Loveland Area Projects-Rate Order No. WAPA-167, 72663-72670 [2014-28715]
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Federal Register / Vol. 79, No. 235 / Monday, December 8, 2014 / Notices
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Issued in Washington, DC, on December 2,
2014.
Peter B. Lyons,
Assistant Secretary for Nuclear Energy, Office
of Nuclear Energy.
[FR Doc. 2014–28695 Filed 12–5–14; 8:45 am]
BILLING CODE 6450–01–P
The
existing Rate Schedule L–F9 was
approved under Rate Order No. WAPA–
146 for the period beginning January 1,
2010, and ending December 31, 2014.1
Under the current rate methodology,
rates for LAP firm electric 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 LAP remains $84.5 million for firm
electric service. In addition, the overall
capacity and energy charges are not
changing, as the existing charges in the
current rate schedules for firm electric
service continue to provide sufficient
revenue to meet LAP’s repayment
obligations. The Rate Schedule
continues 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 Schedule L–F9 is being
superseded by Rate Schedule L–F10.
Under Rate Schedule L–F10, the firm
capacity charge will remain $5.43/
kWmonth and the firm energy charge
will remain 20.71 mills/kWh. The Base
and Drought Adder components
associated with these charges are shown
in Table 1 below:
SUPPLEMENTARY INFORMATION:
DEPARTMENT OF ENERGY
Western Area Power Administration
Loveland Area Projects—Rate Order
No. WAPA–167
Western Area Power
Administration, DOE.
ACTION: Notice of Order Concerning
Firm Electric Rates.
AGENCY:
The Deputy Secretary of
Energy confirmed and approved Rate
Order No. WAPA–167 and Rate
Schedule L–F10, placing firm electric
service rates for the Western Area Power
Administration (Western) Loveland
Area Projects (LAP) into effect on an
interim basis.
DATES: Rate Schedule L–F10 will be
placed into effect on an interim basis on
the first day of the first full billing
period beginning on or after January 1,
2015, and will remain in effect until the
Federal Energy Regulatory Commission
(FERC) confirms, approves, and places
the rate schedule into effect on a final
basis ending December 31, 2019, or
until the rate schedule is superseded.
FOR FURTHER INFORMATION CONTACT: Mr.
Bradley S. Warren, Regional Manager,
Rocky Mountain Region, Western Area
Power Administration, 5555 East
Crossroads Boulevard, Loveland, CO
80538–8986, telephone (970) 461–7201,
or Mrs. Sheila D. Cook, Rates Manager,
Rocky Mountain Region, Western Area
Power Administration, 5555 East
Crossroads Boulevard, Loveland, CO
80538–8986, telephone (970) 461–7211,
email scook@wapa.gov.
SUMMARY:
TABLE 1—SUMMARY OF LAP CHARGE COMPONENTS
Existing charges under Rate Schedule L–F9
effective January 1, 2010
Base
component
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Firm Capacity ($/kWmonth) .....................
Firm Energy (mills/kWh) ..........................
Drought adder
component
$3.29
12.54
Provisional charges under Rate Schedule L–F10
effective January 1, 2015
Total charge
$2.14
8.17
$5.43
20.71
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 Department of Energy
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–167, LAP firm electric service
1 WAPA–146 was approved by the Deputy
Secretary of Energy on December 14, 2009 (74 FR
67191 (Dec 18, 2009)), and confirmed and approved
by FERC on a final basis on June 18, 2010, in Docket
No. EF10–1–000. See United States Department of
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Base
component
$3.92
14.95
Drought adder
component
Total charge
$1.51
5.76
$5.43
20.71
rates, into effect on an interim basis
(Provisional Rates).
The new Rate Schedule L–F10 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.
Energy, Western Area Power Administration
(Loveland Area Projects), 131 FERC ¶ 62,247.
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Order Confirming, Approving, and
Placing the Loveland Area Projects
Firm Electric Service Rates Into Effect
on an Interim Basis
These firm electric service rates for
the Loveland Area Projects (LAP) were
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
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 ....................................................................
P–SMBP ..............................................................
P–SMBP—ED ......................................................
P–SMBP—WD .....................................................
Power ..................................................................
Power Factor ......................................................
Preference ...........................................................
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Provisional Rate .................................................
Revenue Requirement ........................................
Effective Date
The Provisional Rates will take effect
on the first day of the first full billing
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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:
A fixed revenue requirement that includes operation and maintenance expenses, 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.
The Pick-Sloan Missouri Basin Program.
Pick-Sloan Missouri Basin Program—Eastern Division.
Pick-Sloan Missouri Basin Program—Western Division.
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.
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.
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Public Notice and Comment
Western followed the Procedures for
Public Participation in Power and
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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 electric service
rates for LAP. The focus of the webinar
was to provide an update on the FY
2013 PRS, discuss the Base and Drought
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
46430), announced the proposed rates
for LAP and began the 30-day public
consultation and comment period.
3. On August 11, 2014, Western
mailed letters to all LAP 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/rm/ratesRM/2015/
default.htm.
5. During the consultation and
comment period, which ended
September 8, 2014, Western received
one comment letter. The formally
submitted comment has been
considered in the preparation of this
Rate Order.
