Loveland Area Projects-Rate Order No. WAPA-179, 30856-30858 [2017-13980]
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30856
Federal Register / Vol. 82, No. 126 / Monday, July 3, 2017 / Notices
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Dated: June 27, 2017.
Kimberly D. Bose,
Secretary.
[FR Doc. 2017–13952 Filed 6–30–17; 8:45 am]
DEPARTMENT OF ENERGY
Western Area Power Administration
Loveland Area Projects—Rate Order
No. WAPA–179
Western Area Power
Administration, DOE.
ACTION: Notice of proposed firm electric
service and Sale of Surplus Products
rates.
AGENCY:
The Western Area Power
Administration (WAPA) is proposing
revised rates for the Loveland Area
Projects (LAP) firm electric service and
modifications to the existing rate
schedule for Sale of Surplus Products.
Current firm electric service rates, under
Rate Schedule L–F10, are in effect
through December 31, 2019, and the
formula rate for the sale of surplus
products, under Rate Schedule L–M1, is
in effect through September 30, 2021.
LAP consists of the Fryingpan-Arkansas
Project (Fry-Ark) and the Pick-Sloan
Missouri Basin Program (P–SMBP)—
Western Division (WD), which were
sradovich on DSK3GMQ082PROD with NOTICES
SUMMARY:
17:53 Jun 30, 2017
The consultation and comment
period will begin July 3, 2017 and end
October 2, 2017. WAPA will present a
detailed explanation of the proposed
rates and other modifications at public
information forums on the following
dates and times:
1. August 22, 2017, 9:00 a.m. to 10:30
a.m. MDT, Denver, Colorado.
2. August 23, 2017, 9:00 a.m. to 10:30
a.m. CDT, Sioux Falls, South Dakota.
WAPA will accept oral and written
comments at public comment forums on
the following dates and times:
1. August 22, 2017, 11:00 a.m. to no
later than 12 noon MDT, Denver,
Colorado.
2. August 23, 2017, 11:00 a.m. to no
later than 12 noon CDT, Sioux Falls,
South Dakota.
WAPA will accept written comments
anytime during the consultation and
comment period.
ADDRESSES: Written comments and
requests to be informed of Federal
Energy Regulatory Commission (FERC)
actions concerning the proposed rates
submitted by WAPA to FERC for
approval should be sent to: Michael D.
McElhany, Acting Regional Manager,
Rocky Mountain Region, Western Area
DATES:
BILLING CODE 6717–01–P
VerDate Sep<11>2014
integrated for marketing and ratemaking purposes in 1989.
WAPA is proposing to lower the
overall LAP firm electric service charges
by 14 percent, as a result of rebalancing
the charge components in formula-based
Rate Schedule L–F10 by reducing the
drought adder component and
increasing the base component. The
proposed rates will provide sufficient
revenue to pay all annual costs,
including interest expense, and repay
investments within the allowable
periods. In addition, WAPA is
proposing to modify Rate Schedule L–
M1, which allows for the sale of
generation and generation-related
products in excess of LAP’s firm electric
service obligations, to add ‘‘energy’’ as
a surplus product. WAPA will prepare
a brochure providing detailed
information on these proposed rates
prior to the public information forums
listed below. This brochure will be
posted to WAPA’s Web site at: https://
www.wapa.gov/regions/RM/rates/Pages/
2018-Rate-Adjustment---FirmPower.aspx. If approved, the proposed
rates under Rate Schedules L–F11 and
L–M2 would become effective on
January 1, 2018, and would remain in
effect through December 31, 2022, or
until superseded. Publication of this
Federal Register notice begins the
formal process for the proposed rate
adjustment and proposed rate
modifications.
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Frm 00041
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Sfmt 4703
Power Administration, 5555 East
Crossroads Boulevard, Loveland, CO
80538–8986 or email lapfirmadj@
wapa.gov. Information regarding the rate
process is posted on WAPA’s Web site
at: https://www.wapa.gov/regions/RM/
rates/Pages/2018-Rate-Adjustment--Firm-Power.aspx. WAPA will post
official comments received via letter
and email to its Web site after the close
of the comment period. WAPA must
receive written comments by the end of
the consultation and comment period to
ensure they are considered in WAPA’s
decision process.
Public information and comment
forum locations are:
1. Denver—Embassy Suites, 7001
Yampa Street, Denver, Colorado.
