Loveland Area Projects-Rate Order No. WAPA-202, 70799-70808 [2022-25266]
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Federal Register / Vol. 87, No. 223 / Monday, November 21, 2022 / Notices
in reference to this application must be
accompanied by proof of service on all
persons listed in the service list
prepared by the Commission in this
proceeding, in accordance with 18 CFR
4.34(b) and 385.2010.
p. The applicant must file no later
than 60 days following the date of
issuance of this notice: (1) a copy of the
water quality certification; (2) a copy of
the request for certification, including
proof of the date on which the certifying
agency received the request; or (3)
evidence of waiver of water quality
certification. Please note that the
certification request must comply with
40 CFR 121.5(b), including
documentation that a pre-filing meeting
request was submitted to the certifying
authority at least 30 days prior to
submitting the certification request.
Please also note that the certification
request must be sent to the certifying
authority and to the Commission
concurrently.
q. Procedural schedule: The
application will be processed according
to the following preliminary schedule.
Revisions to the schedule will be made
as appropriate.
Target
date
Milestone
The Provisional Formula Rates
under Rate Schedules L–F12, Firm
Electric Service, and L–M3, Sale of
Surplus Products, are effective on the
first day of the first full billing period
beginning on or after January 1, 2023,
and will remain in effect through
December 31, 2027, pending
confirmation and approval by the
Federal Energy Regulatory Commission
(FERC) on a final basis or until
superseded.
DATES:
FOR FURTHER INFORMATION CONTACT:
Barton V. Barnhart, Regional Manager,
Rocky Mountain Region, Western Area
Power Administration, 5555 East
Crossroads Boulevard, Loveland, CO
80538–8986, or email: lapfirmadj@
February wapa.gov, or Sheila D. Cook, Rates
Manager, Rocky Mountain Region,
2023.
Western Area Power Administration,
(970) 685–9562, or email: scook@
r. Final amendments to the
wapa.gov.
application must be filed with the
Commission no later than 30 days from
SUPPLEMENTARY INFORMATION: On May
the issuance date of this notice.
24, 2018, FERC confirmed and approved
Dated: November 14, 2022.
Formula Rate Schedules L–F11 and L–
Kimberly D. Bose,
M2 under Rate Order No. WAPA–179,
Secretary.
on a final basis through December 31,
[FR Doc. 2022–25222 Filed 11–18–22; 8:45 am]
2022.1 These schedules apply to LAP
BILLING CODE 6717–01–P
firm electric service and sale of surplus
products. Western Area Power
Administration (WAPA) published a
DEPARTMENT OF ENERGY
Federal Register notice (Proposed FRN)
on May 25, 2022 (87 FR 31876),
Western Area Power Administration
proposing increases to both the base
component and the drought adder
Loveland Area Projects—Rate Order
component of the LAP firm electric
No. WAPA–202
service rate and to put new 5-year rate
AGENCY: Western Area Power
schedules in place. The Proposed FRN
Administration, DOE.
also initiated a 90-day public
ACTION: Notice of rate order concerning
consultation and comment period and
firm electric service and sale of surplus
set forth the dates and locations of the
products formula rates.
public information and public comment
forums.
SUMMARY: The formula rates for the
Rocky Mountain Region’s (RMR)
1 Order Confirming and Approving Rate
Loveland Area Projects (LAP) firm
Schedules on a Final Basis, FERC Docket No. EF18–
electric service and sale of surplus
3–000, 163 FERC ¶ 62,115 (2018).
Deadline for filing interventions,
protests,
comments,
recommendations, preliminary terms
and conditions, and preliminary
fishway prescriptions.
Deadline for filing reply comments
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products have been confirmed,
approved, and placed into effect on an
interim basis (Provisional Formula
Rates). LAP consists of the FryingpanArkansas Project (Fry-Ark) and the PickSloan Missouri Basin Program (P–
SMBP)—Western Division, which were
integrated for marketing and ratemaking purposes in 1989. These new
formula rates replace the existing
formula rates for these services under
Rate Schedules L–F11, Firm Electric
Service, and L–M2, Sale of Surplus
Products, which expire on December 31,
2022. The LAP firm electric service rate
is increasing 16.5 percent. There are no
changes to the formula rate for sale of
surplus products.
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70799
Legal Authority
By Delegation Order No. S1–DEL–
RATES–2016, effective November 19,
2016, the Secretary of Energy delegated:
(1) the authority to develop power and
transmission rates to the WAPA
Administrator; (2) the authority to
confirm, approve, and place such rates
into effect on an interim basis to the
Deputy Secretary of Energy; and (3) the
authority to confirm, approve, and place
into effect on a final basis, or to remand
or disapprove such rates, to FERC. By
Delegation Order No. S1–DEL–S3–
2022–2, effective June 13, 2022, the
Secretary of Energy also delegated the
authority to confirm, approve, and place
such rates into effect on an interim basis
to the Under Secretary for
Infrastructure. By Redelegation Order
No. S3–DEL–WAPA1–2022, effective
June 13, 2022, the Under Secretary for
Infrastructure further redelegated the
authority to confirm, approve, and place
such rates into effect on an interim basis
to WAPA’s Administrator. This rate
action is issued under Redelegation
Order No. S3–DEL–WAPA1–2022 and
Department of Energy procedures for
public participation in rate adjustments
set forth at 10 CFR part 903.2
Following review of RMR’s proposal,
Rate Order No. WAPA–202, which
provides the formula rates for LAP firm
electric service and sale of surplus
products, is hereby confirmed,
approved, and placed into effect on an
interim basis. WAPA will submit Rate
Order No. WAPA–202 to FERC for
confirmation and approval on a final
basis.
Department of Energy
Administrator, Western Area Power
Administration
In the Matter of: Western Area Power
Administration, Rocky Mountain
Region, Rate Adjustment for the
Loveland Area Projects, Firm Electric
Service and Sale of Surplus Products,
Formula Rates.
Rate Order No. WAPA–202
Order Confirming, Approving, and
Placing the Formula Rates for the
Loveland Area Projects Into Effect on
an Interim Basis
The formula rates in Rate Order No.
WAPA–202 are established following
section 302 of the Department of Energy
(DOE) Organization Act (42 U.S.C.
7152).3
2 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347
(Feb. 21, 2019).
3 This Act transferred to, and vested in, the
Secretary of Energy the power marketing functions
of the Secretary of the Department of the Interior
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Federal Register / Vol. 87, No. 223 / Monday, November 21, 2022 / Notices
By Delegation Order No. S1–DEL–
RATES–2016, effective November 19,
2016, the Secretary of Energy delegated:
(1) the authority to develop power and
transmission rates to the Western Area
Power Administration (WAPA)
Administrator; (2) the authority to
confirm, approve, and place such rates
into effect on an interim basis to the
Deputy Secretary of Energy; and (3) the
authority to confirm, approve, and place
into effect on a final basis, or to remand
or disapprove such rates, to the Federal
Energy Regulatory Commission (FERC).
By Delegation Order No. S1–DEL–S3–
2022–2, effective June 13, 2022, the
Secretary of Energy also delegated the
authority to confirm, approve, and place
such rates into effect on an interim basis
to the Under Secretary for
Infrastructure. By Redelegation Order
No. S3–DEL–WAPA1–2022, effective
June 13, 2022, the Under Secretary for
Infrastructure further redelegated the
authority to confirm, approve, and place
such rates into effect on an interim basis
to WAPA’s Administrator. This rate
action is issued under Redelegation
Order No. S3–DEL–WAPA1–2022 and
DOE procedures for public participation
in rate adjustments set forth at 10 CFR
part 903.4
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Acronyms, Terms, and Definitions
As used in this Rate Order, the
following acronyms, terms, and
definitions apply:
Base: A component of the firm
electric service (FES) rate design that is
a fixed revenue requirement that
includes operation and maintenance
expenses (O&M), investments and
replacements, interest on investments
and replacements, normal timing power
purchases, and transmission costs.
Capacity: The electric capability of a
generator, transformer, transmission
circuit, or other equipment. It is
expressed in kilowatts (kW) or
megawatts (MW).
Capacity Rate: The rate which sets
forth the charges for capacity. It is
expressed in dollars per kilowatt-month
(kWmonth) and applied to each kW of
the Contract Rate of Delivery or 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
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
Project Act of 1939 (43 U.S.C. 485h(c)) and section
5 of the Flood Control Act of 1944 (16 U.S.C. 825s);
and other acts that specifically apply to the projects
involved.
4 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347
(Feb. 21, 2019).
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annual energy sales. It is expressed in
mills per kilowatt-hour (mills/kWh) and
used only for comparison purposes.
Corp of Engineers Annual Operating
Plan (AOP): The Corp of Engineers
(Corps) water management guidelines
designed to meet the reservoir
regulation objectives.
Customer: An entity with a contract
that is receiving Loveland Area Projects
(LAP) firm electric service from WAPA.
Customer Rate Brochure: A document
prepared for public distribution
explaining the rationale and background
for the information contained in the
Proposed FRN and in this rate order.
Deficit(s): Deferred or unrecovered
annual and/or interest expenses.
Drought Adder: A component of the
FES rate design that is a formula-based
revenue requirement that includes
future power purchases above normal
timing power purchases, previous
purchase power drought-related
Deficits, and interest on the purchase
power drought-related 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 (kWh).
Energy Charge: The charge under the
rate schedule for energy. It is expressed
in mills/kWh and applied to each kWh
delivered to each Customer.
FRN: Federal Register Notice—a
document published in the Federal
Register in order for WAPA to provide
information of public interest.
Firm: Power intended to be available
at all times during the period covered by
a guaranteed commitment to deliver,
even under adverse conditions.
FY: WAPA’s 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 Marketing Plan: The Post-1989
General Power Marketing and
Allocation Criteria for the Pick-Sloan
Missouri Basin Program—Western
Division (P–SMBP—WD) and the
Fryingpan-Arkansas Project (Fry-Ark)
(collectively known as Loveland Area
Projects or LAP) (published in January
1986 and extended and amended per
the LAP 2025 Power Marketing
Initiative published on December 10,
2013 (78 FR 79444)) that provides the
principles used to market LAP firm
hydropower resources.
mills/kWh: Mills per kilowatt-hour—
the unit of charge for energy (equal to
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one tenth of a cent or one thousandth
of a dollar).
NEPA: National Environmental Policy
Act of 1969, as amended.
Non-timing Power Purchases: Power
purchases related to drought conditions,
not related to operational constraints.
Normal Timing Power Purchases:
Power purchases related to operational
constraints (e.g., management of
endangered species habitat, water
quality, navigation, balancing authority
purposes, market events, etc.), not
associated with drought conditions.
O&M: Operation and maintenance
expenses.
OM&R: Operation, maintenance, and
replacement expenses.
Order RA 6120.2: DOE Order
outlining Power Marketing
Administration financial reporting and
rate-making procedures.
Power: Capacity and energy.
Power Factor: The ratio of real to
apparent power at any given point and
time in an electrical circuit. Generally,
it is expressed as a percentage.
Power Repayment Study (PRS):
Defined in Order RA 6120.2 as a study
portraying the annual repayment of
power production and transmission
costs of a power system through the
application of revenues over the
repayment period of the power system.
The study shows, among other items,
estimated revenues and expenses, year
by year, over the remainder of the power
system’s repayment period (based upon
conditions prevailing over the cost
evaluation period), the estimated
amount of Federal investment amortized
during each year, and the total
estimated amount of Federal investment
remaining to be amortized.
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 Rates: Formula
rates confirmed, approved, and placed
into effect on an interim basis by the
Secretary of Energy or his/her designee.
Rate-setting PRS: The PRS used for
the rate adjustment proposal.
Reclamation’s Most Probable Inflow
Operating Plan: The combination of the
forecasted generation plans for the
Bureau of Reclamation’s (Reclamation)
North Platte River, Buffalo Bill
Reservoir, Boysen Reservoir, Colorado
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Big-Thompson Project, and Yellowtail
Dam, assuming median generation.
Regional Transmission Organization
(RTO): Organizations that operate bulk
electric power systems across parts of
North America. RTOs are independent,
membership-based, non-profit
organizations that ensure reliability and
optimize supply and demand bids for
wholesale electric power.