Comment
Written Comment Received by the
Following Organization
Mid-West Electric Consumers
Association
Project Description
mstockstill on DSK4VPTVN1PROD with NOTICES
Loveland Area Projects
The Post-1989 General Power
Marketing and Allocation Criteria,
published in the Federal Register on
January 31, 1986 (51 FR 4012),
integrated the resources of the P–
SMBP—WD and Fryingpan-Arkansas
Project (Fry-Ark). This operational and
contractual integration, known as LAP,
allowed an increase in marketable
resource, simplified contract
administration, and established a
blended rate for LAP power sales. The
Rocky Mountain Region markets LAP
power in northeastern Colorado, east of
the Continental Divide in Wyoming,
west of the 101st meridian in Nebraska,
and most of Kansas.
The P–SMBP—WD and Fry-Ark retain
separate financial status. For this
reason, separate PRSs are prepared
annually for each project. These PRSs
are used to determine the sufficiency of
the firm electric service rate to generate
adequate revenue to repay project
investment and costs during each
project’s prescribed repayment period.
The revenue requirement of the Fry-Ark
PRS is combined with the P–SMBP—
WD revenue requirement, derived from
the P–SMBP PRS, to develop one rate
for LAP firm electric sales.
Pick-Sloan Missouri Basin Program
The P–SMBP was authorized by
Congress in Section 9 of the Flood
Control Act of December 22, 1944,
commonly referred to as the Flood
Control Act of 1944. This multipurpose
program provides flood control,
irrigation, navigation, recreation,
preservation and enhancement of fish
and wildlife, and power generation.
Multipurpose projects have been
developed on the Missouri River and its
tributaries in Colorado, Montana,
Nebraska, North Dakota, South Dakota,
and Wyoming.
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 are 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. The
Riverton Extension Unit of the Flood
Control Act of 1944 Project was
reauthorized to include the original
Riverton Project in 1970.
The P–SMBP is marketed by two
regions. The Rocky Mountain Region,
with a regional office in Loveland,
Colorado, markets the Western Division
power of P–SMBP through LAP.
Western Division power is marketed in
Colorado, Kansas, Nebraska, and
Wyoming. The Upper Great Plains
Region, with a regional office in
Billings, Montana, markets power from
the Eastern Division of P–SMBP.
P–SMBP power is marketed to
approximately 53 firm power customers
by the Rocky Mountain Region and
approximately 360 firm power
customers by the Upper Great Plains
Region.
Fryingpan-Arkansas Project
Fry-Ark is a trans-mountain diversion
development in southeastern Colorado
authorized by the Act of Congress on
August 16, 1962 (Pub. L. 87–590, 76
Stat. 389, as amended by Title XI of the
Act of Congress on October 27, 1974
(Pub. L. 93–493, 88 Stat. 1486, 1497)).
The Fry-Ark diverts water from the
Fryingpan River and other tributaries of
the Roaring Fork River in the Colorado
River Basin on the West Slope of the
Rocky Mountains to the Arkansas River
on the East Slope. The water diverted
from the West Slope, together with
regulated Arkansas River water,
provides supplemental irrigation and
M&I water supplies, and produces
hydroelectric power. Flood control, fish
and wildlife enhancement, and
recreation are other important purposes
of Fry-Ark. The only generating facility
in Fry-Ark is the Mt. Elbert PumpedStorage powerplant on the East Slope.
Power Repayment Study—Firm Electric
Service Rate
Western prepares a PRS each FY to
determine if revenues will be sufficient
to repay, within the required time, all
costs assigned to LAP. 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,
revised studies and rate adjustments
have been developed to demonstrate
that sufficient revenues will be collected
under Provisional Rates to meet future
obligations. The PRS revenue
requirement and Composite Rate remain
unchanged, as indicated in Table 1.
TABLE 1—COMPARISON OF LAP REVENUE REQUIREMENT AND COMPOSITE RATE
Existing requirements
(January 1, 2010)
LAP Revenue Requirement (millions $) ......................................
LAP Composite (mills/kWh) .........................................................
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Provisional requirements
(January 1, 2015)
$84.5
41.42
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$84.5
41.42
08DEN1
Percent change
0
0
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Federal Register / Vol. 79, No. 235 / Monday, December 8, 2014 / Notices
Existing and Provisional Rates
Under Rate Schedule L–F10, the firm
capacity charge remains $5.43/
kWmonth, and the firm energy charge
remains 20.71 mills/kWh. This Rate
Schedule is formula-based to provide
for an annual adjustment to the Drought
Adder component. An incremental
upward adjustment to the Drought
Adder greater than the equivalent of 2
mills/kWh to the PRS Composite Rate
will require a public process. The
Drought Adder may be adjusted
downward pursuant to the formula
without a public process. The overall
capacity and energy charges are not
changing, as indicated in the following
Table 2:
TABLE 2—COMPARISON OF EXISTING AND PROVISIONAL LAP FIRM ELECTRIC SERVICE RATES
Existing charges under Rate Shedule
L–F9
effective
January 1, 2010
Firm electric service
Firm Capacity ($/kWmonth) ...........................
Firm Energy (mills/kWh) ................................
Under the current rate methodology,
rates for LAP firm electric 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 truing up the Base and
Drought Adder components included in
the rate schedule and placing a new rate
schedule 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 LAP Drought Adder
have decreased as the actual deficits
were less than the projected deficits.