2. Sioux Falls—Holiday Inn, 100 West
8th Street, Sioux Falls, South Dakota.
FOR FURTHER INFORMATION CONTACT: 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
lapfirmadj@wapa.gov or scook@
wapa.gov.
SUPPLEMENTARY INFORMATION:
Firm Electric Service
On December 2, 2014, the Deputy
Secretary of Energy approved, on an
interim basis, Rate Schedule L–F10
under Rate Order No. WAPA–167 for
the period beginning January 1, 2015,
and ending December 31, 2019 (79 FR
72663–72670 (Dec. 8, 2014)).1 This Rate
Schedule is formula-based, providing
for downward adjustments to the
drought adder component.2 On January
1 FERC confirmed and approved Rate Order
WAPA–167 on a final basis on June 25, 2015, in
Docket No. EF15–4–000. See United States
Department of Energy, Western Area Power
Administration (Loveland Area Projects), 151 FERC
¶ 62,222.
2 The drought adder component is a formulabased revenue requirement that includes future
purchase power above timing purchases, previous
purchase power drought deficits, and interest on
the purchase power drought deficits. See 72 FR
64061 (November 14, 2007). The drought adder was
added as a component to the energy and capacity
rates in Rate Order No. WAPA–134, which was
approved by the Deputy Secretary on an interim
basis on November 14, 2007, (72 FR 64061). FERC
confirmed and approved Rate Order WAPA–134 on
a final basis on May 16, 2008, in Docket No. EF08–
5181. See United States Department of Energy,
Western Area Power Administration (Loveland Area
Projects), 123 FERC ¶ 62,137. Western reviews the
drought adder each September to determine if
drought costs differ from those projected in the
Power Repayment Study and whether an
adjustment to the drought adder is necessary. See
72 FR at 64065. The drought adder may be adjusted
downward using the approved annual drought
adder adjustment process, whereas an incremental
upward adjustment to the drought adder
component greater than the equivalent of 2 mills/
kWh requires a public rate process. See 72 FR at
64065.
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Federal Register / Vol. 82, No. 126 / Monday, July 3, 2017 / Notices
1, 2017, the drought adder component
of the LAP effective rate schedule was
adjusted downward recognizing
repayment of drought costs included in
the drought adder component of the
approved formula rates. The formulabased drought adder component needs
to be adjusted down to zero in 2018.
Such adjustment can be made using the
approved annual drought adder
adjustment process; however, since any
adjustment to the base component must
be done through a public rate process,
WAPA now proposes to adjust both the
base and drought adder components in
Rate Schedule L–F10 through a rate
adjustment process. WAPA proposes to
adjust the formula-based drought adder
component down to zero in 2018, while
the base component will be adjusted
upward to address present costs. The
Fry-Ark and P–SMBP Fiscal Year 2016
Power Repayment Studies (PRS)
revenue requirements and current water
conditions are the determining factors
for this proposed rate adjustment.
The proposed annual revenue
requirement for LAP firm electric
service is $64.1 million. The existing
charges in the current rate schedule are
being reduced, as indicated in Table 1:
TABLE 1—SUMMARY OF CURRENT AND PROPOSED REVENUE REQUIREMENT AND RATES
Current—
under L–F10
with adjusted
drought adder
as of January
1, 2017
Firm electric service
LAP Revenue Requirement (million $) ........................................................................................
LAP Composite Rate (mills/kWh) ................................................................................................
Firm Energy Rate (mills/kWh) .....................................................................................................
Firm Capacity Rate ($/kWmonth) ................................................................................................
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 annual revenue requirement
continues to be allocated equally
between capacity and energy.
WAPA is proposing to place Rate
Schedule L–F11 into effect for the 5year period beginning January 1, 2018,
through December 31, 2022. The
proposed adjustment updates the base
component with present costs and
reduces the drought adder component to
zero, as the drought-related debts are
projected to be fully repaid in 2018.
Base component costs for the P–
SMBP—WD have increased primarily
due to inflationary annual and capital
cost increases associated with
incorporating three new out-year
projections into the 5-year cost
evaluation period into the current ratesetting PRS. Additional details of the P–
SMBP PRS are explained in the P–
SMBP—Eastern Division Rate Order No.
WAPA–180.