RTO West: A group of electricity
service providers focusing on
collaboratively developing long-term
solutions that will improve market
efficiencies in the West.
Regions: WAPA’s Rocky Mountain
Region (RMR) and Upper Great Plains
Region (UGP).
Revenue Requirement: The revenue
required by the PRS to recover annual
expenses (such as O&M, purchase
power, transmission service, interest,
and deferred expenses) and repay
Federal investments and other assigned
costs.
Scheduling, Accounting, and Billing
Procedures (SABPs): The SABP
establish the parameters for scheduling,
accounting, and billing procedures as
they relate to LAP power deliveries.
They are intended to implement the
terms of a contract, not to modify or
amend the contract.
Webex: Webex is an online secure
invite-only meeting platform used by
WAPA. The general website is https://
doe.webex.com.
Western Energy Imbalance Service
Market (WEIS Market): The market for
imbalance energy administered by the
Southwest Power Pool in the Western
Interconnection. The market footprint
encompasses the loads and resources
that are located within a participating
Balancing Authority Area. The Western
Area Colorado Missouri Balancing
Authority or WACM (operated by RMR)
and the Western Area Upper Great
Plains West Balancing Authority or
WAUW (operated by UGP) are both
participating Balancing Authority Areas.
Winter Storm Uri: A severe winter
storm in February 2021 that had
widespread impacts across the RMR and
UGP regions.
Effective Date
The Provisional Formula Rate
Schedules L–F12, Firm Electric Service,
and L–M3, Sale of Surplus Products,
will take effect on the first day of the
first full billing period beginning on or
after January 1, 2023, and will remain in
effect through December 31, 2027,
pending approval by FERC on a final
basis or until superseded.
Public Notice and Comment
RMR followed the Procedures for
Public Participation in Power and
Transmission Rate Adjustments and
Extensions, 10 CFR part 903, in
developing these formula rates. The
steps RMR took to involve interested
parties in the rate process include:
1. On May 25, 2022, a Federal
Register notice (87 FR 31876) (Proposed
FRN) announced the proposed formula
rates and launched the 90-day public
consultation and comment period.
2. On May 25, 2022, RMR notified
Preference Customers and interested
parties of the proposed rates and
provided a copy of the published
Proposed FRN.
3. On June 15, 2022, RMR held a
public information forum via Webex.
RMR’s representatives explained the
proposed formula rates, answered
questions, and gave notice that more
information was available in the
Customer Rate Brochure.
4. On June 29, 2022, RMR held a
public comment forum via Webex to
provide an opportunity for customers
and other interested parties to comment
for the record.
5. RMR provided a website that
contains important dates, letters,
presentations, FRNs, Customer Rate
Brochure, and other information about
this rate process. The website is located
at www.wapa.gov/regions/RM/rates/
Pages/2023-Rate-Adjustment-FirmPower.aspx.
6. During the 90-day consultation and
comment period, which ended on
August 23, 2022, RMR received one oral
comment submission and four comment
letters, encompassing a total of 22
individual comments. The individual
comments and RMR’s responses are
addressed in the ‘‘Comments’’ section.
All comments have been considered in
the preparation of this Rate Order.
Oral comments were received from
the following organization:
Mid-West Electric Consumers
Association, Colorado
Written comments were received from
the following organizations:
Loveland Area Customer Association,
Colorado
Platte River Power Authority, Colorado
Mid-West Electric Consumers Association,
Colorado
East River Electric Power Cooperative, Inc.,
South Dakota
Power Repayment Study—Firm Electric
Service Rate Discussion
PRSs are prepared each FY to
determine if revenues will be sufficient
to repay, within the required time, all
costs assigned to the Pick-Sloan
Missouri Basin Program (P–SMBP) and
the Fry-Ark. Repayment criteria are
based on applicable laws and
legislation, as well as policies including
Order RA 6120.2. To meet the Cost
Recovery Criteria outlined in Order RA
6120.2, RMR developed a rate
adjustment to demonstrate sufficient
revenues will be collected under the
Provisional Formula Rates to meet
future obligations. The revenue
requirement of the Fry-Ark PRS is
combined with the P–SMBP—WD
revenue requirement, derived from the
P–SMBP PRS, to develop one rate for
LAP firm electric service. The revenue
requirement and composite rate for LAP
firm electric service are being increased,
as indicated in Table 1:
TABLE 1—COMPARISON OF EXISTING AND PROVISIONAL REVENUE REQUIREMENTS AND COMPOSITE RATES
Existing
requirements
under L–F11
as of January
1, 2018
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Firm electric service
LAP Revenue Requirement (million $) ........................................................................................
Pick-Sloan—WD 1 ........................................................................................................................
Fry-Ark .........................................................................................................................................
Composite Rate (mills/kWh) ........................................................................................................
$64.1
50.8
13.3
31.44
Provisional
requirements
under L–F12
as of January
1, 2023
$74.7
58.6
16.1
36.61
Percent
change
16.5
15.4
21.1
16.4
1 Additional information on the overall P–SMBP PRS and charge components can be found under Rate Order No. WAPA–203 and on UGP’s
website at www.wapa.gov/regions/UGP/Rates/Pages/2023-firm-rate-adjustment.aspx.
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Federal Register / Vol. 87, No. 223 / Monday, November 21, 2022 / Notices
Firm Electric Service—Existing and
Provisional Formula Rates
Under the current rate methodology,
rates for LAP firm electric service are
designed to recover an annual revenue
requirement that includes investment
repayment (including aid to irrigation),
interest, purchase power, OM&R, and
other expenses within the allowable
period. The annual revenue requirement
continues to be allocated equally
between capacity and energy.
The Base component costs for the P–
SMBP PRS have increased primarily
due to: (1) increased OM&R from WAPA
and the generating agencies; (2)
increased purchase power, including
during the Winter Storm Uri; (3) pricing
volatility; (4) reduced surplus energy
sales; and (5) the loss of certain
balancing authority revenues for
services that are no longer provided
after RMR joined the WEIS Market.
Winter Storm Uri was not a water or
generation issue; therefore, its costs only
impact the Base component.
The Base component costs for the FryArk PRS have increased due to: (1)
increased O&M from both WAPA and
Reclamation; (2) increased purchase
power, transmission, and ancillary
services costs; (3) changes in costs
related to Reclamation’s Mt. Elbert
Rehabilitation project; and (4) price
volatility.
The driver behind the P–SMBP PRS
Drought Adder component increase is
the AOP projecting less than average
generation for the next several years in
the P–SMBP mainstem dams.
Uncertainties with water inflows, hydro
generation, and replacement energy
prices continue to pose potential risks
for meeting firm power contractual
commitments.
The net effect of these changes to the
PRS Base and Drought Adder
components results in an overall
increase to the LAP rate. A comparison
of the existing and Provisional Formula
Rates for firm electric service is shown
in Table 2:
TABLE 2—COMPARISON OF EXISTING AND PROVISIONAL FORMULA RATES
Firm electric service
Existing
charges under
rate
schedule
L–F11 as of
January 1,
2018
Provisional
charges under
rate
schedule
L–F12 as of
January 1,
2023
$4.12
15.72
$4.80
18.31
Firm Capacity Rate ($/kWmonth) ................................................................................................
Firm Energy Rate (mills/kWh) .....................................................................................................
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As a part of the existing and
provisional rate schedule, RMR
provides for a formula-based adjustment
of the Drought Adder component, with
an annual increase of up to 2 mills/kWh
each year. The 2 mills/kWh cap places
a limit on the amount the Drought
Adder component can be adjusted
upward relative to associated drought
costs included in the Drought Adder
formula rate for any 1-year cycle. The
Drought Adder component may be
adjusted downward by any amount.
Continuing to identify the firm electric
service revenue requirement using Base
and Drought Adder components will
assist the Regions in presenting the
future impacts of droughts, demonstrate
repayment of drought-related costs in
the PRSs, and allow the Regions to be
more responsive to changes caused by
drought-related expenses. RMR will
continue to charge and bill its customers
firm electric service rates for energy and
capacity, which are the sum of the Base
and Drought Adder components.
Under Rate Schedule L–F12, RMR
will continue to identify its LAP firm
electric service revenue requirement
using Base and Drought Adder
components. The Base component is a
fixed revenue requirement from each
PRS that includes annual O&M,
investment repayment and associated
interest, Normal Timing Power
Purchases, and transmission costs. RMR
cannot adjust the Base component
without a public process. The Drought
Adder component is a formula-based
revenue requirement from each PRS that
includes costs attributable to drought
conditions in the Regions. The Drought
Adder component includes costs
associated with future Non-timing
Power Purchases to meet firm electric
service contractual obligations not
covered with available system
generation due to a drought, previously
incurred Deficits due to purchased
power debt that resulted from Nontiming Power Purchases made during a
drought, and the interest associated
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16.5
16.5
with drought-related Deficits. The
Drought Adder component is designed
to repay drought-related Deficits within
10 years from the time the Deficit was
incurred, using balloon-payment
methodology. For example, a droughtrelated Deficit incurred in FY 2022 will
be repaid by FY 2032.
The annual revenue requirement
calculation will continue to be
summarized by the following formula:
Annual Revenue Requirement = Base
Revenue Requirement + Drought Adder
Revenue Requirement.
The Provisional charge components
update the Base component with
present costs from a revenue
requirement of $64.1 million to $67.8
million and increases the Drought
Adder component revenue requirement.
For rate year 2023, the Drought Adder
revenue requirement increases from
zero to $6.8 million.5 A comparison of
the existing and provisional
components is shown in Table 3:
5 The exact values are $64,143,960, $67,839,200,
and $6,838,720 respectively.
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change
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TABLE 3—SUMMARY OF LAP EXISTING AND PROVISIONAL CHARGE COMPONENTS
Existing charges under rate schedule L–F11 as
of January 1, 2018
Provisional charges under rate schedule L–F12
as of January 1, 2023
Firm electric service
Base
component
Firm Capacity ($/
kWmonth) .................
Firm Energy (mills/kWh)
Drought adder
component
$4.12
15.72
Total charge
$0
0
RMR reviews the inputs for the P–
SMBP and Fry-Ark PRS Base and
Drought Adder components after the
annual PRSs are complete, generally in
the first quarter of the calendar year. If
an adjustment to the LAP Base
component is necessary, or if an
incremental upward adjustment to the
LAP Drought Adder component greater
than the equivalent of 2 mills/kWh to
the LAP Rate is necessary, RMR will
initiate a public process pursuant to 10
CFR part 903 prior to making an
adjustment.
In accordance with the approved
annual Drought Adder adjustment
process, the PRS Drought Adder
Base
component
$4.12
15.72
Drought adder
component
$4.36
16.63
components are reviewed annually in
early summer to determine if drought
costs differ from those projected in the
PRSs. In October, RMR will determine
if a change to the LAP Drought Adder
component is necessary, either
incremental or decremental. Any
incremental adjustment to the Drought
Adder component, up to 2 mills/kWh,
or decremental adjustment 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
$0.44
1.68
Percent
change
Total charge
$4.80
18.31
16.5
16.5
Adder component adjustment on
January 1 of each year will help keep
the drought-related Deficits from
escalating as quickly, will lower the
interest expense due to drought-related
Deficits, will demonstrate responsible
Deficit management, and will provide
prompt drought-related Deficit
repayments.
Statement of Revenue and Related
Expenses
The following Table 4 provides a
summary of the projected revenue and
expense data for the Fry–Ark revenue
requirement during the 5-year ratesetting periods:
TABLE 4—FRY-ARK COMPARISON OF 5-YEAR RATE PERIODS
TOTAL REVENUES AND EXPENSES
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Existing rate
FY2018–
FY2022
($000)
Provisional
rate FY2023–
FY2027
($000)
Difference
($000)
Total Revenues ......................................................................................................
$91,392
$114,466
$23,074
Revenue Distribution:
Expenses.
O&M ......................................................................................................................................
Purchase Power ...................................................................................................................
Transmission ........................................................................................................................
Ancillary Services .................................................................................................................
Interest ..................................................................................................................................
31,334
724
18,302
979
14,779
38,760
1,378
20,182
6,513
12,446
7,426
654
1,880
5,534
¥2,333
Total Expenses ..............................................................................................................
66,118
79,279
13,161
Principal Payments:
Capitalized Expenses (Deficits) ............................................................................................
