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Notice2023-06142

Olmsted Powerplant Replacement Project-Rate Order No. WAPA-205

Primary source

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Published

March 24, 2023

Effective

May 1, 2023

Issuing agencies

Energy DepartmentWestern Area Power Administration

Abstract

The formula rate for the Colorado River Storage Project (CRSP) Management Center's (MC) Olmsted Powerplant Replacement Project (Olmsted Project) has been confirmed, approved, and placed into effect on an interim basis (Provisional Formula Rate). The new formula rate, under Rate Schedule Olmsted F-2, replaces the existing formula rate for this service, under Rate Schedule Olmsted F-1, which expires on May 6, 2023. A change was made to the definition of Formula Rate in the Rate Schedule F-2 to reflect that the Annual Revenue Requirement is multiplied by the Customer's allocation percentage. The new formula rate under Rate Schedule Olmsted F-2 is effective May 1, 2023, through April 30, 2028.

Full Text

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<title>Federal Register, Volume 88 Issue 57 (Friday, March 24, 2023)</title>
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[Federal Register Volume 88, Number 57 (Friday, March 24, 2023)]
[Notices]
[Pages 17837-17840]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-06142]

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DEPARTMENT OF ENERGY

Western Area Power Administration

Olmsted Powerplant Replacement Project--Rate Order No. WAPA-205

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of rate order concerning electric power service formula
rate.

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SUMMARY: The formula rate for the Colorado River Storage Project (CRSP)
Management Center's (MC) Olmsted Powerplant Replacement Project
(Olmsted Project) has been confirmed, approved, and placed into effect
on an interim basis (Provisional Formula Rate). The new formula rate,
under Rate Schedule Olmsted F-2, replaces the existing formula rate for
this service, under Rate Schedule Olmsted F-1, which expires on May 6,
2023. A change was made to the definition of Formula Rate in the Rate
Schedule F-2 to reflect that the Annual Revenue Requirement is
multiplied by the Customer's allocation percentage. The new formula
rate under Rate Schedule Olmsted F-2 is effective May 1, 2023, through
April 30, 2028.

DATES: The provisional formula rate under Rate Schedule Olmsted F-2 is
effective on the first day of the first full billing period beginning
on or after May 1, 2023, and will remain in effect through April 30,
2028, pending confirmation and approval by the Federal Energy
Regulatory Commission (FERC) on a final basis or until superseded.

FOR FURTHER INFORMATION CONTACT: Rodney Bailey, CRSP Manager, CRSP
Management Center, Western Area Power Administration, 1800 South Rio
Grande Avenue, Montrose, CO 81401, or email: <a href="http://CRSPMC-rate-adj.gov">CRSPMC-rate-adj.gov</a>, or
Thomas Hackett, Rates Manager, CRSP Management Center, Western Area
Power Administration, 801-524-5503, or email: <a href="/cdn-cgi/l/email-protection#442c25272f21303004332534256a232b32"><span class="__cf_email__" data-cfemail="2c444d4f474958586c5b4d5c4d024b435a">[email&#160;protected]</span></a>.

SUPPLEMENTARY INFORMATION: On August 30, 2018, FERC confirmed and
approved Rate Schedule F-1 under Rate Order No. WAPA-177 on a final
basis through May 6, 2023.\1\ This schedule applies to the Olmsted
Project electric power service. Western Area Power Administration
(WAPA) published a Federal Register notice (Proposed FRN) on November
10, 2022 (87 FR 67894), proposing no changes to the existing formula
rate under Rate Order WAPA-177, but establishing a new rate period for
the formula Rate Schedule Olmsted

[[Page 17838]]

F-2. The Proposed FRN also initiated a 30-day public consultation and
comment period on the new rate schedule.
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\1\ Order Confirming and Approving Rate Schedule on a Final
Basis, FERC Docket No. EF18-4-000, 164 FERC ] 62,116 (2018).
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Legal Authority

