Pick-Sloan Missouri Basin Program-Eastern Division-Rate Order No. WAPA-180, 57742-57750 [2017-26376]
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Federal Register / Vol. 82, No. 234 / Thursday, December 7, 2017 / Notices
Adjustments
DEPARTMENT OF ENERGY
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
between 95-percent lagging and
95-percent leading.
Western Area Power Administration
Pick-Sloan Missouri Basin Program—
Eastern Division—Rate Order No.
WAPA–180
Western Area Power
Administration, DOE.
AGENCY:
Notice of order concerning firm
power, firm peaking power, and sale of
surplus product formula rates.
ACTION:
The Deputy Secretary of
Energy confirmed and approved Rate
Order No. WAPA–180 and Rate
Schedules P-SED-F13, P-SED-FP13, and
P–SED–M1 for firm power service, firm
peaking power service, and a new
formula rate for sale of surplus products
for the Western Area Power
Administration (WAPA) Pick-Sloan
Missouri Basin Program—Eastern
Division (P-SMBP—ED) into effect on an
interim basis (Provisional Formula
Rates).
SUMMARY:
Rate Schedule L–M2
(Supersedes Rate Schedule L–M1)
UNITED STATES DEPARTMENT OF
ENERGY
WESTERN AREA POWER
ADMINISTRATION
ROCKY MOUNTAIN REGION
Loveland Area Projects
SALE OF SURPLUS PRODUCTS
(Approved Under Rate Order No.
WAPA–179)
The first day of the first full billing
period beginning on or after January 1,
2018, and extending through December
31, 2022, or until superseded by another
rate schedule, whichever occurs earlier.
The Rate Schedules P-SED-F13,
P-SED-FP13, and P-SED-M1 are effective
on the first day of the first full billing
period beginning on or after January 1,
2018, and will remain in effect through
December 31, 2022, pending
confirmation and approval by Federal
Energy Regulatory Commission (FERC)
on a final basis or until superseded.
Applicable
FOR FURTHER INFORMATION CONTACT:
DATES:
Effective
This rate schedule applies to
Loveland Area Projects (LAP) Marketing
and is applicable to the sale of the
following LAP surplus energy and
capacity products: energy, frequency
response, regulation, and reserves. If
any of the above LAP surplus products
are available, LAP can make the
product(s) available for sale, providing
entities enter into separate agreement(s)
with LAP Marketing which will specify
the terms of sale(s).
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Formula Rate
The charge for each product will be
determined at the time of the sale 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.
[FR Doc. 2017–26375 Filed 12–6–17; 8:45 am]
BILLING CODE 6450–01–P
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Mr.
Jody S. Sundsted, Acting Regional
Manager, Upper Great Plains Region,
Western Area Power Administration,
2900 4th Avenue North, Billings, MT
59101–1266, telephone (406) 255–2800,
or Ms. Linda Cady-Hoffman, Rates
Manager, Upper Great Plains Region,
Western Area Power Administration,
2900 4th Avenue North, Billings, MT
59101–1266, telephone (406) 255–2920,
email cady@wapa.gov.
SUPPLEMENTARY INFORMATION:
Firm Electric Service
On December 2, 2014, the Deputy
Secretary of Energy approved, on an
interim basis, Rate Schedules P-SEDF12 and P-SED-FP12 under Rate Order
No. WAPA–166 for the 5-year period
beginning January 1, 2015, and ending
December 31, 2019 (79 FR 72670–72677
(Dec. 8, 2014)).1 These rate schedules
are formula-based, providing for
adjustments to the Drought Adder
1 FERC confirmed and approved Rate Order
WAPA–166 on a final basis on March 18, 2015, in
Docket No. EF15–3–000. See United States
Department of Energy, Western Area Power
Administration (Pick-Sloan Missouri Basin
Program—Eastern Division), 150 FERC ¶ 62,170.
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component.2 On January 1, 2017, the
Drought Adder component of the P–
SMBP—ED effective rate schedule was
adjusted downward, recognizing
repayment of drought costs included in
the Drought Adder component of the
approved formula rates. Under Rate
Schedule P–SED–F12 with adjusted
Drought Adder component as of January
1, 2017, the firm capacity charge is
$6.50/kWmonth and the firm energy
charge is 16.18 mills/kWh. Under Rate
Schedule
P-SED-FP12, the firm peaking capacity
charge is $5.85/kWmonth. Firm peaking
energy is normally returned. A firm
peaking energy charge of 16.18 mills/
kWh will be assessed in the event
energy is not returned.
Effective January 1, 2018, WAPA is
adjusting the overall composite rate of
the Pick-Sloan Missouri Basin Program,
which is reflected in an adjustment to
the formula-based charge components of
the firm power rate schedules. The
Drought Adder component of the firm
power rate schedules will go down to
zero and the Base component will be
adjusted upward to reflect present costs
attributed to the charge components.
WAPA’s Upper Great Plains Region
(UGP) is removing the 5 percent voltage
discount in the existing P-SMBP—ED
firm power rate schedule P-SED-F12
and removing the voltage discount from
the firm power revenue requirement.
The total annual revenue requirement
for P-SMBP—ED is $230.1 million for
firm power service and firm peaking
power service. Under Rate Schedule PSED-F13, the firm capacity charge is
$5.25/kWmonth and the firm energy
charge is 13.27 mills/kWh. Under Rate
Schedule P-SED-FP13, the firm peaking
capacity charge is $4.75/kWmonth. Firm
Peaking Energy is normally returned. A
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
64067 (November 14, 2007). The Drought Adder
was added as a component to the energy and
capacity rates in Rate Order No. WAPA–135, which
was approved by the Deputy Secretary on an
interim basis on November 14, 2007 (72 FR 64067).
FERC confirmed and approved Rate Order WAPA–
135 on a final basis on April 14, 2008, in Docket
No. EF08–5031. See United States Department of
Energy, Western Area Power Administration (PickSloan Missouri Basin Program-Eastern Division),
123 FERC ¶ 62,048. WAPA reviews the Drought
Adder component each September to determine if
drought costs differ from those projected in the
Power Repayment Study and whether an
adjustment to the Drought Adder component is
necessary. See 72 FR 64071. The Drought Adder
component 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 64071.
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Firm Peaking Energy charge of 13.27
mills/kWh will be assessed in the event
energy is not returned.
Sale of Surplus Products
In addition to the firm power and firm
peaking power rate schedules, WAPA is
implementing a new formula-based rate
schedule, P-SED-M1, applicable to the
sale of surplus energy and capacity
products; energy, reserves, regulation,
and frequency response. If P-SMBP—ED
surplus products are available, the
charge for each product will be
determined 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.
Legal Authority
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 the Administrator
of WAPA; (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.
Federal rules (10 CFR part 903) govern
DOE procedures for public participation
in power rate adjustments.
Under Delegation Order Nos. 00–
037.00B and 00–001.00F and in
compliance with 10 CFR part 903 and
18 CFR part 300, I hereby confirm,
approve, and place Rate Order No.
WAPA–180, which provides the
formula rates for P–SMBP—ED firm
power, firm peaking power, and sale of
surplus products, into effect on an
interim basis. The new Rate Schedules
P-SED-F13, P-SED-FP13, and P-SED-M1
will be submitted to FERC for
confirmation and approval on a final
basis.
Dated: November 30, 2017.
Dan Brouillette,
Deputy Secretary of Energy.
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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–180
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ORDER CONFIRMING, APPROVING,
AND PLACING THE PICK-SLOAN
MISSOURI BASIN PROGRAM—
EASTERN DIVISION FIRM POWER
SERVICE, FIRM PEAKING POWER
SERVICE AND SALE OF SURPLUS
PRODUCT FORMULA RATES INTO
EFFECT ON AN INTERIM BASIS
The firm power, firm peaking power,
and sale of surplus product rates for the
Pick-Sloan Missouri Basin Program—
Eastern Division (P-SMBP—ED) set forth
in this order are established in
accordance with section 302 of the
Department of Energy (DOE)
Organization Act (42 U.S.C. 7152). This
Act transferred to and vested in the
Secretary of Energy the power marketing
functions of the Secretary of the
Department of the Interior and the
Bureau of Reclamation (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 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 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 the Administrator
of Western Area Power Administration
(WAPA); (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). Federal rules (10 CFR part 903)
govern DOE procedures for public
participation in power rate adjustments.
Acronyms, Terms and Definitions
As used in this Rate Order, the
following acronyms, terms and
definitions apply:
Base: A fixed revenue requirement
that includes O&M expense,
investments and replacements, interest
on investments and replacements,
normal timing power purchase
(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 Rate: The rate which sets
forth the charges for capacity. It is
expressed in dollars per kilowatt-month
and applied to each kilowatt of the
Contract Rate of Delivery (CROD).
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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 kilowatt-hour and used only
for comparison purposes.
Customer: An entity with a contract
that is receiving firm electric service
from WAPA.
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. Electric energy is expressed in
kilowatt-hours.
Energy Charge: The charge under the
rate schedule for energy. It is expressed
in mills per kilowatt-hour and applied
to each kilowatt-hour delivered to each
Customer.
Firm: A type of product and/or service
available at the time requested by a
Customer.
FY: Fiscal year; October 1 to
September 30.
kW: Kilowatt—the electrical unit of
capacity that equals 1,000 watts.
kWh: Kilowatt-hour—the electrical
unit of energy that equals 1,000 watts in
1 hour.
kWmonth: Kilowatt-month the
electrical unit of the monthly amount of
capacity.
LAP Loveland Area Projects
mills/kWh: Mills per kilowatt-hour—
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
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Federal Register / Vol. 82, No. 234 / Thursday, December 7, 2017 / Notices
time in an electrical circuit. Generally,
it is expressed as a percentage.
