Pick-Sloan Missouri Basin Program-Eastern Division-Rate Order No. WAPA-135, 30372-30375 [E7-10514]

Download as PDF sroberts on PROD1PC70 with NOTICES 30372 Federal Register / Vol. 72, No. 104 / Thursday, May 31, 2007 / Notices associated with the previously incurred and future drought debt. The Drought Adder is designed to repay the drought debt within 10 years from the time the debt was incurred, using balloon payment methodology. For example, the drought debt incurred in Pick-Sloan in 2006 will be paid off by 2016. The annual revenue requirement calculation can be summarized by the following formula: Annual Revenue Requirement = Base + Drought Adder. Under this proposal, the LAP annual revenue requirement equals $66.1 million and is comprised of a Base revenue requirement of $48.6 million plus a Drought Adder revenue requirement of $17.5 million. Western’s proposal for identifying the firm electric service revenue requirement using a Base and a Drought Adder will allow Western to identify and present the impacts of the drought, demonstrate repayment of those drought related costs in the Fry-Ark PRS and the Pick-Sloan PRS, and allow Western to be more responsive to changes in drought-related expenses. Western 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. Western reviews its firm electric service rates annually. Western will review the Base component after the annual PRSs are completed, generally in the first quarter of the calendar year. If an adjustment to the Base is necessary, Western will initiate a public process pursuant to 10 CFR part 903 prior to making an adjustment. Western will review the Drought Adder each September to determine if drought costs differ from those projected in the PRSs. Based upon this review, Western will determine whether an adjustment to the Drought Adder is necessary. For any adjustments attributed to drought costs of less than or equal to the equivalent of 2 mills/ kWh to the LAP composite rate, Western will notify customers by letter in October of the planned adjustment and implement the adjustment in the following January billing cycle. For the portion of any planned incremental adjustment greater than the equivalent of 2 mills/kWh to the LAP composite rate, Western will engage in a public process pursuant to 10 CFR part 903 prior to making that portion of the adjustment. Although decremental adjustments to the Drought Adder will occur, the adjustment cannot result in the Drought Adder being a negative number. Western will conduct a preliminary review of the Drought Adder in early summer to give customers advance notice of any VerDate Aug<31>2005 16:01 May 30, 2007 Jkt 211001 adjustment for the following January. Customers will be advised by letter of the estimated change to the Drought Adder with the final Drought Adder adjustment verified with notification in the October letter to the customers. Legal Authority Since the proposed rates constitute a major adjustment as defined by 10 CFR part 903, Western will hold both a public information forum and a public comment forum. After review of public comments and possible amendments or adjustments, Western will recommend that the Deputy Secretary of Energy approve the proposed rates on an interim basis. Western is establishing firm electric service rates for LAP under the Department of Energy Organization Act (42 U.S.C. 7152); the Reclamation Act of 1902 (ch. 1093, 32 Stat. 388), as amended and supplemented by subsequent laws; section 9(c) of the Reclamation Project Act of 1939 (43 U.S.C. 485h(c)); section 5 of the Flood Control Act of 1944 (16 U.S.C. 825s); and other acts that specifically apply to the projects involved. By Delegation Order No. 00–037.00, effective December 6, 2001, the Secretary of Energy delegated: (1) The authority to develop power and transmission rates to Western’s Administrator; (2) the authority to confirm, approve, and place such rates into effect on an interim basis to the Deputy Secretary of Energy; and (3) the authority to confirm, approve, and place into effect on a final basis, to remand, or to disapprove such rates to the Commission. Existing Department of Energy (DOE) procedures for public participation in power rate adjustments (10 CFR part 903) were published on September 18, 1985. Availability of Information All brochures, studies, comments, letters, memorandums, e-mail, or other documents that Western initiates to develop the proposed rates are available for inspection and copying at the Rocky Mountain Regional Office, located at 5555 East Crossroads Boulevard, Loveland, Colorado. Many of these documents and supporting information are also available on Western’s Web site under the ‘‘Rate Adjustments’’ section located at http://www.wapa.gov/rm/ ratesRM/2008RatesAdjustment-FirmPower.htm. Ratemaking Procedure Requirements Environmental Compliance In compliance with the National Environmental Policy Act of 1969 PO 00000 Frm 00041 Fmt 4703 Sfmt 4703 (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), Western 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. Determination Under Executive Order 12866 Western 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. Dated: May 15, 2007. Timothy J. Meeks, Administrator. [FR Doc. E7–10513 Filed 5–30–07; 8:45 am] BILLING CODE 6450–01–P DEPARTMENT OF ENERGY Western Area Power Administration Pick-Sloan Missouri Basin Program— Eastern