Pick-Sloan Missouri Basin Program-Eastern Division-Rate Order No. WAPA-203, 70808-70816 [2022-25267]
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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
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(Approved Under Rate Order No.
WAPA–202)
Applicable
This rate schedule applies to
Loveland Area Projects (LAP) Marketing
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Formula Rate
The charge for each product will be
determined at the time of the sale based
on market rates, plus administrative
costs. The customer will be responsible
for acquiring transmission service
necessary to deliver the product(s), for
which a separate charge may be
incurred.
[FR Doc. 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.
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and is applicable to the sale of the
following LAP surplus energy and
capacity products: energy, frequency
response, regulation, and reserves. If
any of the above LAP surplus products
are available, LAP can make the
product(s) available for sale, providing
entities enter into separate agreement(s)
with LAP Marketing which will specify
the terms of sale(s).
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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).
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Department of Energy procedures for
public participation in rate adjustments
set forth at 10 CFR part 903.2
Following review of UGP’s proposal,
Rate Order No. WAPA–203, which
provides the formula rates for the P–
SMBP—ED firm power service, firm
peaking power 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–203 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, Upper Great Plains
Region, Rate Adjustment for the Pick-Sloan
Missouri Basin Program—Eastern Division,
Firm Power Service, Firm Peaking Power
Service, and Sale of Surplus Products
Formula Rates
Rate Order No. WAPA–203
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Order Confirming, Approving, and
Placing the Formula Rates for the PickSloan Missouri Basin Program—
Eastern Division Into Effect on an
Interim Basis
The formula rates in Rate Order No.
WAPA–203 are established following
section 302 of the Department of Energy
(DOE) Organization Act (42 U.S.C.
7152).3
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
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
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.
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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
Acronyms, Terms, and Definitions
As used in this Rate Order, the
following acronyms, terms, and
definitions apply:
Base: A component of the firm power
and firm peaking power 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.
Corps of Engineers Annual Operating
Plan (AOP): The Corps of Engineers
water management guidelines designed
to meet the reservoir regulation
objectives.
Customer: An entity with a contract
that is receiving Pick-Sloan Missouri
Basin Program—Eastern Division (P–
SMBP—ED) firm power 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.
Demand: The rate at which electric
energy is delivered to or by a system or
part of a system, generally expressed in
kilowatts (kW) or megawatts (MW), at a
given instant or averaged over any
designated interval of time.
Drought Adder: A component of the
firm power and firm peaking power rate
4 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347
(Feb. 21, 2019).
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70809
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.
Firm: Power intended to be available
at all times during the period covered by
a guaranteed commitment to deliver,
even under adverse conditions.
FRN: Federal Register Notice—a
document published in the Federal
Register in order for WAPA to provide
information of public interest.
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.
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 (PMA) 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.
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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.
Regions: WAPA’s Upper Great Plains
Region (UGP) and Rocky Mountain
Region (RMR).
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.
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
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widespread impacts across UGP and
RMR regions.
Effective Date
The Provisional Formula Rate
Schedules P–SED–F14, Firm Power
Service; P–SED–FP14, Firm Peaking
Power Service; and P–SED–M2, 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
UGP 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 UGP took to involve interested
parties in the rate process include:
1. On May 25, 2022, a Federal
Register notice (87 FR 31878) (Proposed
FRN) announced the proposed formula
rates and launched the 90-day public
consultation and comment period.
2. On May 25, 2022, UGP notified
Preference Customers and interested
parties of the proposed rates and
provided a copy of the published
Proposed FRN.
3. On June 15, 2022, UGP held a
public information forum via Webex.
UGP’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, UGP held a
public comment forum via Webex to
provide an opportunity for customers
and other interested parties to comment
for the record.
5. UGP 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/UGP/rates/
pages/2023-firm-rate-adjustment.aspx.
6. During the 90-day consultation and
comment period, which ended on
August 23, 2022, UGP received 2 oral
comment submissions and 16 written
comment letters. The comments and
UGP’s responses are addressed in the
‘‘Comments’’ section. All comments
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have been considered in the preparation
of this Rate Order.
Oral comments were received from
the following organizations:
Missouri River Energy Services (MRES),
South Dakota
Mid-West Electric Consumers
Association, Colorado
Written comments were received from
the following organizations:
Missouri River Energy Services (MRES),
South Dakota
Worthington Public Utilities, Minnesota
Valley City Public Works, North Dakota
Lakota Municipal Utilities, North
Dakota
Elbow Lake Municipal Power,
Minnesota
Hartley Municipal Utilities, Iowa
Hawarden Municipal Utilities, Iowa
City of Wadena, Minnesota
City of Vermillion Light & Power, South
Dakota
Jackson, Minnesota
Willmar Municipal Utilities, Minnesota
Denison Municipal Utilities Denison,
Iowa
Orange City, Iowa
City of Melrose Public Utility,
Minnesota
East River Electric Power Cooperative,
Inc., South Dakota
Mid-West Electric Consumers
Association, Colorado
Power Repayment Study—Firm Power
Service Rate Discussion
A PRS is 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).