Preference: The provisions of
Reclamation Law that require WAPA 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 Formula Rate: A formula
rate confirmed, approved, and placed
into effect on an interim basis by the
Deputy Secretary of Energy.
Ratesetting PRS: The Power
Repayment Study used for the rate
adjustment period.
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.
sradovich on DSK3GMQ082PROD with NOTICES
Effective Date
The Provisional Formula Rate
Schedules P-SED-F13, P-SED-FP13, and
P-SED-M1 will take effect on the first
day of the first full billing period
beginning on or after January 1, 2018,
and will remain in effect through
December 31, 2022, pending approval
by FERC on a final basis or until
superseded.
Public Notice and Comment
WAPA-UGP followed the Procedures
for Public Participation in Power and
Transmission Rate Adjustments and
Extensions, 10 CFR part 903, in
developing these rates and schedules.
The steps WAPA took to involve
interested parties in the rate process
were:
1. A Federal Register Notice,
published on July 3, 2017 (82 FR 30858)
(Proposal FRN), announced the
proposed rates for P-SMBP—ED and
began the 90-day public consultation
and comment period.
2. On July 5, 2017, WAPA-UGP
mailed letters to all P-SMBP—ED
Preference Customers and interested
parties transmitting the FRN published
on July 3, 2017.
3. On August 22, 2017, at 9 a.m.
(MDT), WAPA held a public
information forum at the Denver
Embassy Suites, 7000 Yampa Street,
Denver, Colorado. WAPA provided
updates to the proposed firm power
rates and sale of surplus products for
both P-SMBP—ED and Loveland Area
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Projects (LAP). WAPA also answered
questions and gave notice that more
information was available in the
customer rate brochure.
4. On August 22, 2017, at 11 a.m.
(MDT), following the public information
forum, at the same location, a public
comment forum was held, to provide an
opportunity for customers and other
interested parties to comment for the
record. No oral or written comments
were received at this forum.
5. On August 23, 2017, at 9 a.m.
(CDT), WAPA held a public information
forum at the Holiday Inn, 100 West 8th
Street, Sioux Falls, South Dakota.
WAPA provided updates to the
proposed firm power rates and sale of
surplus products for both the P-SMBP—
ED and LAP. WAPA also answered
questions and gave notice that more
information was available in the
customer rate brochure.
6. On August 23, 2017, at 11 a.m.
(CDT), following the public information
forum, and at the same location, a
public comment forum was held. The
comment forum gave the public an
opportunity to comment for the record.
Two oral comments were received at
this forum.
7. WAPA provided a Web site that
contains all dates, customer letters,
presentations, FRNs, customer rate
brochure, and other information about
this rate process. The Web site is located
at https://www.wapa.gov/regions/UGP/
rates/Pages/2018-firm-rateadjustment.aspx.
8. During the 90-day consultation and
comment period, which ended October
2, 2017, WAPA received two oral
comments (at the August 23 public
comment forum) and two comment
letters. The comments and WAPA’s
responses are addressed below. All
comments have been considered in the
preparation of this Rate Order.
Two representatives of the following
organizations made oral comments
Mid-West Electric Consumers
Association, Colorado
Missouri River Energy Services, South
Dakota
Written comments were received from
the following interested parties
Marshall Municipal Utilities, Minnesota
Missouri River Energy Services, South
Dakota
Project Description
The Pick-Sloan Missouri Basin
Program (P-SMBP), originally the
Missouri River Basin Project, was
authorized by Congress in section 9 of
the Flood Control Act of 1944 of
December 22, 1944 (Pub. L. 534, 58 Stat.
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887, 891). 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,
Riverton, and Shoshone Projects were
combined with the P-SMBP in 1954,
followed by the North Platte Project in
1959. These projects were referred to as
the ‘‘Integrated Projects’’ of the
P-SMBP.
The Flood Control Act of 1944 also
authorized the inclusion of the Fort
Peck Project with the P-SMBP for
operation and repayment purposes. The
Riverton Project was reauthorized as a
unit of P-SMBP in 1970.
The P-SMBP power is marketed by
two Regions. The UGP Region, with a
regional office in Billings, Montana,
markets the Eastern Division
(P-SMBP—ED) power to approximately
340 customers. The Rocky Mountain
Region (RMR), with a regional office in
Loveland, Colorado, markets the
Western Division (P-SMBP—WD) power
through LAP to approximately 75
customers.
The adjustment to the LAP rate is a
separate formal rate process, which is
documented in Rate Order No. WAPA–
179. Rate Order No. WAPA–179 is also
scheduled to go into effect on the first
day of the first full billing period on or
after January 1, 2018. The P-SMBP—WD
revenue requirement is incorporated
into the LAP rate, along with the
revenue requirement for the FryingpanArkansas Project.
Power Repayment Study—Firm Power
Rate
WAPA prepares a PRS each FY to
determine if revenues will be sufficient
to repay, within the required time, all
costs assigned to the P-SMBP.
Repayment criteria is based on WAPA’s
applicable laws and legislation, as well
as policies including DOE Order RA
6120.2. To meet the Cost Recovery
Criteria outlined in DOE Order RA
6120.2, a revised study and rate
adjustment has been developed to
demonstrate that sufficient revenues
will be collected under Provisional
Formula Rates to meet future
obligations.
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With the removal of the voltage
discount taken into account, the total
annual revenue requirement for
P-SMBP—ED is $230.1 million for firm
power service and firm peaking power
service. The revenue requirement and
composite rates for P-SMBP—ED firm
power and firm peaking power are being
reduced, as indicated in Table 1:
TABLE 1—COMPARISON OF REVENUE REQUIREMENTS AND COMPOSITE RATES
Existing
requirements
(January 1,
2017)
P-SMBP—ED Revenue Requirement (millions $) ......................................................................
P-SMBP—ED Composite Rate (mills/kWh) ................................................................................
1 Voltage
Provisional
requirements
(January 1,
2018)
$230.1 1
24.00
$282.7
28.25
Percent
change
¥19%
¥15
discount removed.
Under the existing rate methodology,
rates for P-SMBP—ED firm power
service and firm peaking power service
are designed to recover an annual
revenue requirement that includes
power investment repayment, aid to
irrigation repayment, interest expense,
purchase power, O&M, and other
expenses within the allowable period.
The annual revenue requirement
continues to be allocated equally
between capacity and energy.
Existing and Provisional Formula Rates
The existing Rate Schedules P-SEDP12 and P-SED-FP12 and provisional
Rate Schedules P-SED-P13 and P-SEDFP13 continue to be formula-based, with
Base and Drought Adder components,
and provide for an incremental upward
adjustment to the Drought Adder
component up to 2 mills/kwh. An
incremental increase to the Drought
Adder greater than 2 mills/kWh requires
a public process. The Drought Adder
may be adjusted downward pursuant to
the formula, by using the approved
annual Drought Adder adjustment
process. A comparison of the existing
and Provisional Formula Rates for PSMBP—ED firm electric service is listed
in Table 2:
TABLE 2—COMPARISON OF EXISTING AND PROVISIONAL FORMULA RATES
Existing
charges
under
P-SED-F12/
P-SED-FP12
with modified
drought adder
as of
January 1,
2017
Firm power service
Firm
Firm
Firm
Firm
$6.50
16.18
$5.85
16.18
$5.25
13.27
$4.75
13.27
Capacity ($/kW month) ........................................................................................................
Energy (mills/kWh) ..............................................................................................................
Peaking Capacity ($/kW month) .........................................................................................
Peaking Energy (mills/kWh) 1 ..............................................................................................
1 Firm
Percent
change
¥19
¥18
¥19
¥18
Peaking Energy is normally returned. This charge will be assessed in the event Firm Peaking Energy is not returned.
Under the new formula-based Rate
Schedule P-SED-M1, the Provisional
Formula Rate will consist of a charge for
products listed in the rate schedule that
will be determined at the time of the
sale based on market rates, plus
administrative costs.
Certification of Rates
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Provisional
charges under
P-SED-F13/
P-SED-FP13
as of
January 1,
2018
WAPA’s Administrator certified that
the Provisional Formula Rates for PSMBP—ED firm power, firm peaking
power, and sale of surplus product rates
under Rate Schedules P-SED–F13, PSED-FP13, and P-SED-M1 are at the
lowest possible rates consistent with
sound business principles. The
Provisional Formula Rates were
developed following administrative
policies and applicable laws.
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P-SMBP—ED Firm Power Rate
Discussion
According to Reclamation Law,
WAPA is required to establish power
rates sufficient to recover O&M,
purchased power and interest expenses,
and repay power investment and
irrigation aid. The P-SMBP—ED firm
power and firm peaking power Base and
Drought Adder components are updated
to represent present costs. As a part of
the existing and provisional 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
power service revenue requirement
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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 PRS, and
allow WAPA to be more responsive to
changes caused by drought-related
expenses. WAPA will continue to
charge and bill its Preference Customers
firm power service and firm peaking
power service rates for energy and
capacity, which are the sum of the Base
and Drought Adder components.
Under Rate Schedules P-SED-F13 and
P-SED-FP13, WAPA will continue to
identify its firm power revenue
requirement using Base and Drought
Adder components. The Base
component is a fixed revenue
requirement that includes annual O&M
expenses, investment repayment and
associated interest, normal timing
power purchases, and transmission
costs. Normal timing power purchases
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are due to operational constraints (e.g.,
management of endangered species
habitat, water quality, navigation, etc.)
and are not associated with drought.
WAPA cannot adjust the Base
component without a public process.
