Notice2024-26932
Loveland Area Projects-Rate Order No. WAPA-212
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 20, 2024
Effective
January 1, 2025
Issuing agencies
Energy DepartmentWestern Area Power Administration
Abstract
The formula rates for the Rocky Mountain (RM) region's Loveland Area Projects (LAP) firm electric service and sale of surplus products have been confirmed, approved, and placed into effect on an interim basis (Provisional Formula Rates). LAP consists of the Fryingpan-Arkansas Project (Fry-Ark) and the Pick-Sloan Missouri Basin Program (P-SMBP)--Western Division, which were integrated for marketing and ratemaking purposes in 1989. These new formula rates replace the existing formula rates for these services under Rate Schedules L-F12, Firm Electric Service; and L-M3, Sale of Surplus Products, which expire on December 31, 2027. The LAP firm electric service composite rate is increasing over a 2-year period with an 8.8 percent increase on January 1, 2025, and an additional 8.2 percent increase on January 1, 2026. There are no changes to the formula rate for sale of surplus products.
Full Text
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<title>Federal Register, Volume 89 Issue 224 (Wednesday, November 20, 2024)</title>
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[Federal Register Volume 89, Number 224 (Wednesday, November 20, 2024)]
[Notices]
[Pages 91723-91731]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-26932]
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DEPARTMENT OF ENERGY
Western Area Power Administration
Loveland Area Projects--Rate Order No. WAPA-212
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of rate.
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SUMMARY: The formula rates for the Rocky Mountain (RM) region's
Loveland Area Projects (LAP) firm electric service and sale of surplus
products have been confirmed, approved, and placed into effect on an
interim basis (Provisional Formula Rates). LAP consists of the
Fryingpan-Arkansas Project (Fry-Ark) and the Pick-Sloan Missouri Basin
Program (P-SMBP)--Western Division, which were integrated for marketing
and ratemaking purposes in 1989. These new formula rates replace the
existing formula rates for these services under Rate Schedules L-F12,
Firm Electric Service; and L-M3, Sale of Surplus Products, which expire
on December 31, 2027. The LAP firm electric service composite rate is
increasing over a 2-year period with an 8.8 percent increase on January
1, 2025, and an additional 8.2 percent increase on January 1, 2026.
There are no changes to the formula rate for sale of surplus products.
[[Page 91724]]
DATES: The Provisional Formula Rates under Rate Schedules L-F13, Firm
Electric Service; and L-M4, Sale of Surplus Products, are effective on
the first day of the first full billing period beginning on or after
January 1, 2025, and will remain in effect through December 31, 2029,
pending confirmation and approval by the Federal Energy Regulatory
Commission (FERC) on a final basis or until superseded.
FOR FURTHER INFORMATION CONTACT: 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#e08c81908689928d81848aa097819081ce878f96"><span class="__cf_email__" data-cfemail="375b5647515e455a56535d774056475619505841">[email protected]</span></a>, or Sheila D. Cook, Rates Manager, Rocky Mountain
Region, Western Area Power Administration, (970) 685-9562, or email:
<a href="/cdn-cgi/l/email-protection#97e4f4f8f8fcd7e0f6e7f6b9f0f8e1"><span class="__cf_email__" data-cfemail="87f4e4e8e8ecc7f0e6f7e6a9e0e8f1">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: On September 12, 2023, FERC confirmed and
approved Rate Schedules L-F12 and L-M3 under Rate Order No. WAPA-202 on
a final basis through December 31, 2027.\1\ Western Area Power
Administration (WAPA) published a Federal Register notice (Proposed
FRN) on June 28, 2024 (89 FR 53992), proposing adjustments to increase
the base component and decrease the drought adder component of the LAP
firm electric service rate using a two-step rate adjustment where
roughly 50 percent of the total increase is being applied in step 1
(January 2025) and the remaining 50 percent is being applied in step 2
(January 2026), and to put new 5-year rate schedules in place. The
Proposed FRN also initiated a 60-day public consultation and comment
period and set forth the dates and locations of the virtual public
information and public comment forums.
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\1\ Order Confirming and Approving Rate Schedules on a Final
Basis, FERC Docket No. EF23-1-000 (2023).