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, UGP
developed a rate adjustment to
demonstrate sufficient revenues will be
collected under the Provisional Formula
Rates to meet future obligations. The
revenue requirement for P–SMBP is
recovered by both the UGP in the P–
SMB—ED rates and by RMR in the
Loveland Area Projects (LAP) rate. The
revenue requirement and composite rate
for P–SMBP—ED firm power service are
being increased, as indicated in Table 1:
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TABLE 1—COMPARISON OF EXISTING AND PROVISIONAL REVENUE REQUIREMENTS AND COMPOSITE RATES
Firm power service
Existing
requirements
under P–SED–
F13 as of
January 1,
2018
Provisional
requirements
under P–SED–
F14 as of
January 1,
2023
$230.1
24.00
$268.4
27.91
P–SMBP—ED Revenue 1/ Requirement (million $) .....................................................................
P–SMBP—ED Composite Rate (mills/kWh) ................................................................................
Percent
change
16.6
16.3
1/ The Pick-Sloan—WD revenue requirement is recovered under the LAP rate schedule, which can be found under Rate Order No. WAPA–202
and on RMR’s website at www.wapa.gov/regions/RM/rates/Pages/2023-Rate-Adjustment---Firm-Power.aspx.
Firm Power Service—Existing and
Provisional Formula Rates
Under the current rate methodology,
rates for P–SMBP—ED firm power and
firm peaking power services 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 demand 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 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 P–SMBP—ED rate. A
comparison of the existing and
Provisional Formula Rates for firm
power and firm peaking power service
is shown in Table 2:
TABLE 2—COMPARISON OF EXISTING AND PROVISIONAL FORMULA RATES
Firm power & firm peaking power service
Firm
Firm
Firm
Firm
Provisional
charges under
rate schedule
P–SED–F14 &
P–SED–FP14
as of January
1, 2023
$5.25
13.27
4.75
13.27
$6.20
15.27
5.70
15.27
Demand ($/kWmonth) .........................................................................................................
Energy (mills/kWh) ..............................................................................................................
Peaking Demand ($/kWmonth) ...........................................................................................
Peaking Energy 1/ (mills/kWh) .............................................................................................
1/ Firm
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Existing
charges under
rate schedule
P–SED–F13 &
P–SED–FP13
as of January
1, 2018
Percent
change
18.1
15.1
20.0
15.1
Peaking Energy is normally returned. This charge will be assessed in the event Firm Peaking Energy is not returned.
As a part of the existing and
provisional rate schedules, UGP
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 power
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 PRS, and allow the Regions to be
more responsive to changes caused by
drought-related expenses. UGP will
continue to charge and bill its customers
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firm power and firm peaking power
service rates for energy and demand,
which are the sum of the Base and
Drought Adder components.
Under Rate Schedule P–SED–F14,
UGP will continue to identify its P–
SMBP—ED firm power service revenue
requirement using Base and Drought
Adder components. The Base
component is a fixed revenue
requirement that includes annual O&M,
investment repayment and associated
interest, Normal Timing Power
Purchases, and transmission costs. UGP
cannot adjust the Base component
without a public process. The Drought
Adder component is a formula-based
revenue requirement that includes costs
attributable to drought conditions in the
Regions. The Drought Adder component
includes costs associated with future
Non-timing Power Purchases to meet
firm power service contractual
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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 balloonpayment 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
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requirement of $230.1 million to $235.4
million and increases the Drought
Adder component revenue requirement.
For rate year 2023, the Drought Adder
revenue requirement increases from
zero to $33 million. A comparison of the
existing and provisional components is
shown in Table 3:
TABLE 3—SUMMARY OF P–SMBP—ED EXISTING AND PROVISIONAL CHARGE COMPONENTS
Firm power & firm
peaking power service
Existing charges under rate schedules P–SED–
F13 & P–SED–FP13 as of January 1, 2018
Base
component
Firm Demand
(/kWmonth) ...............
Firm Energy (mills/kWh)
Firm Peaking Demand
($/kWmonth) .............
Firm Peaking Energy 1/
(mills/kWh) ................