Additionally, P–SMBP drought costs
were repaid ahead of schedule, which
decreased the drought deficit interest
expense. The portion of the LAP
Drought Adder component coming from
Fry-Ark ($200,000) is now going to $0,
as Fry-Ark did not actually incur any
deficits and Fry-Ark is not projecting
any future Non-timing Power Purchases
at this time. All historical droughtrelated costs for Fry-Ark have been
repaid. In addition, Base costs increased
during that same period due to a new 5year cost evaluation period, new
investments and replacements, and
inflationary costs.
mstockstill on DSK4VPTVN1PROD with NOTICES
Certification of Rates
Western’s Administrator certified that
the firm electric service rates under Rate
Schedule L–F10 are the lowest possible
rates consistent with sound business
principles. The rates were developed
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Provisional charges under Rate
Schedule
L–F10 effective
January 1, 2015
$5.43
20.71
Percent change
$5.43
20.71
following administrative policies and
applicable laws.
0
0
TABLE 3—SUMMARY OF P–SMBP—
WD REVENUE REQUIREMENTS—
Continued
LAP Firm Electric Service Rate
Discussion
[$000]
(34.80+0.00 = 34.80 mills/
kWh × 1,988,000,000 kWh)
Western must establish power rates
sufficient to recover O&M, purchased
power and interest expenses, and repay
power investment and irrigation aid.
The Criteria, published in the Federal
Register on January 31, 1986 (51 FR
4012), operationally and contractually
integrated the resources of the P–
SMBP—WD and Fry-Ark (thereafter
referred to as LAP). A blended rate was
established for the sale of LAP firm
electric service. The P–SMBP—WD
portion of the revenue requirement for
LAP firm electric service rates was
developed from the revenue
requirement calculated in the P–SMBP
Ratesetting PRS. The P–SMBP—WD
revenue requirement remains the same
from the previous rate process revenue
requirement. The revenue requirements
for P–SMBP—WD are as follows:
69,182
The adjustment to the P–SMBP—ED
revenue requirement is a separate
formal rate process, which is
documented in Rate Order No. WAPA–
166. Rate Order No. WAPA–166 is also
scheduled to go into effect on the first
day of the first full billing period on or
after January 1, 2015.
Fry-Ark
The Fry-Ark portion of the revenue
requirement for LAP firm electric
service rates was developed from the
revenue requirement calculated in the
Fry-Ark Ratesetting PRS. The Fry-Ark
revenue requirement remains the same
as the previous rate process revenue
requirement. The revenue requirements
for Fry-Ark are as follows:
TABLE 3—SUMMARY OF P–SMBP—
WD REVENUE REQUIREMENTS
TABLE 4—SUMMARY OF FRY-ARK
REVENUE REQUIREMENTS
[$000]
[$000]
Current Revenue Requirement
(Jan 2010):
(34.80 mills/kWh ×
1,988,000,000 kWh) ..........
Provisional Change (Jan 2015):
Base: 4.84 mills/kWh ×
1,988,000,000 kWh ...........
Drought Adder: ¥4.84 mills/
kWh × 1,988,000,000 kWh
$69,182
9,622
¥9,622
0
Provisional Revenue Requirement:
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Current Revenue Requirement
(Jan 2010) ...............................
Provisional Change (Jan 2015):
Base ....................................
Drought Adder .....................
$15,328
200,000
¥200,000
0
Provisional Revenue Requirement ........................................
15,328
The following table compares LAP
existing revenue requirements to the
proposed revenue requirements:
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TABLE 5—SUMMARY OF LAP REVENUE REQUIREMENTS
[$000]
Existing
(January 2010)
Provisional
(January 2015)
P–SMBP—WD .................................................................................................................................................
Fry-Ark .............................................................................................................................................................
$69,182
15,328
$69,182
15,328
Total LAP ..................................................................................................................................................
84,510
84,510
Under Rate Schedule L–F10, Western
will continue to identify its firm electric
service revenue requirement using Base
and Drought Adder components. The
Base component is a fixed revenue
requirement for each project 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 purchases due to
operational constraints (e.g.,
management of endangered species
habitat, water quality, navigation,
control area purposes, etc.) and are not
associated with drought conditions in
the Regions. 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 LAP. 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. Under this
Provisional Rate, the LAP annual
revenue requirement equals $84.5
million and is comprised of a Base
revenue requirement of $69.2 million
plus a Drought Adder revenue
requirement of $15.3 million.
A comparison of the existing and
provisional charge components is listed
in Table 6.
TABLE 6—SUMMARY OF LAP CHARGE COMPONENTS
Existing charges under Rate Schedule
L–F9 effective
(January 1, 2010)
Firm electric service
Base
component
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Firm Capacity ($/kWmonth) .....................
Firm Energy (mills/kWh) ..........................
$3.29
12.54
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 LAP, 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 electric 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 pursuant to 10 CFR part 903
prior to making an adjustment.
In accordance with the original
implementation of the Drought Adder
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Drought Adder
component
Provisional charges under Rate Schedule L–F10
effective
(January 1, 2015)
Total charge
$2.14
8.17
$5.43
20.71
component, Western will review the
Drought Adder component each
September to determine if drought costs
differ from those projected in the PRSs.
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
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Sfmt 4703
Base
component
$3.92
14.95
Drought Adder
component
$1.51
5.76
Total charge
$5.43
20.71
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, 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
schedule is 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.
