Pick-Sloan Missouri Basin Program-Eastern Division-Rate Order No. WAPA-166, 72670-72677 [2014-28677]
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between 95-percent lagging and 95percent leading.
[FR Doc. 2014–28715 Filed 12–5–14; 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–166
Western Area Power
Administration, DOE.
ACTION: Notice of Order Concerning
Firm Power Rates.
AGENCY:
The Deputy Secretary of
Energy confirmed and approved Rate
Order No. WAPA–166 and Rate
Schedules P–SED–F12 and P–SED–
FP12, placing firm power and firm
peaking power rates for the Western
Area Power Administration (Western)
Pick-Sloan Missouri Basin Program—
Eastern Division (P–SMBP—ED) into
effect on an interim basis.
DATES: Rate Schedules P–SED–F12 and
P–SED–FP12 will be placed into effect
on an interim basis on the first day of
the first full billing period beginning on
or after January 1, 2015, and will remain
in effect until the Federal Energy
Regulatory Commission (FERC)
SUMMARY:
confirms, approves, and places the rate
schedules or substitute rates in effect on
a final basis through December 31, 2019,
or until the rate schedules are
superseded.
FOR FURTHER INFORMATION CONTACT: Mr.
Robert J. Harris, Regional Manager,
Upper Great Plains Region, Western
Area Power Administration, 2900 4th
Avenue North, Billings, MT 59101–
1266, telephone (406) 255–2800, email
rharris@wapa.gov, or Ms. Linda CadyHoffman, Rates Manager, Upper Great
Plains Region, Western Area Power
Administration, 2900 4th Avenue North,
Billings, MT 59101–1266, telephone
(406) 255–2920, email cady@wapa.gov.
SUPPLEMENTARY INFORMATION: Rate
Schedules P–SED–F11 and P–SED–FP11
were approved under Rate Order No.
WAPA–147 for the period beginning
January 1, 2010, and ending December
31, 2014.1 Under the current rate
methodology, rates for P–SMBP—ED
firm power and firm peaking power
service are designed to recover an
annual revenue requirement that
includes investment repayment,
interest, purchase power, operation and
maintenance, and other expenses within
the allowable period. The total annual
revenue requirement for P–SMBP—ED
remains $320.2 million for firm power
and firm peaking power service. In
addition, the overall capacity and
energy charges are not changing, as the
existing charges in the current rate
schedules for firm power and firm
peaking power continue to provide
sufficient revenue to meet the P–
SMBP—ED repayment obligations. The
Rate Schedules continue to be formula
based. An incremental upward
adjustment to the Drought Adder greater
than the equivalent of 2 mills/kWh to
the Power Repayment Study (PRS)
composite rate will require a public
process. The Drought Adder may be
adjusted downward pursuant to the
formula without a public process.
Rate Schedules P–SED–F11 and P–
SED–FP11 are being superseded by Rate
Schedules P–SED–F12 and P–SED–
FP12, respectively. Under Rate
Schedule P–SED–F12, the firm capacity
charge will remain $7.65/kilowattmonth
(kWmonth), and the firm energy charge
will remain 19.05 mills/kilowatthour
(kWh). Under Rate Schedule P–SED–
FP12, the firm peaking power services
capacity charge will remain $6.90/
kWmonth, and the energy charge will
remain 19.05 mills/kWh as of January 1,
2015. Firm Peaking Energy is normally
returned. A Firm Peaking Energy charge
of 19.05 mills/kWh will be assessed in
the event energy is not returned. The
Base and Drought Adder components
associated with these charges are shown
in Table 1 below:
TABLE 1—SUMMARY OF P–SMBP—ED CHARGE COMPONENTS
Existing charges under Rate Schedules effective
(January 1, 2010) P–SED–F11/P–SED–FP11
Base
component
Firm
Firm
Firm
Firm
Capacity ($/kWmonth) ...............
Energy (mills/kWh) ....................
Peaking Capacity ($/kWmonth)
Peaking Energy (mills/kWh) 1 ....
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1 Firm
Drought Adder
component
$3.80
9.53
$3.45
9.53
Provisional charges under Rate Schedules effective
(January 1, 2015) P–SED–F12/P–SED–FP12
Total charge
$3.85
9.52
$3.45
9.52
Base
component
$7.65
19.05
$6.90
19.05
Drought Adder
component
$4.90
12.33
$4.45
12.26
Total charge
$2.75
6.72
$2.45
6.79
$7.65
19.05
$6.90
19.05
Peaking Energy is normally returned. This charge will be assessed in the event firm peaking energy is not returned.
By Delegation Order No. 00–037.00A,
effective October 25, 2013, 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
FERC. Existing DOE procedures for
public participation in power rate
adjustments (10 CFR part 903) were
published on September 18, 1985.
Under Delegation Order Nos. 00–
037.00A and 00–001.00E and in
compliance with 10 CFR part 903 and
18 CFR part 300, I hereby confirm,
approve, and place Rate Order No.
WAPA–166, P–SMBP—ED firm power
and firm peaking power rates, into effect
on an interim basis
(Provisional Rates). The new Rate
Schedules P–SED–F12 and P–SED–FP12
will be promptly submitted to FERC for
confirmation and approval on a final
basis.
Dated: December 2, 2014.
Elizabeth Sherwood-Randall,
Deputy Secretary of Energy.
1 WAPA–147 was approved by the Deputy
Secretary of Energy on December 14, 2009 (74 FR
67197 (Dec 18, 2009)), and confirmed and approved
by FERC on a final basis on September 10, 2010,
in Docket No. EF10–2–000. See United States
Department of Energy, Western Area Power
Administration (Pick-Sloan Missouri Basin
Program—Eastern Division), 132 FERC ¶ 62,159.
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DEPARTMENT OF ENERGY
DEPUTY SECRETARY
In the matter of:
Western Area Power Administration
Rate Adjustment for the Pick-Sloan
Missouri Basin Program—Eastern
Division
Rate Order No. WAPA–166
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ORDER CONFIRMING, APPROVING,
AND PLACING THE PICK-SLOAN
MISSOURI BASIN PROGRAM—
EASTERN DIVISION FIRM POWER
AND FIRM PEAKING POWER SERVICE
RATES INTO EFFECT ON AN INTERIM
BASIS
These firm and firm peaking power
service rates for the Pick-Sloan Missouri
Basin Program—Eastern Division (P–
SMBP—ED) are established in
accordance with section 302 of the
Department of Energy (DOE)
Organization Act (42 U.S.C. 7152). This
Act transferred to and vested in the
Secretary of Energy the power marketing
functions of the Secretary of the
Base ............................................
Capacity .....................................
Capacity Charge ........................
Composite Rate .........................
CROD .........................................
Deficits .......................................
DOE Order RA 6120.2 ...............
Drought Adder ...........................
Energy ........................................
Energy Charge ...........................
Firm ............................................
FY ...............................................
kW ..............................................
kWh ............................................
kWmonth ...................................
mills/kWh ..................................
MW .............................................
Non-timing Power Purchases ...
O&M ...........................................
Power .........................................
Power Factor ..............................
Preference ..................................
Provisional Rate ........................
Revenue Requirement ...............
Department of the Interior and the
Bureau of 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 project involved.
By Delegation Order No. 00–037.00A,
effective October 25, 2013, the Secretary
of Energy delegated: (1) the authority to
develop power and transmission rates to
the Administrator of Western Area
Power Administration (Western); (2) the
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Public Notice and Comment
The Provisional Rates will take effect
on the first day of the first full billing
period beginning on or after January 1,
2015, and will remain in effect until
December 31, 2019, pending approval
by FERC on a final basis.
Western followed the Procedures for
Public Participation in Power and
Transmission Rate Adjustments and
Extensions, 10 CFR part 903, in
developing these rates. The steps
Western took to involve interested
parties in the minor rate process were:
20:19 Dec 05, 2014
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 Federal Energy Regulatory
Commission (FERC). Existing DOE
procedures for public participation in
power rate adjustments (10 CFR part
903) were published on September 18,
1985.
Acronyms and Definitions
As used in this Rate Order, the
following acronyms and definitions
apply:
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.
The electric capability of a generator, transformer, transmission circuit, or other equipment. It is expressed in kilowatts.