Original Project and Additions ..............................................................................................
Replacements .......................................................................................................................
0
14,893
10,381
0
12,873
22,314
0
¥2,020
11,933
Total Principal Payments ..............................................................................................
25,274
35,187
9,913
Total Revenue Distribution ............................................................................................
91,392
114,466
23,074
The summary of the P–SMBP
projected revenues and expenses for the
5-year rate-setting periods is included in
the P–SMBP Statement of Revenue and
Related Expenses that is part of Rate
Order No. WAPA–203.
Sale of Surplus Products Rate
Discussion
The sale of surplus products rate
schedule is formula-based, providing for
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LAP Marketing Office to sell LAP
surplus energy and capacity products. If
LAP surplus products are available, as
specified in the rate schedule, the
charge will be based on market rates
plus administrative costs. The customer
will be responsible for acquiring
transmission service necessary to
deliver the product(s) for which a
separate charge may be incurred. Rate
Schedule L–M2 is being superseded by
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the Provisional Rate Schedule L–M3
and continues to allow for the sale of
energy, frequency response, regulation,
and reserves.
Comments
RMR received a total of 22 individual
oral and written comments during the
public consultation and comment
period. The comments expressed have
been paraphrased and/or combined,
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where appropriate, without
compromising the meaning of the
comments:
A. Comment: A customer association
and a Customer commented that WAPA
contends that its participation in the
WEIS Market is increasing the cost to
the LAP Customers in the form of
administrative fees and lost ancillary
service revenue. With the recent
addition of Colorado Springs Utilities,
and, in April 2023, the utilities that
comprise the Public Service Company of
Colorado balancing authority area
members, the WEIS Market Footprint
will increase in size and resource
diversity. Thus, there is a reasonable
expectation that benefits could accrue to
LAP in the form of a reduced
administrative fee and co-optimized
real-time energy dispatch. WAPA and
the Customers should regularly monitor
the WEIS Market for net benefits
accrued to LAP and should refrain from
assuming the Drought Adder will be
required until WAPA has experience in
the WEIS Market. They request a
commitment to evaluate a downward
rate adjustment should these anticipated
benefits accrue.
Response: Participation in the WEIS
Market required RMR to change some of
the Base component projections in the
Fry-Ark and Pick-Sloan PRSs, for both
revenue and expense. These changes are
a very small contributor to the Base
component increases in comparison to
other contributors, such as O&M and
Normal Timing Power Purchases and
has no impact on the need for, or the
size of, the P–SMBP Drought Adder.
RMR has and will continue to monitor
the WEIS Market for potential benefits,
but due to the nature of the LAP
Marketing Plan, LAP has very little
surplus generation that can be bid into
the WEIS Market. Also, RMR has been
actively working to ensure the costs,
and any benefits, we accrue through our
participation are recovered in the
appropriate rate design(s) as soon as
practical. RMR, in coordination with
UGP, is committed to developing rates
that are the lowest possible, consistent
with sound business principles, which
includes an annual evaluation of the
Base components and a biannual
evaluation of the Drought Adder
components. The Drought Adder
components can be annually reduced
without a cap, or increased subject to a
2 mills/kWh cap, without a public
process, based on this evaluation.
B. Comment: A customer association
and a Customer noted the P–SMBP PRS
assumed a below average generation
profile on a median runoff scenario from
the Corps, factoring in unit and
transmission outages. Their
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understanding is that this outcome was
used to calculate the Drought Adder
component for the P–SMBP—WD,
resulting from a projected deficit of
generation that will be replaced by
purchased power over the study period.
They stated they would like the Regions
to rerun the PRS to assess the impact to
the proposed Drought Adder using an
average generation profile in the P–
SMBP—WD to satisfy the cost recovery
criteria under Order RA 6120.2.
Alternatively, the Regions could follow
its normal formula rate process to
account for actual generation, rather
than working from assumptions that
presume a deficit of generation.
Response: As standard practice, the
P–SMBP PRS includes separate
generation projections for the P–
SMBP—ED and the P–SMBP—WD and
the resulting power purchases and
surplus energy sales are assigned to the
overall P–SMBP revenue requirement.
The overall P–SMBP revenue
requirement is then allocated between
P–SMBP—ED and P–SMBP—WD based
on the ratio of each division’s fixed
amount of annual marketable energy to
the total P–SMBP marketable energy,
regardless of which component the
revenue requirement is identified.
UGP has historically relied upon the
AOP as the source document for
projecting the P–SMBP—ED’s future
purchase power needs and surplus
energy sales in the PRS for a 5-year
projection period. After this 5-year
period, the PRS assumes average P–
SMBP—ED generation and no
generation-related P–SMBP—ED power
purchases or surplus energy sales are
projected. RMR has historically relied
upon Reclamation’s most recent update
to their Most Probable Inflow Operating
Plan for projecting the P–SMBP—WD’s
future purchase power needs and
surplus energy sales in the PRS for a 2year projection period. After this 2-year
period, the PRS assumes average P–
SMBP—WD generation and no
generation-related P–SMBP—WD power
purchases or surplus energy sales are
projected. The 2023 Rate-setting PRS
continues these historical practices.
The 2023 Rate-setting PRS utilized the
Corp’s Final 2021–2022 AOP dated
December 17, 2021, that projected
nearly 20 percent lower generation for
FYs 2022 and 2023 and just under or at
normal generation for FYs 2024–2027
(to our knowledge, the AOP does not
factor in transmission outages as stated
in the comment) and Reclamation’s
2022–2024 plans, received in December
2021, that projected 24 percent lower
generation for FY 2022 and just under
average generation for FYs 2023–2024.
Reclamation’s plans took into
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consideration reservoir inflows that
were 67 percent of average and reservoir
storage that was at 99 percent of average
as of October 2021 and unit and
transmission maintenance schedules.
Utilizing these generation plans, the
2023 Rate-setting PRS includes higher
levels of power purchases to meet UGP
firm contractual commitments, a
reduced amount of surplus energy sales
for P–SMBP—ED, and Normal Timing
Power Purchases and surplus energy
sales for P–SMBP—WD (since P–
SMBP—WD was not formally
considered to be in a drought
condition). Since the P–SMBP—ED was
considered to be in a drought condition,
in accordance with our established
methodology, a second or ‘‘base’’ study
was completed. This ‘‘base’’ study
removed the P–SMBP—ED’s future
drought-related power purchase costs
and added back in the P–SMBP—ED’s
Normal Timing Power Purchases and
normal surplus energy sales (essentially
simulating what the PRS would look
like under a non-drought, or normal,
condition for both P–SMBP—ED and P–
SMBP—WD). The revenue requirement
difference between these two PRSs is
the revenue requirement for the
proposed Drought Adder. There is no
need to rerun these PRSs to assess the
impact to the proposed Drought Adder
using an average generation profile in
the P–SMBP—WD since the PRSs
already utilize Normal Timing Power
Purchases and normal surplus energy
sales for P–SMBP—WD.
C. Comment: A customer association
suggests that concurrent with this rate
adjustment, the Regions perform a
comparison of the unpaid federal
investment balances versus the
depreciated balances of the P–SMBP
investments to determine if the unpaid
investments balances are greater than
the depreciated balances at the present
point in the asset service lives. They
would appreciate the opportunity to
review this analysis to gauge the
reasonableness of the Drought Adder
approach. They note the Regions have
performed analyses such as these in the
past, and they believe that it would be
beneficial again when analyzing both
Deficits and rate adders. Given the
pressures to consumers, they believe
that this information could be useful to
avoid excessive Drought Adders and
keep rates stable, and to allow the
system to function as intended. They
contend that based on conversations
and points raised during informal
discussions, they believe that there is a
sensitivity to taking drought-related
Deficits in the PRSs, and that Deficits
may be considered bad financial
practice to those reviewing rate
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activities. Taking reasonable Deficits for
purchased power is a longstanding
practice that is based on the fact that
historic shortages and surpluses occur
over time, and that over the long run,
these Deficits have always been paid,
even during extreme droughts over the
past 30–40 years. They are part of the
financial flexibility necessary because
WAPA is unable to accumulate rate
stabilization funds during good water
years and can only use surpluses to pay
existing investments ahead of time.
Without accumulated funds, taking
Deficits provides a counterbalance that
keeps rates stable and are part of good
financial practice for short periods of
time. Key to these Deficits is knowing
when they continue to be reasonable
and when they can no longer be
sustained.
Response: As noted, Deficits are an
integral and longstanding component of
WAPA’s repayment methodology and
the Regions do utilize them in the PRSs
when appropriate (in accordance with
Order RA 6120.2). The P–SMBP PRS
incurred a $92.7 million Base-related
Deficit in FY 2021 as the result of
various issues related to Winter Storm
Uri. Also in FY 2021, P–SMBP—ED had
lower than normal generation, though
no adjustment to the Drought Adder
component was implemented. The P–
SMBP—ED projected generation for FY
2022 utilized in the 2023 Rate-setting
PRS is estimating a $76.6 million
drought-related Deficit in FY 2022.
Payments toward these two Deficits are
projected to be made over a 7-year time
frame with final repayment projected in
FY 2028. During this 7-year repayment
plan, the 2023 Rate-setting PRS is
projecting annual interest payments
associated with these Deficits. The
Regions agree it would be beneficial to
prepare an analysis of the unpaid
balances compared to the depreciated
balances of the P–SMBP investments
and will provide Customers/customer
groups with an opportunity to review
once the analysis is completed.
D. Comment: A customer association
commented that they believe the current
proposal may be an overly sensitive
reaction to water conditions and may
lead to rate instability as Drought
Adders continue to be taken on and off,
sometimes with significant rate
increases like this one. At present, they
note that there is no drought-related
Deficits to which these added revenues
could really be applied (pending final
purchases and the application of
revenues for FY 2022). They urge the
Regions to use caution in implementing
a practice that may eventually preclude
the taking of Deficits, with a
replacement policy of covering any
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drought-related purchases during the
year of occurrence, regardless of the
effects of good water over time. Paidahead investments may become a
standard with no offsetting
consideration.
Response: The commentor is correct
that at present, there are no actual
drought-related Deficits in the P–SMBP
2023 Rate-setting PRS, only the
projected $76.6 million drought-related
Deficit in FY 2022. The proposed rates
will not be effective until January 2023,
and the AOP is projecting lower-thanaverage generation in FY 2023, with FY
2023 being the third consecutive year of
lower-than-average generation on the P–
SMBP mainstem. A review of the
Regions’ actual purchase power costs at
a point more than halfway through FY
2022 indicates the projected costs for FY
2022 may be conservative, which will
likely result in a larger than estimated
Deficit for FY 2022.
During the rate formulation timeframe
(end of 2021/beginning of 2022), the
Regions ran multiple PRS scenarios
using various purchase power and
surplus energy sales assumptions (based
on hydrology, generation outlook, and
price volatility information available at
that time), while also considering the
fact there are required investment
payments coming due within the cost
evaluation period. The Regions
ultimately settled on a profile that
resulted in a projected drought-related
Deficit being incurred in FY 2022,
before the proposed Drought Adders
could take effect in January 2023. The
Regions appreciate the commentor’s
concerns over rate stability and ratemaking decisions. The Region’s decision
to implement the proposed Drought
Adder did consider risks and impacts
and was in no way an attempt to
preclude the taking of Deficits, which
are an integral part of WAPA’s
repayment methodology, and which is
evident in the FY 2021 Base-related
Deficit as well as the projected FY 2022
drought-related Deficit. In fact, the
Regions chose to implement the full
amount of the P–SMBP Drought Adder
through the rate process, rather than
implement 2 mills/kWh of it through
the Drought Adder adjustment process,
so there would be transparency and
opportunity for public input.
E. Comment: A customer association
and a Customer commented that they
support the comments of their member
utilities, fellow customer associations,
and other customer groups.
Response: The Regions appreciate the
commentors’ feedback. The Regions
conducted a combined public process
for the rate adjustments under Rate
Order Nos. WAPA–202 and WAPA–203
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70805
and have coordinated all responses.
Comments received specifically by UGP
for the P–SMBP—ED rate process are
recognized as being addressed in UGP’s
Rate Order No. WAPA–203.