1/ Firm
Drought adder
component
Total charge
Provisional charges under rate schedules P–
SED–F14 & P–SED–FP14 as of January 1, 2023
Base
component
Drought adder
component
Percent
change
Total charge
$5.25
13.27
$0.00
0.00
$5.25
13.27
$5.45
13.36
$0.75
1.91
$6.20
15.27
18.1
15.1
4.75
0.00
4.75
5.00
0.70
5.70
20
13.27
0.00
13.27
13.36
1.91
15.27
15.1
peaking energy is normally returned. This charge will be assessed in the event firm peaking energy is not returned.
The Regions review the inputs for the
P–SMBP Base and Drought Adder
components after the annual PRS is
complete, generally in the first quarter
of the calendar year. If an adjustment to
the P–SMBP Base component is
necessary, or if an incremental upward
adjustment to the P–SMBP PRS Drought
Adder component greater than the
equivalent of 2 mills/kWh to the P–
SMBP Composite Rate is necessary, the
Regions will initiate a public process
pursuant to 10 CFR part 903 prior to
making adjustments.
In accordance with the approved
annual Drought Adder adjustment
process, the Drought Adder component
is reviewed annually in early summer to
determine if drought costs differ from
those projected in the PRS. In October,
the Regions will determine if a change
to the Drought Adder component is
necessary, either incremental or
decremental. Any incremental
adjustment to the Drought Adder
component, up to 2 mills/kWh, or any
decremental adjustment will be
implemented by the Regions 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 droughtrelated 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 P–SMBP revenue
requirement during the 5-year ratesetting periods:
TABLE 4—P–SMBP 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 ......................................................................................................
Revenue Distribution.
Expenses
O&M ......................................................................................................................................
Purchase Power ...................................................................................................................
Transmission ........................................................................................................................
Interest ..................................................................................................................................
$2,720.2
$3,185.8
$465.6
1,158.9
124.8
461.0
556.3
1,376.5
288.0
845.2
516.5
217.6
163.2
384.2
(39.8)
Total Expenses ..............................................................................................................
Principal Payments:
Capitalized Expenses (Deficits) ............................................................................................
Original Project and Additions ..............................................................................................
Irrigation Aid .........................................................................................................................
Replacements .......................................................................................................................
2,301.0
3,026.2
725.2
113.4
187.2
45.7
72.9
111.2
38.2
0.0
10.2
(2.2)
(149.0)
(45.7)
(62.7)
Total Principal Payments ..............................................................................................
419.2
159.6
(259.6)
Total Revenue Distribution ............................................................................................
2,720.2
3,185.8
465.6
Sale of Surplus Products Rate
Discussion
The sale of surplus products rate
schedule is formula-based, providing for
P–SMBP—ED Marketing Office to sell
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P–SMBP—ED surplus energy and
demand products. If P–SMBP—ED
surplus products are available, as
specified in the rate schedule, the
charge will be based on market rates
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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
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Federal Register / Vol. 87, No. 223 / Monday, November 21, 2022 / Notices
Schedule P–SED–M1 is being
superseded by the Provisional Rate
Schedule P–SED–M2 and continues to
allow for the sale of energy, frequency
response, regulation, and reserves.
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Comments
UGP received 2 oral and 16 written
submissions during the public
consultation and comment period.
Comments expressed have been
paraphrased and/or combined, where
appropriate, without compromising the
meaning of the comments:
A. Comment: The customer
association, member utility, and the
action agency commented that 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. The action agency
understands the full rate increase of
16.3 percent is necessary in 2023.
Response: The Regions appreciate the
commentors’ recognition of the specific
costs and repayment obligations of the
PRS and the need for the rate
adjustments. The Regions are committed
to developing rates that are the lowest
possible, consistent with sound
business principles.
B. Comment: The action agency
commented that they understand the
need to cover expenses necessary to
provide firm, reliable service that is
sustainable, and wants to ensure that
proper planning is in place in order to
guarantee the solvency of the system
and not get into the situation the P–
SMBP—ED experienced during the last
drought.
Response: UGP appreciates the
commentor’s understanding of the
impacts of drought conditions in the P–
SMBP—ED. UGP intends to continue
transparency and data sharing to
encourage a strong working relationship
with our Customers as we continue to
provide products that are reliable and
sustainable and meet repayment
obligations of the power system.
C. Comment: Several Customers
commented that this rate adjustment is
substantial for the communities they
serve, and they would have preferred for
this increase to be implemented in
multiple stages rather than one large
increase beginning in 2023. They stated
perhaps this could have been achieved
by starting a few years earlier in
planning for rate adjustments.
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Response: The 10-month timeline
associated with a public process is a
major factor when initiating rate
adjustments. Given the required
timeline, in addition to the timing of the
data to effectively evaluate impacts to
the rate, UGP was as timely as could be
when initiating this rate adjustment.