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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-S3-2024, effective August 30, 2024, 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-WAPA1-2023, effective April 10, 2023,
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-WAPA1-2023 and Department of Energy
procedures for public participation in rate adjustments set forth in 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 review of RM's proposal, Rate Order No. WAPA-212, which
provides the formula rates for LAP firm electric service and sale of
surplus products, is hereby confirmed, approved, and placed into effect
on an interim basis. WAPA will submit Rate Order No. WAPA-212 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, Rocky Mountain
Region, Rate Adjustment for the Loveland Area Projects, Firm Electric
Service and Sale of Surplus Products, Formula Rates, Rate Order No.
WAPA-212
Order Confirming, Approving, and Placing the Formula Rates for the
Loveland Area Projects Into Effect on an Interim Basis
The formula rates in Rate Order No. WAPA-212 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 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. 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-S3-2024, effective August 30, 2024, 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-WAPA1-2023, effective April 10, 2023,
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-WAPA1-2023 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:
Base: A component of the firm electric service rate design that is
a fixed revenue requirement that includes operation and maintenance
expenses (O&M), investments and replacements, interest on investments
and replacements, normal timing power purchases, and transmission
costs.
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 of the Contract Rate of Delivery or CROD.
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 (mills/kWh) and used only for comparison
purposes.
Corps of Engineers Annual Operating Plan (AOP): The United States
Army Corps of Engineers (USACE) water management guidelines designed to
meet the reservoir regulation objectives.
Customer: An entity with a contract that is receiving Loveland Area
Projects (LAP) firm electric service from WAPA.
Customer Rate Brochure: A document prepared for public distribution
explaining the rationale and background for the information contained
in the Proposed FRN and in this rate order.
[[Page 91725]]
Deficit(s): Deferred or unrecovered annual and/or interest
expenses.
Drought Adder: A component of the firm electric service rate design
that is a formula-based revenue requirement that includes future power
purchases above normal timing power purchases, previous purchase power
drought-related Deficits, and interest on the purchase power drought-
related Deficits.
Energy: Measured in terms of the work it is capable of doing over a
period of time. Electric energy is expressed in kilowatt-hours (kWh) or
megawatt-hours (MWh).
Energy Charge: The charge under the rate schedule for energy. It is
expressed in mills per kilowatt-hour and applied to each kilowatt-hour
delivered to each Customer.
Firm: Power intended to be available at all times during the period
covered by a guaranteed commitment to deliver, even under adverse
conditions.
FRN: Federal Register Notice--a document published in the Federal
Register in order for WAPA to provide information of public interest.
FY: WAPA's fiscal year; October 1 to September 30.
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.
kW-month: Kilowatt-month--the electrical unit of the monthly amount
of capacity.
mills/kWh: Mills per kilowatt-hour--the unit of charge for energy
(equal to one tenth of a cent or one thousandth of a dollar).
Microsoft Teams: Microsoft Teams is an online secure invite-only
meeting platform used by WAPA. The general website is
<a href="http://www.microsoft.com/en-us/microsoft-teams/group-chat-software">www.microsoft.com/en-us/microsoft-teams/group-chat-software</a>.
NEPA: National Environmental Policy Act of 1969, as amended.
Non-timing Power Purchases: Power purchases related to drought
conditions, not related to operational constraints.
Normal Timing Power Purchases: Power purchases related to
operational constraints (e.g., management of endangered species
habitat, water quality, navigation, balancing authority purposes,
market events, etc.), not associated with drought conditions.
O&M: Operation and maintenance expenses.
Order RA 6120.2: DOE Order outlining Power Marketing Administration
financial reporting and rate-making procedures.
Power: Capacity and energy.
Power Factor: The ratio of real to apparent power at any given
point and time in an electrical circuit. Generally, it is expressed as
a percentage.
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.
Preference: The provisions of Reclamation Law that require WAPA to
first make Federal Power available to certain entities. For example,
section 9(c) of the Reclamation Project Act of 1939 (43 U.S.C. 485h(c))
states that preference in the sale of Federal Power shall be given to
municipalities and other public corporations or agencies and also to
cooperatives and other nonprofit organizations financed in whole or in
part by loans made under the Rural Electrification Act of 1936.
Provisional Formula Rates: Formula rates confirmed, approved, and
placed into effect on an interim basis by the Secretary of Energy or
his/her designee.
Rate-setting PRS: The PRS used for the rate adjustment.
Regions: WAPA's Rocky Mountain (RM) region, WAPA's Upper Great
Plains (UGP) region.