Base component costs for Fry-Ark
have decreased, even though the three
new out-year projections for annual
expenses and capital costs within the 5year cost evaluation period include
inflation. This decrease is caused by the
annual expense projections in the
current Fry-Ark rate-setting PRS being
Proposed—
under L–F11
as of
January 1,
2018
$74.5
36.56
18.28
$4.79
$64.1
31.44
15.72
$4.12
Percent
change
¥14
¥14
¥14
¥14
an average of $0.3 million per year
lower than the annual expense
projections in the previous rate-setting
PRS. In addition to lower annual
expenses, ancillary service revenue
projections have also increased an
average of $1.1 million per year over the
previous projections; resulting in a net
revenue increase of approximately $1.4
million per year. This net revenue helps
offset the revenue requirement for firm
electric service.
The net effect of these adjustments to
the drought adder and base components
results in an overall decrease to the LAP
rate. A comparison of the current and
proposed revenue requirements is
shown in Table 2:
TABLE 2—SUMMARY OF CURRENT AND PROPOSED REVENUE REQUIREMENTS
Current—
under L–F10
with adjusted
drought adder
as of January
1, 2017
Firm electric service
sradovich on DSK3GMQ082PROD with NOTICES
LAP Revenue Requirement (million $) ........................................................................................
Pick-Sloan—WD ..........................................................................................................................
Fry-Ark .........................................................................................................................................
As a part of the current and proposed
rate schedules, WAPA provides for a
formula-based adjustment of the
drought adder component of up to 2
mills/kWh. The 2 mills/kWh cap places
a limit on the amount the drought adder
component can be adjusted relative to
associated drought costs to recover costs
attributable to the drought adder
VerDate Sep<11>2014
17:53 Jun 30, 2017
Jkt 241001
formula rate for any one-year cycle.
Continuing to identify the firm electric
service revenue requirement using base
and drought adder components will
assist WAPA in the presentation of
future impacts of droughts, demonstrate
repayment of drought-related costs in
the PRSs, and allow WAPA to be more
responsive to changes caused by
PO 00000
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Fmt 4703
Sfmt 4703
$74.5
59.2
15.3
Proposed—
under L–F11
as of
January 1,
2018
$64.1
50.8
13.3
Percent
change
¥14
¥14
¥13
drought-related expenses. WAPA will
continue to charge and bill its customers
firm electric service rates for energy and
capacity, which are the sum of the base
and drought adder components. A
comparison of the current and proposed
components is shown in Table 3:
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30858
Federal Register / Vol. 82, No. 126 / Monday, July 3, 2017 / Notices
TABLE 3—SUMMARY OF LAP CHARGE COMPONENTS
Existing charges under rate schedule L–F10 with
adjusted drought adder as of January 1, 2017
Base
component
Firm Capacity (/kWmonth)
Firm Energy (mills/kWh) ....
Drought adder
component
$3.92
14.95
sradovich on DSK3GMQ082PROD with NOTICES
Sale of Surplus Products
On August 12, 2016, the Deputy
Secretary of Energy approved, on an
interim basis, Rate Schedule L–M1
under Rate Order No. WAPA–174, for
the period beginning October 1, 2016,
and ending September 30, 2021 (81 FR
56632–56652 (August 22, 2016)).3 This
Rate Schedule is formula-based,
providing for LAP Marketing to sell LAP
surplus energy and capacity products. If
LAP surplus products are available, as
specified in the rate schedule, the
charge will be based on market rates
plus administrative costs. The customer
will be responsible for acquiring
transmission service necessary to
deliver the product(s) for which a
separate charge may be incurred. The
rate schedule currently allows for the
sale of reserves, regulation, and
frequency response. WAPA is proposing
to add ‘‘energy’’ as a fourth surplus
product offered under this rate
schedule. WAPA is proposing to place
Rate Schedule L–M2 into effect for the
5-year period beginning January 1, 2018,
through December 31, 2022.
Legal Authority
The proposed rates constitute a major
rate adjustment, as defined by 10 CFR
903.2(e); therefore, WAPA will hold
public information and public comment
forums for this rate adjustment,
pursuant to 10 CFR 903.15 and 903.16.
WAPA will review all timely public
comments and make amendments or
adjustments to the proposals as
appropriate. Proposed rates will be
forwarded to the Deputy Secretary of
Energy for approval on an interim basis.
