Proposed Olmsted Project Rate Order No. WAPA-177, 47506-47507 [2017-21936]

Agencies

• DEPARTMENT OF ENERGY
• Western Area Power Administration

[Federal Register Volume 82, Number 196 (Thursday, October 12, 2017)]
[Notices]
[Pages 47506-47507]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-21936]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Proposed Olmsted Project Rate Order No. WAPA-177

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of Proposed Power Formula Rate.

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SUMMARY: The United States Department of Energy, Western Area Power 
Administration (WAPA), Colorado River Storage Project Management Center 
(CRSP MC), is proposing a new power formula rate for the Olmsted 
Hydroelectric Powerplant Replacement Project (Olmsted). There is no 
existing rate for Olmsted; therefore, the CRSP MC is proposing a new 
formula, under Rate Schedule Olmsted F-1, that will be used to 
determine the annual energy charge. WAPA will provide a brochure 
detailing information about the proposed formula rate prior to the 
public information forum and will post it to the Olmsted rate action 
Web site at https://www.wapa.gov/regions/CRSP/rates/Pages/rate-order-177.aspx. If approved, the proposed formula rate under Rate Schedule 
Olmsted F-1 would become effective on April 1, 2018, and remain in 
effect through March 31, 2023, or until superseded. Publication of this 
Federal Register notice begins the formal process for the proposed 
formula rate.

DATES: The consultation and comment period will begin October 12, 2017 
and end January 10, 2018. WAPA will present a detailed explanation 
about the proposed rate at a public information forum on November 17, 
2017, at 10 a.m. MDT in Salt Lake City, Utah. WAPA will accept oral and 
written comments at a public comment forum on November 17, 2017, 
immediately following the conclusion of the public information forum. 
WAPA will accept written comments any time during the 90-day 
consultation and comment period.

ADDRESSES: The public information forum and the public comment forum 
will be held at the new Colorado River Storage Project Management 
Center, Western Area Power Administration, 299 South Main Street, Suite 
200, Salt Lake City, UT 84111. Written comments and requests to be 
informed about the Federal Energy Regulatory Commission's (FERC) 
actions concerning the rates submitted by WAPA to FERC for approval 
should be sent to: Ms. Lynn C. Jeka, CRSP Manager, Colorado River 
Storage Project Management Center, Western Area Power Administration, 
150 East Social Hall Avenue, Suite 300, Salt Lake City, UT 84111, email 
jeka@wapa.gov. The Colorado River Storage Project Management Center is 
scheduled to relocate to the new address in October 2017. WAPA will 
post the new mailing address and the date of the move, as well as 
information about the rate process, on WAPA's Web site at https://www.wapa.gov/regions/CRSP/rates/Pages/rate-order-177.aspx.
    WAPA will post official comments received via letter and email to 
this Web site after the close of the comment period. Written comments 
must be received by the end of the consultation and comment period to 
be considered in WAPA's decision process. Access to WAPA's facility is 
controlled; therefore, any U.S. citizen wanting to attend these forums 
must present an official form of picture identification such as a U.S. 
driver's license, U.S. passport, U.S. Government ID, or U.S. Military 
ID at the time of the forums. Foreign nationals planning to attend 
should contact WAPA 30 days in advance of the forums to allow 
sufficient time to arrange admittance.

FOR FURTHER INFORMATION CONTACT: Mr. Thomas Hackett, CRSP Rates 
Manager, Colorado River Storage Project Management Center, Western Area 
Power Administration, 150 East Social Hall Avenue, Suite 300, Salt Lake 
City, UT 84111, (801) 524-5503 or email hackett@wapa.gov.

SUPPLEMENTARY INFORMATION: The existing Olmsted Powerplant, located in 
northern Utah, is over 100 years old and was acquired from PacifiCorp 
in condemnation proceedings by the United States in 1990. As part of 
the condemnation proceedings, PacifiCorp continued Olmsted operations 
until 2015 after which time the operation of the facility became the 
responsibility of the Department of the Interior. As agreed upon in an 
implementation agreement executed February 4, 2015, among the Central 
Utah Water Conservancy District (District); Department of the Interior 
(Interior), Bureau of Reclamation (Reclamation); and WAPA, the District 
is currently constructing a replacement facility for power generation 
and will operate and maintain the Olmsted facilities in connection with 
its Central Utah Project operations.
    Non-reimbursable funding for Olmsted has largely been contributed 
by the District, Interior, and the Upper Basin States. Funds available 
under Section 5(c) of the Colorado River Storage Project Act were made 
available for Olmsted, and these funds are considered a reimbursable 
Federal investment to be repaid by power revenues. Interior will 
continue to own the Olmsted Powerplant, and commercial operation is 
anticipated to begin July 1, 2018. WAPA will market an energy-only 
product as no capacity will be available to market from Olmsted. Power 
production will be non-dispatchable and incidental to the delivery of 
water. It is expected that annual energy production will average 
approximately 27,000,000 kWh per year.
    It is proposed that each customer which receives an allocation from 
Olmsted will pay its proportional share of the amortized portion of the 
reimbursable investment in Olmsted, with interest, and the associated 
operation, maintenance, and replacement (OM&R) costs in return for its 
proportional share of total marketable energy production. This 
repayment schedule does not depend upon the energy made available for 
sale or the amount of generation each year. Customers are to pay 
reimbursable investment as well as the OM&R costs of Olmsted and, in 
return, will receive all of the energy produced. Each fiscal year (FY) 
WAPA will estimate the Olmsted expenses by preparing a power repayment 
study, which will include estimates of the reimbursable investment 
costs, including interest, and OM&R.
    To date, all investments are accounted for as Construction in 
Progress (CIP) costs and have not been transferred to plant accounts 
for capitalization. Once transferred, an amortization schedule will be 
calculated for repayment. Historical financial data are only available 
through FY 2016, and