UGP did notify Customers in both the
spring 2021 and fall 2021 Drought
Adder review letters that the rate
schedules were expiring December 31,
2022, and that we would be in a formal
rate process in 2022 to put new rates in
place.
D. Comment: The action agency and
customer association commented that
they recommend the Rate’s 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.
E. Comment: The action agency
commented they prefer WAPA return to
meeting with Customers/customer
groups in person, as many in the
industry have been meeting face-to-face
for several months (post-COVID), and
that it is important to have those inperson meetings to deal with issues
more fully as this is the means to further
understanding and to more efficiently
resolve issues.
Response: Customer meeting
attendance is outside the scope of this
rate process; however, the Regions
appreciate the comments and strive to
communicate as broadly as possible
with our Customers. It is the Regions’
observation that the virtual meetings
held for this rate process had greater
attendance than when in person
meetings were held prior to March 2020.
F. Comment: The action agency
commented that the Regions should
provide for more comprehensive and
rigorous scenario analysis as part of the
PRS and show details related to the
assumptions and the results to
Customers/customer groups. It also was
noted that the new PRS system utilized
by WAPA does not have the
transparency promised and has not been
as successful or open to customer access
through the PRS customer portal.
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70813
Response: UGP intends to continue
transparency and data sharing to
encourage a strong working relationship
with our Customers/customer groups.
The PRS software tool is outside the
scope of this rate process; however,
WAPA’s Information Technology (IT)
and Rates staff have been evaluating the
concerns with the PRS software. IT has
contacted the vendor to address the
issues and developed a plan to
hopefully address the interface issue for
external entity interfacing.
G. Comment: The action agency,
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.
H. 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.
I. 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
E:\FR\FM\21NON1.SGM
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70814
Federal Register / Vol. 87, No. 223 / Monday, November 21, 2022 / Notices
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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 has not been modified in
subsequent rate orders.
J. 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.
K. Comment: The customer
association commented that they
support the comments of their member
utilities and fellow customer groups.
Response: The Regions appreciate the
commentor’s 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 RMR
for the LAP rate process are recognized
as being addressed in RMR’s Rate Order
No. WAPA–202.
L. 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 P–SMBP—ED firm
power service under Rate Schedule P–
SED–F14, P–SMBP—ED firm peaking
power service under Rate Schedule P–
SED–FP14, and P–SMBP—ED sale of
surplus products under Rate Schedule
P–SED–M2 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,
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memorandums, and other supporting
materials that were used to develop the
Provisional Formula Rates, is available
for inspection and copying at the Upper
Great Plains Regional Office located at
2900 4th Avenue North, 6th Floor,
Billings, Montana. Many of these
documents are also available on UGP’s
website at www.wapa.gov/regions/UGP/
rates/Pages/2023-firm-rateadjustment.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.5 A copy of
the categorical exclusion determination
is available on WAPA’s website at
www.wapa.gov/regions/UGP/
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–203. 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
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
5 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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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 P–SED–F14 (Supersedes
Rate Schedule P–SED–F13): Effective
January 1, 2023
United States Department of Energy,
Western Area Power Administration
Upper Great Plains Region Pick-Sloan
Missouri Basin Program—Eastern
Division
Firm Power Service (Approved Under
Rate Order No. WAPA–203)
Effective
The first day of the first full billing
period beginning on or after January 1,
2023, through December 31, 2027, or
until superseded by another rate
schedule, whichever occurs earlier.
Available
Within the marketing area served by
the Eastern Division of the Pick-Sloan
Missouri Basin Program, within
Montana, North Dakota, South Dakota,
Minnesota, Iowa, and Nebraska.
Applicable
To the power and energy delivered to
customers as firm power service, as
established in the contract for service.
Character
Alternating current, 60 hertz, three
phase, delivered and metered at the
voltages and points established by
contract.
Formula Rate and Charge Components
Rate = Base component + Drought
Adder component
Monthly Charge as of January 1, 2023,
under the Rate:
CAPACITY CHARGE: $6.20 for each
kilowatt per month (kWmonth) of
billing capacity.
E:\FR\FM\21NON1.SGM
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Federal Register / Vol. 87, No. 223 / Monday, November 21, 2022 / Notices
ENERGY CHARGE: 15.27 mills for
each kilowatt-hour (kWh) for all energy
delivered as firm power service.
BILLING CAPACITY: The billing
capacity will be as defined by the power
sales contract.
