Boulder Canyon Project

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Published

April 19, 2024

Issuing agencies

Energy DepartmentWestern Area Power Administration

Abstract

The Desert Southwest region (DSW) of the Western Area Power Administration (WAPA) proposes an adjustment to the fiscal year (FY) 2025 base charge and rates for Boulder Canyon Project (BCP) electric service under Rate Schedule BCP-F11. The proposed FY 2025 base charge is unchanged from FY 2024 and will remain at $74.3 million. The proposed base charge and rates would go into effect on October 1, 2024, and remain in effect through September 30, 2025. Publication of this Federal Register notice will initiate the public process.

Full Text

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<title>Federal Register, Volume 89 Issue 77 (Friday, April 19, 2024)</title>
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[Federal Register Volume 89, Number 77 (Friday, April 19, 2024)]
[Notices]
[Pages 28767-28769]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-08387]

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DEPARTMENT OF ENERGY

Western Area Power Administration

Boulder Canyon Project

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of proposed fiscal year 2025 Boulder Canyon Project base
charge and rates for electric service.

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SUMMARY: The Desert Southwest region (DSW) of the Western Area Power
Administration (WAPA) proposes an adjustment to the fiscal year (FY)
2025 base charge and rates for Boulder Canyon Project (BCP) electric
service under Rate Schedule BCP-F11. The proposed FY 2025 base charge
is unchanged from FY 2024 and will remain at $74.3 million. The
proposed base charge and rates would go into effect on October 1, 2024,
and remain in effect through September 30, 2025. Publication of this
Federal Register notice will initiate the public process.

DATES: A consultation and comment period begins today and will end July
18, 2024. DSW will present a detailed explanation of the proposed FY
2025 base charge and rates at a public information forum on May 20,
2024, from 10 a.m. Mountain Standard Time to no later than 12 p.m.
Mountain Standard Time. DSW will also host a public comment forum on
June 18, 2024, from 10 a.m. Mountain Standard Time to no later than 12
p.m. Mountain

[[Page 28768]]

Standard Time, or until the last comment is received.

ADDRESSES: The public information and public comment forums will be
held virtually and in person at WAPA's Desert Southwest Regional Office
located at 615 South 43rd Avenue, Phoenix, Arizona 85009. 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/about-wapa/regions/dsw/rates/boulder-canyon-project-rates">www.wapa.gov/about-wapa/regions/dsw/rates/boulder-canyon-project-rates</a>.
DSW will accept written comments any time during the consultation and
comment period.
As access to Federal facilities is controlled, any U.S. citizen
wishing to attend a public forum at WAPA must present an official form
of picture identification (ID), such as a U.S. driver's license, U.S.
passport, U.S. Government ID, or U.S. military ID at the time of the
meeting. Foreign nationals should contact Tina Ramsey, Rates Manager,
Desert Southwest Region, Western Area Power Administration, (602) 605-
2565, or <a href="/cdn-cgi/l/email-protection#e581969295929788978ea592849584cb828a93"><span class="__cf_email__" data-cfemail="d2b6a1a5a2a5a0bfa0b992a5b3a2b3fcb5bda4">[email&#160;protected]</span></a> in advance of a forum to obtain the
necessary form for admittance to the Desert Southwest Regional Office.
Written comments and requests to be informed of Federal Energy
Regulatory Commission (FERC) actions concerning the proposed base
charge and rates should be sent to: Jack D. Murray, Regional Manager,
Desert Southwest Region, Western Area Power Administration, P.O. Box
6457, Phoenix, AZ 85005-6457, or <a href="/cdn-cgi/l/email-protection#84e0f7f3f4f3f6e9f6efc4f3e5f4e5aae3ebf2"><span class="__cf_email__" data-cfemail="88ecfbfff8fffae5fae3c8ffe9f8e9a6efe7fe">[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/about-wapa/regions/dsw/rates/boulder-canyon-project-rates">www.wapa.gov/about-wapa/regions/dsw/rates/boulder-canyon-project-rates</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#bcd8cfcbcccbced1ced7fccbddccdd92dbd3ca"><span class="__cf_email__" data-cfemail="9bffe8ecebece9f6e9f0dbecfaebfab5fcf4ed">[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) with installed
capacity of 2,078.8 megawatts (4,800 kilowatts for plant use). In
collaboration with the U.S. Bureau of Reclamation (Reclamation), WAPA
markets and delivers hydropower from the Hoover Dam power plant through
high-voltage transmission lines and substations to customers in
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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The rate-setting methodology for BCP calculates an annual base
charge rather than a unit rate for Hoover Dam hydropower. The base
charge recovers an annual revenue requirement that includes projected
costs for 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.
On March 31, 2023, FERC approved and confirmed Rate Schedule BCP-
F11, under Rate Order No. WAPA-204, on a final basis through September
30, 2027.\2\ Rate Schedule BCP-F11 and the BCP Electric Service
Contract require WAPA to determine the annual base charge and rates for
the next fiscal year before October 1 of each year. The FY 2024 BCP
base charge and rates expire on September 30, 2024.
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\2\ Order Confirming and Approving Rate Schedule on a Final
Basis, FERC Docket No. EF22-4-000.