The Drought Adder component is a
formula-based revenue requirement that
includes costs attributable to drought
conditions within P-SMBP. The Drought
Adder component includes costs
associated with future Non-timing
Power Purchases to meet firm power
contractual obligations not covered with
available system generation due to a
drought, previously incurred deficits
due to purchased power debt that
resulted from Non-timing Power
Purchases made during a drought, and
the interest associated with drought
debt. The Drought Adder component is
designed to repay WAPA’s drought debt
within 10 years from the time the debt
was incurred, using balloon-payment
methodology. For example, the drought
debt incurred by WAPA in FY 2009 is
required to be repaid by FY 2019.
The annual revenue requirement
calculation will continue to be
summarized by the following formula:
Annual Revenue Requirement = Base
Revenue Requirement + Drought Adder
Revenue Requirement. Both the Base
and Drought Adder components recover
portions of the firm power revenue
requirement and firm peaking power
revenue necessary to equal the
P-SMBP—ED revenue requirement.
Under this Provisional Rate, the PSMBP—ED annual revenue requirement
equals $230.1 million and is comprised
of a Base revenue requirement of $230.1
million plus a Drought Adder revenue
requirement of $0. A comparison of the
existing and provisional charge
components is listed in Table 3.
TABLE 3—SUMMARY OF P-SMBP—ED CHARGE COMPONENTS
Existing charges under rate schedules
P-SED-F12 and P-SED-FP12 with
modified drought adder as of
January 1, 2017
Base
component
Firm Capacity
(/kWmonth) ...............
Firm Energy (mills/kWh)
Firm Peaking Capacity
($/kWmonth) .............
Firm Peaking Energy
(mills/kWh) 1 ..............
1 Firm
Drought Adder
component
Provisional charges under rate
schedules P-SED-F13 and P-SED-FP13
as of January 1, 2018
Total charge
Base
component
Drought Adder
component
Change
(%)
Total charge
$4.90
12.33
$1.60
3.85
$6.50
16.18
$5.25
13.27
$0.00
0.00
$5.25
13.27
¥19%
¥18%
$4.45
$1.40
$5.85
$4.75
$0.00
$4.75
¥19%
12.33
3.85
16.18
13.27
0.00
13.27
¥18%
Peaking Energy is normally returned. This charge will be assessed in the event Firm Peaking Energy is not returned.
WAPA reviews its firm power service
rates annually. WAPA will review the
Base and Drought Adder components
after the annual PRS is completed,
generally in the first quarter of the
calendar year. If an adjustment to the
Base component is necessary or if an
incremental upward adjustment to the
Drought Adder component greater than
the equivalent of 2 mills/kWh to the
PRS Composite Rate is necessary,
WAPA will initiate a public process
following 10 CFR part 903 before
making an adjustment.
In accordance with the approved
Drought Adder adjustment process,
WAPA will review the Drought Adder
component annually in early summer to
determine if drought costs differ from
those projected in the PRS. In October,
WAPA will determine if a change to the
Drought Adder component is necessary,
either incremental or decremental.
Adjustment to the Drought Adder
component, up to 2 mills/kWh, will be
implemented in the following 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. Implementing the Drought
Adder component adjustment on
January 1 of each year will help keep
the drought deficits from escalating as
quickly, will lower the interest expense
due to drought deficits, will
demonstrate responsible deficit
management, and will provide prompt
drought deficit repayments.
Statement of Revenue and Related
Expenses
The following Table 4 provides a
summary of projected revenue and
expense data for the P-SMBP, including
both the Eastern and Western Division’s
firm electric service revenue
requirements, through the 5-year
provisional rate approval period. The
firm power rates for Eastern and
Western Divisions have been developed
with the following revenues and
expenses for the P-SMBP:
TABLE 4—P-SMBP COMPARISON OF 5-YEAR RATE PERIOD (FY 2018–2022) TOTAL REVENUES AND EXPENSES
Existing Rate
($000)
Provisional Rate
($000)
Difference
($000)
sradovich on DSK3GMQ082PROD with NOTICES
Total Revenues1 ........................................................................................................
$2,679,973
$2,644,825
($35,148)
Revenue Distribution
Expenses:
O&M ...........................................................................................................................
Purchased Power ......................................................................................................
Interest .......................................................................................................................
Transmission1 ............................................................................................................
$1,082,969
164,049
561,528
64,072
$1,158,866
124,796
560,257
460,982
$75,897
(39,253)
(1,271)
396,910
Total Expenses ...................................................................................................
$1,872,618
$2,304,901
$432,283
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57747
Federal Register / Vol. 82, No. 234 / Thursday, December 7, 2017 / Notices
TABLE 4—P-SMBP COMPARISON OF 5-YEAR RATE PERIOD (FY 2018–2022) TOTAL REVENUES AND EXPENSES—
Continued
Existing Rate
($000)
Provisional Rate
($000)
Difference
($000)
Principal Payments:
Capitalized Expenses (Deficits) 2 ...............................................................................
Original Project and Additions 2 .................................................................................
Replacements 2 ..........................................................................................................
Irrigation Aid ...............................................................................................................
$345,006
401,193
61,156
0
$42,325
179,017
72,864
45,718
($302,681)
(222,176)
11,708
45,718
Total Principal Payments ....................................................................................
$807,355
$339,924
($467,431)
Total Revenue Distribution .................................................................................
$2,679,973
$2,644,825
($35,148)
1 Transmission
increase is a result of accounting treatment of transmission expense and transmission revenue due to WAPA–UPG joining the
Southwest Power Pool (SPP).
2 Due to historic drought conditions, revenues generated in the cost evaluation period are applied toward repayment of deferred annual expenses rather than repayment of project additions and replacements. The outstanding deferred of amount $42.3 million is projected to be repaid
in 2018, a year ahead of its due date.
Sale of Surplus Products Discussion
WAPA is also implementing a new
formula rate for the sale of surplus
products under Rate Schedule P-SEDM1. This new rate schedule allows for
the sale of generation and generationrelated products in excess of WAPA’s PSMBP—ED firm power obligations at
market rates. P-SED-M1 is a new
formula-based rate schedule, applicable
to the sale of surplus energy and
capacity products. The schedule
includes reserves, regulation, frequency
response, and energy. If WAPA UGP
surplus products are available, the
charge is determined 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. WAPA is placing Rate
Schedule P-SED-M1 into effect for the 5year period beginning January 1, 2018,
through December 31, 2022.
Basis for Rate Development
sradovich on DSK3GMQ082PROD with NOTICES
WAPA is lowering the overall charges
for firm power service and firm peaking
power service by 19 percent, by
reducing the Drought Adder component
to zero, increasing the Base component,
and removing the voltage discount. The
Provisional Formula Rates under Rate
Schedules P-SED-F13 and P-SED-FP13
will provide sufficient revenue to pay
all annual costs, including interest
expense, and repay investments within
the allowable periods.
Comments
WAPA received two comment letters
and two oral comments during the
public consultation and comment
period. The comments expressed in
these letters have been paraphrased,
where appropriate, without
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18:50 Dec 06, 2017
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compromising the meaning of the
comments.
A. Comment: One customer expressed
support of the proposed rate adjustment
as described in the FRN for Rate Order
No. WAPA–180. The customer is aware
that WAPA intends to lower the
Drought Adder to zero and increase the
Base component due to inflationary
pressures. The customer also expressed
support of removing the voltage
discount. The customer commended
WAPA on paying off the $843 million
in drought debt as a significant
achievement. The customer
acknowledged much has been learned
about the risks of power supply
management through drought periods.
The customer encouraged WAPA to
work towards implementing a purchase
power and wheeling strategy for
WAPA’s unobligated balances to help
manage such risks in the future.
Response: This rate reduction
rebalances the Base and Drought Adder
components. WAPA has also
determined that the voltage discount
has served its purpose and now is no
longer needed. In its nearly 70 years of
application, the original intent of
reimbursing customers for relieving the
BOR and then WAPA of transmission
facility construction costs has been met.
The purchase power and wheeling
strategy, as well as the use of
unobligated balances, are not directly
related to this rate action. WAPA will,
however, continue to complete an
annual Drought Adder review that
allows WAPA to be more responsive to
rate adjustments driven by drought
periods. WAPA is committed to
continuing to implement its purchase
power and wheeling strategy and use of
unobligated balances in an open and
transparent manner.
B. Comment: Multiple customer
representatives supported the rate
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adjustment as proposed, and
emphasized the need for continued cost
control regarding the Base component.
Response: WAPA is committed to
keeping the power rates at the lowest
possible rates while maintaining sound
business principles.
Availability of Information
Information about this rate
adjustment, including the customer rate
brochure, PRS, comments, letters,
memorandums, and other supporting
materials that were used to develop the
Provisional Formula Rates, is be
available for inspection and copying at
the Upper Great Plains Regional Office,
located at 2900 4th Avenue North, 6th
Floor, Billings, Montana. Many of these
documents are also available on
WAPA’s Web site under the ‘‘2018 Firm
Rate Adjustment’’ section located at
https://www.wapa.gov/regions/UGP/
rates/Pages/2018-firm-rateadjustment.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
has determined this action is
categorically excluded from preparing
an environmental assessment or an
environmental impact statement. A
copy of the categorical exclusion
determination is available on WAPA’s
Web site at https://www.wapa.gov/
regions/UGP/Environment/Documents/
RateOrderWAPA-180.pdf.
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Federal Register / Vol. 82, No. 234 / Thursday, December 7, 2017 / Notices
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.
Submission to the Federal Energy
Regulatory Commission
The Provisional Formula 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.
Dan Brouillette
Deputy Secretary of Energy
Character
Rate Schedule P-SED-F13
(Supersedes Schedule P-SED-F12)
UNITED STATES DEPARTMENT OF
ENERGY
WESTERN AREA POWER
ADMINISTRATION
Alternating current, 60 hertz, three
phase, delivered and metered at the
voltages and points established by
contract.