Charge Components
Base Component: A fixed-revenue
requirement that includes operation and
maintenance expense, investments and
replacements, interest on investments
and replacements, normal timing 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. As of
January 1, 2023, the Base component
revenue requirement is $213.8 million
and the charges under the formulas are:
Base Capacity =
50% X Base Revenue Requirement = $5.45/kWmonth
Firm Metered Billing Units
Base Energy
50% X Base Revenue Requirement = 13.36 mills/kWh
Annual Energy
Drought Adder Component: A
formula-based revenue requirement that
includes future power purchases above
normal timing power purchases,
previous purchase power droughtrelated deficits, and interest on the
purchase power drought-related deficits.
As of January 1, 2023, the Drought
70815
Adder component revenue requirement
is $30.0 million and the charges under
the formulas are:
Drought Adder= 50% X Drought Adder Revenue Requirement= 0.75/kWmonth
Capacity
Firm Metered Billing Units
Drought Adder= 50% X Drought Adder Revenue Requirement= 1.91 mills/kWh
Energy
Annual Energy
VerDate Sep<11>2014
21:25 Nov 18, 2022
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Missouri Basin Program, within
Montana, North Dakota, South Dakota,
Minnesota, Iowa, and Nebraska.
Rate Schedule P–SED–FP14
(Supersedes Rate Schedule P–SED–
FP13): Effective January 1, 2023
Formula Rate and Charge Components
United States Department of Energy,
Western Area Power Administration
Upper Great Plains Region Pick-Sloan
Missouri Basin Program—Eastern
Division
Firm Peaking Power Service (Under
Rate Order No. WAPA–203)
Effective
The first day of the first full billing
period beginning on or after January 1,
2023, through December 31, 2027, or
until superseded by another rate
schedule, whichever occurs earlier.
Available
Within the marketing area served by
the Eastern Division of the Pick-Sloan
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Applicable
To the power sold to customers as
firm peaking power service, as
established in the contract for service.
Character
Alternating current, 60 hertz, three
phase, delivered and metered at the
voltages and points established by
contract.
Rate = Base component + Drought
Adder component
Monthly Charge as of January 1, 2023,
under the Rate:
CAPACITY CHARGE: $5.70 for each
kilowatt per month (kWmonth) of the
effective contract rate of delivery for
peaking power or the maximum amount
scheduled, whichever is greater.
ENERGY CHARGE: 15.27 mills for
each kilowatt-hour (kWh) for all energy
scheduled for delivery without return.
Charge Components
Base Component: A fixed revenue
requirement that includes operation and
maintenance expense, investments and
replacements, interest on investments
and replacements, normal timing power
purchases (purchases due to operational
constraints, not associated with
E:\FR\FM\21NON1.SGM
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EN21NO22.019</GPH>
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 PickSloan Missouri Basin Program Power
Repayment Study (PRS) composite rate.
Any planned incremental upward
adjustment to the Drought Adder
component greater than the equivalent
of 2 mills/kWh to the PRS composite
rate will require a public process.
The annual review process is initiated
in early summer when the Upper Great
Plains Region (UGP) reviews the
Drought Adder component and provides
notice of any estimated change to the
Drought Adder component charge under
the formula. In October, UGP 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. UGP will inform
customers of updates by letter and post
updates to UGP’s external website.
Adjustments
For Billing of Unauthorized Overruns:
For each billing period in which there
is a contract violation involving an
unauthorized overrun of the contractual
firm power and/or energy obligations,
such overrun shall be billed at 10 times
the formula rate.
For Power Factor: None. Customers
will be required to maintain a power
factor within the range of 95-percent
leading and 95-percent lagging,
measured at the point of
interconnection.
EN21NO22.018</GPH>
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Annual Drought Adder Adjustment
Process
70816
Federal Register / Vol. 87, No. 223 / Monday, November 21, 2022 / Notices
drought), and transmission costs. Any
proposed change to the Base component
will require a public process. As of
January 1, 2023, the Base component
revenue requirement is $21.6 million
and the charges under the formulas are:
Base Capacity= Base Peaking Capacity Revenue Requirement= $5.00/kWmonth
Peaking CROD Billing Units
Drought Adder Component: A
formula-based revenue requirement that
includes future power purchases above
normal timing power purchases,
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 $3.0 million and the charges under
the formulas are:
Drought Adder=Drought Adder Peaking Capacity Revenue Requirement=0. 70/kWmonth
Capacity
Peaking CROD Billing Units
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Adjustments
Billing for Unauthorized Overruns:
For each billing period in which there
is a contract violation involving an
unauthorized overrun of the contractual
obligation for peaking capacity and/or
energy, such overrun shall be billed at
10 times the above rate.
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21:25 Nov 18, 2022
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United States Department of Energy,
Western Area Power Administration
Upper Great Plains Region Pick-Sloan
Missouri Basin Program—Eastern
Division
Sale of Surplus Products (Under Rate
Order No. WAPA–203)
Effective
The first day of the first full billing
period beginning on or after January 1,
2023, through December 31, 2027, or
until superseded by another rate
schedule, whichever occurs earlier.