By Delegation Order No. S1-DEL-RATES-2016, 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 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-S3-2022-2, effective June 13, 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 Infrastructure.
By Redelegation Order No. S3-DEL-WAPA1-2022, effective June 13, 2022,
the Under Secretary for Infrastructure further redelegated the
authority to confirm, approve, and place such rates into effect on an
interim basis to WAPA's Administrator. This rate action is issued under
Redelegation Order No. S3-DEL-WAPA1-2022 and Department of Energy
procedures for public participation in rate adjustments set forth at 10
CFR part 903.\2\
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\2\ 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
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Following a review of CRSP MC's proposal, Rate Order No. WAPA-205,
which provides the formula rate for the Olmsted Powerplant Replacement
Project, is hereby confirmed, approved, and placed into effect on an
interim basis. WAPA will submit Rate Order No. WAPA-205 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 Olmsted
Powerplant Replacement Project, Electric Power Service Formula Rate
Rate Order No. WAPA-205

Order Confirming, Approving, and Placing the Formula Rate for the
Olmsted Powerplant Replacement Project Into Effect on an Interim Basis

The formula rate in Rate Order No. WAPA-205 is 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
involved.
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By Delegation Order No. S1-DEL-RATES-2016, effective November 19,
2016, the Secretary of Energy delegated: (1) the authority to develop
power and transmission rates to the Western Area Power Administration
(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, and place into
effect on a final basis, or to remand or disapprove such rates, to the
Federal Energy Regulatory Commission (FERC). By Delegation Order No.
S1-DEL-S3-2022-2, effective June 13, 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 Infrastructure.
By Redelegation Order No.S3-DEL-WAPA1-2022, effective June 13, 2022,
the Under Secretary for Infrastructure further redelegated the
authority to confirm, approve, and place such rates into effect on an
interim basis to WAPA's Administrator. This rate action is issued under
Redelegation Order No. S3-DEL-WAPA1-2022 and DOE procedures for public
participation in rate adjustments set forth at 10 CFR part 903.\2\
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\2\ 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, the following acronyms, terms, and
definitions apply:
Allocation: A portion of the Olmsted Project assigned to a
particular customer.
Capital Repayment: The total amount of principal and interest
applied to repay capital projects.
Customer: An entity with a contract receiving an allocation of the
Olmsted Project generation.
Customer Rate Brochure: A document prepared for public distribution
explaining the rationale and background for the information contained
in this rate order.
Energy: Measured in terms of the work it can do over time. Electric
energy is expressed in kilowatt-hours or megawatt-hours.
FY: WAPA's fiscal year; October 1 to September 30.
Installments: Annual Revenue Requirement billed to customers in 12
equal monthly amounts.
Marketable Energy: The generation made available for sale.
NEPA: National Environmental Policy Act of 1969, as amended.
O&M: Operation and maintenance expenses.
OM&R: Operation, maintenance, and replacement expenses.
Order RA 6120.2: DOE Order outlining the power marketing
administration financial reporting and rate-making procedures.
Power: Energy (there is no capacity for Olmsted as it is an Energy
only project).
Power Repayment Study (PRS): Defined in Order RA 6120.2 as a study
portraying the annual repayment of power production and transmission
costs of a power system through the application of revenues over the
repayment period of the power system. The study shows, among other
items, estimated revenues and expenses, year by year, over the
remainder of the power system's repayment period (based upon conditions
prevailing over the cost evaluation period), the estimated amount of
Federal investment amortized during each year, and the total estimated
amount of Federal investment remaining to be amortized.
Provisional Formula Rate: A formula rate confirmed, approved, and
placed into effect on an interim basis by the Secretary or his/her
designee.
Revenue Requirement: The revenue required by the PRS to recover
annual expenses (such as operation and maintenance, interest, and
deferred expenses) and repay Federal investments and other assigned
costs.