The charge under the rate schedule for capacity. It is expressed in dollars per kilowattmonth.
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
kilowatthour and used for comparison purposes.
Contract Rate of Delivery. The maximum amount of capacity and energy allocated to a Preference Customer for a period specified under a contract.
Deferred or unrecovered annual and/or interest expenses.
An order outlining power marketing administration financial reporting and rate-making procedures.
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.
Measured in terms of the work it is capable of doing over a period of time. Energy is expressed in
kilowatthours.
The charge under the rate schedule for energy. It is expressed in mills per kilowatthour and applied to
each kilowatthour delivered to each customer.
A type of product and/or service available at the time requested by the customer.
Fiscal year; October 1 to September 30.
Kilowatt—the electrical unit of capacity that equals 1,000 watts.
Kilowatthour—the electrical unit of energy that equals 1,000 watts in 1 hour.
Kilowattmonth—the electrical unit of the monthly amount of capacity.
Mills per kilowatthour—the unit of charge for energy (equal to one tenth of a cent or one thousandth of a
dollar).
Megawatt—the electrical unit of capacity that equals 1 million watts or 1,000 kilowatts.
Power purchases that are not related to operational constraints such as management of endangered species, species habitat, water quality, navigation, control area purposes, etc.
Operation and Maintenance.
Capacity and energy.
The ratio of real to apparent power at any given point and time in an electrical circuit. Generally, it is expressed as a percentage.
The provisions of Reclamation Law that require Western 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.
A rate that has been confirmed, approved, and placed into effect on an interim basis by the Deputy Secretary of Energy.
The revenue required by PRS to recover annual expenses (such as O&M, purchase power, transmission
service expenses, interest, and deferred expenses) and repay Federal investments and other assigned
costs.
Effective Date
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1. On April 17, 2014, Western mailed
a notice announcing an informal public
meeting would be held via webinar on
May 2, 2014, to discuss the rate process
for the expiring firm power rates for the
P–SMBP—ED. The focus of the webinar
was to provide an update on the FY
2013 PRS, discuss the Base and Drought
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Adder component true up, and plan for
the upcoming rate adjustment process.
2. A Federal Register notice (FRN),
published on August 8, 2014 (79 FR
46434), announced the proposed rates
for P–SMBP—ED and began the 30-day
public consultation and comment
period.
3. On August 8, 2014, Western mailed
letters to all P–SMBP—ED Preference
Customers and interested parties
transmitting the FRN published on
August 8, 2014.
4. Western provided a Web page that
contains all dates, customer letters,
presentations, the FRN, and all other
information about this rate process. The
Web page is located at https://www.
wapa.gov/ugp/rates/2015FirmRate
Adjust.
5. During the consultation and
comment period, which ended
September 8, 2014, Western received
three comment letters. All formally
submitted comments have been
considered in the preparation of this
Rate Order.
Comments
Written comments were received
from the following interested parties:
Mid-West Electric Consumers
Association
Missouri River Energy Services
Rodger Otstot
Project Description
The Pick-Sloan Missouri Basin
Program (P–SMBP), originally the
Missouri River Basin Project, was
authorized by Congress in the Flood
Control Act of 1944. The multipurpose
program provides authorization for
construction of certain public works and
improvements on rivers and harbors for
flood control, generation of hydropower,
resources for water supply and
irrigation, aids to navigation,
preservation of water quality,
enhancement of fish and wildlife, and
creation of recreation opportunities.
In addition to the multipurpose water
projects authorized by Section 9 of the
Flood Control Act of 1944, certain other
existing projects have been integrated
with the P–SMBP for power marketing,
operation, and repayment purposes. The
Colorado-Big Thompson, Kendrick, and
Shoshone Projects were combined with
the P–SMBP in 1954, followed by the
North Platte Project in 1959. These
projects were referred to as the
‘‘Integrated Projects’’ of the P–SMBP.
The Flood Control Act of 1944 also
authorized the inclusion of the Fort
Peck Project with the P–SMBP for
operation and repayment purposes.
P–SMBP power is marketed by two
Western regions. The Upper Great
Plains Region (UGPR) markets the
Eastern Division (P–SMBP—ED) and the
Rocky Mountain Region (RMR) markets
the Western Division (P–SMBP—WD)
through the Loveland Area Projects
(LAP). The P–SMBP power is marketed
to approximately 360 firm power
customers by UGPR and approximately
53 firm power customers by RMR.
Power Repayment Study—Firm Power
Rate
Western prepares a PRS each FY to
determine if revenues will be sufficient
to repay, within the required time, all
costs assigned to the P–SMBP.
Repayment criteria are based on
Western’s applicable laws and
legislation, as well as policies including
DOE Order RA 6120.2. To meet Cost
Recovery Criteria outlined in DOE Order
RA 6120.2, a revised study and rate
adjustment has been developed to
demonstrate that sufficient revenues
will be collected under Provisional
Rates to meet future obligations. The
PRS revenue requirement and
Composite Rate remains unchanged, as
indicated in Table 1:
TABLE 1—COMPARISON OF P–SMBP—ED REVENUE REQUIREMENT AND COMPOSITE RATE
Existing
Requirements
(January 1, 2010)
P–SMBP—ED Revenue Requirement ($ in millions) ......................................
P–SMBP—ED Composite Rate (mills/kWh) ....................................................
The P–SMBP—ED annual revenue
requirement equals $332.8 million and
is comprised of a Base revenue
requirement, less a 5 percent discount
for facility credits, resulting in a total
revenue requirement of $320.2 million.
Existing and Provisional Rates
P–SMBP—ED
Under Rate Schedule P–SED–F12, the
firm capacity charge remains $7.65/
Provisional
Requirements
(January 1, 2015)
$320.2
33.25
kWmonth and the firm energy charge
remains 19.05 mills/kWh. Under Rate
Schedule P–SED–FP12, the firm peaking
capacity charge remains $6.90/
kWmonth. Firm Peaking Energy is
normally returned. A Firm Peaking
Energy charge of 19.05 mills/kWh will
be assessed in the event energy is not
returned. These Rate Schedules are
formula based to provide for an annual
adjustment to the Drought Adder
Percent
Change
$320.2
33.25
0
0
component. An 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 Drought Adder may
be adjusted downward pursuant to the
formula without a public process. The
overall capacity and energy charges are
not changing, as indicated in the
following Table 2:
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TABLE 2—COMPARISON OF EXISTING AND PROVISIONAL P–SMBP—ED FIRM POWER RATES
Existing Charges
Under
Rate Schedules Effective
(January 1, 2010)
P–SED–F11/
P–SED–FP11
Firm power service
Provisional Charges
Under Rate Schedules
Effective
(January 1, 2015)
P–SED–F12/
P–SED–FP12
$7.65
19.05
$6.90
$7.65
19.05
$6.90
Firm Capacity ($/kWmonth) .............................................................................
Firm Energy (mills/kWh) ..................................................................................
Firm Peaking Capacity ($/kWmonth) ...............................................................
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Percent
Change
0
0
0
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TABLE 2—COMPARISON OF EXISTING AND PROVISIONAL P–SMBP—ED FIRM POWER RATES—Continued
Existing Charges
Under
Rate Schedules Effective
(January 1, 2010)
P–SED–F11/
P–SED–FP11
Firm power service
Provisional Charges
Under Rate Schedules
Effective
(January 1, 2015)
P–SED–F12/
P–SED–FP12
19.05
19.05
Firm Peaking Energy (mills/kWh) 1 ..................................................................
1 Firm
Percent
Change
0
Peaking Energy is normally returned. This charge will be assessed in the event Firm Peaking Energy is not returned.
Under the current rate methodology,
rates for P–SMBP—ED firm power and
firm peaking power service are designed
to recover an annual revenue
requirement that includes investment
repayment, interest, purchase power,
O&M, and other expenses within the
allowable period.
Western is trueing up the Base and
Drought Adder components of the rate
schedules and placing new rate
schedules into effect for the 5-year
period, beginning January 1, 2015,
through December 31, 2019. The true-up
updates the Base components to
represent present costs and lowers the
Drought Adder components to represent
present drought costs. Over the past 5year rate period, the P–SMBP costs
included in the Drought Adder have
decreased as the actual deficits were
less than the projected deficits.
