjustment.aspx</a>.
Under the current rate methodology, rates for LAP firm electric
service are designed to recover an annual revenue requirement that
includes investment repayment, interest, purchase power, OM&R, and
other expenses within the allowable period. The annual revenue
requirement continues to be allocated equally between capacity and
energy.
A comparison of the current and proposed rates is shown in Table 2:
Table 2--Summary of Current and Proposed Rates
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Current under Proposed under
L-F11 as of L-F12 as of
Firm electric service January 1, January 1, Percent change
2018 2023
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LAP Composite Rate.............................................. 31.44 36.61 16.4
Firm Capacity Rate ($/kilowatt-month)........................... $4.12 $4.80 16.5
Firm Energy Rate (mills/kilowatt-hour).......................... 15.72 18.31 16.5
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As a part of the current and proposed rate schedules, RMR provides
for a formula-based adjustment of the drought adder component, with an
annual increase of up to 2 mills per kilowatt-hour (kWh) each year. The
2 mills/kWh cap places a limit on the amount the drought adder
component can be adjusted upward relative to associated drought costs
included in the drought adder formula rate for any one-year cycle.
Continuing to identify the firm electric service revenue requirement
using base and drought adder components will assist RMR in the
presentation of future impacts of droughts, demonstrate repayment of
drought-related costs in the PRSs, and allow RMR to be more responsive
to changes caused by drought-related expenses. RMR will continue to
charge and bill its customers firm electric service rates for energy
and capacity, which are the sum of the base and drought adder
components.
The proposed adjustment updates the base component with present
costs from a revenue requirement of $64.1 million to $67.8 million and
increases the drought adder component revenue requirement. For rate
year 2023 the drought adder revenue requirement increases from zero to
$6.8 million.\2\
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\2\ The exact values are $64,143,960, $67,839,200, and
$6,838,720 respectively.
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A comparison of the current and proposed components is shown in
Table 3:
[[Page 31878]]
Table 3--Summary of LAP Charge Components
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Current charges under rate Proposed charges under rate
schedule L-F11 as of January 1, schedule L-F12 as of January 1,
2018 2023
------------------------------------------------------------------------ Percent
Drought Drought change
Base adder Total Base adder Total
component component charge component component charge
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Firm Capacity ($/kilowatt- $4.12 $0 $4.12 $4.36 $0.44 $4.80 16.5
month).....................
Firm Energy (mills/kWh)..... 15.72 0 15.72 16.63 1.68 18.31 16.5
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Sale of Surplus Products
The Sale of Surplus Products rate schedule is formula-based,
providing for LAP Marketing to sell LAP surplus energy and capacity
products. If LAP surplus products are available, as specified in the
rate schedule, the charge will be based on market rates plus
administrative costs. The customer will be responsible for acquiring
transmission service necessary to deliver the product(s) for which a
separate charge may be incurred. The proposed Rate Schedule, L-M3,
continues to allow for the sale of energy, frequency response,
regulation, and reserves.
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.\3\ The proposed action is a
major rate adjustment, as defined by 10 CFR 903.2(d). In accordance
with 10 CFR 903.15(a) and 10 CFR 903.16(a), RMR will hold public
information and public comment forums for this rate adjustment. RMR
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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\3\ 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
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WAPA is establishing the formula rates for LAP in accordance with
section 302 of the DOE Organization Act (42 U.S.C. 7152).\4\
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\4\ 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 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
section 5 of the Flood Control Act of 1944 (16 U.S.C. 825s); 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-S4-2022,
effective March 14, 2022, the 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 Innovation). By
Redelegation Order No. S4-DEL-OE1-2021-2, effective December 8, 2021,
the Under Secretary for Science (and Innovation) 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 December 2021 and March 2022 delegations, remains valid.
Availability of Information
All brochures, studies, comments, letters, memorandums, or other
documents that RMR initiates or uses to develop the proposed formula
rates will be available for inspection and copying at the Rocky
Mountain Regional Office located at 5555 East Crossroads Boulevard,
Loveland, Colorado. Many of these documents and supporting information
are also available on RMR's website at: www.wapa.gov/regions/RM/rates/
Pages/2023-Rate-Adjustment_-Firm-Power.aspx.
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.\5\
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\5\ 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 May 4,
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 May 18, 2022.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2022-11029 Filed 5-24-22; 8:45 am]
BILLING CODE 6450-01-P
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