Division—Rate Order No. WAPA–135 Western Area Power Administration, DOE. ACTION: Notice of proposed power rates. AGENCY: SUMMARY: The Western Area Power Administration (Western) is proposing revised rates for Pick-Sloan Missouri Basin Program—Eastern Division (P–SMBP—ED) firm electric and firm peaking power service. Current rates, under Rate Schedules P–SED–F8 and P–SED–FP8, extend through December 31, 2010, but are not sufficient to meet the P–SMBP—ED revenue requirements. The proposed rates will provide sufficient revenue to pay all annual costs, including interest expense, and repayment of required investment within the allowable period. Western will prepare a brochure that provides detailed information on the proposed rates. The proposed rates, under Rate Schedules P–SED–F9 and P–SED–FP9, are scheduled to go into effect on January 1, 2008, and will remain in effect through December 31, 2012. Publication of this Federal Register notice begins the formal process for the proposed rate adjustment. DATES: The consultation and comment period begins today and will end August 29, 2007. Western will present a detailed explanation of the proposed E:\FR\FM\31MYN1.SGM 31MYN1 Federal Register / Vol. 72, No. 104 / Thursday, May 31, 2007 / Notices rates at public information forums. Public information forum dates are: 1. June 18, 2007, 10 a.m. to 12 p.m. MDT, Denver, CO. 2. June 19, 2007, 9 a.m. to 12 p.m. CDT, Sioux Falls, SD. Western will accept oral and written comments at public comment forums. Public comment forums will be held on the following dates: 1. July 23, 2007, 10 a.m. to 12 p.m. MDT, Denver, CO. 2. July 24, 2007, 9 a.m. to 12 p.m. CDT, Sioux Falls, SD. Western will accept written comments any time during the consultation and comment period. ADDRESSES: Written comments and/or requests to be informed of Federal Energy Regulatory Commission (Commission) actions concerning the rates submitted by Western to the Commission for approval should be sent to Robert J. Harris, Regional Manager, Upper Great Plains Region, Western Area Power Administration, 2900 4th Avenue North, Billings, MT 59101– 1266, or e-mail at ugpfirmrate@wapa.gov. Western will post information about the rate process on its Web site at http://www.wapa.gov/ ugp/rates/2008firmrateadjust. Western will post comments received via letter and e-mail to its Web site after the close of the comment period. Written comments must be received by the end of the consultation and comment period to be considered by Western in its decision process. Public information forum locations are: 1. Denver—Radisson Stapleton Plaza, 3333 Quebec Street, Denver, CO. 2. Sioux Falls—Holiday Inn, 100 West 8th Street, Sioux Falls, SD. Public comment forum locations are: 1. Denver—Radisson Stapleton Plaza, 3333 Quebec Street, Denver, CO. 2. Sioux Falls—Holiday Inn, 100 West 8th Street, Sioux Falls, SD. FOR FURTHER INFORMATION CONTACT: Mr. Jon R. Horst, Rates Manager, Upper Great Plains Region, Western Area Power Administration, 2900 4th Avenue North, Billings, MT 59101–1266, telephone (406) 247–7444, e-mail horst@wapa.gov. SUPPLEMENTARY INFORMATION: Proposed rates for P–SMBP—ED firm electric and firm peaking service are designed to recover an annual revenue requirement that includes investment repayment, interest, purchase power, operation and maintenance, and other expenses. The projected annual revenue requirement for firm electric service is allocated equally between capacity and energy. Rate Schedules P–SED–F8 and P– SED–FP8 for P–SMBP—ED firm electric and firm peaking service, respectively, were approved for a 5-year period beginning on January 1, 2006, and ending December 31, 2010 1. Under current Rate Schedule P–SED–F8, the composite rate is 19.54 mills per kilowatthour (mills/kWh), the energy rate is 11.29 mills/kWh, and the capacity rate is 4.45 per kilowattmonth (kWmonth). Under current Rate Schedule P–SED–FP8, the firm peaking capacity rate is $4.45 per kWmonth. These rates are set forth in Table 1, below. During informal discussions prior to the commencement of this rate adjustment process, Western received requests from firm power customers to identify its firm electric service revenue requirement using a Base component (Base) and Drought Adder component (Drought Adder). The firm power customers noted that by identifying the components of the firm electric service revenue requirement in this manner, Western could identify drought impacts in the Pick-Sloan Missouri Basin Program (P–SMBP) and demonstrate a proactive approach to repaying incurred costs related to the drought. Western also received requests from customers to eliminate the tiered rate. The tiered rate charge was implemented in the mid-1970’s for loads in excess of 60 percent monthly load factor. Customers believe that continuing the tiered rate charge discourages load management. Moreover, eliminating the tiered rate from the P–SMBP—ED firm electric service schedule is consistent with the administration of firm electric service rates in the Pick-Sloan Missouri 30373 Basin Program—Western Division (P– SMBP—WD), which does not assess a tiered rate charge. Western also received customer requests to redesign its revenue recovery methodology for firm peaking service. Western presently provides both firm electric and firm peaking service to customers using a seasonal contract rate of delivery (CROD). Western’s firm peaking capacity rate is equal to the firm power capacity rate, which is calculated by dividing one-half of the P–SMBP— ED revenue requirement by the sum of the metered billing units for firm electric service and the seasonal CROD monthly billing units for firm peaking service. During informal discussions, several customers stated that Western’s rate design for firm electric capacity and firm peaking capacity should be representative of the different products. Customers recommended that Western use the sum of the total allocated seasonal CRODs for both firm electric capacity and firm peaking capacity and model them as the billing units for calculating the firm peaking capacity rate. It was noted in these discussions that any change to the peaking power capacity revenue requirement methodology also affects the P–SMBP total firm power capacity revenue requirement in the P–SMBP power repayment study (PRS) which is recovered by both eastern and western divisions of the P–SMBP. In response to these suggestions, Western prepared proposed rate schedules for firm electric service (P– SED–F9) and firm peaking service (P– SED–FP9) for consideration and comment during this public process. The projected annual revenue requirement under these schedules is allocated equally between capacity and energy. These proposed rate schedules also reflect rate adjustments based on the Pick-Sloan revenue requirement derived from the Fiscal Year 2006 Final Power Repayment Study (PRS). The PRS sets the total annual P–SMBP—ED revenue requirement for 2008 for firm electric and firm peaking power service at $235.9 million. TABLE 1.—PROPOSED FIRM ELECTRIC AND FIRM PEAKING SERVICE REVENUE REQUIREMENT AND RATES sroberts on PROD1PC70 with NOTICES Firm electric service Existing rates Proposed rates (Jan. 1, 2008) P–SMBP—ED Firm and Firm Peaking Revenue Requirement .. P–SMBP—ED Composite Rate .................................................. Firm Capacity .............................................................................. Firm Energy ................................................................................ Tiered > 60 Percent Load Factor ............................................... $189.9 million .......................... 19.54 mills/kWh ....................... $4.45/kWmonth ........................ 11.29 mills/kWh ....................... 5.21 mills/kWh. $235.9 million .......................... 24.49 mills/kWh ....................... $5.65/kWmonth ........................ 13.99 mills/kWh ....................... 1 WAPA–126 was approved by the Deputy Secretary of Energy on November 5, 2005 (70 FR VerDate Aug<31>2005 16:01 May 30, 2007 Jkt 211001 ¶ 71280), and confirmed and approved by FERC on PO 00000 Frm 00042 Fmt 4703 Sfmt 4703 Percent change 24.2 25.3 27.0 23.9 a final basis on April 27, 2006, in Docket No. EF06– 5031–000 (115 FERC ¶ 62107). E:\FR\FM\31MYN1.SGM 31MYN1 30374 Federal Register / Vol. 72, No. 104 / Thursday, May 31, 2007 / Notices TABLE 1.—PROPOSED FIRM ELECTRIC AND FIRM PEAKING SERVICE REVENUE REQUIREMENT AND RATES—Continued Firm electric service Existing rates Proposed rates (Jan. 1, 2008) Firm Peaking Capacity ................................................................ Firm Peaking Energy 1 ................................................................ $4.45/kWmonth ........................ 11.29 mills/kWh ....................... $5.10/kWmonth ........................ 13.99 mills/kWh ....................... sroberts on PROD1PC70 with NOTICES 1 Firm Percent change 14.6 23.9 peaking energy is normally returned. This will be assessed in the event firm peaking energy is not returned. Under proposed Rate Schedule P– SED–F9, the composite rate will increase 25.3 percent. The firm energy rate will increase to 13.99 mills per kWh, or 23.9 percent, and the firm capacity rate will increase to $5.65/ kWmonth, or 27.0 percent. Additionally, under Rate Schedule P– SED–F9, Western is proposing to identify its firm electric service revenue requirement using a Base and a Drought Adder. The Base is a revenue requirement that includes annual operation and maintenance expenses, investment repayment and associated interest, normal timing power purchases, and transmission costs. Western’s normal timing power purchases are purchases due to operational constraints (e.g., management of endangered species habitat, water quality, navigation, etc.) and are not associated with the current drought. The Drought Adder is a formula-based revenue requirement that includes costs attributable to the present drought conditions within the Pick-Sloan Program. The Drought Adder includes costs associated with future non-timing purchases of additional power to firm obligations not covered with available system generation due to the drought, previously incurred deficits due to purchased power debt that resulted from non-timing power purchases made during this drought, and the interest associated with the previously incurred and future drought debt. The Drought Adder is designed to repay Western’s drought debt within 10 years from the time the debt was incurred, using balloon payment methodology. For example, the drought debt incurred by Western in 2006 will be paid off by 2016. The annual revenue requirement calculation can be summarized by the following formula: Annual Revenue Requirement = Base + Drought