Additionally, there have been drought
costs repaid ahead of schedule, which
decreased the drought deficit interest
expense. Base costs increased during
that same period due to a new 5-year
cost evaluation period, new investments
and replacements, and inflationary
costs.
P–SMBP—WD
The P–SMBP—WD revenue
requirement is incorporated into the
LAP rate, along with the revenue
requirement for the Fryingpan-Arkansas
Project. The adjustment to the LAP rate
is a separate formal rate process, which
is documented in Rate Order No.
WAPA–167. Rate Order No. WAPA–167
is also scheduled to go into effect on the
first day of the first full billing period
on or after January 1, 2015.
Certification of Rates
Western’s Administrator certified that
the firm power and firm peaking power
rates under Rate Schedules P–SED–F12
and P–SED–FP12 are the lowest
possible rates consistent with sound
business principles. The rates were
developed following administrative
policies and applicable laws.
P–SMBP—ED Firm Power Rate
Discussion
Western is required to establish power
rates sufficient to recover O&M,
purchased power and interest expenses,
and repay power investment and
irrigation aid. The P–SMBP—ED firm
power and firm peaking power Base and
Drought Adder components are updated
to represent present costs. Under Rate
Schedule P–SED–F12, Western will
continue identifying its firm power
service revenue requirement using Base
and Drought Adder components. The
Base component is a fixed revenue
requirement that includes annual O&M
expenses, investment repayment and
associated interest, normal timing
power purchases, and transmission
costs. Western’s normal timing power
purchases are due to operational
constraints (e.g., management of
endangered species habitat, water
quality, navigation, etc.) and are not
associated with drought. The Base
component cannot be adjusted by
Western without a public process.
The Drought Adder component is a
formula-based revenue requirement that
includes costs attributable to drought
conditions within P–SMBP. The
Drought Adder component includes
costs associated with future Non-timing
Power Purchases to meet firm power
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
debt. The Drought Adder component is
designed to repay Western’s drought
debt within 10 years from the time the
debt was incurred, using balloonpayment methodology. For example, the
drought debt incurred by Western in FY
2009 will be repaid by FY 2019.
The annual revenue requirement
calculation will continue to be
summarized by the following formula:
Annual Revenue Requirement = Base
Revenue Requirement + Drought Adder
Revenue Requirement. Both the Base
and Drought Adder components recover
portions of the firm power revenue
requirement, firm peaking power, and
associated 5 percent discount revenue
necessary to equal the P–SMBP—ED
revenue requirement. A comparison of
the existing and provisional charge
components is listed in Table 3.
TABLE 3—SUMMARY OF P–SMBP—ED RATE COMPONENTS
Existing Charges Under Rate Schedules
Effective
(January 1, 2010)
P–SED–F11/
P–SED–FP11
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Firm Power Service
Base
Component
Firm
Firm
Firm
Firm
Capacity ($/kWmonth) .....................
Energy (mills/kWh) ..........................
Peaking Capacity ($/kWmonth) .......
Peaking Energy (mills/kWh) 1 ..........
1 Firm
Drought Adder
Component
$3.80
9.53
$3.45
9.53
Total Charge
$3.85
9.52
$3.45
9.52
Provisional Charges Under Rate Schedules
Effective
(January 1, 2015)
P–SED–F12/
P–SED–FP12
Base
Component
$7.65
19.05
$6.90
19.05
$4.90
12.33
$4.45
12.26
Drought Adder
Component
$2.75
6.72
$2.45
6.79
Peaking Energy is normally returned. This charge will be assessed in the event Firm Peaking Energy is not returned.
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Total Charge
$7.65
19.05
$6.90
19.05
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Continuing to identify the firm
electric service revenue requirement
using Base and Drought Adder
components will assist Western in
presenting the effects of the drought
within P–SMBP, demonstrating
repayment of the drought-related costs,
and allow Western to be more
responsive to changes in drought-related
expenses. Western will continue to
charge and bill Customers firm power
service charges for energy and capacity,
which are the sum of the Base and
Drought Adder components.
Western reviews its firm electric
service rates annually. Western will
review the Base component after the
annual PRS is completed, generally in
the first quarter of the calendar year. If
an adjustment to the Base component is
necessary, Western will initiate a public
process following 10 CFR part 903
before making an adjustment.
In accordance with the original
implementation of the Drought Adder
component, Western will review the
Drought Adder component each
September to determine if drought costs
differ from those projected in the PRS.
If drought costs differ, Western will
determine if an adjustment to the
Drought Adder component is necessary.
Western will notify customers by letter
each October of the planned
incremental or decremental adjustment
and implement the adjustment in the
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. To give customers advance
notice, Western will conduct a
preliminary review of the Drought
Adder component in early summer and
notify customers by letter of the
estimated change to the Drought Adder
component for the following January.
Western will verify the final Drought
Adder component adjustment and
notify customers by letter each October
of any planned increase or decrease in
this component. Implementing the
Drought Adder component adjustment
on January 1 of each year will help keep
the drought deficits from escalating as
quickly, will lower the interest expense
due to drought deficits, will
demonstrate responsible deficit
management, and will provide prompt
drought deficit repayments.
Western’s current and provisional rate
schedules are formula based to provide
for an annual adjustment to the Drought
Adder component. An 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
Drought Adder may be adjusted
downward pursuant to the formula
without a public process.
Statement of Revenue and Related
Expenses
The following Table 4 provides a
summary of projected revenue and
expense data for the total P–SMBP,
including both the Eastern and Western
Division’s firm electric service revenue
requirements through the 5-year rate
approval period. The firm power rates
for both divisions have been developed
with the following revenues and
expenses for the P–SMBP:
TABLE 4—TOTAL P–SMBP FIRM POWER COMPARISON OF 5-YEAR RATE PERIOD (FY 2015–2019) TOTAL REVENUES AND
EXPENSES
Existing Rate
($000)
Provisional Rate
($000)
Difference
($000)
Total Revenues ....................................................................................................
$2,625,336
$2,679,973
$54,637
Revenue Distribution
Expenses:
O&M ..............................................................................................................
Purchased Power .........................................................................................
Interest ..........................................................................................................
Transmission ................................................................................................
$904,884
440,038
650,671
65,853
$1,082,969
164,049
561,528
64,072
$178,085
(275,989)
(89,143)
(1,781)
Total Expenses ......................................................................................
Principal Payments:
Capitalized Expenses (Deficits) 1 .................................................................
Original Project and Additions 1 ....................................................................
Replacements 1 .............................................................................................
Irrigation Aid .................................................................................................
$2,061,446
$1,872,618
$(188,828)
$483,252
10,414
4,825
65,399
$345,006
401,193
61,156
0
$(138,246)
390,779
56,331
(65,399)
Total Principal Payments ......................................................................
$563,890
$807,355
$243,465
Total Revenue Distribution ....................................................................
$2,625,336
$2,679,973
$54,637
mstockstill on DSK4VPTVN1PROD with NOTICES
1 Due to deficit conditions between 2001 and 2009, revenues generated in the cost evaluation period are applied toward repayment of deficits
rather than repayment of project additions and replacements. All deficits are projected to be repaid by 2018.
Basis for Rate Development
The existing charges for firm power
and firm peaking power under Rate
Schedules F11 and FP11, which expire
December 31, 2014, continue to provide
sufficient revenue to meet the P–
SMBP—ED repayment obligations. The
total annual revenue requirement for
P–SMBP—ED remains $320.2 million
for firm power and firm peaking power
service, and the overall capacity and
energy charges are not changing. The
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20:19 Dec 05, 2014
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Provisional Rates, under Rate Schedules
F12 and FP12, will take effect on the
first full billing period on or after
January 1, 2015, and will remain in
effect on an interim basis, pending
FERC’s confirmation and approval of
the rate schedules or substitute rates on
a final basis, through December 31,
2019, or until the rate schedules are
superseded.
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Comments
Western received three comment
letters during the public consultation
and comment period. The comments
expressed in these letters have been
paraphrased, where appropriate,
without compromising the meaning of
the comments.