Revenue Requirement: The revenue required by the PRS to recover
annual expenses (such as O&M, purchase power, transmission service
expenses, interest, and deferred expenses) and repay Federal
investments and replacements and other assigned costs.
Effective Date
The Provisional Formula Rate Schedules L-F13, Firm Electric
Service; and L-M4, Sale of Surplus Products, will take effect on the
first day of the first full billing period beginning on or after
January 1, 2025, and will remain in effect through December 31, 2029,
pending approval by FERC on a final basis or until superseded.
Public Notice and Comment
RM followed the Procedures for Public Participation in Power and
Transmission Rate Adjustments and Extensions, 10 CFR part 903, in
developing these formula rates. RM took the following steps to involve
interested parties in the rate process:
1. On June 28, 2024, a Federal Register notice (89 FR 53992)
(Proposed FRN) announced the proposed formula rates and initiated a 60-
day public consultation and comment period.
2. On July 1, 2024, RM notified Preference Customers and interested
parties of the proposed rates and provided a copy of the published
Proposed FRN.
3. On August 7, 2024, RM held a public information forum via
Microsoft Teams. RM's representatives explained the proposed formula
rates, answered questions, and gave notice that more information was
available in the Customer Rate Brochure.
4. On August 7, 2024, RM held a public comment forum via Microsoft
Teams to provide an opportunity for Customers and other interested
parties to comment for the record.
5. RM established a public website to post information about the
rate process. The website is located at: <a href="http://www.wapa.gov/about-wapa/regions/rm/rm-rates/2025-rate-adjustment-firm-electric-service">www.wapa.gov/about-wapa/regions/rm/rm-rates/2025-rate-adjustment-firm-electric-service</a>.
6. During the 60-day consultation and comment period, which ended
on August 27, 2024, RM received three oral comment submissions and one
written comment letter. The comments and RM's responses are addressed
in the ``Comments'' section. All comments have been considered in the
preparation of this Rate Order.
Oral comments were received from the following organizations:
City of Orange City, Iowa (member utility)
Mid-West Electric Consumers Association, Colorado (customer
association)
Missouri River Energy Services, South Dakota (action agency)
Written comments were received from the following organization:
Mid-West Electric Consumers Association, Colorado (customer
association)
Power Repayment Study--Firm Electric Service Rate Discussion
PRSs are prepared each FY to determine if revenues will be
sufficient to repay, within the required time, all costs assigned to
the Pick-Sloan Missouri Basin Program (P-SMBP) and the Fryingpan-
Arkansas Project (Fry-Ark). Repayment criteria are based on applicable
laws and legislation, as well as policies including Order RA 6120.2. To
meet the Cost Recovery Criteria outlined in Order RA 6120.2, RM
developed a rate adjustment to demonstrate that sufficient revenues
will be collected under the Provisional
[[Page 91726]]
Formula Rate to meet future obligations. The Revenue Requirement of the
Fry-Ark PRS is combined with the P-SMBP--Western Division (WD) Revenue
Requirement, derived from the P-SMBP PRS, to develop one rate for LAP
firm electric service. The Revenue Requirement and composite rate for
LAP firm electric service are being increased using a two-step
adjustment, where roughly 50 percent of the total increase is being
applied in step 1 (January 2025) and the remaining 50 percent is being
applied in step 2 (January 2026), as indicated in Table 1:
Table 1--Comparison of Existing and Provisional Revenue Requirements and Composite Rate
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Provisional Provisional
Existing under under L-F13 under L-F13
LAP firm electric service L-F12 as of first step as First step second step as Second step
Jan. 1, 2023 of Jan. 1, percent change of Jan. 1, percent change
2025 2026
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Total Revenue Requirement \1\ $74.6 $81.3 9.0 $87.9 8.1
(in million $).................
Pick-Sloan--WD \1\ \2\.......... $58.5 $62.6 7.0 $66.3 5.9
Fry-Ark......................... $16.1 $18.7 16.1 $21.6 15.5
(in million $)..................
LAP Composite Rate \1\ (mills/ 36.61 39.84 8.8 43.10 8.2
kWh)...........................
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\1\ Provisional values are estimates only based on using set/final Base and estimated Drought Adder components.
\2\ Additional information on the overall P-SMBP PRS and charge components can be found in Rate Order No. WAPA-
213 and on the UGP's website at: <a href="http://www.wapa.gov/about-wapa/regions/ugp/ugp-rates/2025-firm-rate-adjustment">www.wapa.gov/about-wapa/regions/ugp/ugp-rates/2025-firm-rate-adjustment</a>.