Applicable
This rate schedule applies to PickSloan Missouri Basin Program—Eastern
Division (P–SMBP—ED) Marketing and
is applicable to the sale of the following
P–SMBP—ED surplus energy and
capacity products: energy, frequency
response, regulation, and reserves. If
any P–SMBP—ED surplus energy and
capacity products are available, the
Upper Great Plains Region (UGP) can
make the product(s) available for sale,
providing entities enter into a separate
agreement(s) with the UGP Marketing
Office 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 services
necessary to deliver the product(s), for
which a separate charge may be
incurred.
[FR Doc. 2022–25267 Filed 11–18–22; 8:45 am]
BILLING CODE 6450–01–P
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ENVIRONMENTAL PROTECTION
AGENCY
[EPA–HQ–OPPT–2017–0631; FRL–10433–
01–OMS]
Information Collection Request
Submitted to OMB for Review and
Approval; Comment Request;
Residential Lead-Based Paint Hazards
Disclosure Requirements (Renewal)
Environmental Protection
Agency (EPA).
ACTION: Notice.
AGENCY:
The Environmental Protection
Agency (EPA) has submitted an
information collection request (ICR),
Residential Lead-Based Paint Hazards
Disclosure Requirements (EPA ICR
Number 1710.09, OMB Control Number
2070–0151) to the Office of Management
and Budget (OMB) for review and
approval in accordance with the
Paperwork Reduction Act. This is a
proposed extension of the ICR, which is
currently approved through November
30, 2022. Public comments were
previously requested via the Federal
Register on March 1, 2022, during a 60day comment period. This notice allows
for an additional 30 days for public
comments. A fuller description of the
ICR is given below, including its
estimated burden and cost to the public.
An agency may not conduct or sponsor
and a person is not required to respond
to a collection of information unless it
displays a currently valid OMB control
number.
DATES: Additional comments must be
received on or before December 21,
2022.
ADDRESSES: Submit your comments to
EPA, referencing Docket ID No. EPA–
HQ–OPPT–2017–0631, online
www.regulations.gov (our preferred
method), by email to www.epa.gov/
dockets, or by mail to: EPA Docket
Center, Environmental Protection
SUMMARY:
E:\FR\FM\21NON1.SGM
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EN21NO22.021</GPH>
The Drought Adder may be adjusted
annually using the above formulas for
any costs attributed to drought of less
than or equal to the equivalent of 2
mills/kWh to the Pick-Sloan Missouri
Basin Program Power Repayment Study
(PRS) composite rate. Any planned
incremental upward adjustment to the
Drought Adder greater than the
equivalent of 2 mills/kWh to the PRS
composite rate will require a public
process.
The annual review process is initiated
in early summer when the Upper Great
Plains Region (UGP) reviews the
Drought Adder component and provides
notice of any estimated change to the
Drought Adder component charge under
the formula. In October, UGP 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. UGP will inform
customers of updates by letter and post
updates to UGP’s external website.
BILLING CAPACITY: The billing
capacity will be the greater of (1) the
highest 30-minute integrated capacity
measured during the month up to, but
not in excess of, the delivery obligation
under the power sales contract, or (2)
the contract rate of delivery.
Rate Schedule P–SED–M2 (Supersedes
Rate Schedule P–SED–M1): Effective
January 1, 2023
EN21NO22.020</GPH>
Annual Drought Adder Adjustment
Process
]]>Agencies
[Federal Register Volume 87, Number 223 (Monday, November 21, 2022)]
[Notices]
[Pages 70808-70816]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-25267]
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DEPARTMENT OF ENERGY
Western Area Power Administration
Pick-Sloan Missouri Basin Program--Eastern Division-Rate Order
No. WAPA-203
AGENCY: 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.
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SUMMARY: The formula rates for the Upper Great Plains Region (UGP)
Pick-Sloan 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.
DATES: 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 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:
[email protected], or Linda Cady-Hoffman, Rates Manager, Upper Great
Plains Region, Western Area Power Administration, (406) 255-2920, or
email: [email protected] or [email protected].
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.
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\1\ Order Confirming and Approving Rate Schedule on a Final
Basis, FERC Docket No. EF18-2-000, 163 FERC ] 62,039 (2018).