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Federal Register / Vol. 79, No. 235 / Monday, December 8, 2014 / Notices
Statement of Revenue and Related
Expenses
expense data for the Fry-Ark firm
electric service revenue requirement
through the 5-year rate approval period.
The following Table 7 provides a
summary of projected revenue and
TABLE 7—FRY-ARK COMPARISON OF 5-YEAR RATE PERIOD (FY 2015–2019)
[Total revenues and expenses]
Existing rate
($000)
Provisional
rate
($000)
Difference
($000)
Total Revenues ..........................................................................................................................
$84,897
$89,012
$4,115
Revenue Distribution
Expenses:
O&M 1 .................................................................................................................................
Purchased Power ...............................................................................................................
Interest 2 ..............................................................................................................................
Transmission 3 ....................................................................................................................
25,307
1,077
20,243
20,671
32,322
691
16,080
12,663
7,015
(386)
(4,163)
(8,008)
Total Expenses ............................................................................................................
Principal Payments:
Capitalized Expenses (Deficits) ..........................................................................................
Original Project and Additions 4 ..........................................................................................
Replacements 4 ...................................................................................................................
67,298
61,756
(5,542)
0
14,214
3,385
0
21,757
5,499
0
7,543
2,114
Total Principal Payments ............................................................................................
Total Revenue Distribution ..........................................................................................
17,599
84,897
27,256
89,012
9,657
4,115
1 The
increase in O&M expense is due to changes reflected in both Western’s and Reclamation’s FY15 work plans.
decrease in interest expense is primarily due to increased repayment over the 5-year period.
3 The decrease in Transmission Expenses is due to the negotiation of a new contract.
4 The difference in principal payments is due to increased revenue being available for repayment during the 5-year period.
2 The
The summary of P–SMBP—WD
revenues and expenses for the 5-year
Provisional Rate approval period is
included in the P–SMBP Statement of
Revenue and Related Expenses that is
part of Rate Order No. WAPA–166.
Basis for Rate Development
The existing charges for firm electric
service in Rate Schedule L–F9, which
expires December 31, 2014, continue to
provide sufficient revenue to meet the
LAP repayment obligations. The total
annual revenue requirement for LAP
remains $84.5 million for firm electric
service, and the overall capacity and
energy charges are not changing. The
Provisional Rates, under Rate Schedule
L–F10, 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
schedule or substitute rates on a final
basis, through December 31, 2019.
mstockstill on DSK4VPTVN1PROD with NOTICES
Comment
Western received one comment letter
during the public consultation and
comment period. The comment
expressed in this letter has been
paraphrased, where appropriate,
without compromising the meaning of
the comments.
Comment: One customer
representative supported the rate
VerDate Sep<11>2014
20:19 Dec 05, 2014
Jkt 235001
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 maintaining sound
business principles. All budgeted O&M
and capital improvements are vetted
annually through customer work plan
meetings to assess the impacts to the
rates.
Availability of Information
All documents related to this action
are available for inspection and copying
at the Rocky Mountain Regional Office,
located at 5555 East Crossroads
Boulevard, Loveland, Colorado. These
documents are also available on
Western’s Web page located at https://
www.wapa.gov/rm/ratesRM/2015/
2015RateAdjustment.htm.
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
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Fmt 4703
Sfmt 4703
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 Schedule L–F10
for the Loveland Area Projects of the
Western Area Power Administration.
This rate schedule shall remain in effect
on an interim basis, pending the Federal
Energy Regulatory Commission’s
E:\FR\FM\08DEN1.SGM
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Federal Register / Vol. 79, No. 235 / Monday, December 8, 2014 / Notices
2015, through December 31, 2019, or
until superseded by another rate
schedule.
Dated: December 2, 2014.
Elizabeth Sherwood-Randall,
Deputy Secretary of Energy.
Rate Schedule L–F10
(Supersedes Rate Schedule L–F9)
Effective January 1, 2015
Available:
Within the marketing area served by
the Loveland Area Projects.
Applicable:
To the wholesale power customers for
firm electric service supplied through
one meter at one point of delivery, or as
otherwise established by contract.
United States Department of Energy
Western Area Power Administration
Loveland Area Projects Colorado,
Kansas, Nebraska, Wyoming
Character:
SCHEDULE OF RATE FOR FIRM
ELECTRIC SERVICE
Alternating current, 60 hertz, three
phase, delivered and metered at the
voltages and points established by
contract.
(Approved Under Rate Order No.
WAPA–167)
Formula Rate and Charge Components:
Process:
mstockstill on DSK4VPTVN1PROD with NOTICES
Effective:
The first day of the first full billing
period beginning on or after January 1,
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 the customer 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.
Any proposed change to the Base
component will require a public
process. The Drought Adder component
may be adjusted annually using the
above formulas for any costs attributed
to drought of less than or equal to the
equivalent of 2 mills/kWh to the LAP
Composite Rate. Any planned
incremental adjustment to the Drought
Adder component greater than the
equivalent of 2 mills/kWh to the LAP
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20:19 Dec 05, 2014
Jkt 235001
Rate = Base component + Drought
Adder component
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Monthly Charge as of January 1, 2015,
Under the Rate:
CAPACITY CHARGE: $5.43 per
kilowatt of billing capacity.
ENERGY CHARGE: 20.71 mills per
kilowatthour (kWh) of monthly
entitlement.