Firm Electric Service--Existing and Provisional Formula Rates
Under the existing and provisional rate methodology, rates for LAP
firm electric service are designed to recover an annual Revenue
Requirement that includes investment and replacement repayment
(including aid to irrigation), interest, purchase power, O&M, and other
expenses within the allowable period. The annual Revenue Requirement
continues to be allocated equally between capacity and energy.
Base and Drought Adder Components
As a part of the existing and provisional rate schedule, RM
provides for a formula-based adjustment of the Drought Adder component,
with an annual increase of up to 2mills/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 1-year cycle. The Drought Adder
component may be adjusted downward by any amount. Continuing to
identify the firm electric service Revenue Requirement using Base and
Drought Adder components will assist the Regions in presenting the
future impacts of droughts, demonstrate repayment of drought-related
costs in the PRSs, and allow the Regions to be more responsive to
changes caused by drought-related expenses. RM 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.
Under Rate Schedule L-F13, RM will continue to identify its LAP
firm electric service Revenue Requirement using Base and Drought Adder
components. The Base component is a fixed Revenue Requirement from each
PRS that includes annual O&M, investment and replacement repayment, and
associated interest, Normal Timing Power Purchases, and transmission
costs. RM cannot adjust the Base component without a public process.
The Drought Adder component is a formula-based Revenue Requirement from
each PRS that includes costs attributable to drought conditions in the
Regions. The Drought Adder component includes costs associated with
future Non-timing Power Purchases to meet firm electric service
contractual obligations not covered with available system generation
due to a drought, previously incurred Deficits due to purchased power
debt that resulted from Non-timing Power Purchases made during a
drought, and the interest associated with drought-related Deficits. The
Drought Adder component is designed to repay drought-related Deficits
within 10 years from the time the Deficit was incurred, using balloon-
payment methodology. For example, a drought-related Deficit incurred in
FY2024 would be repaid by FY2034.
The annual Revenue Requirement calculation will continue to be
summarized by the following formula: Annual Revenue Requirement = Base
Revenue Requirement + Drought Adder Revenue Requirement.
Annual Drought Adder Adjustment Process
RM reviews the inputs for the P-SMBP and Fry-Ark PRS Base and
Drought Adder components after the annual PRSs are complete, generally
in the first quarter of the calendar year. If an adjustment to the LAP
Base component is necessary, or if an incremental upward adjustment to
the LAP Drought Adder component greater than the equivalent of 2 mills/
kWh to the LAP Rate is necessary, RM will initiate a public process
pursuant to 10 CFR part 903 prior to making an adjustment.
In accordance with the approved annual Drought Adder adjustment
process, the PRS Drought Adder components are reviewed annually in
early summer to determine if drought costs differ from those projected
in the PRSs. In October, RM will determine if a change to the LAP
Drought Adder component is necessary, either incremental or
decremental. Any incremental adjustment to the Drought Adder component,
up to 2mills/kWh, or any decremental adjustment will be implemented in
the following January billing cycle. Although decremental adjustments
to the Drought Adder component will occur as drought costs are repaid,
the adjustments cannot result in a negative Drought Adder component.
Implementing the Drought Adder component adjustment on January 1 of
each year will help keep the drought-related Deficits from escalating
as quickly, will lower the interest expense due to drought-related
Deficits, will demonstrate responsible Deficit management, and will
provide prompt drought-related Deficit repayments.
Revenue Requirement Changes
The Base component costs for the P-SMBP PRS have increased
primarily due to increased O&M from WAPA and the generating agencies.
The Base component costs for the Fry-Ark PRS have increased primarily
due to
[[Page 91727]]
increased annual expenses, mainly attributed to transmission purchases
and O&M from both WAPA and the Bureau of Reclamation and increases in
capital investment projections for the Mount Elbert Power Plant
repairs/refurbishment.
The driver behind the P-SMBP Drought Adder component decrease is
the USACE's 2024 AOP projecting less than average generation, despite
the improvement to generation as projected in the WAPA-202 January 2023
rate. Planned repayment of both the Base and Drought Adder Deficits are
in the same time frame (2027) as they were projected to be repaid under
WAPA-202. Uncertainties with water inflows, hydro generation, and
replacement energy prices continue to pose potential risks regarding
the ability to satisfy firm power contractual commitments.