WAPA is establishing firm electric
service rates and sale of surplus
products formula rates under the
Department of Energy (DOE)
Organization Act (42 U.S.C. 7152); the
Reclamation Act of 1902 (ch. 1093, 32
Stat. 388), as amended and
supplemented by subsequent
enactments, particularly section 9(c) of
3 FERC confirmed and approved Rate Order
WAPA–174 on a final basis on March 9, 2017, in
Docket Nos. EF16–5–000 and EF16–5–001. See
United States Department of Energy, Western Area
Power Administration (Loveland Area Projects), 158
FERC ¶ 62,181.
VerDate Sep<11>2014
17:53 Jun 30, 2017
Jkt 241001
Total charge
$0.87
3.33
$4.79
18.28
Proposed charges under rate schedule L–F11 as
of January 1, 2018
Base
component
$4.12
15.72
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 specifically
applicable to the projects involved.
By Delegation Order No. 00–037.00B,
effective November 19, 2016, the
Secretary of Energy delegated: (1) The
authority to develop power and
transmission rates to WAPA’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 (50 FR 37835).
All brochures, studies, comments,
letters, memorandums, or other
documents WAPA initiates or uses to
develop the proposed rates will be
available for inspection and copying at
the Rocky Mountain Regional Office
located at 5555 East Crossroads
Boulevard, Loveland, Colorado. These
documents and supporting information
will be posted on WAPA’s Web site as
they become available under the ‘‘2018
Rate Adjustment—Firm Power’’ section
located at: https://www.wapa.gov/
regions/RM/rates/Pages/2018-RateAdjustment---Firm-Power.aspx.
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), WAPA
is in the process of determining whether
an environmental assessment or an
environmental impact statement should
be prepared or if this action can be
categorically excluded from those
requirements.
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Percent
change
Total charge
$0
0
$4.12
15.72
¥14
¥14
Determination Under Executive Order
12866
WAPA has an exemption from
centralized regulatory review under
Executive Order 12866; accordingly, no
clearance of this notice by the Office of
Management and Budget is required.
Dated: June 27, 2017.
Mark A. Gabriel,
Administrator.
[FR Doc. 2017–13980 Filed 6–30–17; 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–180
Western Area Power
Administration, DOE.
ACTION: Notice of Proposed Firm Power
Service and Sale of Surplus Products
Rates.
AGENCY:
Availability of Information
PO 00000
Drought adder
component
Western Area Power
Administration (WAPA) is proposing
revised rates for Pick-Sloan Missouri
Basin Program—Eastern Division (P–
SMBP—ED) firm power and firm
peaking power service, and a new
formula rate for sales of surplus
products. Current firm power and firm
peaking power service rates, under Rate
Schedules P–SED–F12 and P–SED–
FP12, are in effect through December 31,
2019.
WAPA is proposing to lower the
overall charges for firm power and firm
peaking power service by 19 percent, as
a result of rebalancing the charge
components in formula-based Rate
Schedules P–SED–F12 and P–SED–FP12
by reducing the drought adder
component, increasing the base
component, and removing the voltage
discount. The proposed rates will
provide sufficient revenue to pay all
annual costs, including interest
expense, and repay investments within
the allowable periods. In addition,
WAPA is proposing a new formula rate
for the sale of surplus products under
Rate Schedule P–SED–M1. This new
SUMMARY:
E:\FR\FM\03JYN1.SGM
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]]>Agencies
[Federal Register Volume 82, Number 126 (Monday, July 3, 2017)]
[Notices]
[Pages 30856-30858]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-13980]
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
Western Area Power Administration
Loveland Area Projects--Rate Order No. WAPA-179
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of proposed firm electric service and Sale of Surplus
Products rates.
-----------------------------------------------------------------------
SUMMARY: The Western Area Power Administration (WAPA) is proposing
revised rates for the Loveland Area Projects (LAP) firm electric
service and modifications to the existing rate schedule for Sale of
Surplus Products. Current firm electric service rates, under Rate
Schedule L-F10, are in effect through December 31, 2019, and the
formula rate for the sale of surplus products, under Rate Schedule L-
M1, is in effect through September 30, 2021. LAP consists of the
Fryingpan-Arkansas Project (Fry-Ark) and the Pick-Sloan Missouri Basin
Program (P-SMBP)--Western Division (WD), which were integrated for
marketing and rate-making purposes in 1989.