[[Page 47507]]

projections are based on the FY 2019 Reclamation and WAPA work plans 
received in April 2017 as indicated in Table 1. WAPA will post updates 
to these projections on the Web site as data become available.

                                        Table 1--Actual & Projected Investment and OM&R Costs Requiring Repayment
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                           FY                                2015        2016        2017        2018        2019        2020        2021        2022
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Reimbursable CIP........................................  ..........  $5,800,000
Olmsted O&M.............................................    $160,000      10,000     $10,000     $10,000    $140,000    $751,300    $561,352    $281,800
WAPA O&M................................................  ..........  ..........       9,500      10,000      10,500      11,000      11,000      11,500
                                                         -----------------------------------------------------------------------------------------------
    FY Totals...........................................     160,000   5,810,000      19,500      20,000     150,500     762,300     572,352     293,300
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    WAPA will provide the Olmsted power customers with the initial 
installment information at least 30 days prior to initiation of 
service. Service is expected to begin July 1, 2018, or as soon as 
Olmsted is declared commercially operable. The FY 2018 annual 
installment will include all actual and projected OM&R costs requiring 
repayment through FY 2018 in addition to amortized payments on capital 
investments plus interest. The FY 2018 installment amount will be 
divided by the number of months of service, which is anticipated to be 
3 months. Thereafter, the annual installment amount, in 12 monthly 
payments, will be established in advance by WAPA and submitted to the 
Olmsted power customers on or before August 31 prior to the new FY.
    The calculation of the annual installment will include adjustments 
between estimated and actual costs included in preceding installments. 
If costs in the preceding installment are underestimated, an amount 
equal to the difference will be added to the next annual installment. 
Conversely, if costs in the preceding installment are overestimated, 
the amount would be deducted from the next installment.

Legal Authority

    The proposed formula rate constitutes a major rate adjustment as 
defined by 10 CFR 903.2(e); therefore, WAPA will hold both a public 
information forum and a public comment forum for this formula rate 
proposal under 10 CFR 903.15 and 903.16. WAPA will review all timely 
public comments and will make amendments or adjustments to the 
proposal, as appropriate. The final formula rate will be forwarded to 
the Deputy Secretary of Energy for approval on an interim basis.
    WAPA is establishing an electric service formula rate for Olmsted 
under the DOE Organization Act (42 U.S.C. 7152); 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)); the CRSP Act of 1956 (43 U.S.C. 620); 
and other acts that specifically apply to the project 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 903) were published on 
September 18, 1985 (50 FR 87835).

Availability of Information

    All studies, comments, letters, memorandums, or other documents 
that WAPA initiates or uses to develop the proposed rates are available 
for inspection and copying at the Colorado River Storage Project 
Management Center, Western Area Power Administration, 150 East Social 
Hall Avenue, Suite 300, Salt Lake City, UT. WAPA is scheduled to 
relocate to a new address in October 2017. In addition to being 
available at the new address, WAPA will post information about the rate 
process on WAPA's Web site at https://www.wapa.gov/regions/CRSP/rates/Pages/rate-order-177.aspx.

Ratemaking Procedure Requirements

Environmental Compliance

    The U.S. Department of the Interior, Central Utah Project 
Completion Act Office, and the Central Utah Water Conservancy District 
completed an Environmental Assessment (EA) on the Olmsted Hydroelectric 
Powerplant Replacement Project. These agencies issued a Finding Of No 
Significant Impact (FONSI) on the EA. This action was signed January 
16, 2015. WAPA adopted the EA and FONSI for its action of marketing the 
output from the Olmsted Powerplant. This rate action is an action 
included as part of marketing of the Olmsted Powerplant generation.

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: September 5, 2017.
Mark A. Gabriel,
Administrator.
[FR Doc. 2017-21936 Filed 10-11-17; 8:45 am]
BILLING CODE 6450-01-P