Formula Rate and Charge
Components
above timing purchases, previous
purchase power drought deficits, and
interest on the purchase power drought
deficits. The formulas, along with the
charges under the formulas as of January
1, 2018, are:
Annual Drought Adder
Adjustment Process:
The Drought Adder may be adjusted
annually using the above formulas for
any costs attributed to drought of less
than or equal to the equivalent of 2
mills/kWh to the Power Repayment
Study (PRS) composite rate. Any
planned incremental upward
adjustment to the Drought Adder greater
than the equivalent of 2 mills/kWh to
the PRS composite rate will require a
public process.
The annual review process is initiated
in early summer when WAPA reviews
the Drought Adder component and
provides notice of any estimated change
to the Drought Adder component charge
under the formula. In October, WAPA
will make a final determination of any
change to the Drought Adder
component charge, either incremental or
decremental. If a Drought Adder
component change is required, a
modified Drought Adder revenue
requirement and the associated charges
will become effective the following
January 1 and will be identified in a
Drought Adder modification update.
WAPA will inform customers of updates
sradovich on DSK3GMQ082PROD with NOTICES
Dated: November 30, 2017
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FIRM POWER SERVICE
(Approved Under Rate Order No.
WAPA–180)
Effective
The first day of the first full billing
period beginning on or after January 1,
2018, through December 31, 2022, or
until superseded by another rate
schedule, whichever occurs earlier.
Available
Within the marketing area served by
the Eastern Division of the Pick-Sloan
Missouri Basin Program; within
Montana, North Dakota, South Dakota,
Minnesota, Iowa, and Nebraska.
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EN07DE17.002</GPH>
Drought Adder Component: A
formula-based revenue requirement that
includes future purchase power expense
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, 2018, Rate Schedules P-SEDF13, P-SED-FP13, and P-SED-M1 for the
Pick-Sloan Missouri Basin Program—
Eastern Division Project of the Western
Area Power Administration. These rate
schedules shall remain in effect on an
interim basis, pending Federal Energy
Regulatory Commission’s confirmation
and approval of the rate schedules or
substitute rates on a final basis through
December 31, 2022, or until superseded.
Pick-Sloan Missouri Basin Program—
Eastern Division
EN07DE17.001</GPH>
Applicable
To the power and energy delivered to
customers as firm power service.
Rate = Base component + Drought
Adder component.
Monthly Charge as of January 1,
2018, under the Rate:
CAPACITY CHARGE: $5.25 for each
kilowatt per month (kWmo) of billing
capacity.
ENERGY CHARGE: 13.27 mills for
each kilowatt-hour (kWh) for all energy
delivered as firm power service.
BILLING CAPACITY: The billing
capacity will be as defined by the power
sales contract.
Charge Components
Base Component: A fixed revenue
requirement that includes operation and
maintenance expense, investments and
replacements, interest on investments
and replacements, normal timing
purchase power (purchases due to
operational constraints, not associated
with drought), and transmission costs.
Any proposed change to the Base
component will require a public
process.
UPPER GREAT PLAINS REGION
Federal Register / Vol. 82, No. 234 / Thursday, December 7, 2017 / Notices
by letter and post updates to WAPA’s
external Web site.
Adjustments:
For Billing of Unauthorized Overruns:
For each billing period in which there
is a contract violation involving an
unauthorized overrun of the contractual
firm power and/or energy obligations,
such overrun shall be billed at 10 times
the formula rate.
For Power Factor:
None. Customers will be required to
maintain a power factor at the point of
delivery between 95-percent lagging and
95-percent leading.
Rate Schedule P-SED-FP13
(Supersedes Schedule P-SED-FP12)
UNITED STATES DEPARTMENT OF
ENERGY
WESTERN AREA POWER
ADMINISTRATION
2018, through December 31, 2022, or
until superseded by another rate
schedule, whichever occurs earlier.
Available:
Within the marketing area served by
the Eastern Division of the Pick-Sloan
Missouri Basin Program; within
Montana, North Dakota, South Dakota,
Minnesota, Iowa, and Nebraska.
Applicable:
To the power sold to customers as
firm peaking power service.
Character:
Alternating current, 60 hertz, three
phase, delivered and metered at the
voltages and points established by
contract.
57749
13.27 mills for each kilowatt-hour
(kWh) for all energy scheduled for
delivery without return.
Charge Components:
Base Component: A fixed revenue
requirement that includes operation and
maintenance expense, investments and
replacements, interest on investments
and replacements, normal timing
purchase power (purchases due to
operational constraints, not associated
with drought), and transmission costs.
Any proposed change to the Base
component will require a public
process.
Formula Rate and Charge Components:
UPPER GREAT PLAINS REGION
Drought Adder Component: 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.
The formulas, along with the charges
under the formulas as of January 1,
2018, are:
Annual Drought Adder Adjustment
Process:
The Drought Adder may be adjusted
annually using the above formulas for
any costs attributed to drought of less
than or equal to the equivalent of 2
mills/kWh to the Power Repayment
Study (PRS) composite rate. Any
planned incremental upward
adjustment to the Drought Adder greater
than the equivalent of 2 mills/kWh to
the PRS composite rate will require a
public process.
The annual review process is initiated
in early summer when WAPA reviews
the Drought Adder component and
provides notice of any estimated change
to the Drought Adder component charge
under the formula. In October, WAPA
will make a final determination of any
change to the Drought Adder
component charge, either incremental or
decremental. If a Drought Adder
component change is required, a
modified Drought Adder revenue
requirement and the associated charges
will become effective the following
January 1 and will be identified in a
Drought Adder modification update.
WAPA will inform customers of updates
by letter and post updates to WAPA’s
external Web site.
BILLING CAPACITY:
The billing capacity will be the
greater of (1) the highest 30-minute
integrated capacity measured during the
month up to, but not in excess of, the
delivery obligation under the power
sales contract, or (2) the contract rate of
delivery.
Adjustments:
Billing for Unauthorized
Overruns:
For each billing period in which there
is a contract violation involving an
unauthorized overrun of the contractual
obligation for peaking capacity and/or
energy, such overrun shall be billed at
10 times the above rate.
Rate Schedule P-SED-M1
FIRM PEAKING POWER SERVICE
sradovich on DSK3GMQ082PROD with NOTICES
(Approved Under Rate Order No.
WAPA–180)
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EN07DE17.005</GPH>
Pick-Sloan Missouri Basin Program—
Eastern Division
EN07DE17.006</GPH>
Effective:
The first day of the first full billing
period beginning on or after January 1,
Rate = Base component + Drought
Adder component
Monthly Charge as of January 1, 2018,
under the Rate:
CAPACITY CHARGE:
$4.75 for each kilowatt per month
(kWmo) of the effective contract rate of
delivery for peaking power or the
maximum amount scheduled,
whichever is greater.
ENERGY CHARGE:
57750
Federal Register / Vol. 82, No. 234 / Thursday, December 7, 2017 / Notices
UNITED STATES DEPARTMENT OF
ENERGY
WESTERN AREA POWER
ADMINISTRATION
UPPER GREAT PLAINS REGION
PICK-SLOAN MISSOURI BASIN
PROGRAM—EASTERN DIVISION
SALE OF SURPLUS PRODUCTS
(Approved Under Rate Order No.
WAPA–180)
Effective:
The first day of the first full billing
period beginning on or after January 1,
2018, through December 31, 2022, or
until superseded by another rate
schedule, whichever occurs earlier.
Applicable:
This rate schedule applies to Eastern
Division of the Pick-Sloan Missouri
Basin Program marketing and is
applicable to the sale of the following PSMBP—ED surplus energy and capacity
products; energy, frequency response,
regulation, and reserves. If any PSMBP—ED surplus energy and capacity
products are available, UGP can make
the product(s) available for sale,
providing entities enter into a separate
agreement(s) with UGP Marketing Office
which will specify the terms of sale(s).
Formula Rate:
The charge for each product is
determined at the time of the sale based
on market rates, plus administrative
costs. The customer will be responsible
for acquiring transmission services
necessary to deliver the product(s), for
which a separate charge may be
incurred.
[FR Doc. 2017–26376 Filed 12–6–17; 8:45 am]
BILLING CODE 6450–01–P
ENVIRONMENTAL PROTECTION
AGENCY
[FRL–9970–84–Region 6]
Clean Air Act Operating Permit
Program; Petitions for Objection to
State Operating Permit for Big River
Steel, LLC, Osceola, Arkansas
Environmental Protection
Agency (EPA).
ACTION: Notice of final action.
sradovich on DSK3GMQ082PROD with NOTICES
AGENCY:
Pursuant to the Clean Air Act
(CAA), the EPA Administrator signed an
Order, dated October 31, 2017, denying
a petition asking EPA to object to the
operating permit issued by the Arkansas
Department of Environmental Quality
(ADEQ) to Big River Steel, LLC (Big
SUMMARY:
VerDate Sep<11>2014
18:50 Dec 06, 2017
Jkt 244001
operating permit issued on September
18, 2013, to Big River Steel, LLC located
in Osceola, Mississippi County,
Arkansas.