F. Comment: A customer association
and a Customer provided various
comments related to the Mt. Elbert
Powerplant such as: (1) they are aware
that Mt. Elbert is experiencing increased
maintenance costs and will very likely
require future major maintenance that
will put an upward pressure on rates,
(2) the form in which customers can use
Mt. Elbert through the SABPs may be
out of alignment with the West’s
changing energy market paradigms; for
example, Mt. Elbert may be better used
to meet resource adequacy
requirements, and (3) they support
having ongoing discussions and want to
ensure that future costs to rehabilitate
Mt. Elbert come with commensurate
benefits to the whole, which may
require a change in how Mt. Elbert’s
value is captured in an organized energy
market and appropriately credited to
customers.
Response: The SABPs, Customers’ use
of Mt. Elbert, and potential future
organized energy markets are outside
the scope of this rate process; however,
RMR appreciates the comments and is
committed to ongoing discussions
related to the use of Mt. Elbert and how
to address future rehabilitation costs
and potential benefits.
G. Comment: A Customer commented
that benefits may be realized, and costs
mitigated, in a future RTO like
Southwest Power Pool’s RTO West. The
full picture of both costs and benefits
from participation are unknown today,
but the customer suggests the Regions
wait to assess the need for a Drought
Adder until the impacts of the future
RTO West are known.
Response: The possibility of
participation in an RTO is outside of the
scope of this rate process; however,
RMR appreciates the comment and
recognizes there could be benefits from
participation in an RTO and is actively
engaged in exploring various market
opportunities. Since WAPA has not
made a decision on joining a RTO West
market, RMR has not included
estimated operations costs, estimated
benefits, or estimated implementation
costs. In the meantime, implementation
of a Drought Adder under the formula
rate is not dependent on potential future
uncertain events and timelines. The
design of the Drought Adder formula is
flexible enough to be reduced each year
should any such benefits reduce the
need for the Drought Adder.
H. Comment: A customer association
and member utility commented that
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they understand a rate increase is
warranted due to several factors: (1)
persistent low water conditions in the
P–SMBP—ED, (2) increasing market
power pricing, (3) costs incurred during
the Winter Storm Uri, and (4) inflation
on O&M and capital investments for the
system. They encourage WAPA to
continue focus on identifying and
reducing controllable costs within the
Regions and at WAPA’s Headquarters.
Response: The Regions appreciate the
commentors’ recognition of the specific
costs and repayment obligations of the
PRSs and the need for the rate
adjustments. The Regions are committed
to developing rates that are the lowest
possible, consistent with sound
business principles.
I. Comment: A customer association
commented that they recommend the
Rates staff and Regional leadership
continue to meet regularly with the
Mid-West Electric Consumers
Association’s (Mid-West) Water and
Power Committee on a quarterly basis to
update and advise the members on the
latest information on hydrology outlook,
power supply costs, system storage, and
potential need for future adjustments as
this will allow more advance notice for
dealing with future issues.
Response: Customer meeting
attendance is outside the scope of this
rate process; however, the Regions do
intend to continue communication with
our Customers and customer groups as
appropriate.
J. Comment: A customer association
and member utility request WAPA staff
continue transparent engagements with
the Customers and customer groups to
better understand WAPA’s efforts to
control and mitigate costs, rate impacts,
impacts of drought conditions,
importance of rate stability, and need
for risk mitigation through regular
meetings with the Mid-West Water and
Power Committee and impacted
customer groups. The strong
collaboration between customers and
WAPA benefits everyone and improves
the value we all provide to the
consumer-owners at the end of the line.
Response: The Regions appreciate the
support of our Customers and customer
groups and agree that collaboration is
vital when faced with uncertain drought
conditions and other impacts to the firm
power rates. The Regions intend to
continue communication with our
Customers and customer groups as
appropriate.
K. Comment: The customer
association and member utility
commented that they appreciated the
efforts of the UGP and RMR Rates staff
for understanding Customer concerns
regarding the rate.
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Response: The Regions thank the
commentors for recognizing the UGP
and RMR Rates staff and their efforts to
ensure Customer concerns are
addressed.
L. Comment: A customer association
and a member utility commented their
customers are already feeling the
impacts of the current drought in the P–
SMBP—ED and understand the need for
the Drought Adder and the process for
the Drought Adder evaluation. They
requested debt strategy and rate design
options be discussed with customers
before any final decisions are made as
a part of the annual Drought Adder
review process.
Response: The Regions agree with the
need for continued transparency
regarding debt strategy and rate options
related to the annual Drought Adder
adjustment process. The proposed rates
did not reflect any change to the
Regions’ existing rate designs or annual
Drought Adder adjustment process.
Changes to the rate designs or
adjustment process would require a
separate rate process where Customers
and interested parties would have the
opportunity to participate in the
process. The 2007 rate orders
implementing the Drought Adder
component provided the framework for
the annual Drought Adder adjustment
process, which hasn’t been modified in
subsequent rate orders.
M. Comment: The member utility
encourages WAPA to focus on its core
function of marketing and delivering
Preference Power to Preference
Customers.
Response: The Regions appreciate the
comment and intend to continue to
fulfill our mission of marketing to
Preference Power Customers consistent
with current marketing plans.
N. Comment: The customer
association and member utility
appreciated the opportunity to comment
on the rate process, stating that any rate
increase has a direct impact on the
energy affordability of the members it
serves.
Response: The Regions recognize the
impact of the rate increases on
Customers and strive to find ways to
mitigate impacts of the drought and
operational costs to keep rates as low as
possible.
Certification of Rates
I have certified that the Provisional
Formula Rates for LAP firm electric
service under Rate Schedule L–F12 and
LAP sale of surplus products under Rate
Schedule L–M3 are the lowest possible
rates, consistent with sound business
principles. The Provisional Formula
Rates were developed following
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administrative policies and applicable
laws.
Availability of Information
Information about this rate
adjustment, including the Customer
Rate Brochure, PRSs, comments, letters,
memorandums, and other supporting
materials that were used to develop the
Provisional Formula Rates, is available
for inspection and copying at the Rocky
Mountain Regional Office located at
5555 East Crossroads Boulevard,
Loveland, Colorado. Many of these
documents are also available on RMR’s
website at www.wapa.gov/regions/RM/
rates/Pages/2023-Rate-Adjustment--Firm-Power.aspx.
Ratemaking Procedure Requirements
Environmental Compliance
WAPA has determined that this
action fits within the following
categorical exclusions listed in
appendix B to subpart D of 10 CFR part
1021.410: B4.3 (Electric power
marketing rate changes). Categorically
excluded projects and activities do not
require preparation of either an
environmental impact statement or an
environmental assessment.6 A copy of
the categorical exclusion determination
is available on WAPA’s website at
www.wapa.gov/regions/RM/
environment/Pages/CX2022.aspx.
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 above and under the
authority delegated to me, I hereby
confirm, approve, and place into effect,
on an interim basis, Rate Order No.
WAPA–202. The rates will remain in
effect on an interim basis until: (1) FERC
confirms and approves them on a final
basis; (2) subsequent rates are confirmed
6 The determination was done in compliance with
NEPA (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).
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and approved; or (3) such rates are
superseded.
Signing Authority
This document of the Department of
Energy was signed on November 9,
2022, by Tracey A. LeBeau,
Administrator, Western Area Power
Administration, pursuant to delegated
authority from the Secretary of Energy.
That document, with the original
signature and date, is maintained by
DOE. For administrative purposes only,
and in compliance with requirements of
the Office of the Federal Register, the
undersigned DOE Federal Register
Liaison Officer has been authorized to
sign and submit the document in
electronic format for publication, as an
official document of the Department of
Energy. This administrative process in
no way alters the legal effect of this
document upon publication in the
Federal Register.
Signed in Washington, DC, on November
16, 2022.
Treena V. Garrett,
Federal Register Liaison Officer, U.S.
Department of Energy.
Rate Schedule L–F12
Character
Alternating current, 60 hertz, three
phase, delivered and metered at the
voltages and points established by
contract.
(Supersedes Rate Schedule L–F11)
Formula Rate and Charge Components
Effective January 1, 2023
LAP Firm Electric Service Rate (Rate) =
Base component + Drought Adder
component
United States Department of Energy
Western Area Power Administration
Monthly Charge as of January 1, 2023,
Under the Rate
Rocky Mountain Region
Loveland Area Projects
Firm Electric Service
(Approved Under Rate Order No.
WAPA–202)
Effective
The first day of the first full billing
period beginning on or after January 1,
2023, and extending through December
31, 2027, or until superseded by another
rate schedule, whichever occurs earlier.
Available
Within the marketing area served by
the Loveland Area Projects (LAP)
(consisting of the Fryingpan-Arkansas
Project and the Pick-Sloan Missouri
Basin Program—Western Division,
which were integrated for marketing
and rate-making purposes in 1989);
parts of Colorado, Kansas, Nebraska,
and Wyoming.
Applicable
To the LAP firm electric service
delivered at specific point(s) of delivery,
as established by contract.
Capacity Charge: $4.80 per kilowatt
per month (kWmonth) of billing
capacity.
Energy Charge: 18.31 mills per
kilowatt-hour (kWh) of monthly
entitlement.
Billing Capacity: Unless otherwise
specified by contract, the billing
capacity will be the seasonal contract
rate of delivery.
Charge Components
Base Component: A fixed revenue
requirement that includes operation and
maintenance expense, investments and
replacements, interest on investments
and replacements, normal timing power
purchases (purchases due to operational
constraints, not associated with
drought), and transmission costs. Any
proposed change to the Base component
will require a public process. The Base
revenue requirement is $67,839,200 and
the charges under the formulas are:
Base Capacity = 50% X Base Revenue Requirement
Firm Billing Capacity
= $4.36/kWmonth
Base Energy
= 16.63 mills/kWh
= 50% X Base Revenue Requirement
Annual Energy
Drought Adder Component: A
formula-based revenue requirement that
includes future power purchases above
normal timing power purchases,
70807
previous purchase power droughtrelated deficits, and interest on the
purchase power drought-related deficits.
As of January 1, 2023, the Drought
Adder component revenue requirement
is $6,838,720 and the charges under the
formulas are:
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Drought Adder= 50% X Drought Adder Revenue Requirement= 1.68 mills/kWh
Energy
Annual Energy
EN21NO22.022</GPH>
lotter on DSK11XQN23PROD with NOTICES1
Drought Adder= 50% X Drought Adder Revenue Requirement= $0.44/kWmonth
Capacity
Firm Billing Capacity
70808
Federal Register / Vol. 87, No. 223 / Monday, November 21, 2022 / Notices
Annual Drought Adder Adjustment
Process
The Drought Adder component may
be adjusted annually using the above
formulas for any costs attributed to
drought of less than or equal to the
equivalent of 2 mills/kWh to the Rate.
Any planned incremental upward
adjustment to the Drought Adder
component greater than the equivalent
of 2 mills/kWh to the Rate will require
a public process.
The annual review process is initiated
in early summer when the Rocky
Mountain Region (RMR) reviews the
Drought Adder component and provides
notice of any estimated change to the
Drought Adder component charge under
the formula. In October, RMR 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. RMR will inform
customers of updates by letter and post
updates to RMR’s external website.
Adjustments
For Transformer Losses: If delivery is
made at transmission voltage but
metered on the low-voltage side of the
substation, the meter readings will be
increased to compensate for transformer
losses as provided for in the contract.
For Power Factor: None. Customers
will be required to maintain a power
factor within the range of 95-percent
leading to 95-percent lagging, measured
at the point of interconnection.
Rate Schedule L–M3
(Supersedes Rate Schedule L–M2)
Effective January 1, 2023
United States Department of Energy
Western Area Power Administration
Rocky Mountain Region
Loveland Area Projects
Sale of Surplus Products
lotter on DSK11XQN23PROD with NOTICES1
(Approved Under Rate Order No.
WAPA–202)
Applicable
This rate schedule applies to
Loveland Area Projects (LAP) Marketing
21:25 Nov 18, 2022
Jkt 259001
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. 2022–25266 Filed 11–18–22; 8:45 am]
BILLING CODE 6450–01–P
DEPARTMENT OF ENERGY
Western Area Power Administration
Pick-Sloan Missouri Basin Program—
Eastern Division-Rate Order No.
WAPA–203
Western Area Power
Administration, DOE.
