Notice2024-26933
Pick-Sloan Missouri Basin Program-Eastern Division-Rate Order No. WAPA-213
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 Upper Great Plains (UGP) region's Pick-Sloan Missouri Basin Program (P-SMBP)--Eastern Division (ED) firm power service, firm peaking power service, and sale of surplus products have been confirmed, approved, and placed into effect on an interim basis (Provisional Formula Rates). These new formula rates replace the existing formula rates for these services under Rate Schedules P-SED- F14, Firm Power Service; P-SED-FP14, Firm Peaking Power Service; and P- SED-M2, Sale of Surplus Products, which expire on December 31, 2027. The P-SMBP--ED firm power service composite rate is increasing over a 2-year period with a 7.5 percent increase on January 1, 2025, and an additional 6.2 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 91731-91739]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-26933]
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DEPARTMENT OF ENERGY
Western Area Power Administration
Pick-Sloan Missouri Basin Program--Eastern Division--Rate Order
No. WAPA-213
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of rate order.
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SUMMARY: The formula rates for the Upper Great Plains (UGP) region's
Pick-Sloan Missouri Basin Program (P-SMBP)--Eastern Division (ED) firm
power service, firm peaking power service, and sale of surplus products
have been confirmed, approved, and placed into effect on an interim
basis (Provisional Formula Rates). These new formula rates replace the
existing formula rates for these services under Rate Schedules P-SED-
F14, Firm Power Service; P-SED-FP14, Firm Peaking Power Service; and P-
SED-M2, Sale of Surplus Products, which expire on December 31, 2027.
The P-SMBP--ED firm power service composite rate is increasing over a
2-year period with a 7.5 percent increase on January 1, 2025, and an
additional 6.2 percent increase on January 1, 2026. There are no
changes to the formula rate for sale of surplus products.
DATES: The Provisional Formula Rates under Rate Schedules P-SED-F15,
Firm Power Service; P-SED-FP15, Firm Peaking Power Service; and Rate
Schedule P-SED-M3, 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: Lloyd Linke, Regional Manager, Upper
Great Plains Region, Western Area Power Administration, 2900 4th Avenue
North, 6th Floor, Billings, MT 59101-1266, or email:
<a href="/cdn-cgi/l/email-protection#d4a1b3a4b2bda6b9a6b5a0b194a3b5a4b5fab3bba2"><span class="__cf_email__" data-cfemail="d4a1b3a4b2bda6b9a6b5a0b194a3b5a4b5fab3bba2">[email protected]</span></a>, or Linda Cady-Hoffman, Rates Manager, Upper Great
Plains Region, Western Area Power Administration, (406) 255-2920, or
email: <a href="/cdn-cgi/l/email-protection#cba8aaafb28bbcaabbaae5aca4bd"><span class="__cf_email__" data-cfemail="9af9fbfee3daedfbeafbb4fdf5ec">[email protected]</span></a> or <a href="/cdn-cgi/l/email-protection#aadfcddaccc3d8c7d8cbdecfeaddcbdacb84cdc5dc"><span class="__cf_email__" data-cfemail="ef9a889f89869d829d8e9b8aaf988e9f8ec1888099">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: On June 29, 2023, FERC confirmed and
approved Formula Rate Schedules P-SED-F14, P-SED-FP14, and P-SED-M2,
under Rate Order No. WAPA-203, 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 53989),
proposing adjustments to increase the base component and decrease the
drought adder component of the P-SMBP--ED firm power service and firm
peaking power 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 Schedule on a Final
Basis, FERC Docket No. EF23-2-000 (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 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 review of UGP's proposal, Rate Order No. WAPA-213, which
provides the formula rates for the P-SMBP--ED firm power service, firm
peaking power 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-213 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, Upper Great
Plains Region, Rate Adjustment for the Pick-Sloan Missouri Basin
Program--Eastern Division, Firm Power Service, Firm Peaking Power
Service, and Sale of Surplus Products Formula Rates, Rate Order No.
WAPA-213
Order Confirming, Approving, and Placing The Formula Rates for the
Pick-Sloan Missouri Basin Program--Eastern Division into Effect on an
Interim Basis
The formula rates in Rate Order No. WAPA-213 are established
following section 302 of the Department of Energy
[[Page 91732]]
(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 power and firm peaking power 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).