The Petitioner requests that the
Administrator object to the proposed
operating permit issued by the ADEQ to
Big River based on twelve claims. The
claims are described in detail in Section
IV of the Order. In summary, the issues
raised are that: (1) ADEQ conducted an
inadequate review of background air
quality data; (2) the PM2.5 modeling is
deficient because it excluded certain
areas from the analysis; (3) the PM2.5
modeling is deficient because ADEQ
failed to include secondary formation of
PM2.5, and instead only included PM2.5
directly emitted by the facility; (4)
ADEQ’S air quality impacts analysis for
PM2.5 NAAQS was inadequate because
there are discrepancies among different
modeled PM2.5 annual impact values in
or associated with the PM2.5 modeling.;
(5) ADEQ and Big River failed to
properly carry out an additional impacts
FOR FURTHER INFORMATION CONTACT
analysis; (6) the emission factors for
section to view copies of the final Order, natural gas combustion used to issue the
petition, and other supporting
Draft Permit are conflicting; (7) Big
information. You may view the hard
River did not adequately demonstrate
copies Monday through Friday, from
the basis for its proposed PM2.5 emission
9:00 a.m. to 3:00 p.m., excluding
factors; (8) the Big River facility design
Federal holidays. If you wish to
was incomplete in critical ways that
examine these documents, you should
affected the validity of air quality
make an appointment at least 24 hours
modeling; (9) the permit does not
before the visiting day. Additionally, the contain enforceable permit conditions
final October 31, 2017, Order is
that lead to compliance; (10) the Permit
available electronically at: https://
does not contain adequate monitoring,
www.epa.gov/sites/production/files/
recordkeeping, and reporting
2017-10/documents/big_river_steel_
requirements to comply with the
response2013.pdf.
requirements of 40 CFR 70.6(a)(3)(i)(B)
because it does not provide for a test
FOR FURTHER INFORMATION CONTACT:
method; (11) the Permit does not
Dinesh Senghani at (214) 665–7221,
email address: senghani.dinesh@epa.gov appropriately establish BACT
requirements; and (12) ADEQ’s Draft
or the above EPA, Region 6 address.
Permit does not comply with public
SUPPLEMENTARY INFORMATION: The CAA
notice and participation requirements.
affords EPA a 45-day period to review,
The Order issued on October 31, 2017,
and object, as appropriate, to a title V
responds to the Petition and explains
operating permit proposed by a state
the basis for EPA’s decision.
permitting authority. Sections 307(b)
and 505(b)(2) of the CAA, 42 U.S.C.
Dated: December 1, 2017.
7661d(b)(2), and 40 CFR 70.8(d)
Samuel Coleman,
authorizes any person to petition the
Acting Regional Administrator, Region 6.
EPA Administrator, within 60 days after [FR Doc. 2017–26400 Filed 12–6–17; 8:45 am]
the expiration of this review period, to
BILLING CODE 6560–50–P
object to a title V operating permit if
EPA has not done so. Petitions must be
based only on objections to the permit
FARM CREDIT ADMINISTRATION
that were raised with reasonable
specificity during the public comment
Sunshine Act Meeting; Farm Credit
period provided by the state, unless the
Administration Board
petitioner demonstrates that it was
AGENCY: Farm Credit Administration.
impracticable to raise these issues
during the comment period or unless
ACTION: Notice, regular meeting.
the grounds for the issue arose after this
SUMMARY: Notice is hereby given,
period.
EPA received the petition from the
pursuant to the Government in the
Petitioners on October 9, 2013, for the
Sunshine Act, of the regular meeting of
River) for its Steel Mill. Title V
operating permit number 2305–AOP–R0
was issued on September 18, 2013, by
the ADEQ to Big River for a new steel
mill in Osceola, Mississippi County,
Arkansas. EPA’s October 31, 2017,
Order responds to a petition submitted
on October 9, 2013 by the Nucor SteelArkansas and Nucor-Yamato Steel
Company (the Petitioners), pursuant to
the Clean Air Act (CAA or Act). The Act
provides that a petitioner may ask for
judicial review of those portions of the
Orders that deny objections raised in the
petitions in the appropriate United
States Court of Appeals. Any petition
for review shall be filed within 60 days
from the date this notice appears in the
Federal Register, pursuant to the Act.
ADDRESSES: You may review copies of
the final Order, the petition, and other
supporting information at EPA Region 6,
1445 Ross Avenue, Dallas, Texas 75202–
2733.
EPA requests that if at all possible,
you contact the individual listed in the
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]]>Agencies
[Federal Register Volume 82, Number 234 (Thursday, December 7, 2017)]
[Notices]
[Pages 57742-57750]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-26376]
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
Western Area Power Administration
Pick-Sloan Missouri Basin Program--Eastern Division--Rate Order
No. WAPA-180
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of order concerning firm power, firm peaking power, and
sale of surplus product formula rates.
-----------------------------------------------------------------------
SUMMARY: The Deputy Secretary of Energy confirmed and approved Rate
Order No. WAPA-180 and Rate Schedules P-SED-F13, P-SED-FP13, and P-SED-
M1 for firm power service, firm peaking power service, and a new
formula rate for sale of surplus products for the Western Area Power
Administration (WAPA) Pick-Sloan Missouri Basin Program--Eastern
Division (P-SMBP--ED) into effect on an interim basis (Provisional
Formula Rates).
DATES: The Rate Schedules P-SED-F13, P-SED-FP13, and P-SED-M1 are
effective on the first day of the first full billing period beginning
on or after January 1, 2018, and will remain in effect through December
31, 2022, pending confirmation and approval by Federal Energy
Regulatory Commission (FERC) on a final basis or until superseded.
FOR FURTHER INFORMATION CONTACT: Mr. Jody S. Sundsted, Acting Regional
Manager, Upper Great Plains Region, Western Area Power Administration,
2900 4th Avenue North, Billings, MT 59101-1266, telephone (406) 255-
2800, or Ms. Linda Cady-Hoffman, Rates Manager, Upper Great Plains
Region, Western Area Power Administration, 2900 4th Avenue North,
Billings, MT 59101-1266, telephone (406) 255-2920, email cady@wapa.gov.
SUPPLEMENTARY INFORMATION:
Firm Electric Service
On December 2, 2014, the Deputy Secretary of Energy approved, on an
interim basis, Rate Schedules P-SED-F12 and P-SED-FP12 under Rate Order
No. WAPA-166 for the 5-year period beginning January 1, 2015, and
ending December 31, 2019 (79 FR 72670-72677 (Dec. 8, 2014)).\1\ These
rate schedules are formula-based, providing for adjustments to the
Drought Adder component.\2\ On January 1, 2017, the Drought Adder
component of the P-SMBP--ED effective rate schedule was adjusted
downward, recognizing repayment of drought costs included in the
Drought Adder component of the approved formula rates. Under Rate
Schedule P-SED-F12 with adjusted Drought Adder component as of January
1, 2017, the firm capacity charge is $6.50/kWmonth and the firm energy
charge is 16.18 mills/kWh. Under Rate Schedule P-SED-FP12, the firm
peaking capacity charge is $5.85/kWmonth. Firm peaking energy is
normally returned. A firm peaking energy charge of 16.18 mills/kWh will
be assessed in the event energy is not returned.
---------------------------------------------------------------------------
\1\ FERC confirmed and approved Rate Order WAPA-166 on a final
basis on March 18, 2015, in Docket No. EF15-3-000. See United States
Department of Energy, Western Area Power Administration (Pick-Sloan
Missouri Basin Program--Eastern Division), 150 FERC ] 62,170.
\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 64067 (November 14,
2007). The Drought Adder was added as a component to the energy and
capacity rates in Rate Order No. WAPA-135, which was approved by the
Deputy Secretary on an interim basis on November 14, 2007 (72 FR
64067). FERC confirmed and approved Rate Order WAPA-135 on a final
basis on April 14, 2008, in Docket No. EF08-5031. See United States
Department of Energy, Western Area Power Administration (Pick-Sloan
Missouri Basin Program-Eastern Division), 123 FERC ] 62,048. WAPA
reviews the Drought Adder component each September to determine if
drought costs differ from those projected in the Power Repayment
Study and whether an adjustment to the Drought Adder component is
necessary. See 72 FR 64071. The Drought Adder component 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 64071.
---------------------------------------------------------------------------
Effective January 1, 2018, WAPA is adjusting the overall composite
rate of the Pick-Sloan Missouri Basin Program, which is reflected in an
adjustment to the formula-based charge components of the firm power
rate schedules. The Drought Adder component of the firm power rate
schedules will go down to zero and the Base component will be adjusted
upward to reflect present costs attributed to the charge components.
WAPA's Upper Great Plains Region (UGP) is removing the 5 percent
voltage discount in the existing P-SMBP--ED firm power rate schedule P-
SED-F12 and removing the voltage discount from the firm power revenue
requirement. The total annual revenue requirement for P-SMBP--ED is
$230.1 million for firm power service and firm peaking power service.
Under Rate Schedule P-SED-F13, the firm capacity charge is $5.25/
kWmonth and the firm energy charge is 13.27 mills/kWh. Under Rate
Schedule P-SED-FP13, the firm peaking capacity charge is $4.75/kWmonth.
Firm Peaking Energy is normally returned. A
[[Page 57743]]
Firm Peaking Energy charge of 13.27 mills/kWh will be assessed in the
event energy is not returned.
Sale of Surplus Products
In addition to the firm power and firm peaking power rate
schedules, WAPA is implementing a new formula-based rate schedule, P-
SED-M1, applicable to the sale of surplus energy and capacity products;
energy, reserves, regulation, and frequency response. If P-SMBP--ED
surplus products are available, the charge for each product will be
determined 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.
Legal Authority
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 the Administrator of WAPA; (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. Federal rules (10 CFR part 903)
govern DOE procedures for public participation in power rate
adjustments.
Under Delegation Order Nos. 00-037.00B and 00-001.00F and in
compliance with 10 CFR part 903 and 18 CFR part 300, I hereby confirm,
approve, and place Rate Order No. WAPA-180, which provides the formula
rates for P-SMBP--ED firm power, firm peaking power, and sale of
surplus products, into effect on an interim basis. The new Rate
Schedules P-SED-F13, P-SED-FP13, and P-SED-M1 will be submitted to FERC
for confirmation and approval on a final basis.