ACTION: Notice of rate order concerning
firm power service, firm peaking power
service, and sale of surplus products
formula rates.
AGENCY:
The formula rates for the
Upper Great Plains Region (UGP) PickSloan Missouri Basin Program—Eastern
Division (P–SMBP—ED) firm power
service, firm peaking power service, and
sale of surplus products have been
confirmed, approved, and placed into
effect on an interim basis (Provisional
Formula Rates). These new formula
rates replace the existing formula rates
for these services under Rate Schedules
P–SED–F13, P–SED–FP13, and P–SED–
M1, which expire on December 31,
2022. The P–SMBP—ED firm power
service composite rate is increasing 16.3
percent. There are no changes to the
formula rate for sale of surplus
products.
SUMMARY:
The Provisional Formula Rates
under Rate Schedules P–SED–F14, Firm
Power Service; P–SED–FP14, Firm
Peaking Power Service; and Rate
Schedule P–SED–M2, Sale of Surplus
Products, are effective on the first day
of the first full billing period beginning
on or after January 1, 2023, and will
remain in effect through December 31,
2027, pending confirmation and
approval by the Federal Energy
DATES:
Effective
The first day of the first full billing
period beginning on or after January 1,
2023, and extending through December
31, 2027, or until superseded by another
rate schedule, whichever occurs earlier.
VerDate Sep<11>2014
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).
PO 00000
Frm 00039
Fmt 4703
Sfmt 4703
Regulatory Commission (FERC) on a
final basis or until superseded.
FOR FURTHER INFORMATION CONTACT:
Lloyd Linke, Regional Manager, Upper
Great Plains Region, Western Area
Power Administration, 2900 4th Avenue
North, 6th Floor, Billings, MT 59101–
1266, or email: ugpfirmrate@wapa.gov,
or Linda Cady-Hoffman, Rates Manager,
Upper Great Plains Region, Western
Area Power Administration, (406) 255–
2920, or email: cady@wapa.gov or
ugpfirmrate@wapa.gov.
SUPPLEMENTARY INFORMATION: On April
16, 2018, FERC confirmed and approved
Formula Rate Schedules P–SED–F13, P–
SED–FP13, and P–SED–M1, under Rate
Order No. WAPA–180, on a final basis
through December 31, 2022.1 These
schedules apply to P–SMBP—ED firm
power service, firm peaking power
service, and sale of surplus products.
Western Area Power Administration
(WAPA) published a Federal Register
notice (Proposed FRN) on May 25, 2022
(87 FR 31878), proposing increases to
both the base component and the
drought adder component of the P–
SMBP—ED firm power service and firm
peaking power service and to put new
5-year rate schedules in place. The
Proposed FRN also initiated a 90-day
public consultation and comment
period and set forth the dates and
locations of the public information and
public comment forums.
Legal Authority
By Delegation Order No. S1–DEL–
RATES–2016, effective November 19,
2016, the Secretary of Energy delegated:
(1) the authority to develop power and
transmission rates to the WAPA
Administrator; (2) the authority to
confirm, approve, and place such rates
into effect on an interim basis to the
Deputy Secretary of Energy; and (3) the
authority to confirm, approve, and place
into effect on a final basis, or to remand
or disapprove such rates, to FERC. By
Delegation Order No. S1–DEL–S3–
2022–2, effective June 13, 2022, the
Secretary of Energy also delegated the
authority to confirm, approve, and place
such rates into effect on an interim basis
to the Under Secretary for
Infrastructure. By Redelegation Order
No. S3–DEL–WAPA1–2022, effective
June 13, 2022, the Under Secretary for
Infrastructure further redelegated the
authority to confirm, approve, and place
such rates into effect on an interim basis
to WAPA’s Administrator. This rate
action is issued under Redelegation
Order No. S3–DEL–WAPA1–2022 and
1 Order Confirming and Approving Rate Schedule
on a Final Basis, FERC Docket No. EF18–2–000, 163
FERC ¶ 62,039 (2018).
E:\FR\FM\21NON1.SGM
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]]>Agencies
[Federal Register Volume 87, Number 223 (Monday, November 21, 2022)]
[Notices]
[Pages 70799-70808]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-25266]
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
Western Area Power Administration
Loveland Area Projects--Rate Order No. WAPA-202
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of rate order concerning firm electric service and sale
of surplus products formula rates.
-----------------------------------------------------------------------
SUMMARY: The formula rates for the Rocky Mountain Region's (RMR)
Loveland Area Projects (LAP) firm electric service and sale of surplus
products have been confirmed, approved, and placed into effect on an
interim basis (Provisional Formula Rates). LAP consists of the
Fryingpan-Arkansas Project (Fry-Ark) and the Pick-Sloan Missouri Basin
Program (P-SMBP)--Western Division, which were integrated for marketing
and rate-making purposes in 1989. These new formula rates replace the
existing formula rates for these services under Rate Schedules L-F11,
Firm Electric Service, and L-M2, Sale of Surplus Products, which expire
on December 31, 2022. The LAP firm electric service rate is increasing
16.5 percent. There are no changes to the formula rate for sale of
surplus products.
DATES: The Provisional Formula Rates under Rate Schedules L-F12, Firm
Electric Service, and L-M3, Sale of Surplus Products, are effective on
the first day of the first full billing period beginning on or after
January 1, 2023, and will remain in effect through December 31, 2027,
pending confirmation and approval by the Federal Energy Regulatory
Commission (FERC) on a final basis or until superseded.
FOR FURTHER INFORMATION CONTACT: Barton V. Barnhart, Regional Manager,
Rocky Mountain Region, Western Area Power Administration, 5555 East
Crossroads Boulevard, Loveland, CO 80538-8986, or email:
[email protected], or Sheila D. Cook, Rates Manager, Rocky Mountain
Region, Western Area Power Administration, (970) 685-9562, or email:
[email protected].
SUPPLEMENTARY INFORMATION: On May 24, 2018, FERC confirmed and approved
Formula Rate Schedules L-F11 and L-M2 under Rate Order No. WAPA-179, on
a final basis through December 31, 2022.\1\ These schedules apply to
LAP firm electric service and sale of surplus products. Western Area
Power Administration (WAPA) published a Federal Register notice
(Proposed FRN) on May 25, 2022 (87 FR 31876), proposing increases to
both the base component and the drought adder component of the LAP firm
electric service rate and to put new 5-year rate schedules in place.
The Proposed FRN also initiated a 90-day public consultation and
comment period and set forth the dates and locations of the public
information and public comment forums.
---------------------------------------------------------------------------
\1\ Order Confirming and Approving Rate Schedules on a Final
Basis, FERC Docket No. EF18-3-000, 163 FERC ] 62,115 (2018).
---------------------------------------------------------------------------
Legal Authority
By Delegation Order No. S1-DEL-RATES-2016, effective November 19,
2016, the Secretary of Energy delegated: (1) the authority to develop
power and transmission rates to the WAPA Administrator; (2) the
authority to confirm, approve, and place such rates into effect on an
interim basis to the Deputy Secretary of Energy; and (3) the authority
to confirm, approve, and place into effect on a final basis, or to
remand or disapprove such rates, to FERC. By Delegation Order No. S1-
DEL-S3-2022-2, effective June 13, 2022, the Secretary of Energy also
delegated the authority to confirm, approve, and place such rates into
effect on an interim basis to the Under Secretary for Infrastructure.
By Redelegation Order No. S3-DEL-WAPA1-2022, effective June 13, 2022,
the Under Secretary for Infrastructure further redelegated the
authority to confirm, approve, and place such rates into effect on an
interim basis to WAPA's Administrator. This rate action is issued under
Redelegation Order No. S3-DEL-WAPA1-2022 and Department of Energy
procedures for public participation in rate adjustments set forth at 10
CFR part 903.\2\
---------------------------------------------------------------------------
\2\ 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
---------------------------------------------------------------------------
Following review of RMR's proposal, Rate Order No. WAPA-202, which
provides the formula rates for LAP firm electric service and sale of
surplus products, is hereby confirmed, approved, and placed into effect
on an interim basis. WAPA will submit Rate Order No. WAPA-202 to FERC
for confirmation and approval on a final basis.
Department of Energy
Administrator, Western Area Power Administration
In the Matter of: Western Area Power Administration, Rocky Mountain
Region, Rate Adjustment for the Loveland Area Projects, Firm Electric
Service and Sale of Surplus Products, Formula Rates.
Rate Order No. WAPA-202
Order Confirming, Approving, and Placing the Formula Rates for the
Loveland Area Projects Into Effect on an Interim Basis
The formula rates in Rate Order No. WAPA-202 are established
following section 302 of the Department of Energy (DOE) Organization
Act (42 U.S.C. 7152).\3\
---------------------------------------------------------------------------
\3\ 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 Project Act of 1939 (43 U.S.C.
485h(c)) and section 5 of the Flood Control Act of 1944 (16 U.S.C.
825s); and other acts that specifically apply to the projects
involved.
---------------------------------------------------------------------------
[[Page 70800]]
By Delegation Order No. S1-DEL-RATES-2016, effective November 19,
2016, the Secretary of Energy delegated: (1) the authority to develop
power and transmission rates to the Western Area Power Administration
(WAPA) Administrator; (2) the authority to confirm, approve, and place
such rates into effect on an interim basis to the Deputy Secretary of
Energy; and (3) the authority to confirm, approve, and place into
effect on a final basis, or to remand or disapprove such rates, to the
Federal Energy Regulatory Commission (FERC). By Delegation Order No.
S1-DEL-S3-2022-2, effective June 13, 2022, the Secretary of Energy also
delegated the authority to confirm, approve, and place such rates into
effect on an interim basis to the Under Secretary for Infrastructure.
By Redelegation Order No. S3-DEL-WAPA1-2022, effective June 13, 2022,
the Under Secretary for Infrastructure further redelegated the
authority to confirm, approve, and place such rates into effect on an
interim basis to WAPA's Administrator. This rate action is issued under
Redelegation Order No. S3-DEL-WAPA1-2022 and DOE procedures for public
participation in rate adjustments set forth at 10 CFR part 903.\4\
---------------------------------------------------------------------------
\4\ 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
---------------------------------------------------------------------------
Acronyms, Terms, and Definitions
As used in this Rate Order, the following acronyms, terms, and
definitions apply:
Base: A component of the firm electric service (FES) rate design
that is a fixed revenue requirement that includes operation and
maintenance expenses (O&M), investments and replacements, interest on
investments and replacements, normal timing power purchases, and
transmission costs.
Capacity: The electric capability of a generator, transformer,
transmission circuit, or other equipment. It is expressed in kilowatts
(kW) or megawatts (MW).
Capacity Rate: The rate which sets forth the charges for capacity.
It is expressed in dollars per kilowatt-month (kWmonth) and applied to
each kW of the Contract Rate of Delivery or 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 (mills/kWh) and used only for comparison
purposes.
Corp of Engineers Annual Operating Plan (AOP): The Corp of
Engineers (Corps) water management guidelines designed to meet the
reservoir regulation objectives.
Customer: An entity with a contract that is receiving Loveland Area
Projects (LAP) firm electric service from WAPA.
Customer Rate Brochure: A document prepared for public distribution
explaining the rationale and background for the information contained
in the Proposed FRN and in this rate order.
Deficit(s): Deferred or unrecovered annual and/or interest
expenses.
Drought Adder: A component of the FES rate design that is a
formula-based revenue requirement that includes future power purchases
above normal timing power purchases, previous purchase power drought-
related Deficits, and interest on the purchase power drought-related
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 (kWh).
Energy Charge: The charge under the rate schedule for energy. It is
expressed in mills/kWh and applied to each kWh delivered to each
Customer.
FRN: Federal Register Notice--a document published in the Federal
Register in order for WAPA to provide information of public interest.
Firm: Power intended to be available at all times during the period
covered by a guaranteed commitment to deliver, even under adverse
conditions.
FY: WAPA's 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 Marketing Plan: The Post-1989 General Power Marketing and
Allocation Criteria for the Pick-Sloan Missouri Basin Program--Western
Division (P-SMBP--WD) and the Fryingpan-Arkansas Project (Fry-Ark)
(collectively known as Loveland Area Projects or LAP) (published in
January 1986 and extended and amended per the LAP 2025 Power Marketing
Initiative published on December 10, 2013 (78 FR 79444)) that provides
the principles used to market LAP firm hydropower resources.