Adder. Under this proposal, the P–SMBP—ED annual revenue requirement equals $245.2 million and is comprised of a Base revenue requirement of $157.2 million plus a Drought Adder revenue requirement of $88.0 million. Both the Base and Drought Adder recover portions of the firm power revenue requirement, firm peaking power, and VerDate Aug<31>2005 16:01 May 30, 2007 Jkt 211001 associated 5 percent discount revenue necessary to equal the P–SMBP—ED annual revenue requirement. Western’s proposal for identifying its firm electric service revenue requirement using Base and Drought Adder will help Western present the impacts of the drought within the PickSloan Program, demonstrate repayment of those drought related costs in the PRS, and allow Western to be more responsive to changes in drought related expenses. Western 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. Western reviews its firm electric service rates annually. Western will review the Base after the annual PRS is completed, generally in the first quarter of the calendar year. If an adjustment to the Base is necessary, Western will initiate a public process pursuant to 10 CFR part 903 prior to making an adjustment. Western will review the Drought Adder each September to determine if drought costs differ from those projected in the PRS, and, if so, whether an adjustment to the Drought Adder is necessary. For any adjustments attributed to drought costs of less than or equal to the equivalent of 2 mills/ kWh to the PRS composite rate, Western will notify customers by letter in October of the planned adjustment and implement the adjustment in the January billing cycle. For the portion of any planned incremental adjustment greater than the equivalent of 2 mills/ kWh to the PRS composite rate, Western will engage in a public process pursuant to 10 CFR part 903 prior to making that portion of the adjustment. Although decremental adjustments to the Drought Adder will occur, the adjustment cannot result in the Drought Adder being a negative number. Western will conduct a preliminary review of the Drought Adder in early summer to give customers advanced notice of any adjustment in the following January. Customers will be advised by letter of the estimated change to the Drought Adder with the final Drought Adder adjustment verified with notification in the October letter to the customers. PO 00000 Frm 00043 Fmt 4703 Sfmt 4703 Under Rate Schedule P–SED–F9, Western is also proposing to eliminate the tiered rate in the P–SMBP—ED. Western agrees with customers that continuing a tiered rate charge for loads in excess of 60 percent monthly load factor discourages load management, and eliminating the tiered rate from the P–SMBP—ED firm electric service schedule is consistent with the design of firm electric service rates in the P– SMBP—WD. Western is also proposing to redesign its revenue recovery methodology for firm peaking service. Under proposed Rate Schedule P–SED–FP9, the firm peaking capacity charge will be calculated by dividing one-half of the P– SMBP—ED revenue requirement by the sum of the total allocated seasonal CRODs modeled as monthly billing units for both firm electric and firm peaking service. While Western is proposing to redesign its methodology for calculating the firm peaking capacity rate, it notes that the firm electric capacity and firm peaking capacity rates combined will continue to recover onehalf of P–SMBP—ED annual revenue requirement. As set forth in Table 1, above, under proposed Rate Schedule P–SED–FP9, the firm peaking capacity rate will increase to $5.10 per kWmonth, or 14.6 percent. Peaking energy is either returned to Western or paid for in accordance with the terms of the contract between Western and the peaking power customer. The firm peaking energy rate is set forth in Table 1, above. Legal Authority Since the proposed rates constitute a major rate adjustment as defined by 10 CFR part 903, Western will hold both public information forums and public comment forums. After review of public comments, and possible amendments or adjustments, Western will recommend the Deputy Secretary of Energy approve the proposed rates on an interim basis. Western is establishing firm electric service and peaking rates for P–SMBP— ED under the Department of Energy Organization Act (42 U.S.C. 7152); the Reclamation Act of 1902 (ch. 1093, 32 Stat. 388), as amended and supplemented by subsequent laws, E:\FR\FM\31MYN1.SGM 31MYN1 Federal Register / Vol. 72, No. 104 / Thursday, May 31, 2007 / Notices particularly section 9(c) of the Reclamation Project Act of 1939 (43 U.S.C. 485h(c)); section 5 of the Flood Control Act of 1944 (16 U.S.C. 825s); and other acts that specifically apply to the projects involved. By Delegation Order No. 00–037.00, effective December 6, 2001, the Secretary of Energy delegated: (1) The authority to develop power and transmission rates to Western’s Administrator; (2) the authority to confirm, approve, and place such rates into effect on an interim basis to the Deputy Secretary of Energy; and (3) the authority to confirm, approve, and place into effect on a final basis, to remand, or to disapprove such rates to the Commission. Existing Department of Energy (DOE) procedures for public participation in power rate adjustments (10 CFR part 903) were published on September 18, 1985. Availability of Information Interested parties