BILLING CAPACITY: Unless
otherwise specified by contract, the
billing capacity will be the seasonal
contract rate of delivery.
Base: A fixed revenue requirement
that includes operation and
maintenance expense, investment
repayment and associated interest,
normal timing power purchases
(purchases due to operational
constraints, not associated with
drought), and transmission costs. The
Base revenue requirement is $69.2
million.
Adjustments:
For Transformer Losses: If delivery is
made at transmission voltage but
metered on the low-voltage side of the
substation, the meter readings will be
increased to compensate for transformer
losses as provided for in the contract.
For Power Factor: None. The customer
will be required to maintain a power
factor at all points of measurement
E:\FR\FM\08DEN1.SGM
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EN08DE14.036</GPH>
confirmation and approval of the rate
schedule or substitute rates on a final
basis through December 31, 2019.
72669
72670
Federal Register / Vol. 79, No. 235 / Monday, December 8, 2014 / Notices
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 ....
mstockstill on DSK4VPTVN1PROD with NOTICES
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.
VerDate Sep<11>2014
20:19 Dec 05, 2014
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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
E:\FR\FM\08DEN1.SGM
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]]>Agencies
[Federal Register Volume 79, Number 235 (Monday, December 8, 2014)]
[Proposed Rules]
[Pages 72663-72670]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-28715]
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
Western Area Power Administration
Loveland Area Projects--Rate Order No. WAPA-167
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of Order Concerning Firm Electric Rates.
-----------------------------------------------------------------------
SUMMARY: The Deputy Secretary of Energy confirmed and approved Rate
Order No. WAPA-167 and Rate Schedule L-F10, placing firm electric
service rates for the Western Area Power Administration (Western)
Loveland Area Projects (LAP) into effect on an interim basis.
DATES: Rate Schedule L-F10 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 schedule into effect on a final basis ending December 31, 2019, or
until the rate schedule is superseded.
FOR FURTHER INFORMATION CONTACT: Mr. Bradley S. Warren, Regional
Manager, Rocky Mountain Region, Western Area Power Administration, 5555
East Crossroads Boulevard, Loveland, CO 80538-8986, telephone (970)
461-7201, or Mrs. Sheila D. Cook, Rates Manager, Rocky Mountain Region,
Western Area Power Administration, 5555 East Crossroads Boulevard,
Loveland, CO 80538-8986, telephone (970) 461-7211, email
scook@wapa.gov.
SUPPLEMENTARY INFORMATION: The existing Rate Schedule L-F9 was approved
under Rate Order No. WAPA-146 for the period beginning January 1, 2010,
and ending December 31, 2014.\1\ Under the current rate methodology,
rates for LAP firm electric 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 LAP
remains $84.5 million for firm electric service. In addition, the
overall capacity and energy charges are not changing, as the existing
charges in the current rate schedules for firm electric service
continue to provide sufficient revenue to meet LAP's repayment
obligations. The Rate Schedule continues 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-146 was approved by the Deputy Secretary of Energy on
December 14, 2009 (74 FR 67191 (Dec 18, 2009)), and confirmed and
approved by FERC on a final basis on June 18, 2010, in Docket No.
EF10-1-000. See United States Department of Energy, Western Area
Power Administration (Loveland Area Projects), 131 FERC ] 62,247.
---------------------------------------------------------------------------
Rate Schedule L-F9 is being superseded by Rate Schedule L-F10.
Under Rate Schedule L-F10, the firm capacity charge will remain $5.43/
kWmonth and the firm energy charge will remain 20.71 mills/kWh. The
Base and Drought Adder components associated with these charges are
shown in Table 1 below:
Table 1--Summary of LAP Charge Components
--------------------------------------------------------------------------------------------------------------------------------------------------------
Existing charges under Rate Schedule L-F9 Provisional charges under Rate Schedule L-F10
effective January 1, 2010 effective January 1, 2015
-----------------------------------------------------------------------------------------------
Base Drought adder Base Drought adder
component component Total charge component component Total charge
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firm Capacity ($/kWmonth)............................... $3.29 $2.14 $5.43 $3.92 $1.51 $5.43
Firm Energy (mills/kWh)................................. 12.54 8.17 20.71 14.95 5.76 20.71
--------------------------------------------------------------------------------------------------------------------------------------------------------
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 Department of Energy 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-167, LAP firm electric service
rates, into effect on an interim basis (Provisional Rates).
The new Rate Schedule L-F10 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.
[[Page 72664]]
Order Confirming, Approving, and Placing the Loveland Area Projects
Firm Electric Service Rates Into Effect on an Interim Basis
These firm electric service rates for the Loveland Area Projects
(LAP) were 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 expenses,
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.
P-SMBP....................... The Pick-Sloan Missouri Basin Program.
P-SMBP_ED.................... Pick-Sloan Missouri Basin Program_Eastern
Division.
P-SMBP_WD.................... Pick-Sloan Missouri Basin Program_Western
Division.
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
[[Page 72665]]
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 electric service rates
for LAP. The focus of the webinar was to provide an update on the FY
2013 PRS, discuss the Base and Drought 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 46430), announced the proposed rates for LAP and began the 30-day
public consultation and comment period.
3. On August 11, 2014, Western mailed letters to all LAP 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/rm/ratesRM/2015/default.htm.