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).
NEPA: National Environmental Policy Act of 1969, as amended.
Non-timing Power Purchases: Power purchases related to drought
conditions, not related to operational constraints.
Normal Timing Power Purchases: Power purchases related to
operational constraints (e.g., management of endangered species
habitat, water quality, navigation, balancing authority purposes,
market events, etc.), not associated with drought conditions.
O&M: Operation and maintenance expenses.
OM&R: Operation, maintenance, and replacement expenses.
Order RA 6120.2: DOE Order outlining Power Marketing Administration
financial reporting and rate-making procedures.
Power: Capacity and energy.
Power Factor: The ratio of real to apparent power at any given
point and time in an electrical circuit. Generally, it is expressed as
a percentage.
Power Repayment Study (PRS): Defined in Order RA 6120.2 as a study
portraying the annual repayment of power production and transmission
costs of a power system through the application of revenues over the
repayment period of the power system. The study shows, among other
items, estimated revenues and expenses, year by year, over the
remainder of the power system's repayment period (based upon conditions
prevailing over the cost evaluation period), the estimated amount of
Federal investment amortized during each year, and the total estimated
amount of Federal investment remaining to be amortized.
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 Rates: Formula rates confirmed, approved, and
placed into effect on an interim basis by the Secretary of Energy or
his/her designee.
Rate-setting PRS: The PRS used for the rate adjustment proposal.
Reclamation's Most Probable Inflow Operating Plan: The combination
of the forecasted generation plans for the Bureau of Reclamation's
(Reclamation) North Platte River, Buffalo Bill Reservoir, Boysen
Reservoir, Colorado
[[Page 70801]]
Big-Thompson Project, and Yellowtail Dam, assuming median generation.
Regional Transmission Organization (RTO): Organizations that
operate bulk electric power systems across parts of North America. RTOs
are independent, membership-based, non-profit organizations that ensure
reliability and optimize supply and demand bids for wholesale electric
power.
RTO West: A group of electricity service providers focusing on
collaboratively developing long-term solutions that will improve market
efficiencies in the West.
Regions: WAPA's Rocky Mountain Region (RMR) and Upper Great Plains
Region (UGP).
Revenue Requirement: The revenue required by the PRS to recover
annual expenses (such as O&M, purchase power, transmission service,
interest, and deferred expenses) and repay Federal investments and
other assigned costs.
Scheduling, Accounting, and Billing Procedures (SABPs): The SABP
establish the parameters for scheduling, accounting, and billing
procedures as they relate to LAP power deliveries. They are intended to
implement the terms of a contract, not to modify or amend the contract.
Webex: Webex is an online secure invite-only meeting platform used
by WAPA. The general website is https://doe.webex.com.
Western Energy Imbalance Service Market (WEIS Market): The market
for imbalance energy administered by the Southwest Power Pool in the
Western Interconnection. The market footprint encompasses the loads and
resources that are located within a participating Balancing Authority
Area. The Western Area Colorado Missouri Balancing Authority or WACM
(operated by RMR) and the Western Area Upper Great Plains West
Balancing Authority or WAUW (operated by UGP) are both participating
Balancing Authority Areas.
Winter Storm Uri: A severe winter storm in February 2021 that had
widespread impacts across the RMR and UGP regions.
Effective Date
The Provisional Formula Rate Schedules L-F12, Firm Electric
Service, and L-M3, Sale of Surplus Products, will take effect on the
first day of the first full billing period beginning on or after
January 1, 2023, and will remain in effect through December 31, 2027,
pending approval by FERC on a final basis or until superseded.
Public Notice and Comment
RMR followed the Procedures for Public Participation in Power and
Transmission Rate Adjustments and Extensions, 10 CFR part 903, in
developing these formula rates. The steps RMR took to involve
interested parties in the rate process include:
1. On May 25, 2022, a Federal Register notice (87 FR 31876)
(Proposed FRN) announced the proposed formula rates and launched the
90-day public consultation and comment period.
2. On May 25, 2022, RMR notified Preference Customers and
interested parties of the proposed rates and provided a copy of the
published Proposed FRN.
3. On June 15, 2022, RMR held a public information forum via Webex.
RMR's representatives explained the proposed formula rates, answered
questions, and gave notice that more information was available in the
Customer Rate Brochure.
4. On June 29, 2022, RMR held a public comment forum via Webex to
provide an opportunity for customers and other interested parties to
comment for the record.
5. RMR provided a website that contains important dates, letters,
presentations, FRNs, Customer Rate Brochure, and other information
about this rate process. The website is located at www.wapa.gov/regions/RM/rates/Pages/2023-Rate-Adjustment-Firm-Power.aspx.
6. During the 90-day consultation and comment period, which ended
on August 23, 2022, RMR received one oral comment submission and four
comment letters, encompassing a total of 22 individual comments. The
individual comments and RMR's responses are addressed in the
``Comments'' section. All comments have been considered in the
preparation of this Rate Order.
Oral comments were received from the following organization:
Mid-West Electric Consumers Association, Colorado
Written comments were received from the following organizations:
Loveland Area Customer Association, Colorado
Platte River Power Authority, Colorado
Mid-West Electric Consumers Association, Colorado
East River Electric Power Cooperative, Inc., South Dakota
Power Repayment Study--Firm Electric Service Rate Discussion
PRSs are prepared each FY to determine if revenues will be
sufficient to repay, within the required time, all costs assigned to
the Pick-Sloan Missouri Basin Program (P-SMBP) and the Fry-Ark.
Repayment criteria are based on applicable laws and legislation, as
well as policies including Order RA 6120.2. To meet the Cost Recovery
Criteria outlined in Order RA 6120.2, RMR developed a rate adjustment
to demonstrate sufficient revenues will be collected under the
Provisional Formula Rates to meet future obligations. The revenue
requirement of the Fry-Ark PRS is combined with the P-SMBP--WD revenue
requirement, derived from the P-SMBP PRS, to develop one rate for LAP
firm electric service. The revenue requirement and composite rate for
LAP firm electric service are being increased, as indicated in Table 1:
Table 1--Comparison of Existing and Provisional Revenue Requirements and Composite Rates
----------------------------------------------------------------------------------------------------------------
Existing Provisional
requirements requirements
Firm electric service under L-F11 as under L-F12 as Percent change
of January 1, of January 1,
2018 2023
----------------------------------------------------------------------------------------------------------------
LAP Revenue Requirement (million $)............................. $64.1 $74.7 16.5
Pick-Sloan--WD \1\.............................................. 50.8 58.6 15.4
Fry-Ark......................................................... 13.3 16.1 21.1
Composite Rate (mills/kWh)...................................... 31.44 36.61 16.4
----------------------------------------------------------------------------------------------------------------
\1\ Additional information on the overall P-SMBP PRS and charge components can be found under Rate Order No.
WAPA-203 and on UGP's website at www.wapa.gov/regions/UGP/Rates/Pages/2023-firm-rate-adjustment.aspx.
[[Page 70802]]
Firm Electric Service--Existing and Provisional Formula Rates
Under the current rate methodology, rates for LAP firm electric
service are designed to recover an annual revenue requirement that
includes investment repayment (including aid to irrigation), interest,
purchase power, OM&R, and other expenses within the allowable period.
The annual revenue requirement continues to be allocated equally
between capacity and energy.
The Base component costs for the P-SMBP PRS have increased
primarily due to: (1) increased OM&R from WAPA and the generating
agencies; (2) increased purchase power, including during the Winter
Storm Uri; (3) pricing volatility; (4) reduced surplus energy sales;
and (5) the loss of certain balancing authority revenues for services
that are no longer provided after RMR joined the WEIS Market. Winter
Storm Uri was not a water or generation issue; therefore, its costs
only impact the Base component.
The Base component costs for the Fry-Ark PRS have increased due to:
(1) increased O&M from both WAPA and Reclamation; (2) increased
purchase power, transmission, and ancillary services costs; (3) changes
in costs related to Reclamation's Mt. Elbert Rehabilitation project;
and (4) price volatility.
The driver behind the P-SMBP PRS Drought Adder component increase
is the AOP projecting less than average generation for the next several
years in the P-SMBP mainstem dams. Uncertainties with water inflows,
hydro generation, and replacement energy prices continue to pose
potential risks for meeting firm power contractual commitments.
The net effect of these changes to the PRS Base and Drought Adder
components results in an overall increase to the LAP rate. A comparison
of the existing and Provisional Formula Rates for firm electric service
is shown in Table 2:
Table 2--Comparison of Existing and Provisional Formula Rates
----------------------------------------------------------------------------------------------------------------
Existing Provisional
charges under charges under
rate schedule rate schedule
Firm electric service L-F11 as of L-F12 as of Percent change
January 1, January 1,
2018 2023
----------------------------------------------------------------------------------------------------------------
Firm Capacity Rate ($/kWmonth).................................. $4.12 $4.80 16.5
Firm Energy Rate (mills/kWh).................................... 15.72 18.31 16.5
----------------------------------------------------------------------------------------------------------------
As a part of the existing and provisional rate schedule, RMR
provides for a formula-based adjustment of the Drought Adder component,
with an annual increase of up to 2 mills/kWh each year. The 2 mills/kWh
cap places a limit on the amount the Drought Adder component can be
adjusted upward relative to associated drought costs included in the
Drought Adder formula rate for any 1-year cycle. The Drought Adder
component may be adjusted downward by any amount. Continuing to
identify the firm electric service revenue requirement using Base and
Drought Adder components will assist the Regions in presenting the
future impacts of droughts, demonstrate repayment of drought-related
costs in the PRSs, and allow the Regions to be more responsive to
changes caused by drought-related expenses. RMR will continue to charge
and bill its customers firm electric service rates for energy and
capacity, which are the sum of the Base and Drought Adder components.
Under Rate Schedule L-F12, RMR will continue to identify its LAP
firm electric service revenue requirement using Base and Drought Adder
components. The Base component is a fixed revenue requirement from each
PRS that includes annual O&M, investment repayment and associated
interest, Normal Timing Power Purchases, and transmission costs. RMR
cannot adjust the Base component without a public process. The Drought
Adder component is a formula-based revenue requirement from each PRS
that includes costs attributable to drought conditions in the Regions.
The Drought Adder component includes costs associated with future Non-
timing Power Purchases to meet firm electric service 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-related Deficits. The Drought Adder
component is designed to repay drought-related Deficits within 10 years
from the time the Deficit was incurred, using balloon-payment
methodology. For example, a drought-related Deficit incurred in FY 2022
will be repaid by FY 2032.
The annual revenue requirement calculation will continue to be
summarized by the following formula: Annual Revenue Requirement = Base
Revenue Requirement + Drought Adder Revenue Requirement.
The Provisional charge components update the Base component with
present costs from a revenue requirement of $64.1 million to $67.8
million and increases the Drought Adder component revenue requirement.
For rate year 2023, the Drought Adder revenue requirement increases
from zero to $6.8 million.\5\ A comparison of the existing and
provisional components is shown in Table 3:
---------------------------------------------------------------------------
\5\ The exact values are $64,143,960, $67,839,200, and
$6,838,720 respectively.
[[Page 70803]]
Table 3--Summary of LAP Existing and Provisional Charge Components
--------------------------------------------------------------------------------------------------------------------------------------------------------
Existing charges under rate schedule L-F11 as Provisional charges under rate schedule L-F12
of January 1, 2018 as of January 1, 2023
Firm electric service ------------------------------------------------------------------------------------------------ Percent change
Base Drought adder Base Drought adder
component component Total charge component component Total charge
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firm Capacity ($/kWmonth)............... $4.12 $0 $4.12 $4.36 $0.44 $4.80 16.5
Firm Energy (mills/kWh)................. 15.72 0 15.72 16.63 1.68 18.31 16.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
RMR reviews the inputs for the P-SMBP and Fry-Ark PRS Base and
Drought Adder components after the annual PRSs are complete, generally
in the first quarter of the calendar year. If an adjustment to the LAP
Base component is necessary, or if an incremental upward adjustment to
the LAP Drought Adder component greater than the equivalent of 2 mills/
kWh to the LAP Rate is necessary, RMR will initiate a public process
pursuant to 10 CFR part 903 prior to making an adjustment.