WAPA is proposing to lower the overall LAP firm electric service
charges by 14 percent, as a result of rebalancing the charge components
in formula-based Rate Schedule L-F10 by reducing the drought adder
component and increasing the base component. The proposed rates will
provide sufficient revenue to pay all annual costs, including interest
expense, and repay investments within the allowable periods. In
addition, WAPA is proposing to modify Rate Schedule L-M1, which allows
for the sale of generation and generation-related products in excess of
LAP's firm electric service obligations, to add ``energy'' as a surplus
product. WAPA will prepare a brochure providing detailed information on
these proposed rates prior to the public information forums listed
below. This brochure will be posted to WAPA's Web site at: https://
www.wapa.gov/regions/RM/rates/Pages/2018-Rate-Adjustment_-Firm-
Power.aspx. If approved, the proposed rates under Rate Schedules L-F11
and L-M2 would become effective on January 1, 2018, and would remain in
effect through December 31, 2022, or until superseded. Publication of
this Federal Register notice begins the formal process for the proposed
rate adjustment and proposed rate modifications.
DATES: The consultation and comment period will begin July 3, 2017 and
end October 2, 2017. WAPA will present a detailed explanation of the
proposed rates and other modifications at public information forums on
the following dates and times:
1. August 22, 2017, 9:00 a.m. to 10:30 a.m. MDT, Denver, Colorado.
2. August 23, 2017, 9:00 a.m. to 10:30 a.m. CDT, Sioux Falls, South
Dakota.
WAPA will accept oral and written comments at public comment forums
on the following dates and times:
1. August 22, 2017, 11:00 a.m. to no later than 12 noon MDT,
Denver, Colorado.
2. August 23, 2017, 11:00 a.m. to no later than 12 noon CDT, Sioux
Falls, South Dakota.
WAPA will accept written comments anytime during the consultation
and comment period.
ADDRESSES: Written comments and requests to be informed of Federal
Energy Regulatory Commission (FERC) actions concerning the proposed
rates submitted by WAPA to FERC for approval should be sent to: Michael
D. McElhany, Acting Regional Manager, Rocky Mountain Region, Western
Area Power Administration, 5555 East Crossroads Boulevard, Loveland, CO
80538-8986 or email lapfirmadj@wapa.gov. Information regarding the rate
process is posted on WAPA's Web site at: https://www.wapa.gov/regions/
RM/rates/Pages/2018-Rate-Adjustment_-Firm-Power.aspx. WAPA will post
official comments received via letter and email to its Web site after
the close of the comment period. WAPA must receive written comments by
the end of the consultation and comment period to ensure they are
considered in WAPA's decision process.
Public information and comment forum locations are:
1. Denver--Embassy Suites, 7001 Yampa Street, Denver, Colorado.
2. Sioux Falls--Holiday Inn, 100 West 8th Street, Sioux Falls,
South Dakota.
FOR FURTHER INFORMATION CONTACT: 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 lapfirmadj@wapa.gov or scook@wapa.gov.
SUPPLEMENTARY INFORMATION:
Firm Electric Service
On December 2, 2014, the Deputy Secretary of Energy approved, on an
interim basis, Rate Schedule L-F10 under Rate Order No. WAPA-167 for
the period beginning January 1, 2015, and ending December 31, 2019 (79
FR 72663-72670 (Dec. 8, 2014)).\1\ This Rate Schedule is formula-based,
providing for downward adjustments to the drought adder component.\2\
On January
[[Page 30857]]
1, 2017, the drought adder component of the LAP effective rate schedule
was adjusted downward recognizing repayment of drought costs included
in the drought adder component of the approved formula rates. The
formula-based drought adder component needs to be adjusted down to zero
in 2018. Such adjustment can be made using the approved annual drought
adder adjustment process; however, since any adjustment to the base
component must be done through a public rate process, WAPA now proposes
to adjust both the base and drought adder components in Rate Schedule
L-F10 through a rate adjustment process. WAPA proposes to adjust the
formula-based drought adder component down to zero in 2018, while the
base component will be adjusted upward to address present costs. The
Fry-Ark and P-SMBP Fiscal Year 2016 Power Repayment Studies (PRS)
revenue requirements and current water conditions are the determining
factors for this proposed rate adjustment.