may review and copy all brochures, studies, comments, letters, memorandums, or other documents that Western initiates or uses to develop the proposed rates. These documents are at the Upper Great Plains Regional Office, located at 2900 4th Avenue North, Billings, Montana. Many of these documents and supporting information are also available on Western’s Web site under the ‘‘2008 Firm Rate Adjustment’’ section located at http://www.wapa.gov/ugp/rates/ 2008firmrateadjust. Ratemaking Procedure Requirements Environmental Compliance In compliance with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321, et seq.); Council on Environmental Quality Regulations (40 CFR parts 1500–1508); and DOE NEPA Regulations (10 CFR part 1021), Western 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. sroberts on PROD1PC70 with NOTICES Determination Under Executive Order 12866 Western 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. Dated: May 18, 2007. Timothy J. Meeks, Administrator. [FR Doc. E7–10514 Filed 5–30–07; 8:45 am] BILLING CODE 6450–01–P VerDate Aug<31>2005 16:01 May 30, 2007 Jkt 211001 ENVIRONMENTAL PROTECTION AGENCY [EPA–HQ–OECA–2006–0724; FRL–8320–4] Agency Information Collection Activities; Submission to OMB for Review and Approval; Comment Request; NESHAP for Boat Manufacturing (Renewal), EPA ICR Number 1966.03, OMB Control Number 2060–0546 Environmental Protection Agency (EPA). ACTION: Notice. AGENCY: SUMMARY: In compliance with the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), this document announces that an Information Collection Request (ICR) has been forwarded to the Office of Management and Budget (OMB) for review and approval. This is a request to renew an existing approved collection. The ICR which is abstracted below describes the nature of the collection and the estimated burden and cost. DATES: Additional comments may be submitted on or before July 2, 2007. ADDRESSES: Submit your comments, referencing docket ID number EPA–HQ– OECA–2006–0724, to (1) EPA online using www.regulations.gov (our preferred method), or by e-mail to docket.oeca@epa.gov, or by mail to: EPA Docket Center (EPA/DC), Environmental Protection Agency, Enforcement and Compliance Docket and Information Center, mail code 2201T, 1200 Pennsylvania Avenue, NW., Washington, DC 20460, and (2) OMB at: Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), Attention: Desk Officer for EPA, 725 17th Street, NW., Washington, DC 20503. FOR FURTHER INFORMATION CONTACT: Learia Williams, Compliance Assessment and Media Programs Division, Office of Compliance, Mail Code 2223A, Environmental Protection Agency, 1200 Pennsylvania Avenue, NW., Washington, DC 20460; telephone number: (202) 564–4113; fax number: (202) 564–0050; e-mail address: williams.learia@epa.gov. EPA has submitted the following ICR to OMB for review and approval according to the procedures prescribed in 5 CFR 1320.12. On October 5, 2006 (71 FR 38853), EPA sought comments on this ICR pursuant to 5 CFR 1320.8(d). EPA received no comments. Any additional comments on this ICR should be submitted to EPA and OMB within 30 days of this notice. SUPPLEMENTARY INFORMATION: PO 00000 Frm 00044 Fmt 4703 Sfmt 4703 30375 EPA has established a public docket for this ICR under Docket ID Number EPA–HQ–OECA–2006–0724, which is available for public viewing online at http://www.regulations.gov, or in person viewing at the Enforcement and Compliance Docket in the EPA Docket Center (EPA/DC), EPA West, Room 3334, 1301 Constitution Avenue, NW., Washington, DC. The EPA Docket Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Reading Room is (202) 566–1744, and the telephone number for the Enforcement and Compliance Docket and Information Center is (202) 566– 1752. Use EPA’s electronic docket and comment system at http:// www.regulations.gov, to submit or view public comments, access the index listing of the contents of the docket, and to access those documents in the docket that are available electronically. Once in the system, select ‘‘docket search,’’ then key in the docket ID number identified above. Please note that EPA’s policy is that public comments, whether submitted electronically or in paper, will be made available for public viewing at http://www.regulations.gov, as EPA receives them and without change, unless the comment contains copyrighted material (CBI), or other information whose public disclosure is restricted by statute. For further information about the electronic docket, go to www.regulations.gov. Title: NESHAP for Boat Manufacturing. ICR Numbers: EPA ICR Number 1966.03, OMB Control Number 2060– 0546. ICR Status: This ICR is scheduled to expire on July 31, 2007. Under OMB regulations, the Agency may continue to conduct or sponsor the collection of information while this submission is pending at OMB. An Agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA’s regulations in title 40 of the CFR, after appearing in the Federal Register when approved, are listed in 40 CFR Part 9, and displayed either by publication in the Federal Register or by other appropriate means, such as on the related collection instrument or form, if applicable. The display of OMB control numbers in certain EPA regulations is consolidated in 40 CFR part 9. Abstract: The National Emission Standards for Hazardous Air Pollutants (NESHAP) for Boat Manufacturing (40 E:\FR\FM\31MYN1.SGM 31MYN1