Dated: November 30, 2017.
Dan Brouillette,
Deputy Secretary of Energy.
DEPARTMENT OF ENERGY
DEPUTY SECRETARY
In the matter of: Western Area Power Administration
Rate Adjustment for the Pick-Sloan Missouri Basin Program--Eastern
Division)
Rate Order No. WAPA-180
ORDER CONFIRMING, APPROVING, AND PLACING THE PICK-SLOAN MISSOURI BASIN
PROGRAM--EASTERN DIVISION FIRM POWER SERVICE, FIRM PEAKING POWER
SERVICE AND SALE OF SURPLUS PRODUCT FORMULA RATES INTO EFFECT ON AN
INTERIM BASIS
The firm power, firm peaking power, and sale of surplus product
rates for the Pick-Sloan Missouri Basin Program--Eastern Division (P-
SMBP--ED) set forth in this order are established in accordance with
section 302 of the Department of Energy (DOE) Organization Act (42
U.S.C. 7152). This Act transferred to and vested in the Secretary of
Energy the power marketing functions of the Secretary of the Department
of the Interior and the Bureau of Reclamation (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 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 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 the Administrator of Western Area Power
Administration (WAPA); (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). Federal rules (10 CFR part
903) govern DOE procedures for public participation in power rate
adjustments.
Acronyms, Terms and Definitions
As used in this Rate Order, the following acronyms, terms and
definitions apply:
Base: A fixed revenue requirement that includes O&M expense,
investments and replacements, interest on investments and replacements,
normal timing power purchase (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 Rate: The rate which sets forth the charges for capacity.
It is expressed in dollars per kilowatt-month and applied to each
kilowatt of the Contract Rate of Delivery (CROD).
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 kilowatt-hour and used only for comparison purposes.
Customer: An entity with a contract that is receiving firm electric
service from WAPA.
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. Electric energy is expressed in kilowatt-hours.
Energy Charge: The charge under the rate schedule for energy. It is
expressed in mills per kilowatt-hour and applied to each kilowatt-hour
delivered to each Customer.
Firm: A type of product and/or service available at the time
requested by a Customer.
FY: Fiscal year; October 1 to September 30.
kW: Kilowatt--the electrical unit of capacity that equals 1,000
watts.
kWh: Kilowatt-hour--the electrical unit of energy that equals 1,000
watts in 1 hour.
kWmonth: Kilowatt-month the electrical unit of the monthly amount
of capacity.
LAP Loveland Area Projects
mills/kWh: Mills per kilowatt-hour--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
[[Page 57744]]
time in an electrical circuit. Generally, it is expressed as a
percentage.
Preference: The provisions of Reclamation Law that require WAPA 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 Formula Rate: A formula rate confirmed, approved, and
placed into effect on an interim basis by the Deputy Secretary of
Energy.
Ratesetting PRS: The Power Repayment Study used for the rate
adjustment period.
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 Formula Rate Schedules P-SED-F13, P-SED-FP13, and
P-SED-M1 will take effect on the first day of the first full billing
period beginning on or after January 1, 2018, and will remain in effect
through December 31, 2022, pending approval by FERC on a final basis or
until superseded.
Public Notice and Comment
WAPA-UGP followed the Procedures for Public Participation in Power
and Transmission Rate Adjustments and Extensions, 10 CFR part 903, in
developing these rates and schedules. The steps WAPA took to involve
interested parties in the rate process were:
1. A Federal Register Notice, published on July 3, 2017 (82 FR
30858) (Proposal FRN), announced the proposed rates for P-SMBP--ED and
began the 90-day public consultation and comment period.
2. On July 5, 2017, WAPA-UGP mailed letters to all P-SMBP--ED
Preference Customers and interested parties transmitting the FRN
published on July 3, 2017.
3. On August 22, 2017, at 9 a.m. (MDT), WAPA held a public
information forum at the Denver Embassy Suites, 7000 Yampa Street,
Denver, Colorado. WAPA provided updates to the proposed firm power
rates and sale of surplus products for both P-SMBP--ED and Loveland
Area Projects (LAP). WAPA also answered questions and gave notice that
more information was available in the customer rate brochure.
4. On August 22, 2017, at 11 a.m. (MDT), following the public
information forum, at the same location, a public comment forum was
held, to provide an opportunity for customers and other interested
parties to comment for the record. No oral or written comments were
received at this forum.
5. On August 23, 2017, at 9 a.m. (CDT), WAPA held a public
information forum at the Holiday Inn, 100 West 8th Street, Sioux Falls,
South Dakota. WAPA provided updates to the proposed firm power rates
and sale of surplus products for both the P-SMBP--ED and LAP. WAPA also
answered questions and gave notice that more information was available
in the customer rate brochure.
6. On August 23, 2017, at 11 a.m. (CDT), following the public
information forum, and at the same location, a public comment forum was
held. The comment forum gave the public an opportunity to comment for
the record. Two oral comments were received at this forum.
7. WAPA provided a Web site that contains all dates, customer
letters, presentations, FRNs, customer rate brochure, and other
information about this rate process. The Web site is located at https://www.wapa.gov/regions/UGP/rates/Pages/2018-firm-rate-adjustment.aspx.
8. During the 90-day consultation and comment period, which ended
October 2, 2017, WAPA received two oral comments (at the August 23
public comment forum) and two comment letters. The comments and WAPA's
responses are addressed below. All comments have been considered in the
preparation of this Rate Order.
Two representatives of the following organizations made oral comments
Mid-West Electric Consumers Association, Colorado
Missouri River Energy Services, South Dakota
Written comments were received from the following interested parties
Marshall Municipal Utilities, Minnesota
Missouri River Energy Services, South Dakota
Project Description
The Pick-Sloan Missouri Basin Program (P-SMBP), originally the
Missouri River Basin Project, was authorized by Congress in section 9
of the Flood Control Act of 1944 of December 22, 1944 (Pub. L. 534, 58
Stat. 887, 891). 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,
Riverton, and Shoshone Projects were combined with the P-SMBP in 1954,
followed by the North Platte Project in 1959. These projects were
referred to as the ``Integrated Projects'' of the P-SMBP.
The Flood Control Act of 1944 also authorized the inclusion of the
Fort Peck Project with the P-SMBP for operation and repayment purposes.
The Riverton Project was reauthorized as a unit of P-SMBP in 1970.
The P-SMBP power is marketed by two Regions. The UGP Region, with a
regional office in Billings, Montana, markets the Eastern Division (P-
SMBP--ED) power to approximately 340 customers. The Rocky Mountain
Region (RMR), with a regional office in Loveland, Colorado, markets the
Western Division (P-SMBP--WD) power through LAP to approximately 75
customers.
The adjustment to the LAP rate is a separate formal rate process,
which is documented in Rate Order No. WAPA-179. Rate Order No. WAPA-179
is also scheduled to go into effect on the first day of the first full
billing period on or after January 1, 2018. The P-SMBP--WD revenue
requirement is incorporated into the LAP rate, along with the revenue
requirement for the Fryingpan-Arkansas Project.
Power Repayment Study--Firm Power Rate
WAPA prepares a PRS each FY to determine if revenues will be
sufficient to repay, within the required time, all costs assigned to
the P-SMBP. Repayment criteria is based on WAPA's applicable laws and
legislation, as well as policies including DOE Order RA 6120.2. To meet
the Cost Recovery Criteria outlined in DOE Order RA 6120.2, a revised
study and rate adjustment has been developed to demonstrate that
sufficient revenues will be collected under Provisional Formula Rates
to meet future obligations.
[[Page 57745]]
With the removal of the voltage discount taken into account, the
total annual revenue requirement for P-SMBP--ED is $230.1 million for
firm power service and firm peaking power service. The revenue
requirement and composite rates for P-SMBP--ED firm power and firm
peaking power are being reduced, as indicated in Table 1:
Table 1--Comparison of Revenue Requirements and Composite Rates
----------------------------------------------------------------------------------------------------------------
Existing Provisional
requirements requirements
(January 1, (January 1, Percent change
2017) 2018)
----------------------------------------------------------------------------------------------------------------
P-SMBP--ED Revenue Requirement (millions $)..................... $282.7 $230.1 \1\ -19%
P-SMBP--ED Composite Rate (mills/kWh)........................... 28.25 24.00 -15
----------------------------------------------------------------------------------------------------------------
\1\ Voltage discount removed.
Under the existing rate methodology, rates for P-SMBP--ED firm
power service and firm peaking power service are designed to recover an
annual revenue requirement that includes power investment repayment,
aid to irrigation repayment, interest expense, purchase power, O&M, and
other expenses within the allowable period. The annual revenue
requirement continues to be allocated equally between capacity and
energy.
Existing and Provisional Formula Rates
The existing Rate Schedules P-SED-P12 and P-SED-FP12 and
provisional Rate Schedules P-SED-P13 and P-SED-FP13 continue to be
formula-based, with Base and Drought Adder components, and provide for
an incremental upward adjustment to the Drought Adder component up to 2
mills/kwh. An incremental increase to the Drought Adder greater than 2
mills/kWh requires a public process. The Drought Adder may be adjusted
downward pursuant to the formula, by using the approved annual Drought
Adder adjustment process. A comparison of the existing and Provisional
Formula Rates for P-SMBP--ED firm electric service is listed in Table
2:
Table 2--Comparison of Existing and Provisional Formula Rates
----------------------------------------------------------------------------------------------------------------
Existing
charges under Provisional
P-SED-F12/ P- charges under
SED-FP12 with P-SED-F13/ P-
Firm power service modified SED-FP13 as of Percent change
drought adder January 1,
as of January 2018
1, 2017
----------------------------------------------------------------------------------------------------------------
Firm Capacity ($/kW month)...................................... $6.50 $5.25 -19
Firm Energy (mills/kWh)......................................... 16.18 13.27 -18
Firm Peaking Capacity ($/kW month).............................. $5.85 $4.75 -19
Firm Peaking Energy (mills/kWh) \1\............................. 16.18 13.27 -18
----------------------------------------------------------------------------------------------------------------
\1\ Firm Peaking Energy is normally returned. This charge will be assessed in the event Firm Peaking Energy is
not returned.