The net effect of these changes to the PRS Base and Drought Adder
components results in an overall increase to the LAP rate. To implement
the required rate increase over a two-year period/in two steps, the
Base component Revenue Requirements and associated charges for each
step are set values. For the Drought Adder component, RM is using
estimated Revenue Requirements and associated charges for each step
based on the USACE's 2024 AOP and drought costs projected in the Rate-
Setting PRSs. In accordance with the approved annual Drought Adder
adjustment process, these Drought Adder estimates are subject to change
based upon updated AOPs/generation models and revised drought costs. A
comparison of the existing and provisional charge component Revenue
Requirements for firm electric service are shown in Table 2:
Table 2--Comparison of Existing and Provisional Charge Component Revenue Requirements
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Provisional Provisional
Existing under under L-F13 under L-F13
L-F12 as of first step as First step second step as Second step
LAP firm electric service Jan.1, 2023 of Jan. 1, percent change of Jan. 1, percent change
(in million $) 2025 (in 2026 (in
million $) million $)
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Base Component.................. $67.8 $76.4 12.7 $85.1 11.4
Pick-Sloan--WD \1\.............. 51.7 57.7 11.6 63.5 10.1
Fry--Ark........................ 16.1 18.7 16.1 21.6 15.5
Drought Adder Component \2\..... 6.8 4.9 -27.9 2.8 -42.9
Pick-Sloan--WD \1\ \2\.......... 6.8 4.9 -27.9 2.8 -42.9
Fry--Ark \2\.................... 0.0 0.0 0.0 0.0 0.0
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\1\ Additional information on the overall P-SMBP PRS and charge components can be found in Rate Order No.WAPA-
213 and on UGP's website at: <a href="http://www.wapa.gov/about-wapa/regions/ugp/ugp-rates/2025-firm-rate-adjustment">www.wapa.gov/about-wapa/regions/ugp/ugp-rates/2025-firm-rate-adjustment</a>.
\2\ Provisional values are estimates that may change during the existing annual Drought Adder adjustment
process.
A summary of the provisional charge components is shown in Table 3:
Table 3--Summary of Two-Step Provisional Charge Components
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Provisional charges under rate Provisional charges under rate
schedule L-F13 first step as of Jan. schedule L-F13 second step as of Jan.
1, 2025 1, 2026
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Drought Drought
Base adder Total Base adder Total
component component charge \2\ component component charge \2\
\1\ \1\
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Firm Capacity ($/kilowatt-month).. $4.91 $0.31 $5.22 $5.47 $0.18 $5.65
Firm Energy (mills/kWh)........... 18.72 1.20 19.92 20.86 0.69 21.55
----------------------------------------------------------------------------------------------------------------
\1\ Provisional values are estimates that may change during the existing annual Drought Adder adjustment
process.
\2\ Provisional values are estimates only based on using final Base and estimated Drought Adder components.
Statement of Revenue and Related Expenses
The following Table 4 provides a summary of projected revenue and
expense data for the Fry-Ark firm power service Revenue Requirement
through the 5-year provisional rate approval periods:
BILLING CODE 6450-01-P
[[Page 91728]]
[GRAPHIC] [TIFF OMITTED] TN20NO24.073
BILLING CODE 6450-01-C
The summary of the P-SMBP projected revenue and expenses for the 5-
year rate-setting periods is included in the P-SMBP Statement of
Revenue and Related Expenses that is part of Rate Order No. WAPA-213.
Sale of Surplus Products Rate Discussion
The sale of surplus products rate schedule is formula-based,
providing for LAP Marketing Office 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. Rate Schedule L-M3 is being superseded
by the Provisional Rate Schedule L-M4 and continues to allow for the
sale of energy, frequency response, regulation, and reserves.
Comments
RM received four separate oral and/or written comments during the
public consultation and comment period. The comments expressed have
been paraphrased and/or combined, where appropriate, without
compromising the meaning of the comments.
A. Comment: The customer association, member utility, and action
agency commented that they understand a rate increase is necessary due
to inflation on O&M and labor costs, along with increased debt
principal costs and they support and appreciate the increase being
implemented in two steps rather than one large increase.
Response: WAPA appreciates the recognition of the impacts many
entities are facing due to increasing inflation and labor costs, the
specific costs of the power repayment study, and the two-step
implementation for the rate adjustment.