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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
[[Page 70809]]
Department of Energy procedures for public participation in rate
adjustments set forth at 10 CFR part 903.\2\
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\2\ 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
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Following review of UGP's proposal, Rate Order No. WAPA-203, which
provides the formula rates for the P-SMBP--ED firm power service, firm
peaking power 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-203 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, Upper Great
Plains Region, Rate Adjustment for the Pick-Sloan Missouri Basin
Program--Eastern Division, Firm Power Service, Firm Peaking Power
Service, and Sale of Surplus Products Formula Rates
Rate Order No. WAPA-203
Order Confirming, Approving, and Placing the Formula Rates for the
Pick-Sloan Missouri Basin Program--Eastern Division Into Effect on an
Interim Basis
The formula rates in Rate Order No. WAPA-203 are established
following section 302 of the Department of Energy (DOE) Organization
Act (42 U.S.C. 7152).\3\
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\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.
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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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\4\ 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
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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 power and firm peaking power 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.
Corps of Engineers Annual Operating Plan (AOP): The Corps of
Engineers water management guidelines designed to meet the reservoir
regulation objectives.
Customer: An entity with a contract that is receiving Pick-Sloan
Missouri Basin Program--Eastern Division (P-SMBP--ED) firm power
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.
Demand: The rate at which electric energy is delivered to or by a
system or part of a system, generally expressed in kilowatts (kW) or
megawatts (MW), at a given instant or averaged over any designated
interval of time.
Drought Adder: A component of the firm power and firm peaking power
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.
Firm: Power intended to be available at all times during the period
covered by a guaranteed commitment to deliver, even under adverse
conditions.
FRN: Federal Register Notice--a document published in the Federal
Register in order for WAPA to provide information of public interest.
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.
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
(PMA) 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.
[[Page 70810]]
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.
Regions: WAPA's Upper Great Plains Region (UGP) and Rocky Mountain
Region (RMR).
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.
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 UGP and RMR regions.
Effective Date
The Provisional Formula Rate Schedules P-SED-F14, Firm Power
Service; P-SED-FP14, Firm Peaking Power Service; and P-SED-M2, 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
UGP 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 UGP took to involve
interested parties in the rate process include:
1. On May 25, 2022, a Federal Register notice (87 FR 31878)
(Proposed FRN) announced the proposed formula rates and launched the
90-day public consultation and comment period.
2. On May 25, 2022, UGP notified Preference Customers and
interested parties of the proposed rates and provided a copy of the
published Proposed FRN.
3. On June 15, 2022, UGP held a public information forum via Webex.
UGP'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, UGP held a public comment forum via Webex to
provide an opportunity for customers and other interested parties to
comment for the record.
5. UGP 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/UGP/rates/pages/2023-firm-rate-adjustment.aspx.
6. During the 90-day consultation and comment period, which ended
on August 23, 2022, UGP received 2 oral comment submissions and 16
written comment letters. The comments and UGP'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 organizations:
Missouri River Energy Services (MRES), South Dakota
Mid-West Electric Consumers Association, Colorado
Written comments were received from the following organizations:
Missouri River Energy Services (MRES), South Dakota
Worthington Public Utilities, Minnesota
Valley City Public Works, North Dakota
Lakota Municipal Utilities, North Dakota
Elbow Lake Municipal Power, Minnesota
Hartley Municipal Utilities, Iowa
Hawarden Municipal Utilities, Iowa
City of Wadena, Minnesota
City of Vermillion Light & Power, South Dakota
Jackson, Minnesota
Willmar Municipal Utilities, Minnesota
Denison Municipal Utilities Denison, Iowa
Orange City, Iowa
City of Melrose Public Utility, Minnesota
East River Electric Power Cooperative, Inc., South Dakota
Mid-West Electric Consumers Association, Colorado
Power Repayment Study--Firm Power Service Rate Discussion
A PRS is 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). 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, UGP developed a rate adjustment to demonstrate sufficient
revenues will be collected under the Provisional Formula Rates to meet
future obligations. The revenue requirement for P-SMBP is recovered by
both the UGP in the P-SMB--ED rates and by RMR in the Loveland Area
Projects (LAP) rate. The revenue requirement and composite rate for P-
SMBP--ED firm power service are being increased, as indicated in Table
1:
[[Page 70811]]
Table 1--Comparison of Existing and Provisional Revenue Requirements and Composite Rates
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Existing Provisional
requirements requirements
Firm power service under P-SED- under P-SED- Percent change
F13 as of F14 as of
January 1, January 1,
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P-SMBP--ED Revenue 1/ Requirement (million $)................... $230.1 $268.4 16.6
P-SMBP--ED Composite Rate (mills/kWh)........................... 24.00 27.91 16.3
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1/ The Pick-Sloan--WD revenue requirement is recovered under the LAP rate schedule, which can be found under
Rate Order No. WAPA-202 and on RMR's website at www.wapa.gov/regions/RM/rates/Pages/2023-Rate-Adjustment_-
Firm-Power.aspx.