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 Pick-Sloan
Missouri Basin Program--Eastern Division (P-SMBP--ED) firm power
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.
Deficit(s): Deferred or unrecovered annual and/or interest
expenses.
Demand: The rate at which electric energy is delivered to or by a
system or part of a system, generally expressed in kilowatts (kW) or
megawatts (MW), at a given instant or averaged over any designated
interval of time.
Drought Adder: A component of the firm power and firm peaking power
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,
interest,
[[Page 91733]]
and deferred expenses) and repay Federal investments and replacements
and other assigned costs.
Effective Date
The Provisional Formula Rate Schedules P-SED-F15, Firm Power
Service; P-SED-FP15, Firm Peaking Power Service; and P-SED-M3, 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
UGP followed the Procedures for Public Participation in Power and
Transmission Rate Adjustments and Extensions, 10 CFR part 903, in
developing these formula rates. UGP took the following steps to involve
interested parties in the rate process:
1. On June 28, 2024, a Federal Register notice (89 FR 53989)
(Proposed FRN) announced the proposed formula rates and launched the
60-day public consultation and comment period.
2. On July 2, 2024, UGP notified Preference Customers and
interested parties of the proposed rates and provided a copy of the
published Proposed FRN.
3. On August 7, 2024, UGP held a public information forum via
Microsoft Teams. UGP'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, UGP held a public comment forum via Microsoft
Teams to provide an opportunity for Customers and other interested
parties to comment for the record.
5. UGP 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/ugp/ugp-rates/2025-firm-rate-adjustment">www.wapa.gov/about-wapa/regions/ugp/ugp-rates/2025-firm-rate-adjustment</a>.
6. During the 60-day consultation and comment period, which ended
on August 27, 2024, UGP received three oral comment submissions and 20
written comment letters. The comments and UGP'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 organizations:
East River Electric Power Cooperative, South Dakota (member utility)
Mid-West Electric Consumers Association, Colorado (customer
association)
Missouri River Energy Services, South Dakota (action agency)
City of Alton, Iowa (member utility)
City of Benson, Minnesota (member utility)
City of Denison, Iowa (member utility)
City of Detroit Lakes, Minnesota (member utility)
City of Hawarden, Iowa (member utility)
City of Lake Park, Iowa (member utility)
City of Madison, Minnesota (member utility)
City of Orange City, Iowa (member utility)
City of Rock Rapids, Iowa (member utility)
City of Sauk Centre, Minnesota (member utility)
City of Sioux Center, Iowa (member utility)
City of Valley City, North Dakota (member utility)
City of Vermillion, South Dakota (member utility)
City of Wadena, Minnesota (member utility)
City of Watertown, South Dakota (member utility)
City of Willmar, Minnesota (member utility)
City of Worthington, Minnesota (member utility)
Power Repayment Study--Firm Power Service Rate Discussion
A PRS is 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). 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, UGP developed a rate adjustment to demonstrate sufficient
revenues will be collected under the Provisional Formula Rates to meet
future obligations. The Revenue Requirement for P-SMBP is recovered by
both the UGP in the P-SMBP--ED rates and by RM in the Loveland Area
Projects (LAP) rate. The Revenue Requirement and composite rate for P-
SMBP--ED firm power service is 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 P-SED- under P-SED-
P-SMBP firm power service P-SED-F14 as F15 first step First Step F15 second Second step
of Jan. 1, as of Jan. 1, Percent Change step as of percent change
2023 2025 \1\ Jan. 1, 2026
----------------------------------------------------------------------------------------\2\---------------------
Total Revenue Requirement (in $268.4 $288.1 7.4 $306.0 6.2
million $).....................
P-SMBP--ED Composite Rate (mills/ 27.91 30.00 7.5 31.87 6.2
kWh)...........................
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\1\ Provisional values are estimates only based on using set/final Base and estimated Drought Adder components.
\2\ Provisional values are estimates that may change during the existing annual drought adder adjustment
process.
Firm Power Service--Existing and Provisional Formula Rates
Under the existing and provisional rate methodology, rates for P-
SMBP--ED firm power and firm peaking power services 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 demand
and energy.