---------------------------------------------------------------------------
\1\ FERC confirmed and approved Rate Order WAPA-167 on a final
basis on June 25, 2015, in Docket No. EF15-4-000. See United States
Department of Energy, Western Area Power Administration (Loveland
Area Projects), 151 FERC ] 62,222.
\2\ The drought adder component is 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. See 72 FR 64061 (November 14,
2007). The drought adder was added as a component to the energy and
capacity rates in Rate Order No. WAPA-134, which was approved by the
Deputy Secretary on an interim basis on November 14, 2007, (72 FR
64061). FERC confirmed and approved Rate Order WAPA-134 on a final
basis on May 16, 2008, in Docket No. EF08-5181. See United States
Department of Energy, Western Area Power Administration (Loveland
Area Projects), 123 FERC ] 62,137. Western reviews the drought adder
each September to determine if drought costs differ from those
projected in the Power Repayment Study and whether an adjustment to
the drought adder is necessary. See 72 FR at 64065. The drought
adder may be adjusted downward using the approved annual drought
adder adjustment process, whereas an incremental upward adjustment
to the drought adder component greater than the equivalent of 2
mills/kWh requires a public rate process. See 72 FR at 64065.
---------------------------------------------------------------------------
The proposed annual revenue requirement for LAP firm electric
service is $64.1 million. The existing charges in the current rate
schedule are being reduced, as indicated in Table 1:
Table 1--Summary of Current and Proposed Revenue Requirement and Rates
----------------------------------------------------------------------------------------------------------------
Current--
under L-F10 Proposed--
with adjusted under L-F11 as
Firm electric service drought adder of January 1, Percent change
as of January 2018
1, 2017
----------------------------------------------------------------------------------------------------------------
LAP Revenue Requirement (million $)............................. $74.5 $64.1 -14
LAP Composite Rate (mills/kWh).................................. 36.56 31.44 -14
Firm Energy Rate (mills/kWh).................................... 18.28 15.72 -14
Firm Capacity Rate ($/kWmonth).................................. $4.79 $4.12 -14
----------------------------------------------------------------------------------------------------------------
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 annual
revenue requirement continues to be allocated equally between capacity
and energy.
WAPA is proposing to place Rate Schedule L-F11 into effect for the
5-year period beginning January 1, 2018, through December 31, 2022. The
proposed adjustment updates the base component with present costs and
reduces the drought adder component to zero, as the drought-related
debts are projected to be fully repaid in 2018.
Base component costs for the P-SMBP--WD have increased primarily
due to inflationary annual and capital cost increases associated with
incorporating three new out-year projections into the 5-year cost
evaluation period into the current rate-setting PRS. Additional details
of the P-SMBP PRS are explained in the P-SMBP--Eastern Division Rate
Order No. WAPA-180.
Base component costs for Fry-Ark have decreased, even though the
three new out-year projections for annual expenses and capital costs
within the 5-year cost evaluation period include inflation. This
decrease is caused by the annual expense projections in the current
Fry-Ark rate-setting PRS being an average of $0.3 million per year
lower than the annual expense projections in the previous rate-setting
PRS. In addition to lower annual expenses, ancillary service revenue
projections have also increased an average of $1.1 million per year
over the previous projections; resulting in a net revenue increase of
approximately $1.4 million per year. This net revenue helps offset the
revenue requirement for firm electric service.