Effective Date

The Provisional Formula Rate Schedule Olmsted F-2 will take effect
on the first day of the first full billing period beginning on or after
May 1, 2023, and will remain in effect through April 30, 2028, pending
approval by FERC on a final basis or until superseded.

Public Notice and Comment

CRSP MC followed the Procedures for Public Participation in Power
and Transmission Rate Adjustments and Extensions, 10 CFR part 903, in
developing this formula rate. The steps CRSP MC took to involve
interested parties in the rate process included:
1. On November 10, 2022, a Federal Register notice (87 FR 67894)
(Proposed FRN) announced the proposed formula rate and launched a 30-
day public consultation and comment period.
2. On November 10, 2022, CRSP MC notified Customers and interested
parties of the proposed rate and

[[Page 17839]]

provided a copy of the published Proposed FRN.
3. CRSP MC provided a website that contained all dates, letters,
presentations, the FRN, a Customer Rate Brochure, and other information
about this rate process. The website is located at <a href="http://www.wapa.gov/regions/CRSP/rates/Pages/rate-order-205.aspx">www.wapa.gov/regions/CRSP/rates/Pages/rate-order-205.aspx</a>.
4. The 30-day consultation and comment period ended on December 12,
2022. CRSP MC received no oral or written comments.

Power Repayment Study--Electric Power Service Formula Rate

CRSP MC prepares a PRS each FY to determine if revenues will be
sufficient to repay, within the required time, all costs assigned to
the Olmsted Project. Repayment criteria are based on applicable laws,
legislation, and policies, including Order RA 6120.2. To meet the Cost
Recovery Criteria outlined in Order RA 6120.2, CRSP MC developed a
formula rate to demonstrate that sufficient revenues will be collected
under the Provisional Formula Rate to meet future obligations.
A change was made to the definition of Formula Rate in the Rate
Schedule F-2 to reflect that the Annual Revenue Requirement is
multiplied by the Customer's allocation percentage. Each customer will
continue to be billed for its proportional share of the Olmsted Project
Revenue Requirement. The Revenue Requirement is calculated every FY and
is payable in 12 monthly Installments. CRSP MC will forecast Olmsted
Project FY expenses by preparing a PRS, which will include estimates of
future OM&R, associated interest expenses, and other assigned costs.
This repayment schedule does not depend on the energy made available
for sale or the year's generation amount. The amount of each monthly
installment is established in advance and submitted to the Customers on
or before August 31 of the year preceding the appropriate FY. Customers
are to pay reimbursable investment and the OM&R of the Olmsted Project
and, in return, will receive all marketable Energy produced.
CRSP MC will calculate the revenue requirement based on two years
of data. The calculation also includes an adjustment. The adjustment is
the surplus or deficit in the last historic year when actual costs and
repayment obligations are subtracted from revenues. This surplus or
deficit is combined with the projected revenue requirement year costs
to arrive at the annual revenue requirement. Each customer's annual
installment pays the annual amortized portion of the United States'
investment in the Olmsted Project with interest and the associated
OM&R.
To date, all investments not currently in progress (or in progress
and not yet complete), are accounted for as Construction in Progress
costs and have not been transferred to plant accounts for
capitalization. Once transferred, an amortization schedule will be
calculated for repayment. Historical financial data is available
through FY 2021. Current projections are based on the FY 2024
Reclamation and WAPA work plans received in February 2022, as indicated
in Table 1. WAPA will update these projections on the website as data
becomes available.