Agencies

[Federal Register Volume 72, Number 104 (Thursday, May 31, 2007)]
[Notices]
[Pages 30372-30375]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-10514]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Pick-Sloan Missouri Basin Program--Eastern Division--Rate Order 
No. WAPA-135

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of proposed power rates.

-----------------------------------------------------------------------

SUMMARY: The Western Area Power Administration (Western) is proposing 
revised rates for Pick-Sloan Missouri Basin Program--Eastern Division 
(P-SMBP--ED) firm electric and firm peaking power service. Current 
rates, under Rate Schedules P-SED-F8 and P-SED-FP8, extend through 
December 31, 2010, but are not sufficient to meet the P-SMBP--ED 
revenue requirements. The proposed rates will provide sufficient 
revenue to pay all annual costs, including interest expense, and 
repayment of required investment within the allowable period. Western 
will prepare a brochure that provides detailed information on the 
proposed rates. The proposed rates, under Rate Schedules P-SED-F9 and 
P-SED-FP9, are scheduled to go into effect on January 1, 2008, and will 
remain in effect through December 31, 2012. Publication of this Federal 
Register notice begins the formal process for the proposed rate 
adjustment.

DATES: The consultation and comment period begins today and will end 
August 29, 2007. Western will present a detailed explanation of the 
proposed

[[Page 30373]]

rates at public information forums. Public information forum dates are:
    1. June 18, 2007, 10 a.m. to 12 p.m. MDT, Denver, CO.
    2. June 19, 2007, 9 a.m. to 12 p.m. CDT, Sioux Falls, SD.
    Western will accept oral and written comments at public comment 
forums. Public comment forums will be held on the following dates:
    1. July 23, 2007, 10 a.m. to 12 p.m. MDT, Denver, CO.
    2. July 24, 2007, 9 a.m. to 12 p.m. CDT, Sioux Falls, SD.
    Western will accept written comments any time during the 
consultation and comment period.

ADDRESSES: Written comments and/or requests to be informed of Federal 
Energy Regulatory Commission (Commission) actions concerning the rates 
submitted by Western to the Commission for approval should be sent to 
Robert J. Harris, Regional Manager, Upper Great Plains Region, Western 
Area Power Administration, 2900 4th Avenue North, Billings, MT 59101-
1266, or e-mail at ugpfirmrate@wapa.gov. Western will post information 
about the rate process on its Web site at http://www.wapa.gov/ugp/
rates/2008firmrateadjust. Western will post comments received via 
letter and e-mail to its Web site after the close of the comment 
period. Written comments must be received by the end of the 
consultation and comment period to be considered by Western in its 
decision process.
    Public information forum locations are:
    1. Denver--Radisson Stapleton Plaza, 3333 Quebec Street, Denver, 
CO.
    2. Sioux Falls--Holiday Inn, 100 West 8th Street, Sioux Falls, SD.
    Public comment forum locations are:
    1. Denver--Radisson Stapleton Plaza, 3333 Quebec Street, Denver, 
CO.
    2. Sioux Falls--Holiday Inn, 100 West 8th Street, Sioux Falls, SD.

FOR FURTHER INFORMATION CONTACT: Mr. Jon R. Horst, Rates Manager, Upper 
Great Plains Region, Western Area Power Administration, 2900 4th Avenue 
North, Billings, MT 59101-1266, telephone (406) 247-7444, e-mail 
horst@wapa.gov.

SUPPLEMENTARY INFORMATION: Proposed rates for P-SMBP--ED firm electric 
and firm peaking service are designed to recover an annual revenue 
requirement that includes investment repayment, interest, purchase 
power, operation and maintenance, and other expenses. The projected 
annual revenue requirement for firm electric service is allocated 
equally between capacity and energy.
    Rate Schedules P-SED-F8 and P-SED-FP8 for P-SMBP--ED firm electric 
and firm peaking service, respectively, were approved for a 5-year 
period beginning on January 1, 2006, and ending December 31, 2010 \1\. 
Under current Rate Schedule P-SED-F8, the composite rate is 19.54 mills 
per kilowatthour (mills/kWh), the energy rate is 11.29 mills/kWh, and 
the capacity rate is 4.45 per kilowattmonth (kWmonth). Under current 
Rate Schedule P-SED-FP8, the firm peaking capacity rate is $4.45 per 
kWmonth. These rates are set forth in Table 1, below.
---------------------------------------------------------------------------

    \1\ WAPA-126 was approved by the Deputy Secretary of Energy on 
November 5, 2005 (70 FR ] 71280), and confirmed and approved by FERC 
on a final basis on April 27, 2006, in Docket No. EF06-5031-000 (115 
FERC ] 62107).
---------------------------------------------------------------------------