Base and Drought Adder Components
As a part of the existing and provisional rate schedules, UGP
provides for a formula-based adjustment
[[Page 91734]]
of the Drought Adder component, with an annual increase of up to 2
mills/kWh. 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 power service Revenue Requirement using
Base and Drought Adder components will assist the Regions in presenting
future impacts of droughts, demonstrate repayment of drought-related
costs in the PRS, and allow the Regions to be more responsive to
changes caused by drought-related expenses. UGP will continue to charge
and bill its customers firm power and firm peaking power service rates
for energy and demand, which are the sum of the Base and Drought Adder
components.
Under Rate Schedule P-SED-F15, UGP will continue to identify its P-
SMBP--ED firm power service Revenue Requirement using Base and Drought
Adder components. The Base component is a fixed Revenue Requirement
that includes annual O&M, investment and replacement repayment, and
associated interest, Normal Timing Power Purchases, and transmission
costs. UGP cannot adjust the Base component without a public process.
The Drought Adder component is a formula-based Revenue Requirement 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 power 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 FY 2024
would be repaid by FY 2034.
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
The Regions review the inputs for the P-SMBP Base and Drought Adder
components after the annual PRS is complete, generally in the first
quarter of the calendar year. If an adjustment to the P-SMBP Base
component is necessary, or if an incremental upward adjustment to the
P-SMBP PRS Drought Adder component greater than the equivalent of 2
mills/kWh to the P-SMBP Composite Rate is necessary, the Regions 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 component is reviewed annually in early
summer to determine if drought costs differ from those projected in the
PRS. In October, the Regions will determine if a change to the Drought
Adder component is necessary, either incremental or decremental. Any
incremental adjustment to the Drought Adder component, up to 2 mills/
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 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-203 January 2023
rates. 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-203. 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 P-SMBP 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, UGP 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 PRS. 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
Requirement for firm power 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 P-SED- under P-SED-
P-SED-F14/ P- F15/ P-SED- F15/ P-SED-
P-SMBP--ED firm power service SED-FP14 as of FP15 first First step FP15 second Second step
Jan. 1, 2023 step as of percent change step as of percent change
(in million $) Jan. 1, 2025 Jan. 1, 2026
\1\ (in \1\ (in
----------------------------------------------------million $)----------------------million $)------------------
Base Component.................. $235.4 $264.5 12.4 $292.4 10.5
Drought Adder Component......... 33.0 23.6 -28.5 13.6 -42.4
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\1\ Provisional values are estimates that may change during the existing annual Drought Adder adjustment
process.
[[Page 91735]]
A summary of the provisional charge components is shown in Table 3:
Table 3--Summary of Two-Step Provisional Charge Components
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Provisional charges under rate Provisional charges under rate
schedules P-SED-F15 and P-SED-FP15 schedules P-SED-F15 and P-SED-FP15
first step as of Jan. 1, 2025 second step as of Jan. 1, 2026
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Drought Drought
Base adder Total Base adder Total
component component charge \2\ component component charge \2\
\1\ \1\
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Firm Demand ($/kilowatt-month).... $6.05 $0.55 $6.60 $6.70 $0.30 $7.00
Firm Energy (mills/kWh)........... 15.21 1.34 16.55 16.80 0.80 17.60
Firm Peaking Demand ($/kilowatt- $5.55 $0.50 $6.05 $6.10 $0.30 $6.40
month)...........................
Firm Peaking Energy \3\ (mills/ 15.21 1.34 16.55 16.80 0.80 17.60
kWh).............................
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\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.
\3\ Firm peaking energy is normally returned. This charge will be assessed in the event firm peaking energy is
not returned.
Statement of Revenue and Related Expenses
The following Table 4 provides a summary of the projected revenue
and expense data for the P-SMBP firm power service Revenue Requirement
through the 5-year provisional rate approval periods:
BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TN20NO24.076
BILLING CODE 6450-01-C
Sale of Surplus Products Rate Discussion
The sale of surplus products rate schedule is formula-based,
providing for P-SMBP--ED Marketing Office to sell P-SMBP--ED surplus
energy and demand products. If P-SMBP--ED 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
[[Page 91736]]
separate charge may be incurred. Rate Schedule P-SED-M2 is being
superseded by the Provisional Rate Schedule P-SED-M3 and continues to
allow for the sale of energy, frequency response, regulation, and
reserves.
Comments
UGP received 23 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 action agency commented that the rate adjustment is
a $15 million cumulative increase for their member communities. The
member utilities commented that the rate adjustment would have
increases ranging from $30,000 to $490,000 annually in wholesale power
supply costs depending on the customers' Contract Rate of Delivery
(CROD).