A. Comment: Two customer
representatives recognized the need for
true up of the Base and Drought Adder
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72675
Ratemaking Procedure Requirements:
United States Department of Energy
Environmental Compliance
Western Area Power Administration
In compliance with the National
Environmental Policy Act (NEPA) of
1969 (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), Western
has determined this action is
categorically excluded from preparing
an environmental assessment or an
environmental impact statement.
Pick–Sloan Missouri Basin Program—
Eastern Division
Availability of Information
mstockstill on DSK4VPTVN1PROD with NOTICES
charge components of the composite
rate.
Response: Western agrees with the
above comment. Rather than extend
rates with out-of-date charge
components, Western choose to do a
minor rate adjustment to address trueing
up the charge components.
B. Comment: One customer
representative supported the rate
modifications as proposed, and
emphasized the need for continued cost
control regarding the Base component.
They stated the Base costs cannot grow
unabated and replace the shrinking
Drought Adder. The customer stressed
that cost control is of paramount
importance.
Response: Western agrees with the
above comment. Western is committed
to keeping the power rates at the lowest
possible rates while maintain sound
business principles. All budgeted O&M
and capital improvements are vetted
annually through customer work plan
meetings to access the impacts to the
rates.
C. Comment: One interested party
expressed concern over the
suballocation of the power allocation for
the Pick-Sloan Missouri Basin Program.
The customer feels the allocation is not
being calculated in agreement with the
ultimate development concept or in
accordance with the repayment rules set
forth in the Report of Financial Position,
Missouri River Basin Project, dated
December 1963.
Response: Compliance with applicable
authority regarding suballocations for
the Pick-Sloan Missouri Basin Program
is beyond the scope of this minor rate
adjustment process and public process.
Western is in compliance with
applicable authority. Moreover, any
change in the cost allocations would
require Congressional approval
pursuant to the DOE Organization Act of
1977 (42 U.S.C. 7152(a)(3)).
Dated: December 2, 2014.
Elizabeth Sherwood-Randall,
Deputy Secretary of Energy.
Rate Schedule P–SED–F12
(Supersedes Schedule P–SED–F11)
January 1, 2015
All documents related to this action
are available for inspection and copying
at the Upper Great Plains Regional
Office, located at 2900 4th Avenue
North, Billings, Montana. These
documents are also available on
Western’s Web site located at https://
www.wapa.gov/ugp/rates/
2015firmrateadjust.
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Jkt 235001
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.
Submission to the Federal Energy
Regulatory Commission
The Provisional 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.
Montana, North Dakota, South Dakota,
Minnesota, Iowa, Nebraska
SCHEDULE OF RATES FOR FIRM
POWER SERVICE
(Approved Under Rate Order No.
WAPA–166)
Effective:
The first day of the first full billing
period beginning on or after January 1,
2015, through December 31, 2019, or
until superseded by another rate
schedule.
Available:
Within the marketing area served by
the Eastern Division of the Pick-Sloan
Missouri Basin Program.
Applicable:
To the power and energy delivered to
customers as firm power service.
Character:
Alternating current, 60 hertz, three
phase, delivered and metered at the
voltages and points established by
contract.
ORDER
Formula Rate and Charge Components:
In view of the foregoing and under the
authority delegated to me, I confirm and
approve on an interim basis, effective on
the first full billing period on or after
January 1, 2015, Rate Schedules P–SED–
F12 and P–SED–FP12 for the Pick-Sloan
Missouri Basin Program—Eastern
Division Project of the Western Area
Power Administration. These rate
schedules shall remain in effect on an
interim basis, pending FERC’s
confirmation and approval of the rate
schedules or substitute rates on a final
basis through December 31, 2019, or
until the rate schedules are superseded.
Rate = Base component + Drought
Adder component
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Monthly Charge as of January 1, 2015,
under the Rate:
CAPACITY CHARGE:
$7.65 for each kilowatt per month
(kWmonth) of billing capacity.
ENERGY CHARGE:
19.05 mills for each kilowatthour
(kWh) for all energy delivered as firm
power service.
BILLING CAPACITY: The billing
capacity will be as defined by the power
sales contract.
Base: 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.
The Base component charges are fixed
amounts under this Rate Schedule,
determined as follows:
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Process:
For Billing of Unauthorized Overruns:
Applicable:
Any proposed change to the Base
component will require a public
process.
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.
To the power sold to customers as
firm peaking power service.
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 Drought Adder may
be adjusted downward pursuant to the
formulas without a public process.
A revised Drought Adder charge may
go into effect January 1 of each year
based on the formula above. Western
will notify customers annually in
October of the revised monthly charges.
Any change to the Drought Adder
component will be identified in a
revision to charges under this rate
schedule.
Character:
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.
Alternating current, 60 hertz, three
phase, delivered and metered at the
voltages and points established by
contract.
Formula Rate and Charge Components:
Rate Schedule P–SED–FP12
(Supersedes Schedule P–SED–FP11)
January 1, 2015
Rate = Base component + Drought
Adder component
Monthly Charge as of January 1, 2015,
under the Rate:
United States Department of Energy
CAPACITY CHARGE:
Western Area Power Administration
$6.90 for each kilowatt per month
(kWmonth) of the effective contract rate
of delivery for peaking power or the
maximum amount scheduled,
whichever is greater.
Pick-Sloan Missouri Basin Program—
Eastern Division Montana, North
Dakota, South Dakota, Minnesota,
Iowa, Nebraska
ENERGY CHARGE:
Adjustments:
(Approved Under Rate Order No.
WAPA–166)
For Character and Conditions of
Service:
19.05 mills for each kilowatthour
(kWh) for all energy scheduled for
delivery without return.
Effective:
Customers who receive deliveries at
transmission voltage may, in some
instances, be eligible to receive a 5
percent discount on capacity and energy
charges when facilities are provided by
the customer that results in a sufficient
savings to Western to justify the
discount. The determination of
eligibility for receipt of the voltage
discount shall be exclusively vested in
Western.
Available:
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Jkt 235001
The first day of the first full billing
period beginning on or after January 1,
2015, through December 31, 2019, or
until superseded by another rate
schedule.
Within the marketing area served by
the Eastern Division of the Pick-Sloan
Missouri Basin Program, to customers
with generating resources, enabling
them to use firm peaking power service.
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Base: 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.
The Base component charges are fixed
amounts under this Rate Schedule,
determined as follows:
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mstockstill on DSK4VPTVN1PROD with NOTICES
SCHEDULE OF RATES FOR FIRM
PEAKING POWER SERVICE
Federal Register / Vol. 79, No. 235 / Monday, December 8, 2014 / Notices
DEPARTMENT OF ENERGY
Any proposed change to the Base
component will require a public
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 Drought Adder may
be adjusted downward pursuant to the
formulas without a public process.
A revised Drought Adder charge may
go into effect January 1 of each year
based on the formula above. Western
will notify customers annually in
October of the revised monthly charges.
Any change to the Drought Adder
component will be identified in a
revision to charges under this rate
schedule.
Western Area Power Administration
BILLING CAPACITY:
The billing capacity will be the
greater of (1) the highest 30-minute
integrated capacity 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:
mstockstill on DSK4VPTVN1PROD with NOTICES
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 capacity and/or
energy, such overrun shall be billed at
10 times the formula rate.
[FR Doc. 2014–28677 Filed 12–5–14; 8:45 am]
BILLING CODE 6450–01–P
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Antelope Valley Station to Neset
Transmission Project Record of
Decision (DOE/EIS–0478)
Western Area Power
Administration, DOE.
ACTION: Record of Decision.
AGENCY:
Western Area Power
Administration (Western), an agency
within the U.S. Department of Energy
(DOE), received a request from Basin
Electric Power Cooperative (Basin
Electric) to interconnect its proposed
Antelope Valley Station (AVS) to Neset
Transmission Project (Project) to
Western’s Williston Substation and
Williston to Charlie Creek 230-kilovolt
(kV) transmission line. The Project
would be located in northwest North
Dakota including parts of Mercer, Dunn,
McKenzie, Williams, and Mountrail
counties. On May 30, 2014, the Notice
of Availability (NOA) of the Final
Environmental Impact Statement (EIS)
for the Project was published in the
Federal Register (79 FR 31085). The
U.S. Department of Agriculture (USDA),
Rural Utilities Service (RUS) was the
lead Federal agency for the EIS. Western
was a cooperating agency in preparation
of the EIS. After considering the
environmental impacts, Western has
decided to allow Basin Electric’s request
for interconnection.