Under the new formula-based Rate Schedule P-SED-M1, the Provisional
Formula Rate will consist of a charge for products listed in the rate
schedule that will be determined at the time of the sale based on
market rates, plus administrative costs.
Certification of Rates
WAPA's Administrator certified that the Provisional Formula Rates
for P-SMBP--ED firm power, firm peaking power, and sale of surplus
product rates under Rate Schedules P-SED-F13, P-SED-FP13, and P-SED-M1
are at the lowest possible rates consistent with sound business
principles. The Provisional Formula Rates were developed following
administrative policies and applicable laws.
P-SMBP--ED Firm Power Rate Discussion
According to Reclamation Law, WAPA is required to establish power
rates sufficient to recover O&M, purchased power and interest expenses,
and repay power investment and irrigation aid. The P-SMBP--ED firm
power and firm peaking power Base and Drought Adder components are
updated to represent present costs. As a part of the existing and
provisional 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 power 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 PRS, and allow WAPA to be more responsive to changes
caused by drought-related expenses. WAPA will continue to charge and
bill its Preference Customers firm power service and firm peaking power
service rates for energy and capacity, which are the sum of the Base
and Drought Adder components.
Under Rate Schedules P-SED-F13 and P-SED-FP13, WAPA will continue
to identify its firm power revenue requirement using Base and Drought
Adder components. The Base component is a fixed revenue requirement
that includes annual O&M expenses, investment repayment and associated
interest, normal timing power purchases, and transmission costs. Normal
timing power purchases
[[Page 57746]]
are due to operational constraints (e.g., management of endangered
species habitat, water quality, navigation, etc.) and are not
associated with drought. WAPA cannot adjust the Base component without
a public process.
The Drought Adder component is a formula-based revenue requirement
that includes costs attributable to drought conditions within P-SMBP.
The Drought Adder component includes costs associated with future Non-
timing Power Purchases to meet firm power contractual obligations not
covered with available system generation due to a drought, previously
incurred deficits due to purchased power debt that resulted from Non-
timing Power Purchases made during a drought, and the interest
associated with drought debt. The Drought Adder component is designed
to repay WAPA's drought debt within 10 years from the time the debt was
incurred, using balloon-payment methodology. For example, the drought
debt incurred by WAPA in FY 2009 is required to be repaid by FY 2019.
The annual revenue requirement calculation will continue to be
summarized by the following formula: Annual Revenue Requirement = Base
Revenue Requirement + Drought Adder Revenue Requirement. Both the Base
and Drought Adder components recover portions of the firm power revenue
requirement and firm peaking power revenue necessary to equal the P-
SMBP--ED revenue requirement. Under this Provisional Rate, the P-SMBP--
ED annual revenue requirement equals $230.1 million and is comprised of
a Base revenue requirement of $230.1 million plus a Drought Adder
revenue requirement of $0. A comparison of the existing and provisional
charge components is listed in Table 3.
Table 3--Summary of P-SMBP--ED Charge Components
--------------------------------------------------------------------------------------------------------------------------------------------------------
Existing charges under rate schedules P-SED- Provisional charges under rate schedules P-SED- Change
F12 and P-SED-FP12 with modified drought F13 and P-SED-FP13 as of January 1, 2018 ---------------
adder as of January 1, 2017 ------------------------------------------------
------------------------------------------------
Base Drought Adder Base Drought Adder Total charge (%)
component component Total charge component component
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firm Capacity $4.90 $1.60 $6.50 $5.25 $0.00 $5.25 -19%
(/kWmonth).............................
Firm Energy (mills/kWh)................. 12.33 3.85 16.18 13.27 0.00 13.27 -18%
Firm Peaking Capacity ($/kWmonth)....... $4.45 $1.40 $5.85 $4.75 $0.00 $4.75 -19%
Firm Peaking Energy (mills/kWh) \1\..... 12.33 3.85 16.18 13.27 0.00 13.27 -18%
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Firm Peaking Energy is normally returned. This charge will be assessed in the event Firm Peaking Energy is not returned.
WAPA reviews its firm power service rates annually. WAPA will
review the Base and Drought Adder components after the annual PRS is
completed, generally in the first quarter of the calendar year. If an
adjustment to the Base component is necessary or if an incremental
upward adjustment to the Drought Adder component greater than the
equivalent of 2 mills/kWh to the PRS Composite Rate is necessary, WAPA
will initiate a public process following 10 CFR part 903 before making
an adjustment.
In accordance with the approved Drought Adder adjustment process,
WAPA will review the Drought Adder component annually in early summer
to determine if drought costs differ from those projected in the PRS.
In October, WAPA will determine if a change to the Drought Adder
component is necessary, either incremental or decremental. Adjustment
to the Drought Adder component, up to 2 mills/kWh, will be implemented
in the following 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. Implementing the Drought Adder component adjustment on
January 1 of each year will help keep the drought deficits from
escalating as quickly, will lower the interest expense due to drought
deficits, will demonstrate responsible deficit management, and will
provide prompt drought deficit repayments.
Statement of Revenue and Related Expenses
The following Table 4 provides a summary of projected revenue and
expense data for the P-SMBP, including both the Eastern and Western
Division's firm electric service revenue requirements, through the 5-
year provisional rate approval period. The firm power rates for Eastern
and Western Divisions have been developed with the following revenues
and expenses for the P-SMBP:
Table 4--P-SMBP Comparison of 5-Year Rate Period (FY 2018-2022) Total Revenues and Expenses
----------------------------------------------------------------------------------------------------------------
Existing Rate Provisional Rate
($000) ($000) Difference ($000)
----------------------------------------------------------------------------------------------------------------
Total Revenues\1\...................................... $2,679,973 $2,644,825 ($35,148)
----------------------------------------------------------------------------------------------------------------
Revenue Distribution
Expenses:
O&M.................................................... $1,082,969 $1,158,866 $75,897
Purchased Power........................................ 164,049 124,796 (39,253)
Interest............................................... 561,528 560,257 (1,271)
Transmission\1\........................................ 64,072 460,982 396,910
----------------------------------------------------------------------------------------------------------------
Total Expenses..................................... $1,872,618 $2,304,901 $432,283
[[Page 57747]]
Principal Payments:
Capitalized Expenses (Deficits) \2\.................... $345,006 $42,325 ($302,681)
Original Project and Additions \2\..................... 401,193 179,017 (222,176)
Replacements \2\....................................... 61,156 72,864 11,708
Irrigation Aid......................................... 0 45,718 45,718
--------------------------------------------------------
Total Principal Payments........................... $807,355 $339,924 ($467,431)
--------------------------------------------------------
Total Revenue Distribution......................... $2,679,973 $2,644,825 ($35,148)
----------------------------------------------------------------------------------------------------------------
\1\ Transmission increase is a result of accounting treatment of transmission expense and transmission revenue
due to WAPA-UPG joining the Southwest Power Pool (SPP).
\2\ Due to historic drought conditions, revenues generated in the cost evaluation period are applied toward
repayment of deferred annual expenses rather than repayment of project additions and replacements. The
outstanding deferred of amount $42.3 million is projected to be repaid in 2018, a year ahead of its due date.
Sale of Surplus Products Discussion
WAPA is also implementing a new formula rate for the sale of
surplus products under Rate Schedule P-SED-M1. This new rate schedule
allows for the sale of generation and generation-related products in
excess of WAPA's P-SMBP--ED firm power obligations at market rates. P-
SED-M1 is a new formula-based rate schedule, applicable to the sale of
surplus energy and capacity products. The schedule includes reserves,
regulation, frequency response, and energy. If WAPA UGP surplus
products are available, the charge is determined 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. WAPA is placing Rate Schedule
P-SED-M1 into effect for the 5-year period beginning January 1, 2018,
through December 31, 2022.
Basis for Rate Development
WAPA is lowering the overall charges for firm power service and
firm peaking power service by 19 percent, by reducing the Drought Adder
component to zero, increasing the Base component, and removing the
voltage discount. The Provisional Formula Rates under Rate Schedules P-
SED-F13 and P-SED-FP13 will provide sufficient revenue to pay all
annual costs, including interest expense, and repay investments within
the allowable periods.
Comments
WAPA received two comment letters and two oral comments during the
public consultation and comment period. The comments expressed in these
letters have been paraphrased, where appropriate, without compromising
the meaning of the comments.
A. Comment: One customer expressed support of the proposed rate
adjustment as described in the FRN for Rate Order No. WAPA-180. The
customer is aware that WAPA intends to lower the Drought Adder to zero
and increase the Base component due to inflationary pressures. The
customer also expressed support of removing the voltage discount. The
customer commended WAPA on paying off the $843 million in drought debt
as a significant achievement. The customer acknowledged much has been
learned about the risks of power supply management through drought
periods. The customer encouraged WAPA to work towards implementing a
purchase power and wheeling strategy for WAPA's unobligated balances to
help manage such risks in the future.