5. During the consultation and comment period, which ended
September 8, 2014, Western received one comment letter. The formally
submitted comment has been considered in the preparation of this Rate
Order.
Comment
Written Comment Received by the Following Organization
Mid-West Electric Consumers Association
Project Description
Loveland Area Projects
The Post-1989 General Power Marketing and Allocation Criteria,
published in the Federal Register on January 31, 1986 (51 FR 4012),
integrated the resources of the P-SMBP--WD and Fryingpan-Arkansas
Project (Fry-Ark). This operational and contractual integration, known
as LAP, allowed an increase in marketable resource, simplified contract
administration, and established a blended rate for LAP power sales. The
Rocky Mountain Region markets LAP power in northeastern Colorado, east
of the Continental Divide in Wyoming, west of the 101st meridian in
Nebraska, and most of Kansas.
The P-SMBP--WD and Fry-Ark retain separate financial status. For
this reason, separate PRSs are prepared annually for each project.
These PRSs are used to determine the sufficiency of the firm electric
service rate to generate adequate revenue to repay project investment
and costs during each project's prescribed repayment period. The
revenue requirement of the Fry-Ark PRS is combined with the P-SMBP--WD
revenue requirement, derived from the P-SMBP PRS, to develop one rate
for LAP firm electric sales.
Pick-Sloan Missouri Basin Program
The P-SMBP was authorized by Congress in Section 9 of the Flood
Control Act of December 22, 1944, commonly referred to as the Flood
Control Act of 1944. This multipurpose program provides flood control,
irrigation, navigation, recreation, preservation and enhancement of
fish and wildlife, and power generation. Multipurpose projects have
been developed on the Missouri River and its tributaries in Colorado,
Montana, Nebraska, North Dakota, South Dakota, and Wyoming.
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 are 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.
The Riverton Extension Unit of the Flood Control Act of 1944 Project
was reauthorized to include the original Riverton Project in 1970.
The P-SMBP is marketed by two regions. The Rocky Mountain Region,
with a regional office in Loveland, Colorado, markets the Western
Division power of P-SMBP through LAP. Western Division power is
marketed in Colorado, Kansas, Nebraska, and Wyoming. The Upper Great
Plains Region, with a regional office in Billings, Montana, markets
power from the Eastern Division of P-SMBP. P-SMBP power is marketed to
approximately 53 firm power customers by the Rocky Mountain Region and
approximately 360 firm power customers by the Upper Great Plains
Region.
Fryingpan-Arkansas Project
Fry-Ark is a trans-mountain diversion development in southeastern
Colorado authorized by the Act of Congress on August 16, 1962 (Pub. L.
87-590, 76 Stat. 389, as amended by Title XI of the Act of Congress on
October 27, 1974 (Pub. L. 93-493, 88 Stat. 1486, 1497)). The Fry-Ark
diverts water from the Fryingpan River and other tributaries of the
Roaring Fork River in the Colorado River Basin on the West Slope of the
Rocky Mountains to the Arkansas River on the East Slope. The water
diverted from the West Slope, together with regulated Arkansas River
water, provides supplemental irrigation and M&I water supplies, and
produces hydroelectric power. Flood control, fish and wildlife
enhancement, and recreation are other important purposes of Fry-Ark.
The only generating facility in Fry-Ark is the Mt. Elbert Pumped-
Storage powerplant on the East Slope.
Power Repayment Study--Firm Electric Service Rate
Western prepares a PRS each FY to determine if revenues will be
sufficient to repay, within the required time, all costs assigned to
LAP. 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, revised studies
and rate adjustments have been developed to demonstrate that sufficient
revenues will be collected under Provisional Rates to meet future
obligations. The PRS revenue requirement and Composite Rate remain
unchanged, as indicated in Table 1.
Table 1--Comparison of LAP Revenue Requirement and Composite Rate
----------------------------------------------------------------------------------------------------------------
Provisional
Existing requirements requirements (January Percent change
(January 1, 2010) 1, 2015)
----------------------------------------------------------------------------------------------------------------
LAP Revenue Requirement (millions $). $84.5 $84.5 0
LAP Composite (mills/kWh)............ 41.42 41.42 0
----------------------------------------------------------------------------------------------------------------
[[Page 72666]]
Existing and Provisional Rates
Under Rate Schedule L-F10, the firm capacity charge remains $5.43/
kWmonth, and the firm energy charge remains 20.71 mills/kWh. This Rate
Schedule is formula-based to provide for an annual adjustment to the
Drought Adder component. An incremental upward adjustment to the
Drought Adder greater than the equivalent of 2 mills/kWh to the PRS
Composite Rate will require a public process. The Drought Adder may be
adjusted downward pursuant to the formula without a public process. The
overall capacity and energy charges are not changing, as indicated in
the following Table 2:
Table 2--Comparison of Existing and Provisional LAP Firm Electric Service Rates
--------------------------------------------------------------------------------------------------------------------------------------------------------
Existing charges under Rate Provisional charges under Rate
Firm electric service Shedule L-F9 effective January 1, Schedule L-F10 effective January Percent change
2010 1, 2015
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firm Capacity ($/kWmonth).................................... $5.43 $5.43 0
Firm Energy (mills/kWh)...................................... 20.71 20.71 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Under the current rate methodology, rates for LAP firm electric 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 truing up the Base and Drought Adder components included
in the rate schedule and placing a new rate schedule 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 LAP Drought Adder have decreased as the actual deficits
were less than the projected deficits. Additionally, P-SMBP drought
costs were repaid ahead of schedule, which decreased the drought
deficit interest expense. The portion of the LAP Drought Adder
component coming from Fry-Ark ($200,000) is now going to $0, as Fry-Ark
did not actually incur any deficits and Fry-Ark is not projecting any
future Non-timing Power Purchases at this time. All historical drought-
related costs for Fry-Ark have been repaid. In addition, Base costs
increased during that same period due to a new 5-year cost evaluation
period, new investments and replacements, and inflationary costs.