The net effect of these adjustments to the drought adder and base
components results in an overall decrease to the LAP rate. A comparison
of the current and proposed revenue requirements is shown in Table 2:
Table 2--Summary of Current and Proposed Revenue Requirements
----------------------------------------------------------------------------------------------------------------
Current--
under L-F10 Proposed--
with adjusted under L-F11 as
Firm electric service drought adder of January 1, Percent change
as of January 2018
1, 2017
----------------------------------------------------------------------------------------------------------------
LAP Revenue Requirement (million $)............................. $74.5 $64.1 -14
Pick-Sloan--WD.................................................. 59.2 50.8 -14
Fry-Ark......................................................... 15.3 13.3 -13
----------------------------------------------------------------------------------------------------------------
As a part of the current and proposed rate schedules, WAPA provides
for a formula-based adjustment of the drought adder component of up to
2 mills/kWh. The 2 mills/kWh cap places a limit on the amount the
drought adder component can be adjusted relative to associated drought
costs to recover costs attributable to the drought adder formula rate
for any one-year cycle. Continuing to identify the firm electric
service revenue requirement using base and drought adder components
will assist WAPA in the presentation of future impacts of droughts,
demonstrate repayment of drought-related costs in the PRSs, and allow
WAPA to be more responsive to changes caused by drought-related
expenses. WAPA will continue to charge and bill its customers firm
electric service rates for energy and capacity, which are the sum of
the base and drought adder components. A comparison of the current and
proposed components is shown in Table 3:
[[Page 30858]]
Table 3--Summary of LAP Charge Components
--------------------------------------------------------------------------------------------------------------------------------------------------------
Existing charges under rate schedule L-F10 Proposed charges under rate schedule L-F11 as
with adjusted drought adder as of January 1, of January 1, 2018
----------------------2017---------------------------------------------------------------------- Percent
Drought adder Drought adder change
Base component component Total charge Base component component Total charge
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firm Capacity (/kWmonth).................... $3.92 $0.87 $4.79 $4.12 $0 $4.12 -14
Firm Energy (mills/kWh)..................... 14.95 3.33 18.28 15.72 0 15.72 -14
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sale of Surplus Products
On August 12, 2016, the Deputy Secretary of Energy approved, on an
interim basis, Rate Schedule L-M1 under Rate Order No. WAPA-174, for
the period beginning October 1, 2016, and ending September 30, 2021 (81
FR 56632-56652 (August 22, 2016)).\3\ This Rate Schedule is formula-
based, providing for LAP Marketing to sell LAP surplus energy and
capacity products. If LAP surplus products are available, as specified
in the rate schedule, the charge will be based on market rates plus
administrative costs. The customer will be responsible for acquiring
transmission service necessary to deliver the product(s) for which a
separate charge may be incurred. The rate schedule currently allows for
the sale of reserves, regulation, and frequency response. WAPA is
proposing to add ``energy'' as a fourth surplus product offered under
this rate schedule. WAPA is proposing to place Rate Schedule L-M2 into
effect for the 5-year period beginning January 1, 2018, through
December 31, 2022.
---------------------------------------------------------------------------
\3\ FERC confirmed and approved Rate Order WAPA-174 on a final
basis on March 9, 2017, in Docket Nos. EF16-5-000 and EF16-5-001.
See United States Department of Energy, Western Area Power
Administration (Loveland Area Projects), 158 FERC ] 62,181.
---------------------------------------------------------------------------
Legal Authority
The proposed rates constitute a major rate adjustment, as defined
by 10 CFR 903.2(e); therefore, WAPA will hold public information and
public comment forums for this rate adjustment, pursuant to 10 CFR
903.15 and 903.16. WAPA will review all timely public comments and make
amendments or adjustments to the proposals as appropriate. Proposed
rates will be forwarded to the Deputy Secretary of Energy for approval
on an interim basis.
WAPA is establishing firm electric service rates and sale of
surplus products formula rates under the Department of Energy (DOE)
Organization Act (42 U.S.C. 7152); the Reclamation Act of 1902 (ch.
1093, 32 Stat. 388), as amended and supplemented by subsequent
enactments, 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 specifically applicable to the
projects involved.
By Delegation Order No. 00-037.00B, effective November 19, 2016,
the Secretary of Energy delegated: (1) The authority to develop power
and transmission rates to WAPA'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 (50 FR 37835).
Availability of Information
All brochures, studies, comments, letters, memorandums, or other
documents WAPA initiates or uses to develop the proposed rates will be
available for inspection and copying at the Rocky Mountain Regional
Office located at 5555 East Crossroads Boulevard, Loveland, Colorado.
These documents and supporting information will be posted on WAPA's Web
site as they become available under the ``2018 Rate Adjustment--Firm
Power'' section located at: https://www.wapa.gov/regions/RM/rates/
Pages/2018-Rate-Adjustment_-Firm-Power.aspx.
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), WAPA is
in the process of determining whether an environmental assessment or an
environmental impact statement should be prepared or if this action can
be categorically excluded from those requirements.
Determination Under Executive Order 12866
WAPA has an exemption from centralized regulatory review under
Executive Order 12866; accordingly, no clearance of this notice by the
Office of Management and Budget is required.
Dated: June 27, 2017.
Mark A. Gabriel,
Administrator.
[FR Doc. 2017-13980 Filed 6-30-17; 8:45 am]
BILLING CODE 6450-01-P