In accordance with the approved annual Drought Adder adjustment
process, the PRS Drought Adder components are reviewed annually in
early summer to determine if drought costs differ from those projected
in the PRSs. In October, RMR will determine if a change to the LAP
Drought Adder component is necessary, either incremental or
decremental. Any incremental adjustment to the Drought Adder component,
up to 2 mills/kWh, or decremental adjustment 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-related Deficits from escalating
as quickly, will lower the interest expense due to drought-related
Deficits, will demonstrate responsible Deficit management, and will
provide prompt drought-related Deficit repayments.
Statement of Revenue and Related Expenses
The following Table 4 provides a summary of the projected revenue
and expense data for the Fry-Ark revenue requirement during the 5-year
rate-setting periods:
Table 4--Fry-Ark Comparison of 5-Year Rate Periods
Total Revenues and Expenses
----------------------------------------------------------------------------------------------------------------
Provisional
Existing rate rate FY2023- Difference
FY2018-FY2022 FY2027 ($000) ($000)
($000)
----------------------------------------------------------------------------------------------------------------
Total Revenues...................................... $91,392 $114,466 $23,074
----------------------------------------------------------------------------------------------------------------
Revenue Distribution:
Expenses........................................................
O&M......................................................... 31,334 38,760 7,426
Purchase Power.............................................. 724 1,378 654
Transmission................................................ 18,302 20,182 1,880
Ancillary Services.......................................... 979 6,513 5,534
Interest.................................................... 14,779 12,446 -2,333
-----------------------------------------------
Total Expenses.......................................... 66,118 79,279 13,161
----------------------------------------------------------------------------------------------------------------
Principal Payments:
Capitalized Expenses (Deficits)............................. 0 0 0
Original Project and Additions.............................. 14,893 12,873 -2,020
Replacements................................................ 10,381 22,314 11,933
-----------------------------------------------
Total Principal Payments................................ 25,274 35,187 9,913
----------------------------------------------------------------------------------------------------------------
Total Revenue Distribution.............................. 91,392 114,466 23,074
----------------------------------------------------------------------------------------------------------------
The summary of the P-SMBP projected revenues and expenses for the
5-year rate-setting periods is included in the P-SMBP Statement of
Revenue and Related Expenses that is part of Rate Order No. WAPA-203.
Sale of Surplus Products Rate Discussion
The sale of surplus products rate schedule is formula-based,
providing for LAP Marketing Office to sell LAP surplus energy and
capacity products. If LAP surplus products are available, as specified
in the rate schedule, the charge will be based on market rates plus
administrative costs. The customer will be responsible for acquiring
transmission service necessary to deliver the product(s) for which a
separate charge may be incurred. Rate Schedule L-M2 is being superseded
by the Provisional Rate Schedule L-M3 and continues to allow for the
sale of energy, frequency response, regulation, and reserves.
Comments
RMR received a total of 22 individual oral and written comments
during the public consultation and comment period. The comments
expressed have been paraphrased and/or combined,
[[Page 70804]]
where appropriate, without compromising the meaning of the comments:
A. Comment: A customer association and a Customer commented that
WAPA contends that its participation in the WEIS Market is increasing
the cost to the LAP Customers in the form of administrative fees and
lost ancillary service revenue. With the recent addition of Colorado
Springs Utilities, and, in April 2023, the utilities that comprise the
Public Service Company of Colorado balancing authority area members,
the WEIS Market Footprint will increase in size and resource diversity.
Thus, there is a reasonable expectation that benefits could accrue to
LAP in the form of a reduced administrative fee and co-optimized real-
time energy dispatch. WAPA and the Customers should regularly monitor
the WEIS Market for net benefits accrued to LAP and should refrain from
assuming the Drought Adder will be required until WAPA has experience
in the WEIS Market. They request a commitment to evaluate a downward
rate adjustment should these anticipated benefits accrue.
Response: Participation in the WEIS Market required RMR to change
some of the Base component projections in the Fry-Ark and Pick-Sloan
PRSs, for both revenue and expense. These changes are a very small
contributor to the Base component increases in comparison to other
contributors, such as O&M and Normal Timing Power Purchases and has no
impact on the need for, or the size of, the P-SMBP Drought Adder. RMR
has and will continue to monitor the WEIS Market for potential
benefits, but due to the nature of the LAP Marketing Plan, LAP has very
little surplus generation that can be bid into the WEIS Market. Also,
RMR has been actively working to ensure the costs, and any benefits, we
accrue through our participation are recovered in the appropriate rate
design(s) as soon as practical. RMR, in coordination with UGP, is
committed to developing rates that are the lowest possible, consistent
with sound business principles, which includes an annual evaluation of
the Base components and a biannual evaluation of the Drought Adder
components. The Drought Adder components can be annually reduced
without a cap, or increased subject to a 2 mills/kWh cap, without a
public process, based on this evaluation.
B. Comment: A customer association and a Customer noted the P-SMBP
PRS assumed a below average generation profile on a median runoff
scenario from the Corps, factoring in unit and transmission outages.
Their understanding is that this outcome was used to calculate the
Drought Adder component for the P-SMBP--WD, resulting from a projected
deficit of generation that will be replaced by purchased power over the
study period. They stated they would like the Regions to rerun the PRS
to assess the impact to the proposed Drought Adder using an average
generation profile in the P-SMBP--WD to satisfy the cost recovery
criteria under Order RA 6120.2. Alternatively, the Regions could follow
its normal formula rate process to account for actual generation,
rather than working from assumptions that presume a deficit of
generation.
Response: As standard practice, the P-SMBP PRS includes separate
generation projections for the P-SMBP--ED and the P-SMBP--WD and the
resulting power purchases and surplus energy sales are assigned to the
overall P-SMBP revenue requirement. The overall P-SMBP revenue
requirement is then allocated between P-SMBP--ED and P-SMBP--WD based
on the ratio of each division's fixed amount of annual marketable
energy to the total P-SMBP marketable energy, regardless of which
component the revenue requirement is identified.
UGP has historically relied upon the AOP as the source document for
projecting the P-SMBP--ED's future purchase power needs and surplus
energy sales in the PRS for a 5-year projection period. After this 5-
year period, the PRS assumes average P-SMBP--ED generation and no
generation-related P-SMBP--ED power purchases or surplus energy sales
are projected. RMR has historically relied upon Reclamation's most
recent update to their Most Probable Inflow Operating Plan for
projecting the P-SMBP--WD's future purchase power needs and surplus
energy sales in the PRS for a 2-year projection period. After this 2-
year period, the PRS assumes average P-SMBP--WD generation and no
generation-related P-SMBP--WD power purchases or surplus energy sales
are projected. The 2023 Rate-setting PRS continues these historical
practices.
The 2023 Rate-setting PRS utilized the Corp's Final 2021-2022 AOP
dated December 17, 2021, that projected nearly 20 percent lower
generation for FYs 2022 and 2023 and just under or at normal generation
for FYs 2024-2027 (to our knowledge, the AOP does not factor in
transmission outages as stated in the comment) and Reclamation's 2022-
2024 plans, received in December 2021, that projected 24 percent lower
generation for FY 2022 and just under average generation for FYs 2023-
2024. Reclamation's plans took into consideration reservoir inflows
that were 67 percent of average and reservoir storage that was at 99
percent of average as of October 2021 and unit and transmission
maintenance schedules.
Utilizing these generation plans, the 2023 Rate-setting PRS
includes higher levels of power purchases to meet UGP firm contractual
commitments, a reduced amount of surplus energy sales for P-SMBP--ED,
and Normal Timing Power Purchases and surplus energy sales for P-SMBP--
WD (since P-SMBP--WD was not formally considered to be in a drought
condition). Since the P-SMBP--ED was considered to be in a drought
condition, in accordance with our established methodology, a second or
``base'' study was completed. This ``base'' study removed the P-SMBP--
ED's future drought-related power purchase costs and added back in the
P-SMBP--ED's Normal Timing Power Purchases and normal surplus energy
sales (essentially simulating what the PRS would look like under a non-
drought, or normal, condition for both P-SMBP--ED and P-SMBP--WD). The
revenue requirement difference between these two PRSs is the revenue
requirement for the proposed Drought Adder. There is no need to rerun
these PRSs to assess the impact to the proposed Drought Adder using an
average generation profile in the P-SMBP--WD since the PRSs already
utilize Normal Timing Power Purchases and normal surplus energy sales
for P-SMBP--WD.
C. Comment: A customer association suggests that concurrent with
this rate adjustment, the Regions perform a comparison of the unpaid
federal investment balances versus the depreciated balances of the P-
SMBP investments to determine if the unpaid investments balances are
greater than the depreciated balances at the present point in the asset
service lives. They would appreciate the opportunity to review this
analysis to gauge the reasonableness of the Drought Adder approach.
They note the Regions have performed analyses such as these in the
past, and they believe that it would be beneficial again when analyzing
both Deficits and rate adders. Given the pressures to consumers, they
believe that this information could be useful to avoid excessive
Drought Adders and keep rates stable, and to allow the system to
function as intended. They contend that based on conversations and
points raised during informal discussions, they believe that there is a
sensitivity to taking drought-related Deficits in the PRSs, and that
Deficits may be considered bad financial practice to those reviewing
rate
[[Page 70805]]
activities. Taking reasonable Deficits for purchased power is a
longstanding practice that is based on the fact that historic shortages
and surpluses occur over time, and that over the long run, these
Deficits have always been paid, even during extreme droughts over the
past 30-40 years. They are part of the financial flexibility necessary
because WAPA is unable to accumulate rate stabilization funds during
good water years and can only use surpluses to pay existing investments
ahead of time. Without accumulated funds, taking Deficits provides a
counterbalance that keeps rates stable and are part of good financial
practice for short periods of time. Key to these Deficits is knowing
when they continue to be reasonable and when they can no longer be
sustained.
Response: As noted, Deficits are an integral and longstanding
component of WAPA's repayment methodology and the Regions do utilize
them in the PRSs when appropriate (in accordance with Order RA 6120.2).
The P-SMBP PRS incurred a $92.7 million Base-related Deficit in FY 2021
as the result of various issues related to Winter Storm Uri. Also in FY
2021, P-SMBP--ED had lower than normal generation, though no adjustment
to the Drought Adder component was implemented. The P-SMBP--ED
projected generation for FY 2022 utilized in the 2023 Rate-setting PRS
is estimating a $76.6 million drought-related Deficit in FY 2022.
Payments toward these two Deficits are projected to be made over a 7-
year time frame with final repayment projected in FY 2028. During this
7-year repayment plan, the 2023 Rate-setting PRS is projecting annual
interest payments associated with these Deficits. The Regions agree it
would be beneficial to prepare an analysis of the unpaid balances
compared to the depreciated balances of the P-SMBP investments and will
provide Customers/customer groups with an opportunity to review once
the analysis is completed.
D. Comment: A customer association commented that they believe the
current proposal may be an overly sensitive reaction to water
conditions and may lead to rate instability as Drought Adders continue
to be taken on and off, sometimes with significant rate increases like
this one. At present, they note that there is no drought-related
Deficits to which these added revenues could really be applied (pending
final purchases and the application of revenues for FY 2022). They urge
the Regions to use caution in implementing a practice that may
eventually preclude the taking of Deficits, with a replacement policy
of covering any drought-related purchases during the year of
occurrence, regardless of the effects of good water over time. Paid-
ahead investments may become a standard with no offsetting
consideration.
Response: The commentor is correct that at present, there are no
actual drought-related Deficits in the P-SMBP 2023 Rate-setting PRS,
only the projected $76.6 million drought-related Deficit in FY 2022.
The proposed rates will not be effective until January 2023, and the
AOP is projecting lower-than-average generation in FY 2023, with FY
2023 being the third consecutive year of lower-than-average generation
on the P-SMBP mainstem. A review of the Regions' actual purchase power
costs at a point more than halfway through FY 2022 indicates the
projected costs for FY 2022 may be conservative, which will likely
result in a larger than estimated Deficit for FY 2022.