Response: This rate reduction rebalances the Base and Drought Adder
components. WAPA has also determined that the voltage discount has
served its purpose and now is no longer needed. In its nearly 70 years
of application, the original intent of reimbursing customers for
relieving the BOR and then WAPA of transmission facility construction
costs has been met. The purchase power and wheeling strategy, as well
as the use of unobligated balances, are not directly related to this
rate action. WAPA will, however, continue to complete an annual Drought
Adder review that allows WAPA to be more responsive to rate adjustments
driven by drought periods. WAPA is committed to continuing to implement
its purchase power and wheeling strategy and use of unobligated
balances in an open and transparent manner.
B. Comment: Multiple customer representatives supported the rate
adjustment as proposed, and emphasized the need for continued cost
control regarding the Base component.
Response: WAPA is committed to keeping the power rates at the
lowest possible rates while maintaining sound business principles.
Availability of Information
Information about this rate adjustment, including the customer rate
brochure, PRS, comments, letters, memorandums, and other supporting
materials that were used to develop the Provisional Formula Rates, is
be available for inspection and copying at the Upper Great Plains
Regional Office, located at 2900 4th Avenue North, 6th Floor, Billings,
Montana. Many of these documents are also available on WAPA's Web site
under the ``2018 Firm Rate Adjustment'' section located at https://www.wapa.gov/regions/UGP/rates/Pages/2018-firm-rate-adjustment.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
has determined this action is categorically excluded from preparing an
environmental assessment or an environmental impact statement. A copy
of the categorical exclusion determination is available on WAPA's Web
site at https://www.wapa.gov/regions/UGP/Environment/Documents/RateOrderWAPA-180.pdf.
[[Page 57748]]
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.
Submission to the Federal Energy Regulatory Commission
The Provisional Formula 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, 2018, Rate Schedules P-SED-F13,
P-SED-FP13, and P-SED-M1 for the Pick-Sloan Missouri Basin Program--
Eastern Division Project of the Western Area Power Administration.
These rate schedules shall remain in effect on an interim basis,
pending Federal Energy Regulatory Commission's confirmation and
approval of the rate schedules or substitute rates on a final basis
through December 31, 2022, or until superseded.
Dated: November 30, 2017
Dan Brouillette
Deputy Secretary of Energy
Rate Schedule P-SED-F13
(Supersedes Schedule P-SED-F12)
UNITED STATES DEPARTMENT OF ENERGY
WESTERN AREA POWER ADMINISTRATION
UPPER GREAT PLAINS REGION
Pick-Sloan Missouri Basin Program--Eastern Division
FIRM POWER SERVICE
(Approved Under Rate Order No. WAPA-180)
Effective
The first day of the first full billing period beginning on or
after January 1, 2018, through December 31, 2022, or until superseded
by another rate schedule, whichever occurs earlier.
Available
Within the marketing area served by the Eastern Division of the
Pick-Sloan Missouri Basin Program; within Montana, North Dakota, South
Dakota, Minnesota, Iowa, and Nebraska.
Applicable
To the power and energy delivered to customers as firm power
service.
Character
Alternating current, 60 hertz, three phase, delivered and metered
at the voltages and points established by contract.
Formula Rate and Charge Components
Rate = Base component + Drought Adder component.
Monthly Charge as of January 1, 2018, under the Rate:
CAPACITY CHARGE: $5.25 for each kilowatt per month (kWmo) of
billing capacity.
ENERGY CHARGE: 13.27 mills for each kilowatt-hour (kWh) for all
energy delivered as firm power service.
BILLING CAPACITY: The billing capacity will be as defined by the
power sales contract.
Charge Components
Base Component: A fixed revenue requirement that includes operation
and maintenance expense, investments and replacements, interest on
investments and replacements, normal timing purchase power (purchases
due to operational constraints, not associated with drought), and
transmission costs. Any proposed change to the Base component will
require a public process.
[GRAPHIC] [TIFF OMITTED] TN07DE17.001
Drought Adder Component: A formula-based revenue requirement that
includes future purchase power expense above timing purchases, previous
purchase power drought deficits, and interest on the purchase power
drought deficits. The formulas, along with the charges under the
formulas as of January 1, 2018, are:
[GRAPHIC] [TIFF OMITTED] TN07DE17.002
Annual Drought Adder Adjustment Process:
The Drought Adder may be adjusted annually using the above formulas
for any costs attributed to drought of less than or equal to the
equivalent of 2 mills/kWh to the Power Repayment Study (PRS) composite
rate. Any planned incremental upward adjustment to the Drought Adder
greater than the equivalent of 2 mills/kWh to the PRS composite rate
will require a public process.
The annual review process is initiated in early summer when WAPA
reviews the Drought Adder component and provides notice of any
estimated change to the Drought Adder component charge under the
formula. In October, WAPA will make a final determination of any change
to the Drought Adder component charge, either incremental or
decremental. If a Drought Adder component change is required, a
modified Drought Adder revenue requirement and the associated charges
will become effective the following January 1 and will be identified in
a Drought Adder modification update. WAPA will inform customers of
updates
[[Page 57749]]
by letter and post updates to WAPA's external Web site.
Adjustments:
For Billing of Unauthorized Overruns:
For each billing period in which there is a contract violation
involving an unauthorized overrun of the contractual firm power and/or
energy obligations, such overrun shall be billed at 10 times the
formula rate.
For Power Factor:
None. Customers will be required to maintain a power factor at the
point of delivery between 95-percent lagging and 95-percent leading.
Rate Schedule P-SED-FP13
(Supersedes Schedule P-SED-FP12)
UNITED STATES DEPARTMENT OF ENERGY
WESTERN AREA POWER ADMINISTRATION
UPPER GREAT PLAINS REGION
Pick-Sloan Missouri Basin Program--Eastern Division
FIRM PEAKING POWER SERVICE
(Approved Under Rate Order No. WAPA-180)
Effective:
The first day of the first full billing period beginning on or
after January 1, 2018, through December 31, 2022, or until superseded
by another rate schedule, whichever occurs earlier.
Available:
Within the marketing area served by the Eastern Division of the
Pick-Sloan Missouri Basin Program; within Montana, North Dakota, South
Dakota, Minnesota, Iowa, and Nebraska.
Applicable:
To the power sold to customers as firm peaking power service.
Character:
Alternating current, 60 hertz, three phase, delivered and metered
at the voltages and points established by contract.
Formula Rate and Charge Components:
Rate = Base component + Drought Adder component
Monthly Charge as of January 1, 2018, under the Rate:
CAPACITY CHARGE:
$4.75 for each kilowatt per month (kWmo) of the effective contract
rate of delivery for peaking power or the maximum amount scheduled,
whichever is greater.
ENERGY CHARGE:
13.27 mills for each kilowatt-hour (kWh) for all energy scheduled
for delivery without return.
Charge Components:
Base Component: A fixed revenue requirement that includes operation
and maintenance expense, investments and replacements, interest on
investments and replacements, normal timing purchase power (purchases
due to operational constraints, not associated with drought), and
transmission costs. Any proposed change to the Base component will
require a public process.
[GRAPHIC] [TIFF OMITTED] TN07DE17.005
Drought Adder Component: 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. The formulas, along with the charges under the
formulas as of January 1, 2018, are:
[GRAPHIC] [TIFF OMITTED] TN07DE17.006
Annual Drought Adder Adjustment Process:
The Drought Adder may be adjusted annually using the above formulas
for any costs attributed to drought of less than or equal to the
equivalent of 2 mills/kWh to the Power Repayment Study (PRS) composite
rate. Any planned incremental upward adjustment to the Drought Adder
greater than the equivalent of 2 mills/kWh to the PRS composite rate
will require a public process.
The annual review process is initiated in early summer when WAPA
reviews the Drought Adder component and provides notice of any
estimated change to the Drought Adder component charge under the
formula. In October, WAPA will make a final determination of any change
to the Drought Adder component charge, either incremental or
decremental. If a Drought Adder component change is required, a
modified Drought Adder revenue requirement and the associated charges
will become effective the following January 1 and will be identified in
a Drought Adder modification update. WAPA will inform customers of
updates by letter and post updates to WAPA's external Web site.
BILLING CAPACITY:
The billing capacity will be the greater of (1) the highest 30-
minute integrated capacity measured during the month up to, but not in
excess of, the delivery obligation under the power sales contract, or
(2) the contract rate of delivery.
Adjustments:
Billing for Unauthorized Overruns:
For each billing period in which there is a contract violation
involving an unauthorized overrun of the contractual obligation for
peaking capacity and/or energy, such overrun shall be billed at 10
times the above rate.
Rate Schedule P-SED-M1
[[Page 57750]]
UNITED STATES DEPARTMENT OF ENERGY
WESTERN AREA POWER ADMINISTRATION
UPPER GREAT PLAINS REGION
PICK-SLOAN MISSOURI BASIN PROGRAM--EASTERN DIVISION
SALE OF SURPLUS PRODUCTS
(Approved Under Rate Order No. WAPA-180)
Effective:
The first day of the first full billing period beginning on or
after January 1, 2018, through December 31, 2022, or until superseded
by another rate schedule, whichever occurs earlier.
Applicable:
This rate schedule applies to Eastern Division of the Pick-Sloan
Missouri Basin Program marketing and is applicable to the sale of the
following P-SMBP--ED surplus energy and capacity products; energy,
frequency response, regulation, and reserves. If any P-SMBP--ED surplus
energy and capacity products are available, UGP can make the product(s)
available for sale, providing entities enter into a separate
agreement(s) with UGP Marketing Office which will specify the terms of
sale(s).
Formula Rate:
The charge for each product is determined at the time of the sale
based on market rates, plus administrative costs. The customer will be
responsible for acquiring transmission services necessary to deliver
the product(s), for which a separate charge may be incurred.
[FR Doc. 2017-26376 Filed 12-6-17; 8:45 am]
BILLING CODE 6450-01-P