Certification of Rates
Western's Administrator certified that the firm electric service
rates under Rate Schedule L-F10 are the lowest possible rates
consistent with sound business principles. The rates were developed
following administrative policies and applicable laws.
LAP Firm Electric Service Rate Discussion
Western must establish power rates sufficient to recover O&M,
purchased power and interest expenses, and repay power investment and
irrigation aid.
The Criteria, published in the Federal Register on January 31, 1986
(51 FR 4012), operationally and contractually integrated the resources
of the P-SMBP--WD and Fry-Ark (thereafter referred to as LAP). A
blended rate was established for the sale of LAP firm electric service.
The P-SMBP--WD portion of the revenue requirement for LAP firm electric
service rates was developed from the revenue requirement calculated in
the P-SMBP Ratesetting PRS. The P-SMBP--WD revenue requirement remains
the same from the previous rate process revenue requirement. The
revenue requirements for P-SMBP--WD are as follows:
Table 3--Summary of P-SMBP--WD Revenue Requirements
[$000]
------------------------------------------------------------------------
------------------------------------------------------------------------
Current Revenue Requirement (Jan 2010):
(34.80 mills/kWh x 1,988,000,000 kWh).................... $69,182
Provisional Change (Jan 2015):
Base: 4.84 mills/kWh x 1,988,000,000 kWh................. 9,622
Drought Adder: -4.84 mills/kWh x 1,988,000,000 kWh....... -9,622
------------
0
Provisional Revenue Requirement:
(34.80+0.00 = 34.80 mills/kWh x 1,988,000,000 kWh)....... 69,182
------------------------------------------------------------------------
The adjustment to the P-SMBP--ED revenue requirement is a separate
formal rate process, which is documented in Rate Order No. WAPA-166.
Rate Order No. WAPA-166 is also scheduled to go into effect on the
first day of the first full billing period on or after January 1, 2015.
Fry-Ark
The Fry-Ark portion of the revenue requirement for LAP firm
electric service rates was developed from the revenue requirement
calculated in the Fry-Ark Ratesetting PRS. The Fry-Ark revenue
requirement remains the same as the previous rate process revenue
requirement. The revenue requirements for Fry-Ark are as follows:
Table 4--Summary of Fry-Ark Revenue Requirements
[$000]
------------------------------------------------------------------------
------------------------------------------------------------------------
Current Revenue Requirement (Jan 2010)...................... $15,328
Provisional Change (Jan 2015):
Base.................................................... 200,000
Drought Adder........................................... -200,000
-----------
0
Provisional Revenue Requirement............................. 15,328
------------------------------------------------------------------------
The following table compares LAP existing revenue requirements to
the proposed revenue requirements:
[[Page 72667]]
Table 5--Summary of LAP Revenue Requirements
[$000]
------------------------------------------------------------------------
Existing Provisional
(January 2010) (January 2015)
------------------------------------------------------------------------
P-SMBP_WD........................... $69,182 $69,182
Fry-Ark............................. 15,328 15,328
-----------------------------------
Total LAP....................... 84,510 84,510
------------------------------------------------------------------------
Under Rate Schedule L-F10, Western will continue to identify its
firm electric service revenue requirement using Base and Drought Adder
components. The Base component is a fixed revenue requirement for each
project 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 purchases due to
operational constraints (e.g., management of endangered species
habitat, water quality, navigation, control area purposes, etc.) and
are not associated with drought conditions in the Regions. 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 LAP. 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. Under this
Provisional Rate, the LAP annual revenue requirement equals $84.5
million and is comprised of a Base revenue requirement of $69.2 million
plus a Drought Adder revenue requirement of $15.3 million.
A comparison of the existing and provisional charge components is
listed in Table 6.
Table 6--Summary of LAP Charge Components
--------------------------------------------------------------------------------------------------------------------------------------------------------
Existing charges under Rate Schedule L-F9 Provisional charges under Rate Schedule L-F10
effective (January 1, 2010) effective (January 1, 2015)
Firm electric service -----------------------------------------------------------------------------------------------
Drought Adder Drought Adder
Base component component Total charge Base component component Total charge
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firm Capacity ($/kWmonth)............................... $3.29 $2.14 $5.43 $3.92 $1.51 $5.43
Firm Energy (mills/kWh)................................. 12.54 8.17 20.71 14.95 5.76 20.71
--------------------------------------------------------------------------------------------------------------------------------------------------------
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 LAP, 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 electric 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 pursuant to 10 CFR part 903 prior to 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 PRSs. 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, 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 schedule is 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.
[[Page 72668]]
Statement of Revenue and Related Expenses
The following Table 7 provides a summary of projected revenue and
expense data for the Fry-Ark firm electric service revenue requirement
through the 5-year rate approval period.