During the rate formulation timeframe (end of 2021/beginning of
2022), the Regions ran multiple PRS scenarios using various purchase
power and surplus energy sales assumptions (based on hydrology,
generation outlook, and price volatility information available at that
time), while also considering the fact there are required investment
payments coming due within the cost evaluation period. The Regions
ultimately settled on a profile that resulted in a projected drought-
related Deficit being incurred in FY 2022, before the proposed Drought
Adders could take effect in January 2023. The Regions appreciate the
commentor's concerns over rate stability and rate-making decisions. The
Region's decision to implement the proposed Drought Adder did consider
risks and impacts and was in no way an attempt to preclude the taking
of Deficits, which are an integral part of WAPA's repayment
methodology, and which is evident in the FY 2021 Base-related Deficit
as well as the projected FY 2022 drought-related Deficit. In fact, the
Regions chose to implement the full amount of the P-SMBP Drought Adder
through the rate process, rather than implement 2 mills/kWh of it
through the Drought Adder adjustment process, so there would be
transparency and opportunity for public input.
E. Comment: A customer association and a Customer commented that
they support the comments of their member utilities, fellow customer
associations, and other customer groups.
Response: The Regions appreciate the commentors' feedback. The
Regions conducted a combined public process for the rate adjustments
under Rate Order Nos. WAPA-202 and WAPA-203 and have coordinated all
responses. Comments received specifically by UGP for the P-SMBP--ED
rate process are recognized as being addressed in UGP's Rate Order No.
WAPA-203.
F. Comment: A customer association and a Customer provided various
comments related to the Mt. Elbert Powerplant such as: (1) they are
aware that Mt. Elbert is experiencing increased maintenance costs and
will very likely require future major maintenance that will put an
upward pressure on rates, (2) the form in which customers can use Mt.
Elbert through the SABPs may be out of alignment with the West's
changing energy market paradigms; for example, Mt. Elbert may be better
used to meet resource adequacy requirements, and (3) they support
having ongoing discussions and want to ensure that future costs to
rehabilitate Mt. Elbert come with commensurate benefits to the whole,
which may require a change in how Mt. Elbert's value is captured in an
organized energy market and appropriately credited to customers.
Response: The SABPs, Customers' use of Mt. Elbert, and potential
future organized energy markets are outside the scope of this rate
process; however, RMR appreciates the comments and is committed to
ongoing discussions related to the use of Mt. Elbert and how to address
future rehabilitation costs and potential benefits.
G. Comment: A Customer commented that benefits may be realized, and
costs mitigated, in a future RTO like Southwest Power Pool's RTO West.
The full picture of both costs and benefits from participation are
unknown today, but the customer suggests the Regions wait to assess the
need for a Drought Adder until the impacts of the future RTO West are
known.
Response: The possibility of participation in an RTO is outside of
the scope of this rate process; however, RMR appreciates the comment
and recognizes there could be benefits from participation in an RTO and
is actively engaged in exploring various market opportunities. Since
WAPA has not made a decision on joining a RTO West market, RMR has not
included estimated operations costs, estimated benefits, or estimated
implementation costs. In the meantime, implementation of a Drought
Adder under the formula rate is not dependent on potential future
uncertain events and timelines. The design of the Drought Adder formula
is flexible enough to be reduced each year should any such benefits
reduce the need for the Drought Adder.
H. Comment: A customer association and member utility commented
that
[[Page 70806]]
they understand a rate increase is warranted due to several factors:
(1) persistent low water conditions in the P-SMBP--ED, (2) increasing
market power pricing, (3) costs incurred during the Winter Storm Uri,
and (4) inflation on O&M and capital investments for the system. They
encourage WAPA to continue focus on identifying and reducing
controllable costs within the Regions and at WAPA's Headquarters.
Response: The Regions appreciate the commentors' recognition of the
specific costs and repayment obligations of the PRSs and the need for
the rate adjustments. The Regions are committed to developing rates
that are the lowest possible, consistent with sound business
principles.
I. Comment: A customer association commented that they recommend
the Rates staff and Regional leadership continue to meet regularly with
the Mid-West Electric Consumers Association's (Mid-West) Water and
Power Committee on a quarterly basis to update and advise the members
on the latest information on hydrology outlook, power supply costs,
system storage, and potential need for future adjustments as this will
allow more advance notice for dealing with future issues.
Response: Customer meeting attendance is outside the scope of this
rate process; however, the Regions do intend to continue communication
with our Customers and customer groups as appropriate.
J. Comment: A customer association and member utility request WAPA
staff continue transparent engagements with the Customers and customer
groups to better understand WAPA's efforts to control and mitigate
costs, rate impacts, impacts of drought conditions, importance of rate
stability, and need for risk mitigation through regular meetings with
the Mid-West Water and Power Committee and impacted customer groups.
The strong collaboration between customers and WAPA benefits everyone
and improves the value we all provide to the consumer-owners at the end
of the line.
Response: The Regions appreciate the support of our Customers and
customer groups and agree that collaboration is vital when faced with
uncertain drought conditions and other impacts to the firm power rates.
The Regions intend to continue communication with our Customers and
customer groups as appropriate.
K. Comment: The customer association and member utility commented
that they appreciated the efforts of the UGP and RMR Rates staff for
understanding Customer concerns regarding the rate.
Response: The Regions thank the commentors for recognizing the UGP
and RMR Rates staff and their efforts to ensure Customer concerns are
addressed.
L. Comment: A customer association and a member utility commented
their customers are already feeling the impacts of the current drought
in the P-SMBP--ED and understand the need for the Drought Adder and the
process for the Drought Adder evaluation. They requested debt strategy
and rate design options be discussed with customers before any final
decisions are made as a part of the annual Drought Adder review
process.
Response: The Regions agree with the need for continued
transparency regarding debt strategy and rate options related to the
annual Drought Adder adjustment process. The proposed rates did not
reflect any change to the Regions' existing rate designs or annual
Drought Adder adjustment process. Changes to the rate designs or
adjustment process would require a separate rate process where
Customers and interested parties would have the opportunity to
participate in the process. The 2007 rate orders implementing the
Drought Adder component provided the framework for the annual Drought
Adder adjustment process, which hasn't been modified in subsequent rate
orders.
M. Comment: The member utility encourages WAPA to focus on its core
function of marketing and delivering Preference Power to Preference
Customers.
Response: The Regions appreciate the comment and intend to continue
to fulfill our mission of marketing to Preference Power Customers
consistent with current marketing plans.
N. Comment: The customer association and member utility appreciated
the opportunity to comment on the rate process, stating that any rate
increase has a direct impact on the energy affordability of the members
it serves.
Response: The Regions recognize the impact of the rate increases on
Customers and strive to find ways to mitigate impacts of the drought
and operational costs to keep rates as low as possible.
Certification of Rates
I have certified that the Provisional Formula Rates for LAP firm
electric service under Rate Schedule L-F12 and LAP sale of surplus
products under Rate Schedule L-M3 are the lowest possible rates,
consistent with sound business principles. The Provisional Formula
Rates were developed following administrative policies and applicable
laws.
Availability of Information
Information about this rate adjustment, including the Customer Rate
Brochure, PRSs, comments, letters, memorandums, and other supporting
materials that were used to develop the Provisional Formula Rates, is
available for inspection and copying at the Rocky Mountain Regional
Office located at 5555 East Crossroads Boulevard, Loveland, Colorado.
Many of these documents are also available on RMR's website at
www.wapa.gov/regions/RM/rates/Pages/2023-Rate-Adjustment_-Firm-
Power.aspx.
Ratemaking Procedure Requirements
Environmental Compliance
WAPA has determined that this action fits within the following
categorical exclusions listed in appendix B to subpart D of 10 CFR part
1021.410: B4.3 (Electric power marketing rate changes). Categorically
excluded projects and activities do not require preparation of either
an environmental impact statement or an environmental assessment.\6\ A
copy of the categorical exclusion determination is available on WAPA's
website at www.wapa.gov/regions/RM/environment/Pages/CX2022.aspx.
---------------------------------------------------------------------------
\6\ The determination was done in compliance with NEPA (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).
---------------------------------------------------------------------------
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 above and under the authority delegated to me, I
hereby confirm, approve, and place into effect, on an interim basis,
Rate Order No. WAPA-202. The rates will remain in effect on an interim
basis until: (1) FERC confirms and approves them on a final basis; (2)
subsequent rates are confirmed
[[Page 70807]]
and approved; or (3) such rates are superseded.
Signing Authority
This document of the Department of Energy was signed on November 9,
2022, by Tracey A. LeBeau, Administrator, Western Area Power
Administration, pursuant to delegated authority from the Secretary of
Energy. That document, with the original signature and date, is
maintained by DOE. For administrative purposes only, and in compliance
with requirements of the Office of the Federal Register, the
undersigned DOE Federal Register Liaison Officer has been authorized to
sign and submit the document in electronic format for publication, as
an official document of the Department of Energy. This administrative
process in no way alters the legal effect of this document upon
publication in the Federal Register.
Signed in Washington, DC, on November 16, 2022.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
Rate Schedule L-F12
(Supersedes Rate Schedule L-F11)
Effective January 1, 2023
United States Department of Energy
Western Area Power Administration
Rocky Mountain Region
Loveland Area Projects
Firm Electric Service
(Approved Under Rate Order No. WAPA-202)
Effective
The first day of the first full billing period beginning on or
after January 1, 2023, and extending through December 31, 2027, or
until superseded by another rate schedule, whichever occurs earlier.
Available
Within the marketing area served by the Loveland Area Projects
(LAP) (consisting of the Fryingpan-Arkansas Project and the Pick-Sloan
Missouri Basin Program--Western Division, which were integrated for
marketing and rate-making purposes in 1989); parts of Colorado, Kansas,
Nebraska, and Wyoming.
Applicable
To the LAP firm electric service delivered at specific point(s) of
delivery, as established by contract.
Character
Alternating current, 60 hertz, three phase, delivered and metered
at the voltages and points established by contract.
Formula Rate and Charge Components
LAP Firm Electric Service Rate (Rate) = Base component + Drought Adder
component
Monthly Charge as of January 1, 2023, Under the Rate
Capacity Charge: $4.80 per kilowatt per month (kWmonth) of billing
capacity.
Energy Charge: 18.31 mills per kilowatt-hour (kWh) of monthly
entitlement.
Billing Capacity: Unless otherwise specified by contract, the
billing capacity will be the seasonal contract rate of delivery.
Charge Components
Base Component: A fixed revenue requirement that includes operation
and maintenance expense, investments and replacements, interest on
investments and replacements, normal timing power purchases (purchases
due to operational constraints, not associated with drought), and
transmission costs. Any proposed change to the Base component will
require a public process. The Base revenue requirement is $67,839,200
and the charges under the formulas are:
[GRAPHIC] [TIFF OMITTED] TN21NO22.022
Drought Adder Component: A formula-based revenue requirement that
includes future power purchases above normal timing power purchases,
previous purchase power drought-related deficits, and interest on the
purchase power drought-related deficits. As of January 1, 2023, the
Drought Adder component revenue requirement is $6,838,720 and the
charges under the formulas are:
[GRAPHIC] [TIFF OMITTED] TN21NO22.023
[[Page 70808]]
Annual Drought Adder Adjustment Process
The Drought Adder component may be adjusted annually using the
above formulas for any costs attributed to drought of less than or
equal to the equivalent of 2 mills/kWh to the Rate. Any planned
incremental upward adjustment to the Drought Adder component greater
than the equivalent of 2 mills/kWh to the Rate will require a public
process.
The annual review process is initiated in early summer when the
Rocky Mountain Region (RMR) reviews the Drought Adder component and
provides notice of any estimated change to the Drought Adder component
charge under the formula. In October, RMR 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. RMR will
inform customers of updates by letter and post updates to RMR's
external website.
Adjustments
For Transformer Losses: If delivery is made at transmission voltage
but metered on the low-voltage side of the substation, the meter
readings will be increased to compensate for transformer losses as
provided for in the contract.
For Power Factor: None. Customers will be required to maintain a
power factor within the range of 95-percent leading to 95-percent
lagging, measured at the point of interconnection.
Rate Schedule L-M3
(Supersedes Rate Schedule L-M2)
Effective January 1, 2023
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-202)
Effective
The first day of the first full billing period beginning on or
after January 1, 2023, and extending through December 31, 2027, or
until superseded by another rate schedule, whichever occurs earlier.
Applicable
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).
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. 2022-25266 Filed 11-18-22; 8:45 am]
BILLING CODE 6450-01-P