    During informal discussions prior to the commencement of this rate 
adjustment process, Western received requests from firm power customers 
to identify its firm electric service revenue requirement using a Base 
component (Base) and Drought Adder component (Drought Adder). The firm 
power customers noted that by identifying the components of the firm 
electric service revenue requirement in this manner, Western could 
identify drought impacts in the Pick-Sloan Missouri Basin Program (P-
SMBP) and demonstrate a proactive approach to repaying incurred costs 
related to the drought.
    Western also received requests from customers to eliminate the 
tiered rate. The tiered rate charge was implemented in the mid-1970's 
for loads in excess of 60 percent monthly load factor. Customers 
believe that continuing the tiered rate charge discourages load 
management. Moreover, eliminating the tiered rate from the P-SMBP--ED 
firm electric service schedule is consistent with the administration of 
firm electric service rates in the Pick-Sloan Missouri Basin Program--
Western Division (P-SMBP--WD), which does not assess a tiered rate 
charge.
    Western also received customer requests to redesign its revenue 
recovery methodology for firm peaking service. Western presently 
provides both firm electric and firm peaking service to customers using 
a seasonal contract rate of delivery (CROD). Western's firm peaking 
capacity rate is equal to the firm power capacity rate, which is 
calculated by dividing one-half of the P-SMBP--ED revenue requirement 
by the sum of the metered billing units for firm electric service and 
the seasonal CROD monthly billing units for firm peaking service. 
During informal discussions, several customers stated that Western's 
rate design for firm electric capacity and firm peaking capacity should 
be representative of the different products. Customers recommended that 
Western use the sum of the total allocated seasonal CRODs for both firm 
electric capacity and firm peaking capacity and model them as the 
billing units for calculating the firm peaking capacity rate. It was 
noted in these discussions that any change to the peaking power 
capacity revenue requirement methodology also affects the P-SMBP total 
firm power capacity revenue requirement in the P-SMBP power repayment 
study (PRS) which is recovered by both eastern and western divisions of 
the P-SMBP.
    In response to these suggestions, Western prepared proposed rate 
schedules for firm electric service (P-SED-F9) and firm peaking service 
(P-SED-FP9) for consideration and comment during this public process. 
The projected annual revenue requirement under these schedules is 
allocated equally between capacity and energy. These proposed rate 
schedules also reflect rate adjustments based on the Pick-Sloan revenue 
requirement derived from the Fiscal Year 2006 Final Power Repayment 
Study (PRS). The PRS sets the total annual P-SMBP--ED revenue 
requirement for 2008 for firm electric and firm peaking power service 
at $235.9 million.

             Table 1.--Proposed Firm Electric and Firm Peaking Service Revenue Requirement and Rates
----------------------------------------------------------------------------------------------------------------
                                                                          Proposed rates  (Jan. 1,     Percent
          Firm electric service                   Existing rates                   2008)                change
----------------------------------------------------------------------------------------------------------------
P-SMBP--ED Firm and Firm Peaking Revenue   $189.9 million.............  $235.9 million.............         24.2
 Requirement.
P-SMBP--ED Composite Rate................  19.54 mills/kWh............  24.49 mills/kWh............         25.3
Firm Capacity............................  $4.45/kWmonth..............  $5.65/kWmonth..............         27.0
Firm Energy..............................  11.29 mills/kWh............  13.99 mills/kWh............         23.9
Tiered > 60 Percent Load Factor..........  5.21 mills/kWh.............

[[Page 30374]]

 
Firm Peaking Capacity....................  $4.45/kWmonth..............  $5.10/kWmonth..............         14.6
Firm Peaking Energy 1....................  11.29 mills/kWh............  13.99 mills/kWh............        23.9
----------------------------------------------------------------------------------------------------------------
1 Firm peaking energy is normally returned. This will be assessed in the event firm peaking energy is not
  returned.