Table 7--Fry-Ark Comparison of 5-Year Rate Period (FY 2015-2019)
[Total revenues and expenses]
----------------------------------------------------------------------------------------------------------------
Existing rate Provisional Difference
($000) rate ($000) ($000)
----------------------------------------------------------------------------------------------------------------
Total Revenues................................................. $84,897 $89,012 $4,115
----------------------------------------------------------------------------------------------------------------
Revenue Distribution
Expenses:
O&M \1\.................................................... 25,307 32,322 7,015
Purchased Power............................................ 1,077 691 (386)
Interest \2\............................................... 20,243 16,080 (4,163)
Transmission \3\........................................... 20,671 12,663 (8,008)
------------------------------------------------
Total Expenses......................................... 67,298 61,756 (5,542)
Principal Payments:
Capitalized Expenses (Deficits)............................ 0 0 0
Original Project and Additions \4\......................... 14,214 21,757 7,543
Replacements \4\........................................... 3,385 5,499 2,114
------------------------------------------------
Total Principal Payments............................... 17,599 27,256 9,657
Total Revenue Distribution............................. 84,897 89,012 4,115
----------------------------------------------------------------------------------------------------------------
\1\ The increase in O&M expense is due to changes reflected in both Western's and Reclamation's FY15 work plans.
\2\ The decrease in interest expense is primarily due to increased repayment over the 5-year period.
\3\ The decrease in Transmission Expenses is due to the negotiation of a new contract.
\4\ The difference in principal payments is due to increased revenue being available for repayment during the 5-
year period.
The summary of P-SMBP--WD revenues and expenses for the 5-year
Provisional Rate approval period is included in the P-SMBP Statement of
Revenue and Related Expenses that is part of Rate Order No. WAPA-166.
Basis for Rate Development
The existing charges for firm electric service in Rate Schedule L-
F9, which expires December 31, 2014, continue to provide sufficient
revenue to meet the LAP repayment obligations. The total annual revenue
requirement for LAP remains $84.5 million for firm electric service,
and the overall capacity and energy charges are not changing. The
Provisional Rates, under Rate Schedule L-F10, 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 schedule or substitute rates on a final basis, through
December 31, 2019.
Comment
Western received one comment letter during the public consultation
and comment period. The comment expressed in this letter has been
paraphrased, where appropriate, without compromising the meaning of the
comments.
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
maintaining sound business principles. All budgeted O&M and capital
improvements are vetted annually through customer work plan meetings to
assess the impacts to the rates.
Availability of Information
All documents related to this action are available for inspection
and copying at the Rocky Mountain Regional Office, located at 5555 East
Crossroads Boulevard, Loveland, Colorado. These documents are also
available on Western's Web page located at https://www.wapa.gov/rm/ratesRM/2015/2015RateAdjustment.htm.
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 Schedule L-F10 for the
Loveland Area Projects of the Western Area Power Administration. This
rate schedule shall remain in effect on an interim basis, pending the
Federal Energy Regulatory Commission's
[[Page 72669]]
confirmation and approval of the rate schedule or substitute rates on a
final basis through December 31, 2019.
Dated: December 2, 2014.
Elizabeth Sherwood-Randall,
Deputy Secretary of Energy.
Rate Schedule L-F10
(Supersedes Rate Schedule L-F9)
Effective January 1, 2015
United States Department of Energy Western Area Power Administration
Loveland Area Projects Colorado, Kansas, Nebraska, Wyoming
SCHEDULE OF RATE FOR FIRM ELECTRIC SERVICE
(Approved Under Rate Order No. WAPA-167)
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 Loveland Area Projects.
Applicable:
To the wholesale power customers for firm electric service supplied
through one meter at one point of delivery, or as otherwise established
by contract.
Character:
Alternating current, 60 hertz, three phase, delivered and metered
at the voltages and points established by contract.
Formula Rate and Charge Components:
Rate = Base component + Drought Adder component
Monthly Charge as of January 1, 2015, Under the Rate:
CAPACITY CHARGE: $5.43 per kilowatt of billing capacity.
ENERGY CHARGE: 20.71 mills per kilowatthour (kWh) of monthly
entitlement.
BILLING CAPACITY: Unless otherwise specified by contract, the
billing capacity will be the seasonal contract rate of delivery.
Base: A fixed revenue requirement that includes operation and
maintenance expense, investment repayment and associated interest,
normal timing power purchases (purchases due to operational
constraints, not associated with drought), and transmission costs. The
Base revenue requirement is $69.2 million.
[GRAPHIC] [TIFF OMITTED] TN08DE14.036
Process:
Any proposed change to the Base component will require a public
process. The Drought Adder component may be adjusted annually using the
above formulas for any costs attributed to drought of less than or
equal to the equivalent of 2 mills/kWh to the LAP Composite Rate. Any
planned incremental adjustment to the Drought Adder component greater
than the equivalent of 2 mills/kWh to the LAP 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 the customer 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 Transformer Losses: If delivery is made at transmission voltage
but metered on the low-voltage side of the substation, the meter
readings will be increased to compensate for transformer losses as
provided for in the contract.
For Power Factor: None. The customer will be required to maintain a
power factor at all points of measurement
[[Page 72670]]
between 95-percent lagging and 95-percent leading.
[FR Doc. 2014-28715 Filed 12-5-14; 8:45 am]
BILLING CODE 6450-01-P