Response: WAPA recognizes the magnitude of the increased rate and
its impact on its customers. WAPA is committed to continuing to adapt
to rising industry costs while also providing power and energy to its
customers at the lowest cost possible. WAPA does not take the increase
in costs lightly and is committed to continuing to find ways to limit
the impact of increasing industry costs as much as possible.
B. Comment: The customer association, member utilities, 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 14 percent 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.
C. Comment: The customer association, member utilities, 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.
D. 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 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.
E. 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.
F. 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 the issues concerning the firm power
rate.
Certification of Rates
I have certified that the Provisional Formula Rates for P-SMBP--ED
firm power service under Rate Schedule P-SED-F15, P-SMBP--ED firm
peaking power service under Rate Schedule P-SED-FP15, and P-SMBP--ED
sale of surplus products under Rate Schedule P-SED-M3 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 UGP to develop the Provisional Formula Rates is
available for inspection and copying at the Upper Great Plains Regional
Office located at 2900 4th Avenue North, 6th Floor, Billings, Montana.
Many of these documents are also available on UGP's Rates 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>.
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 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/2024/08/Rate-order-drought-adder-and-base-component-increases-for-2025-and-2026-CX-08302024.pdf">www.wapa.gov/wp-content/uploads/2024/08/Rate-order-drought-adder-and-base-component-increases-for-2025-and-2026-CX-08302024.pdf</a>.
---------------------------------------------------------------------------
\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-213. The rates will remain in effect on an interim
basis until: (1) FERC
[[Page 91737]]
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 P-SED-F15
(Supersedes Schedule P-SED-F14)
United States Department of Energy
Western Area Power Administration
Upper Great Plains Region
Pick-Sloan Missouri Basin Program--Eastern Division
Firm Power Service
(Approved Under Rate Order No. WAPA-213)
Effective
First Step: Beginning on the first day of 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, through December 31,
2029, or until superseded by another rate schedule, whichever occurs
earlier.
Available
Within the marketing area served by the Eastern Division of the
Pick-Sloan Missouri Basin Program; within Montana, North Dakota, South
Dakota, Minnesota, Iowa, and Nebraska.
Applicable
To the power and energy delivered to customers as firm power
service, as established in the contract for service.
Character
Alternating current, 60 hertz, three phase, delivered and metered
at the voltages and points established by contract.
Formula Rate and Charge Components
Rate = Base component + Drought Adder component
----------------------------------------------------------------------------------------------------------------
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\
----------------------------------------------------------------------------------------------------------------
Firm Demand Charge ($/kilowatt- $6.05 $0.55 $6.60 $6.70 $0.30 $7.00
month)...........................
Firm Energy Charge (mills/kWh).... 15.21 1.34 16.55 16.80 0.80 17.60
----------------------------------------------------------------------------------------------------------------
\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.
Billing Demand: The billing demand will be as defined by the power
sales contract.
Charge Components
Base Component: A fixed revenue requirement that includes operation
and maintenance expense, investments and replacements, interest on
investments and replacements, normal timing purchase power (purchases
due to operational constraints, not associated with drought), and
transmission costs. Any provisional change to the Base component will
require a public process.
[GRAPHIC] [TIFF OMITTED] TN20NO24.077
Drought Adder Component: A formula-based revenue requirement that
includes future purchase power expense above timing purchases, previous
purchase power drought deficits, and interest on the purchase power
drought deficits. The second step revenue requirement is subject to
change during the annual Drought Adder adjustment process starting in
January 2026.
[[Page 91738]]
[GRAPHIC] [TIFF OMITTED] TN20NO24.078
Annual Drought Adder Adjustment Process
The Drought Adder 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 Power Repayment Study (PRS) composite
rate. Any planned incremental upward adjustment to the Drought Adder
greater than the equivalent of 2 mills/kWh to the PRS composite rate
will require a public process.
The annual review process is initiated in early summer when WAPA
reviews the Drought Adder component and provides notice of any
estimated change to the Drought Adder component charge under the
formula. In October, WAPA 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. WAPA will inform customers of
updates by letter and post updates to WAPA's external website.
Adjustments
For Billing of Unauthorized Overruns: For each billing period in
which there is a contract violation involving an unauthorized overrun
of the contractual firm power and/or energy obligations, such overrun
shall be billed at 10 times the formula rate.