Table 1--Actual & Projected Investment and O&M, and Capital Repayment
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FY 2022 2023 2024 2025 2026 2027
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Capital Repayment....................................... $385,144 $408,263 $408,973 $408,898 $408,821 $408,742
CUWCD Olmsted O&M....................................... 709,657 1,029,299 1,017,876 483,559 562,421 543,187
USBR O&M................................................ 27,500 10,000 27,500 27,500 10,000 10,000
WAPA O&M................................................ 17,357 19,177 19,560 19,951 20,350 20,757
Provo Facility Use...................................... 118,841 118,841 118,841 118,841 118,841 118,841
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FY Totals........................................... 1,258,498 1,585,580 1,575,250 1,058,749 1,120,434 1,101,527
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The FY 2023 annual revenue requirement includes all projected FY
2023 OM&R requiring repayment through FY 2023. Annual installments are
established in advance by WAPA and submitted to the Olmsted Project
customers on August 31, before the new FY. The FY 2024 annual
installment will include all actual OM&R requiring repayment from the
FY 2022 final financial data, the projected FY 2025 OM&R work plan, and
amortized payments on capital investments plus interest. Subsequent
annual installment updates will use updated financial data from
appropriate conforming years.

Comments

CRSP MC received no oral or written comments during the public
consultation and comment period.

Certification of Rates

I have certified that the Provisional Formula Rate for the Olmsted
Project electric power service under Rate Schedule Olmsted F-2 is the
lowest possible rate, consistent with sound business principles. The
Provisional Formula Rate was developed following administrative
policies and applicable laws.

Availability of Information

Information about this rate adjustment, including the Customer Rate
Brochure, PRSs, comments, letters, memorandums, and other supporting
materials used to develop the Provisional Formula Rate, is available
for inspection and copying at the CRSP MC Regional 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/rate-order-205.aspx">www.wapa.gov/regions/CRSP/rates/Pages/rate-order-205.aspx</a>.

Ratemaking Procedure Requirements

Environmental Compliance

WAPA has determined that this 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). Categorically
excluded projects and activities do not require the preparation of
either an environmental impact statement or an environmental
assessment.\3\ A copy of the categorical exclusion determination is
available on WAPA's website at <a href="http://www.wapa.gov/regions/CRSP/rates/Pages/rate-order-205.aspx">www.wapa.gov/regions/CRSP/rates/Pages/rate-order-205.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.

[[Page 17840]]

Submission to the Federal Energy Regulatory Commission

The Provisional Formula Rate is 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-205. The rate will remain in effect on an interim
basis until: (1) FERC confirms and approves it on a final basis; (2) a
subsequent rate is confirmed and approved; or (3) such rate is
superseded.

Signing Authority

This document of the Department of Energy was signed on March 14,
2023, 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 Office of the Federal Register requirements, 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 March 21, 2023.
Treena V. Garrett
Federal Register Liaison Officer, U.S. Department of Energy.

Rate Schedule Olmsted F-2
(Supersedes Rate Schedule F-1)

United States Department of Energy

Western Area Power Administration

Colorado River Storage Project Management Center

Olmsted Powerplant Replacement Project

Electric Power Service

(Approved Under Rate Order No. WAPA-205)

Effective
The first day of the first, full billing period beginning on or
after May 1, 2023, and extending through April 30, 2028, or until
superseded by another rate schedule, whichever occurs earlier.
Available
Within the marketing area served by the Colorado River Storage
Project; parts of Northern Utah.
Applicable
To the sale of total plant generation to all customers with an
Olmsted Project allocation.
Character
Alternating current, 60 hertz, three-phase, delivered and metered
at the voltages and points established by contract.
Formula Rate
Annual Revenue Requirement (Projected Operations, Maintenance, and
Replacement Costs + Projected Interest + Projected Principal Payments
<plus-minus> True-Up Adjustment) x Customer's Allocation Percentage.
Adjustments
True-Up Adjustment: The surplus or deficit that occurred in the
last historic year when actual costs and repayment obligations are
subtracted from actual revenues.
Adjustment for Power Factor: The customer will be required to
maintain a power factor at all points of measurement between 95 percent
lagging and 95 percent leading.
[FR Doc. 2023-06142 Filed 3-23-23; 8:45 am]
BILLING CODE 6450-01-P

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