FOR FURTHER INFORMATION CONTACT: For
further information, please contact Mr.
Rod O’Sullivan, Corporate Services
Office, Western Area Power
Administration, A7400, P.O. Box
281213, Lakewood, CO 80228–8213,
telephone (720) 962–7260 or email:
OSullivan@wapa.gov. For general
information on DOE’s National
Environmental Policy Act of 1969
(NEPA) review process, please contact
Carol M. Borgstrom, Director, Office of
NEPA Policy and Compliance, GC–54,
U.S. Department of Energy, Washington,
SUMMARY:
PO 00000
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Fmt 4703
Sfmt 4703
DC 20585, telephone (202) 586–4600 or
(800) 472–2756.
SUPPLEMENTARY INFORMATION: Western is
a Federal agency under the DOE that
markets and transmits wholesale
electrical power through an integrated
17,000-circuit mile, high-voltage
transmission system across 15 western
states. Basin Electric’s request for
interconnection was processed in
accordance with Western’s General
Requirements for Interconnection,
which sets forth the procedures and
requirements for certain types of
interconnection to Western’s
transmission system that are not
provided for in Western’s Open Access
Transmission Tariff (e.g., system-tosystem interconnections not associated
with transmission or generator
interconnection service).
Interested parties were notified of the
proposed Project and the public scoping
comment opportunity through a Notice
of Intent published in the Federal
Register on November 2, 2011 (76 FR
67670). The RUS published an NOA of
the Draft EIS in the Federal Register on
December 7, 2012 (77 FR 73029). On
December 20, 2013, the U.S.
Environmental Protection Agency (EPA)
published an NOA of the Supplemental
Draft EIS for the Project in the Federal
Register (78 FR 77121). On May 30,
2014, RUS published an NOA of the
Final EIS for the Project in the Federal
Register (79 FR 31085).1 The RUS
published its NOA for its Record of
Decision (ROD) on September 22, 2014,
in the Federal Register (79 FR 56557).
With the issuance of its ROD, RUS
selected Alternative C as the
transmission line route.
The RUS was the lead Federal agency
for the EIS. Western and the USDA,
Forest Service (USFS) participated as
cooperating agencies on the EIS. After
an independent review of the Final EIS,
Western has concluded that its needs
1 The Final EIS can be found on the RUS Web site
at: https://www.rurdev.usda.gov/UWP-AVSNeset.html.
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Process:
72677
]]>Agencies
[Federal Register Volume 79, Number 235 (Monday, December 8, 2014)]
[Proposed Rules]
[Pages 72670-72677]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-28677]
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
Western Area Power Administration
Pick-Sloan Missouri Basin Program--Eastern Division-Rate Order
No. WAPA-166
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of Order Concerning Firm Power Rates.
-----------------------------------------------------------------------
SUMMARY: The Deputy Secretary of Energy confirmed and approved Rate
Order No. WAPA-166 and Rate Schedules P-SED-F12 and P-SED-FP12, placing
firm power and firm peaking power rates for the Western Area Power
Administration (Western) Pick-Sloan Missouri Basin Program--Eastern
Division (P-SMBP--ED) into effect on an interim basis.
DATES: Rate Schedules P-SED-F12 and P-SED-FP12 will be placed into
effect on an interim basis on the first day of the first full billing
period beginning on or after January 1, 2015, and will remain in effect
until the Federal Energy Regulatory Commission (FERC) confirms,
approves, and places the rate schedules or substitute rates in effect
on a final basis through December 31, 2019, or until the rate schedules
are superseded.
FOR FURTHER INFORMATION CONTACT: Mr. Robert J. Harris, Regional
Manager, Upper Great Plains Region, Western Area Power Administration,
2900 4th Avenue North, Billings, MT 59101-1266, telephone (406) 255-
2800, email rharris@wapa.gov, or Ms. Linda Cady-Hoffman, Rates Manager,
Upper Great Plains Region, Western Area Power Administration, 2900 4th
Avenue North, Billings, MT 59101-1266, telephone (406) 255-2920, email
cady@wapa.gov.
SUPPLEMENTARY INFORMATION: Rate Schedules P-SED-F11 and P-SED-FP11 were
approved under Rate Order No. WAPA-147 for the period beginning January
1, 2010, and ending December 31, 2014.\1\ Under the current rate
methodology, rates for P-SMBP--ED firm power and firm peaking power
service are designed to recover an annual revenue requirement that
includes investment repayment, interest, purchase power, operation and
maintenance, and other expenses within the allowable period. The total
annual revenue requirement for P-SMBP--ED remains $320.2 million for
firm power and firm peaking power service. In addition, the overall
capacity and energy charges are not changing, as the existing charges
in the current rate schedules for firm power and firm peaking power
continue to provide sufficient revenue to meet the P-SMBP--ED repayment
obligations. The Rate Schedules continue to be formula based. An
incremental upward adjustment to the Drought Adder greater than the
equivalent of 2 mills/kWh to the Power Repayment Study (PRS) composite
rate will require a public process. The Drought Adder may be adjusted
downward pursuant to the formula without a public process.
---------------------------------------------------------------------------
\1\ WAPA-147 was approved by the Deputy Secretary of Energy on
December 14, 2009 (74 FR 67197 (Dec 18, 2009)), and confirmed and
approved by FERC on a final basis on September 10, 2010, in Docket
No. EF10-2-000. See United States Department of Energy, Western Area
Power Administration (Pick-Sloan Missouri Basin Program--Eastern
Division), 132 FERC ] 62,159.
---------------------------------------------------------------------------
Rate Schedules P-SED-F11 and P-SED-FP11 are being superseded by
Rate Schedules P-SED-F12 and P-SED-FP12, respectively. Under Rate
Schedule P-SED-F12, the firm capacity charge will remain $7.65/
kilowattmonth (kWmonth), and the firm energy charge will remain 19.05
mills/kilowatthour (kWh). Under Rate Schedule P-SED-FP12, the firm
peaking power services capacity charge will remain $6.90/kWmonth, and
the energy charge will remain 19.05 mills/kWh as of January 1, 2015.
Firm Peaking Energy is normally returned. A Firm Peaking Energy charge
of 19.05 mills/kWh will be assessed in the event energy is not
returned. The Base and Drought Adder components associated with these
charges are shown in Table 1 below:
Table 1--Summary of P-SMBP--ED Charge Components
--------------------------------------------------------------------------------------------------------------------------------------------------------
Existing charges under Rate Schedules Provisional charges under Rate Schedules
effective (January 1, 2010) P-SED-F11/P-SED- effective (January 1, 2015) P-SED-F12/P-SED-FP12
----------------------FP11------------------------------------------------------------------------
Base Drought Adder Drought Adder
component component Total charge Base component component Total charge
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firm Capacity ($/kWmonth)............................ $3.80 $3.85 $7.65 $4.90 $2.75 $7.65
Firm Energy (mills/kWh).............................. 9.53 9.52 19.05 12.33 6.72 19.05
Firm Peaking Capacity ($/kWmonth).................... $3.45 $3.45 $6.90 $4.45 $2.45 $6.90
Firm Peaking Energy (mills/kWh) \1\.................. 9.53 9.52 19.05 12.26 6.79 19.05
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Firm Peaking Energy is normally returned. This charge will be assessed in the event firm peaking energy is not returned.
By Delegation Order No. 00-037.00A, effective October 25, 2013, 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 FERC. Existing DOE procedures for public
participation in power rate adjustments (10 CFR part 903) were
published on September 18, 1985.
Under Delegation Order Nos. 00-037.00A and 00-001.00E and in
compliance with 10 CFR part 903 and 18 CFR part 300, I hereby confirm,
approve, and place Rate Order No. WAPA-166, P-SMBP--ED firm power and
firm peaking power rates, into effect on an interim basis
(Provisional Rates). The new Rate Schedules P-SED-F12 and P-SED-
FP12 will be promptly submitted to FERC for confirmation and approval
on a final basis.