Comparison of Base Charge and Rates
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FY 2024 FY 2025 Amount change Percent change
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Base Charge ($)........................... $74,334,285 $74,334,285 $0.00 0.0
Composite Rate (mills/kWh)................ 23.10 24.61 1.51 6.5
Energy Rate (mills/kWh)................... 11.55 12.30 0.75 6.5
Capacity Rate ($/kW-Mo)................... $2.15 $2.19 $0.04 1.9
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The proposed FY 2025 base charge for BCP electric service is
projected to remain at $74.3 million, the same as FY 2024.
Reclamation's FY 2025 budget is decreasing $700,000 from $87.9
million to $87.2 million, a 0.8 percent decrease from FY 2024.
Reflected in this budget, O&M costs are increasing $1.1 million
primarily due to higher projected labor costs for salaries, benefits,
and overhead. Several large projects are being delayed, decreasing
replacements costs by $2.2 million. Post-retirement benefits costs are
increasing $109,000 based on a higher five-year average of recent
actual expenses. Visitor services costs are increasing by $270,000
primarily due to higher projected labor costs for salaries, benefits,
overhead, and overtime. The FY 2024 budget amounts cited for
Reclamation do not include approximately $20.8 million in costs that
are funded by prior year carryover from FY 2023.
WAPA's FY 2025 budget is increasing approximately $600,000 to $10.1
million, a 5.9 percent increase from FY 2024. WAPA's O&M costs are
increasing $770,000 from FY 2024 due to higher labor projections for
salaries, overtime, overhead, and benefits. The increase in O&M costs
is offset by a $208,000 decrease in replacement costs and modest
decreases in WAPA's post-retirement benefit costs and interest expenses
due to lower 5-year averages of recent actual expenses. The FY 2024
budget amounts for WAPA do not include approximately $282,000 in costs
that are funded by prior year carryover from FY 2023.
Non-power revenue projections for Reclamation and WAPA are
decreasing $2.1 million due to lower estimated revenues for the
Commercial Use Fee program and ancillary services. Prior year carryover
is projected to be $4.1 million, a $1.9 million increase from FY 2024.
The composite and energy rate are both increasing 6.5 percent and
the capacity rate is increasing 1.9 percent from FY 2024. 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

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final base charge and rates if hydrological conditions change.
WAPA's proposed base charge and rates for FY 2025, which would be
effective October 1, 2024, are preliminary and subject to change based
on modifications to forecasts before publication of the final base
charge and rates.

Legal Authority

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.
WAPA's proposal to calculate the base charge and rates for FY 2025
constitutes 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
proposal as appropriate.
DOE regulations governing charges for the sale of BCP power, 10 CFR
904.7(e), require annual review of the BCP base charge and an
``adjust[ment], either upward or downward, when necessary and
administratively feasible, to assure sufficient revenues to effect
payment of all costs and financial obligations associated with the
[p]roject.'' This proposal is issued pursuant to Delegation Order No.
S1-DEL-RATES-2016, effective November 19, 2016, in which the Secretary
of Energy delegated the authority to develop power and transmission
rates to WAPA's Administrator. The BCP Electric Service Contract states
that for years other than the first year and each fifth year
thereafter, when the rate schedule is approved by the Deputy Secretary
of Energy on a provisional basis and by FERC on a final basis,
adjustments to the base charge ``shall become effective upon approval
by the Deputy Secretary of Energy.'' Accordingly, the Deputy Secretary
of Energy would approve the final FY 2025 base charge and rates for BCP
electric service, as authorized by the BCP Electric Service Contract
and DOE's procedures for public participation in rate adjustments set
forth at 10 CFR parts 903 and 904.\3\ The FY 2025 base charge will also
be filed at FERC for informational purposes only.
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\3\ 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
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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 Regional Office,
located at 615 South 43rd Avenue, Phoenix, Arizona. Many of these
documents and supporting information are also available on DSW's
website at: <a href="http://www.wapa.gov/about-wapa/regions/dsw/rates/boulder-canyon-project-rates">www.wapa.gov/about-wapa/regions/dsw/rates/boulder-canyon-project-rates</a>.

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.\4\
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\4\ In compliance with the National Environmental Policy Act of
1969 (NEPA), 42 U.S.C. 4321 et seq., 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 April 12,
2024, by Tracey A. LeBeau, Administrator, Western Area Power
Administration, pursuant to delegated authority from the Secretary of
Energy. The 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 16, 2024.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2024-08387 Filed 4-18-24; 8:45 am]
BILLING CODE 6450-01-P

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