B. Comment: The customer association and the action agency
commented that they have a concern with the addition of new Full-Time
Employees (FTE) when many positions within WAPA remain unfilled. The
customers encourage WAPA to evaluate its internal processes for cost
control, seeking efficiencies in workflow and staffing.
Response: WAPA understands the concern raised with the addition of
new FTEs and the impacts of the FTEs to the rate. WAPA is committed to
finding ways to limit cost increases impacting its customers while
still ensuring it has the positions needed to fulfill its mission.
C. Comment: The action agency commented that they lack an
understanding of any compromises made within the budgeting process to
meet the WAPA Administrator's guidance stating tradeoffs need to be
made. The action agency also stated they believe that this guidance
could have been followed as an element of cost control.
Response: WAPA appreciates the comment regarding the need for
better cost control and that compromises in the budgeting process may
be necessary
[[Page 91729]]
to accomplish this effort. WAPA is committed to looking for ways to
control its costs and will continue to communicate its funding
priorities to its customers.
D. Comment: The action agency and the customer association
commented that they have concerns about the long-term viability of the
P-SMBP going forward as it faces significant financial and operational
issues in the future including: (1) USACE's plan of rehabilitation of
the Missouri River; (2) dam safety repairs; (3) Aid to Irrigation
payments coming due; and (4) environmental impact issues from non-
supporting stakeholders. They also expressed their concern that these
issues could result in significant future rate impacts to the firm
power customers and that WAPA needs to focus on cost control in the
future.
Response: WAPA appreciates the concerns regarding the long-term
stability and affordability of the P-SMBP beyond the 5-year rate
window. WAPA is committed to continuing to focus on the impact of
rising costs and to mitigate those costs when possible.
E. Comment: The customer organization commented that they
appreciate WAPA engaging with the customers early in the ratemaking
process, responding to Customer concerns and questions. The customer
organization also commented that they encourage WAPA leadership to
support their rates and finance teams who have long-standing working
relationships with the customers.
Response: WAPA appreciates the comment regarding WAPA's commitment
to engaging with the Customers on issues concerning the firm power
rate.
Certification of Rates
I have certified that the Provisional Formula Rates for LAP firm
electric service under Rate Schedule L-F13 and LAP sale of surplus
products under Rate Schedule L-M4 are the lowest possible rates,
consistent with sound business principles. The Provisional Formula
Rates were developed following administrative policies and applicable
laws.
Availability of Information
Information used by RM to develop the Provisional Formula Rates is
available for inspection and copying at the Rocky Mountain Regional
Office, 5555 East Crossroads Boulevard, Loveland, Colorado. Many of
these documents are also available on RM's Rates website at:
<a href="http://www.wapa.gov/about-wapa/regions/rm/rm-rates/2025-rate-adjustment-firm-electric-service">www.wapa.gov/about-wapa/regions/rm/rm-rates/2025-rate-adjustment-firm-electric-service</a>.
Ratemaking Procedure Requirements
Environmental Compliance
WAPA has determined that this action fits within the following
categorical exclusion listed in appendix B to subpart D of 10 CFR part
1021: B4.3 (Electric power marketing rate changes).\3\ Categorically
excluded projects and activities do not require preparation of either
an environmental impact statement or an environmental assessment. A
copy of the categorical exclusion determination is available on WAPA's
Rates website at: <a href="http://www.wapa.gov/wp-content/uploads/2024/10/2025-001-Proposed-Loveland-area-FY25-Rate-adjustment-CX.pdf">www.wapa.gov/wp-content/uploads/2024/10/2025-001-Proposed-Loveland-area-FY25-Rate-adjustment-CX.pdf</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).
---------------------------------------------------------------------------
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 Formula Rates 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-212. 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 November
12, 2024, 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 November 14, 2024.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
Rate Schedule L-F13
(Supersedes Rate Schedule L-F12 Effective January 1, 2023)
United States Department of Energy
Western Area Power Administration
Rocky Mountain Region
Loveland Area Projects
Firm Electric Service
(Approved Under Rate Order No. WAPA-212)
Effective
First Step: Beginning on the first day of the first full billing
period beginning on or after January 1, 2025, through December 31,
2025.
Second Step: Beginning on January 1, 2026, and extending through
December 31, 2029, or until superseded by another rate schedule,
whichever occurs earlier.
Available
Within the marketing area served by the Loveland Area Projects
(LAP) (consisting of the Fryingpan-Arkansas Project and the Pick-Sloan
Missouri Basin Program--Western Division, which were integrated for
marketing and rate-making purposes in 1989), parts of Colorado, Kansas,
Nebraska, and Wyoming.