Dated: December 2, 2014.
Elizabeth Sherwood-Randall,
Deputy Secretary of Energy.
DEPARTMENT OF ENERGY
DEPUTY SECRETARY
In the matter of:
Western Area Power Administration
Rate Adjustment for the Pick-Sloan Missouri Basin Program--Eastern
Division
Rate Order No. WAPA-166
[[Page 72671]]
ORDER CONFIRMING, APPROVING, AND PLACING THE PICK-SLOAN MISSOURI BASIN
PROGRAM--EASTERN DIVISION FIRM POWER AND FIRM PEAKING POWER SERVICE
RATES INTO EFFECT ON AN INTERIM BASIS
These firm and firm peaking power service rates for the Pick-Sloan
Missouri Basin Program--Eastern Division (P-SMBP--ED) are established
in accordance with section 302 of the Department of Energy (DOE)
Organization Act (42 U.S.C. 7152). 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 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 project involved.
By Delegation Order No. 00-037.00A, effective October 25, 2013, the
Secretary of Energy delegated: (1) the authority to develop power and
transmission rates to the Administrator of Western Area Power
Administration (Western); (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 Federal Energy Regulatory Commission (FERC). Existing DOE
procedures for public participation in power rate adjustments (10 CFR
part 903) were published on September 18, 1985.
Acronyms and Definitions
As used in this Rate Order, the following acronyms and definitions
apply:
Base............................................. 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.
Capacity......................................... The electric capability of a generator, transformer,
transmission circuit, or other equipment. It is expressed in
kilowatts.
Capacity Charge.................................. The charge under the rate schedule for capacity. It is
expressed in dollars per kilowattmonth.
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 kilowatthour and used
for comparison purposes.
CROD............................................. Contract Rate of Delivery. The maximum amount of capacity and
energy allocated to a Preference Customer for a period
specified under a contract.
Deficits......................................... Deferred or unrecovered annual and/or interest expenses.
DOE Order RA 6120.2.............................. An order outlining power marketing administration financial
reporting and rate-making procedures.
Drought Adder.................................... 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.
Energy........................................... Measured in terms of the work it is capable of doing over a
period of time. Energy is expressed in kilowatthours.
Energy Charge.................................... The charge under the rate schedule for energy. It is
expressed in mills per kilowatthour and applied to each
kilowatthour delivered to each customer.
Firm............................................. A type of product and/or service available at the time
requested by the customer.
FY............................................... Fiscal year; October 1 to September 30.
kW............................................... Kilowatt_the electrical unit of capacity that equals 1,000
watts.
kWh.............................................. Kilowatthour_the electrical unit of energy that equals 1,000
watts in 1 hour.
kWmonth.......................................... Kilowattmonth_the electrical unit of the monthly amount of
capacity.
mills/kWh........................................ Mills per kilowatthour_the unit of charge for energy (equal
to one tenth of a cent or one thousandth of a dollar).
MW............................................... Megawatt_the electrical unit of capacity that equals 1
million watts or 1,000 kilowatts.
Non-timing Power Purchases....................... Power purchases that are not related to operational
constraints such as management of endangered species,
species habitat, water quality, navigation, control area
purposes, etc.
O&M.............................................. Operation and Maintenance.
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.
Preference....................................... The provisions of Reclamation Law that require Western 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 Rate................................. A rate that has been confirmed, approved, and placed into
effect on an interim basis by the Deputy Secretary of
Energy.
Revenue Requirement.............................. The revenue required by PRS to recover annual expenses (such
as O&M, purchase power, transmission service expenses,
interest, and deferred expenses) and repay Federal
investments and other assigned costs.
Effective Date
The Provisional Rates will take effect on the first day of the
first full billing period beginning on or after January 1, 2015, and
will remain in effect until December 31, 2019, pending approval by FERC
on a final basis.
Public Notice and Comment
Western followed the Procedures for Public Participation in Power
and Transmission Rate Adjustments and Extensions, 10 CFR part 903, in
developing these rates. The steps Western took to involve interested
parties in the minor rate process were:
1. On April 17, 2014, Western mailed a notice announcing an
informal public meeting would be held via webinar on May 2, 2014, to
discuss the rate process for the expiring firm power rates for the P-
SMBP--ED. The focus of the webinar was to provide an update on the FY
2013 PRS, discuss the Base and Drought
[[Page 72672]]
Adder component true up, and plan for the upcoming rate adjustment
process.
2. A Federal Register notice (FRN), published on August 8, 2014 (79
FR 46434), announced the proposed rates for P-SMBP--ED and began the
30-day public consultation and comment period.
3. On August 8, 2014, Western mailed letters to all P-SMBP--ED
Preference Customers and interested parties transmitting the FRN
published on August 8, 2014.
4. Western provided a Web page that contains all dates, customer
letters, presentations, the FRN, and all other information about this
rate process. The Web page is located at https://www.wapa.gov/ugp/rates/2015FirmRateAdjust.
5. During the consultation and comment period, which ended
September 8, 2014, Western received three comment letters. All formally
submitted comments have been considered in the preparation of this Rate
Order.
Comments
Written comments were received from the following interested
parties:
Mid-West Electric Consumers Association
Missouri River Energy Services
Rodger Otstot
Project Description
The Pick-Sloan Missouri Basin Program (P-SMBP), originally the
Missouri River Basin Project, was authorized by Congress in the Flood
Control Act of 1944. The multipurpose program provides authorization
for construction of certain public works and improvements on rivers and
harbors for flood control, generation of hydropower, resources for
water supply and irrigation, aids to navigation, preservation of water
quality, enhancement of fish and wildlife, and creation of recreation
opportunities.
In addition to the multipurpose water projects authorized by
Section 9 of the Flood Control Act of 1944, certain other existing
projects have been integrated with the P-SMBP for power marketing,
operation, and repayment purposes. The Colorado-Big Thompson, Kendrick,
and Shoshone Projects were combined with the P-SMBP in 1954, followed
by the North Platte Project in 1959. These projects were referred to as
the ``Integrated Projects'' of the P-SMBP. The Flood Control Act of
1944 also authorized the inclusion of the Fort Peck Project with the P-
SMBP for operation and repayment purposes.
P-SMBP power is marketed by two Western regions. The Upper Great
Plains Region (UGPR) markets the Eastern Division (P-SMBP--ED) and the
Rocky Mountain Region (RMR) markets the Western Division (P-SMBP--WD)
through the Loveland Area Projects (LAP). The P-SMBP power is marketed
to approximately 360 firm power customers by UGPR and approximately 53
firm power customers by RMR.
Power Repayment Study--Firm Power Rate
Western prepares a PRS each FY to determine if revenues will be
sufficient to repay, within the required time, all costs assigned to
the P-SMBP. Repayment criteria are based on Western's applicable laws
and legislation, as well as policies including DOE Order RA 6120.2. To
meet Cost Recovery Criteria outlined in DOE Order RA 6120.2, a revised
study and rate adjustment has been developed to demonstrate that
sufficient revenues will be collected under Provisional Rates to meet
future obligations. The PRS revenue requirement and Composite Rate
remains unchanged, as indicated in Table 1:
Table 1--Comparison of P-SMBP--ED Revenue Requirement and Composite Rate
----------------------------------------------------------------------------------------------------------------
Existing Provisional
Requirements Requirements Percent
(January 1, 2010) (January 1, 2015) Change
----------------------------------------------------------------------------------------------------------------
P-SMBP_ED Revenue Requirement ($ in millions)..... $320.2 $320.2 0
P-SMBP_ED Composite Rate (mills/kWh).............. 33.25 33.25 0
----------------------------------------------------------------------------------------------------------------
The P-SMBP--ED annual revenue requirement equals $332.8 million and
is comprised of a Base revenue requirement, less a 5 percent discount
for facility credits, resulting in a total revenue requirement of
$320.2 million.