    Under proposed Rate Schedule P-SED-F9, the composite rate will 
increase 25.3 percent. The firm energy rate will increase to 13.99 
mills per kWh, or 23.9 percent, and the firm capacity rate will 
increase to $5.65/kWmonth, or 27.0 percent.
    Additionally, under Rate Schedule P-SED-F9, Western is proposing to 
identify its firm electric service revenue requirement using a Base and 
a Drought Adder. The Base is a revenue requirement that includes annual 
operation and maintenance expenses, investment repayment and associated 
interest, normal timing power purchases, and transmission costs. 
Western's normal timing power purchases are purchases due to 
operational constraints (e.g., management of endangered species 
habitat, water quality, navigation, etc.) and are not associated with 
the current drought.
    The Drought Adder is a formula-based revenue requirement that 
includes costs attributable to the present drought conditions within 
the Pick-Sloan Program. The Drought Adder includes costs associated 
with future non-timing purchases of additional power to firm 
obligations not covered with available system generation due to the 
drought, previously incurred deficits due to purchased power debt that 
resulted from non-timing power purchases made during this drought, and 
the interest associated with the previously incurred and future drought 
debt. The Drought Adder is designed to repay Western's drought debt 
within 10 years from the time the debt was incurred, using balloon 
payment methodology. For example, the drought debt incurred by Western 
in 2006 will be paid off by 2016.
    The annual revenue requirement calculation can be summarized by the 
following formula: Annual Revenue Requirement = Base + Drought Adder. 
Under this proposal, the P-SMBP--ED annual revenue requirement equals 
$245.2 million and is comprised of a Base revenue requirement of $157.2 
million plus a Drought Adder revenue requirement of $88.0 million. Both 
the Base and Drought Adder recover portions of the firm power revenue 
requirement, firm peaking power, and associated 5 percent discount 
revenue necessary to equal the P-SMBP--ED annual revenue requirement.
    Western's proposal for identifying its firm electric service 
revenue requirement using Base and Drought Adder will help Western 
present the impacts of the drought within the Pick-Sloan Program, 
demonstrate repayment of those drought related costs in the PRS, and 
allow Western to be more responsive to changes in drought related 
expenses. Western 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.
    Western reviews its firm electric service rates annually. Western 
will review the Base after the annual PRS is completed, generally in 
the first quarter of the calendar year. If an adjustment to the Base is 
necessary, Western will initiate a public process pursuant to 10 CFR 
part 903 prior to making an adjustment.
    Western will review the Drought Adder each September to determine 
if drought costs differ from those projected in the PRS, and, if so, 
whether an adjustment to the Drought Adder is necessary. For any 
adjustments attributed to drought costs of less than or equal to the 
equivalent of 2 mills/kWh to the PRS composite rate, Western will 
notify customers by letter in October of the planned adjustment and 
implement the adjustment in the January billing cycle. For the portion 
of any planned incremental adjustment greater than the equivalent of 2 
mills/kWh to the PRS composite rate, Western will engage in a public 
process pursuant to 10 CFR part 903 prior to making that portion of the 
adjustment. Although decremental adjustments to the Drought Adder will 
occur, the adjustment cannot result in the Drought Adder being a 
negative number. Western will conduct a preliminary review of the 
Drought Adder in early summer to give customers advanced notice of any 
adjustment in the following January. Customers will be advised by 
letter of the estimated change to the Drought Adder with the final 
Drought Adder adjustment verified with notification in the October 
letter to the customers.
    Under Rate Schedule P-SED-F9, Western is also proposing to 
eliminate the tiered rate in the P-SMBP--ED. Western agrees with 
customers that continuing a tiered rate charge for loads in excess of 
60 percent monthly load factor discourages load management, and 
eliminating the tiered rate from the P-SMBP--ED firm electric service 
schedule is consistent with the design of firm electric service rates 
in the P-SMBP--WD.
    Western is also proposing to redesign its revenue recovery 
methodology for firm peaking service. Under proposed Rate Schedule P-
SED-FP9, the firm peaking capacity charge will be calculated by 
dividing one-half of the P-SMBP--ED revenue requirement by the sum of 
the total allocated seasonal CRODs modeled as monthly billing units for 
both firm electric and firm peaking service. While Western is proposing 
to redesign its methodology for calculating the firm peaking capacity 
rate, it notes that the firm electric capacity and firm peaking 
capacity rates combined will continue to recover one-half of P-SMBP--ED 
annual revenue requirement.
    As set forth in Table 1, above, under proposed Rate Schedule P-SED-
FP9, the firm peaking capacity rate will increase to $5.10 per kWmonth, 
or 14.6 percent. Peaking energy is either returned to Western or paid 
for in accordance with the terms of the contract between Western and 
the peaking power customer. The firm peaking energy rate is set forth 
in Table 1, above.

Legal Authority

    Since the proposed rates constitute a major rate adjustment as 
defined by 10 CFR part 903, Western will hold both public information 
forums and public comment forums. After review of public comments, and 
possible amendments or adjustments, Western will recommend the Deputy 
Secretary of Energy approve the proposed rates on an interim basis.
    Western is establishing firm electric service and peaking rates for 
P-SMBP--ED under the Department of Energy Organization Act (42 U.S.C. 
7152); the Reclamation Act of 1902 (ch. 1093, 32 Stat. 388), as amended 
and supplemented by subsequent laws,

[[Page 30375]]

particularly section 9(c) of the Reclamation Project Act of 1939 (43 
U.S.C. 485h(c)); section 5 of the Flood Control Act of 1944 (16 U.S.C. 
825s); and other acts that specifically apply to the projects involved.
    By Delegation Order No. 00-037.00, effective December 6, 2001, the 
Secretary of Energy delegated: (1) The authority to develop power and 
transmission rates to Western's Administrator; (2) the authority to 
confirm, approve, and place such rates into effect on an interim basis 
to the Deputy Secretary of Energy; and (3) the authority to confirm, 
approve, and place into effect on a final basis, to remand, or to 
disapprove such rates to the Commission. Existing Department of Energy 
(DOE) procedures for public participation in power rate adjustments (10 
CFR part 903) were published on September 18, 1985.

Availability of Information

    Interested parties may review and copy all brochures, studies, 
comments, letters, memorandums, or other documents that Western 
initiates or uses to develop the proposed rates. These documents are at 
the Upper Great Plains Regional Office, located at 2900 4th Avenue 
North, Billings, Montana. Many of these documents and supporting 
information are also available on Western's Web site under the ``2008 
Firm Rate Adjustment'' section located at http://www.wapa.gov/ugp/
rates/2008firmrateadjust.

Ratemaking Procedure Requirements

Environmental Compliance

    In compliance with the National Environmental Policy Act of 1969 
(NEPA) (42 U.S.C. 4321, et seq.); Council on Environmental Quality 
Regulations (40 CFR parts 1500-1508); and DOE NEPA Regulations (10 CFR 
part 1021), Western 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.

Determination Under Executive Order 12866

    Western 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.

    Dated: May 18, 2007.
Timothy J. Meeks,
Administrator.
 [FR Doc. E7-10514 Filed 5-30-07; 8:45 am]
BILLING CODE 6450-01-P