Applicable
To the LAP firm electric service delivered at specific point(s) of
delivery, as established by contract.
Character
Alternating current, 60 hertz, three phase, delivered and metered
at the voltages and points established by contract.
Formula Rate and Charge Components
LAP Firm Electric Service Rate (Rate) = Base component + Drought Adder
component:
[[Page 91730]]
----------------------------------------------------------------------------------------------------------------
First step January 1, 2025 monthly Second step January 1, 2026 monthly
charges charges
-----------------------------------------------------------------------------
Drought
Base Drought Total Base adder Total
component adder charge component component charge \2\
component \1\
----------------------------------------------------------------------------------------------------------------
Capacity Charge ($/kilowatt-month $4.91 $0.31 $5.22 $5.47 $0.18 $5.65
of billing capacity \3\).........
Energy Charge (mills/kWh of 18.72 1.20 19.92 20.86 0.69 21.55
monthly entitlement).............
----------------------------------------------------------------------------------------------------------------
\1\ Values are estimates that are subject to change during the annual Drought Adder adjustment process.
\2\ Values are estimates only based on final Base and estimated Drought Adder components.
\3\ Unless otherwise specified by contract, the billing capacity will be the seasonal contract rate of delivery.
Charge Components
Base Component: A fixed revenue requirement that includes operation
and maintenance expense, investments and replacements, interest on
investments and replacements, normal timing power purchases (purchases
due to operational constraints, not associated with drought), and
transmission costs. Any proposed change to the Base component will
require a public process. The Base component revenue requirement for
the first step is $76,396,300 and for the second step is $85,126,600.
[GRAPHIC] [TIFF OMITTED] TN20NO24.074
Drought Adder Component: A formula-based revenue requirement that
includes future power purchases above normal timing power purchases,
previous purchase power drought-related deficits, and interest on the
purchase power drought-related deficits. The Drought Adder component
revenue requirement for the first step is $4,890,480 and for the second
step is estimated to be $2,803,080. The second step revenue requirement
is subject to change during the annual Drought Adder adjustment
processes starting in January 2026.
[GRAPHIC] [TIFF OMITTED] TN20NO24.075
Annual Drought Adder Adjustment Process
The Drought Adder component may be adjusted annually using the
above formulas for any costs attributed to drought of less than or
equal to the equivalent of 2 mills/kWh to the Rate. Any planned
incremental upward adjustment to the Drought Adder component greater
than the equivalent of 2 mills/kWh to the Rate will require a public
process.
The annual review process is initiated in early summer when the
Rocky Mountain (RM) region reviews the Drought Adder component and
provides notice of any estimated change to the Drought Adder component
charge under the formula. In October, RM will make a final
determination of any change to the Drought Adder component charge,
either incremental or decremental. If a Drought Adder component change
is required, a modified Drought Adder revenue requirement and the
associated charges will become effective the following January 1 and
will be identified in a Drought Adder modification update. RM will
inform customers of updates by letter and post updates to RM's external
website.
Adjustments
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 for in the contract.
For Power Factor: None. Customers will be required to maintain a
power factor within the range of 95-percent leading to 95-percent
lagging, measured at the point of interconnection.
[[Page 91731]]
Rate Schedule L-M4
(Supersedes Rate Schedule L-M3 Effective January 1, 2023)
United States Department of Energy
Western Area Power Administration
Rocky Mountain Region
Loveland Area Projects
Sale of Surplus Products
(Approved Under Rate Order No. WAPA-212)
Effective
The first day of the first full billing period beginning on or
after January 1, 2025, and extending through December 31, 2029, or
until superseded by another rate schedule, whichever occurs earlier.
Applicable
This rate schedule applies to Loveland Area Projects (LAP)
marketing and is applicable to the sale of the following LAP surplus
energy and capacity products: energy, frequency response, regulation,
and reserves. If any of the above LAP surplus products are available,
LAP can make the product(s) available for sale, providing entities
enter into separate agreement(s) with LAP Marketing Office which will
specify the terms of sale(s).
Formula Rate
The charge for each product will be determined at the time of the
sale 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.
[FR Doc. 2024-26932 Filed 11-19-24; 8:45 am]
BILLING CODE 6450-01-P
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</html>Indexed from Federal Register on November 20, 2024.
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.