Existing and Provisional Rates
P-SMBP--ED
Under Rate Schedule P-SED-F12, the firm capacity charge remains
$7.65/kWmonth and the firm energy charge remains 19.05 mills/kWh. Under
Rate Schedule P-SED-FP12, the firm peaking capacity charge remains
$6.90/kWmonth. Firm Peaking Energy is normally returned. A Firm Peaking
Energy charge of 19.05 mills/kWh will be assessed in the event energy
is not returned. These Rate Schedules are formula based to provide for
an annual adjustment to the Drought Adder component. An incremental
upward adjustment to the Drought Adder greater than the equivalent of 2
mills/kWh to the PRS Composite Rate will require a public process. The
Drought Adder may be adjusted downward pursuant to the formula without
a public process. The overall capacity and energy charges are not
changing, as indicated in the following Table 2:
Table 2--Comparison of Existing and Provisional P-SMBP--ED Firm Power Rates
----------------------------------------------------------------------------------------------------------------
Existing Charges Provisional Charges
Under Rate Schedules Under Rate Schedules
Firm power service Effective (January Effective (January Percent
1, 2010) P-SED-F11/ 1, 2015) P-SED-F12/ Change
P-SED-FP11 P-SED-FP12
----------------------------------------------------------------------------------------------------------------
Firm Capacity ($/kWmonth)......................... $7.65 $7.65 0
Firm Energy (mills/kWh)........................... 19.05 19.05 0
Firm Peaking Capacity ($/kWmonth)................. $6.90 $6.90 0
[[Page 72673]]
Firm Peaking Energy (mills/kWh) \1\............... 19.05 19.05 0
----------------------------------------------------------------------------------------------------------------
\1\ Firm Peaking Energy is normally returned. This charge will be assessed in the event Firm Peaking Energy is
not returned.
Under the current rate methodology, rates for P-SMBP--ED firm power
and firm peaking power service are designed to recover an annual
revenue requirement that includes investment repayment, interest,
purchase power, O&M, and other expenses within the allowable period.
Western is trueing up the Base and Drought Adder components of the
rate schedules and placing new rate schedules into effect for the 5-
year period, beginning January 1, 2015, through December 31, 2019. The
true-up updates the Base components to represent present costs and
lowers the Drought Adder components to represent present drought costs.
Over the past 5-year rate period, the P-SMBP costs included in the
Drought Adder have decreased as the actual deficits were less than the
projected deficits. Additionally, there have been drought costs repaid
ahead of schedule, which decreased the drought deficit interest
expense. Base costs increased during that same period due to a new 5-
year cost evaluation period, new investments and replacements, and
inflationary costs.
P-SMBP--WD
The P-SMBP--WD revenue requirement is incorporated into the LAP
rate, along with the revenue requirement for the Fryingpan-Arkansas
Project. The adjustment to the LAP rate is a separate formal rate
process, which is documented in Rate Order No. WAPA-167. Rate Order No.
WAPA-167 is also scheduled to go into effect on the first day of the
first full billing period on or after January 1, 2015.
Certification of Rates
Western's Administrator certified that the firm power and firm
peaking power rates under Rate Schedules P-SED-F12 and P-SED-FP12 are
the lowest possible rates consistent with sound business principles.
The rates were developed following administrative policies and
applicable laws.
P-SMBP--ED Firm Power Rate Discussion
Western is required to establish power rates sufficient to recover
O&M, purchased power and interest expenses, and repay power investment
and irrigation aid. The P-SMBP--ED firm power and firm peaking power
Base and Drought Adder components are updated to represent present
costs. Under Rate Schedule P-SED-F12, Western will continue identifying
its firm power service revenue requirement using Base and Drought Adder
components. The Base component is a fixed revenue requirement that
includes annual O&M expenses, investment repayment and associated
interest, normal timing power purchases, and transmission costs.
Western's normal timing power purchases are due to operational
constraints (e.g., management of endangered species habitat, water
quality, navigation, etc.) and are not associated with drought. The
Base component cannot be adjusted by Western without a public process.
The Drought Adder component is a formula-based revenue requirement
that includes costs attributable to drought conditions within P-SMBP.
The Drought Adder component includes costs associated with future Non-
timing Power Purchases to meet firm power 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 debt. The Drought Adder component 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 FY 2009 will be repaid by FY 2019.
The annual revenue requirement calculation will continue to be
summarized by the following formula: Annual Revenue Requirement = Base
Revenue Requirement + Drought Adder Revenue Requirement. Both the Base
and Drought Adder components recover portions of the firm power revenue
requirement, firm peaking power, and associated 5 percent discount
revenue necessary to equal the P-SMBP--ED revenue requirement. A
comparison of the existing and provisional charge components is listed
in Table 3.
Table 3--Summary of P-SMBP--ED Rate Components
--------------------------------------------------------------------------------------------------------------------------------------------------------
Existing Charges Under Rate Schedules Provisional Charges Under Rate Schedules
Effective (January 1, 2010) P-SED-F11/ P-SED- Effective (January 1, 2015) P-SED-F12/ P-SED-
Firm Power Service ----------------------FP11--------------------------------------------FP12---------------------
Drought Adder Drought Adder
Base Component Component Total Charge Base Component Component Total Charge
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firm Capacity ($/kWmonth)............................... $3.80 $3.85 $7.65 $4.90 $2.75 $7.65
Firm Energy (mills/kWh)................................. 9.53 9.52 19.05 12.33 6.72 19.05
Firm Peaking Capacity ($/kWmonth)....................... $3.45 $3.45 $6.90 $4.45 $2.45 $6.90
Firm Peaking Energy (mills/kWh) \1\..................... 9.53 9.52 19.05 12.26 6.79 19.05
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Firm Peaking Energy is normally returned. This charge will be assessed in the event Firm Peaking Energy is not returned.
[[Page 72674]]
Continuing to identify the firm electric service revenue
requirement using Base and Drought Adder components will assist Western
in presenting the effects of the drought within P-SMBP, demonstrating
repayment of the drought-related costs, and allow Western to be more
responsive to changes in drought-related expenses. Western will
continue to charge and bill Customers firm power service charges for
energy and capacity, which are the sum of the Base and Drought Adder
components.
Western reviews its firm electric service rates annually. Western
will review the Base component after the annual PRS is completed,
generally in the first quarter of the calendar year. If an adjustment
to the Base component is necessary, Western will initiate a public
process following 10 CFR part 903 before making an adjustment.
In accordance with the original implementation of the Drought Adder
component, Western will review the Drought Adder component each
September to determine if drought costs differ from those projected in
the PRS. If drought costs differ, Western will determine if an
adjustment to the Drought Adder component is necessary. Western will
notify customers by letter each October of the planned incremental or
decremental adjustment and implement the adjustment in the 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. To give customers
advance notice, Western will conduct a preliminary review of the
Drought Adder component in early summer and notify customers by letter
of the estimated change to the Drought Adder component for the
following January. Western will verify the final Drought Adder
component adjustment and notify customers by letter each October of any
planned increase or decrease in this component. Implementing the
Drought Adder component adjustment on January 1 of each year will help
keep the drought deficits from escalating as quickly, will lower the
interest expense due to drought deficits, will demonstrate responsible
deficit management, and will provide prompt drought deficit repayments.
Western's current and provisional rate schedules are formula based
to provide for an annual adjustment to the Drought Adder component. An
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 Drought Adder may be adjusted downward pursuant to
the formula without a public process.
Statement of Revenue and Related Expenses
The following Table 4 provides a summary of projected revenue and
expense data for the total P-SMBP, including both the Eastern and
Western Division's firm electric service revenue requirements through
the 5-year rate approval period. The firm power rates for both
divisions have been developed with the following revenues and expenses
for the P-SMBP:
Table 4--Total P-SMBP Firm Power Comparison of 5-Year Rate Period (FY 2015-2019) Total Revenues and Expenses
----------------------------------------------------------------------------------------------------------------
Existing Rate Provisional Rate
($000) ($000) Difference ($000)
----------------------------------------------------------------------------------------------------------------
Total Revenues...................................... $2,625,336 $2,679,973 $54,637
----------------------------------------------------------------------------------------------------------------
Revenue Distribution
Expenses:
O&M............................................. $904,884 $1,082,969 $178,085
Purchased Power................................. 440,038 164,049 (275,989)
Interest........................................ 650,671 561,528 (89,143)
Transmission.................................... 65,853 64,072 (1,781)
-----------------------------------------------------------
Total Expenses.............................. $2,061,446 $1,872,618 $(188,828)
Principal Payments:
Capitalized Expenses (Deficits) \1\............. $483,252 $345,006 $(138,246)
Original Project and Additions \1\.............. 10,414 401,193 390,779
Replacements \1\................................ 4,825 61,156 56,331
Irrigation Aid.................................. 65,399 0 (65,399)
-----------------------------------------------------------
Total Principal Payments.................... $563,890 $807,355 $243,465
-----------------------------------------------------------
Total Revenue Distribution.................. $2,625,336 $2,679,973 $54,637
----------------------------------------------------------------------------------------------------------------
\1\ Due to deficit conditions between 2001 and 2009, revenues generated in the cost evaluation period are
applied toward repayment of deficits rather than repayment of project additions and replacements. All deficits
are projected to be repaid by 2018.