For Power Factor: None. Customers will be required to maintain a
power factor at the point of delivery between 95-percent lagging and
95-percent leading.
Rate Schedule P-SED-FP15
(Supersedes Schedule P-SED-FP14)
United States Department of Energy
Western Area Power Administration
Upper Great Plains Region
Pick-Sloan Missouri Basin Program--Eastern Division
Firm Peaking Power Service
(Approved Under Rate Order No. WAPA-213)
Effective
First Step: Beginning on the first day of 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, through December 31,
2029, or until superseded by another rate schedule, whichever occurs
earlier.
Available
Within the marketing area served by the Eastern Division of the
Pick-Sloan Missouri Basin Program; within Montana, North Dakota, South
Dakota, Minnesota, Iowa, and Nebraska.
Applicable
To the power sold to customers as firm peaking power service, as
established in the contract for service.
Character
Alternating current, 60 hertz, three phase, delivered and metered
at the voltages and points established by contract.
Formula Rate and Charge Components
Rate = Base component + Drought Adder component
----------------------------------------------------------------------------------------------------------------
First step January 1, 2025 monthly Second step January 1, 2026 monthly
charges charges
-----------------------------------------------------------------------------------
Drought
Base Drought Base adder Total charge
component adder Total charge component component \2\
component \1\
----------------------------------------------------------------------------------------------------------------
Firm Peaking Demand Charge $5.55 $0.50 $6.05 $6.10 $0.30 $6.40
($/kilowatt-month).........
----------------------------------------------------------------------------------------------------------------
\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 component.
Charge Components
Base Component: A fixed revenue requirement that includes operation
and maintenance expense, investments and replacements, interest on
investments and replacements, normal timing purchase power (purchases
due to operational constraints, not associated with drought), and
transmission costs. Any provisional change to the Base component will
require a public process.
[GRAPHIC] [TIFF OMITTED] TN20NO24.079
[[Page 91739]]
Drought Adder Component: A formula-based revenue requirement that
includes future purchase power above timing purchases, previous
purchase power drought deficits, and interest on the purchase power
drought deficits. The second step revenue requirement is subject to
change during the annual Drought Adder adjustment processes starting in
January 2026.
[GRAPHIC] [TIFF OMITTED] TN20NO24.080
Annual Drought Adder Adjustment Process
The Drought Adder 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 Power Repayment Study (PRS) composite
rate. Any planned incremental upward adjustment to the Drought Adder
greater than the equivalent of 2 mills/kWh to the PRS composite rate
will require a public process.
The annual review process is initiated in early summer when WAPA
reviews the Drought Adder component and provides notice of any
estimated change to the Drought Adder component charge under the
formula. In October, WAPA 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. WAPA will inform customers of
updates by letter and post updates to WAPA's external website.
Billing Demand
The billing demand will be the greater of (1) the highest 30-minute
integrated demand measured during the month up to, but not in excess
of, the delivery obligation under the power sales contract, or (2) the
contract rate of delivery.
Adjustments
For Billing for Unauthorized Overruns: For each billing period in
which there is a contract violation involving an unauthorized overrun
of the contractual obligation for peaking demand and/or energy, such
overrun shall be billed at 10 times the above rate.
Rate Schedule P-SED-M3
(Supersedes Rate Schedule P-SED-M2)
United States Department of Energy
Western Area Power Administration
Upper Great Plains Region
Pick-Sloan Missouri Basin Program--Eastern Division
Sale of Surplus Products
(Approved Under Rate Order No. WAPA-213)
Effective
The first day of the first full billing period beginning on or
after January 1, 2025, through December 31, 2029, or until superseded
by another rate schedule, whichever occurs earlier.
Applicable
This rate schedule applies to Eastern Division of the Pick-Sloan
Missouri Basin Program marketing and is applicable to the sale of the
following P-SMBP--ED surplus energy and capacity products: energy,
frequency response, regulation, and reserves. If any P-SMBP--ED surplus
energy and capacity products are available, UGP can make the product(s)
available for sale, providing entities enter into a separate
agreement(s) with UGP Marketing Office which will specify the terms of
sale(s).
Formula Rate
The charge for each product is determined at the time of the sale
based on market rates, plus administrative costs. The customer will be
responsible for acquiring transmission services necessary to deliver
the product(s), for which a separate charge may be incurred.
[FR Doc. 2024-26933 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.