Basis for Rate Development
The existing charges for firm power and firm peaking power under
Rate Schedules F11 and FP11, which expire December 31, 2014, continue
to provide sufficient revenue to meet the P-SMBP--ED repayment
obligations. The total annual revenue requirement for P-SMBP--ED
remains $320.2 million for firm power and firm peaking power service,
and the overall capacity and energy charges are not changing. The
Provisional Rates, under Rate Schedules F12 and FP12, will take effect
on the first full billing period on or after January 1, 2015, and will
remain in effect on an interim basis, pending FERC's confirmation and
approval of the rate schedules or substitute rates on a final basis,
through December 31, 2019, or until the rate schedules are superseded.
Comments
Western received three comment letters during the public
consultation and comment period. The comments expressed in these
letters have been paraphrased, where appropriate, without compromising
the meaning of the comments.
A. Comment: Two customer representatives recognized the need for true
up of the Base and Drought Adder
[[Page 72675]]
charge components of the composite rate.
Response: Western agrees with the above comment. Rather than extend
rates with out-of-date charge components, Western choose to do a minor
rate adjustment to address trueing up the charge components.
B. Comment: One customer representative supported the rate
modifications as proposed, and emphasized the need for continued cost
control regarding the Base component. They stated the Base costs cannot
grow unabated and replace the shrinking Drought Adder. The customer
stressed that cost control is of paramount importance.
Response: Western agrees with the above comment. Western is committed
to keeping the power rates at the lowest possible rates while maintain
sound business principles. All budgeted O&M and capital improvements
are vetted annually through customer work plan meetings to access the
impacts to the rates.
C. Comment: One interested party expressed concern over the
suballocation of the power allocation for the Pick-Sloan Missouri Basin
Program. The customer feels the allocation is not being calculated in
agreement with the ultimate development concept or in accordance with
the repayment rules set forth in the Report of Financial Position,
Missouri River Basin Project, dated December 1963.
Response: Compliance with applicable authority regarding suballocations
for the Pick-Sloan Missouri Basin Program is beyond the scope of this
minor rate adjustment process and public process. Western is in
compliance with applicable authority. Moreover, any change in the cost
allocations would require Congressional approval pursuant to the DOE
Organization Act of 1977 (42 U.S.C. 7152(a)(3)).
Availability of Information
All documents related to this action are available for inspection
and copying at the Upper Great Plains Regional Office, located at 2900
4th Avenue North, Billings, Montana. These documents are also available
on Western's Web site located at https://www.wapa.gov/ugp/rates/
2015firmrateadjust.
Ratemaking Procedure Requirements:
Environmental Compliance
In compliance with the National Environmental Policy Act (NEPA) of
1969 (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), Western
has determined this action is categorically excluded from preparing an
environmental assessment or an environmental impact statement.
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.
Submission to the Federal Energy Regulatory Commission
The Provisional 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 foregoing and under the authority delegated to me, I
confirm and approve on an interim basis, effective on the first full
billing period on or after January 1, 2015, Rate Schedules P-SED-F12
and P-SED-FP12 for the Pick-Sloan Missouri Basin Program--Eastern
Division Project of the Western Area Power Administration. These rate
schedules shall remain in effect on an interim basis, pending FERC's
confirmation and approval of the rate schedules or substitute rates on
a final basis through December 31, 2019, or until the rate schedules
are superseded.
Dated: December 2, 2014.
Elizabeth Sherwood-Randall,
Deputy Secretary of Energy.
Rate Schedule P-SED-F12
(Supersedes Schedule P-SED-F11)
January 1, 2015
United States Department of Energy
Western Area Power Administration
Pick-Sloan Missouri Basin Program--Eastern Division
Montana, North Dakota, South Dakota, Minnesota, Iowa, Nebraska
SCHEDULE OF RATES FOR FIRM POWER SERVICE
(Approved Under Rate Order No. WAPA-166)
Effective:
The first day of the first full billing period beginning on or
after January 1, 2015, through December 31, 2019, or until superseded
by another rate schedule.
Available:
Within the marketing area served by the Eastern Division of the
Pick-Sloan Missouri Basin Program.
Applicable:
To the power and energy delivered to customers as firm power
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
Monthly Charge as of January 1, 2015, under the Rate:
CAPACITY CHARGE:
$7.65 for each kilowatt per month (kWmonth) of billing capacity.
ENERGY CHARGE:
19.05 mills for each kilowatthour (kWh) for all energy delivered as
firm power service.
BILLING CAPACITY: The billing capacity will be as defined by the
power sales contract.
Base: 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. The Base component charges are fixed amounts under
this Rate Schedule, determined as follows:
[[Page 72676]]
[GRAPHIC] [TIFF OMITTED] TN08DE14.018
Process:
Any proposed change to the Base component will require a public
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 Drought Adder may be adjusted
downward pursuant to the formulas without a public process.
A revised Drought Adder charge may go into effect January 1 of each
year based on the formula above. Western will notify customers annually
in October of the revised monthly charges. Any change to the Drought
Adder component will be identified in a revision to charges under this
rate schedule.
Adjustments:
For Character and Conditions of Service:
Customers who receive deliveries at transmission voltage may, in some
instances, be eligible to receive a 5 percent discount on capacity and
energy charges when facilities are provided by the customer that
results in a sufficient savings to Western to justify the discount. The
determination of eligibility for receipt of the voltage discount shall
be exclusively vested in Western.
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-FP12
(Supersedes Schedule P-SED-FP11)
January 1, 2015
United States Department of Energy
Western Area Power Administration
Pick-Sloan Missouri Basin Program--Eastern Division Montana, North
Dakota, South Dakota, Minnesota, Iowa, Nebraska
SCHEDULE OF RATES FOR FIRM PEAKING POWER SERVICE
(Approved Under Rate Order No. WAPA-166)
Effective:
The first day of the first full billing period beginning on or
after January 1, 2015, through December 31, 2019, or until superseded
by another rate schedule.
Available:
Within the marketing area served by the Eastern Division of the
Pick-Sloan Missouri Basin Program, to customers with generating
resources, enabling them to use firm peaking power service.
Applicable:
To the power sold to customers as firm peaking power 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
Monthly Charge as of January 1, 2015, under the Rate:
CAPACITY CHARGE:
$6.90 for each kilowatt per month (kWmonth) of the effective
contract rate of delivery for peaking power or the maximum amount
scheduled, whichever is greater.
ENERGY CHARGE:
19.05 mills for each kilowatthour (kWh) for all energy scheduled
for delivery without return.
Base: 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. The Base component charges are fixed amounts under
this Rate Schedule, determined as follows:
[[Page 72677]]
[GRAPHIC] [TIFF OMITTED] TN08DE14.019
Process:
Any proposed change to the Base component will require a public
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 Drought Adder may be adjusted
downward pursuant to the formulas without a public process.
A revised Drought Adder charge may go into effect January 1 of each
year based on the formula above. Western will notify customers annually
in October of the revised monthly charges. Any change to the Drought
Adder component will be identified in a revision to charges under this
rate schedule.
BILLING CAPACITY:
The billing capacity will be the greater of (1) the highest 30-
minute integrated capacity 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:
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 capacity and/or energy, such overrun shall be billed at 10
times the formula rate.
[FR Doc. 2014-28677 Filed 12-5-14; 8:45 am]
BILLING CODE 6450-01-P