Firm Power Service--Existing and Provisional Formula Rates
Under the current rate methodology, rates for P-SMBP--ED firm power
and firm peaking power services 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 demand 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 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 P-SMBP--ED rate. A
comparison of the existing and Provisional Formula Rates for firm power
and firm peaking power service is shown in Table 2:
Table 2--Comparison of Existing and Provisional Formula Rates
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Existing Provisional
charges under charges under
rate schedule rate schedule
Firm power & firm peaking power service P-SED-F13 & P- P-SED-F14 & P- Percent change
SED-FP13 as of SED-FP14 as of
January 1, January 1,
2018 2023
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Firm Demand ($/kWmonth)......................................... $5.25 $6.20 18.1
Firm Energy (mills/kWh)......................................... 13.27 15.27 15.1
Firm Peaking Demand ($/kWmonth)................................. 4.75 5.70 20.0
Firm Peaking Energy 1/ (mills/kWh).............................. 13.27 15.27 15.1
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1/ Firm Peaking Energy is normally returned. This charge will be assessed in the event Firm Peaking Energy is
not returned.
As a part of the existing and provisional rate schedules, UGP
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 power 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 PRS, and allow the Regions to be more responsive to
changes caused by drought-related expenses. UGP will continue to charge
and bill its customers firm power and firm peaking power service rates
for energy and demand, which are the sum of the Base and Drought Adder
components.
Under Rate Schedule P-SED-F14, UGP will continue to identify its P-
SMBP--ED firm power service revenue requirement using Base and Drought
Adder components. The Base component is a fixed revenue requirement
that includes annual O&M, investment repayment and associated interest,
Normal Timing Power Purchases, and transmission costs. UGP cannot
adjust the Base component without a public process. The Drought Adder
component is a formula-based revenue requirement that includes costs
attributable to drought conditions in the Regions. The Drought Adder
component includes costs associated with future Non-timing Power
Purchases to meet firm power 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
[[Page 70812]]
requirement of $230.1 million to $235.4 million and increases the
Drought Adder component revenue requirement. For rate year 2023, the
Drought Adder revenue requirement increases from zero to $33 million. A
comparison of the existing and provisional components is shown in Table
3:
Table 3--Summary of P-SMBP--ED Existing and Provisional Charge Components
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Existing charges under rate schedules P-SED- Provisional charges under rate schedules P-SED-
F13 & P-SED-FP13 as of January 1, 2018 F14 & P-SED-FP14 as of January 1, 2023
Firm power & firm peaking power service ------------------------------------------------------------------------------------------------ Percent change
Base Drought adder Base Drought adder
component component Total charge component component Total charge
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Firm Demand (/kWmonth).................. $5.25 $0.00 $5.25 $5.45 $0.75 $6.20 18.1
Firm Energy (mills/kWh)................. 13.27 0.00 13.27 13.36 1.91 15.27 15.1
Firm Peaking Demand ($/kWmonth)......... 4.75 0.00 4.75 5.00 0.70 5.70 20
Firm Peaking Energy 1/ (mills/kWh)...... 13.27 0.00 13.27 13.36 1.91 15.27 15.1
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1/ Firm peaking energy is normally returned. This charge will be assessed in the event firm peaking energy is not returned.
The Regions review the inputs for the P-SMBP Base and Drought Adder
components after the annual PRS is complete, generally in the first
quarter of the calendar year. If an adjustment to the P-SMBP Base
component is necessary, or if an incremental upward adjustment to the
P-SMBP PRS Drought Adder component greater than the equivalent of 2
mills/kWh to the P-SMBP Composite Rate is necessary, the Regions will
initiate a public process pursuant to 10 CFR part 903 prior to making
adjustments.
In accordance with the approved annual Drought Adder adjustment
process, the Drought Adder component is reviewed annually in early
summer to determine if drought costs differ from those projected in the
PRS. In October, the Regions will determine if a change to the Drought
Adder component is necessary, either incremental or decremental. Any
incremental adjustment to the Drought Adder component, up to 2 mills/
kWh, or any decremental adjustment will be implemented by the Regions
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 P-SMBP revenue requirement during the 5-year
rate-setting periods:
Table 4--P-SMBP Comparison of 5-Year Rate Periods Total Revenues and Expenses
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Provisional
Existing rate rate FY2023- Difference
FY2018-FY2022 FY2027 ($000) ($000)
($000)
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Total Revenues...................................... $2,720.2 $3,185.8 $465.6
Revenue Distribution............................................
Expenses
O&M......................................................... 1,158.9 1,376.5 217.6
Purchase Power.............................................. 124.8 288.0 163.2
Transmission................................................ 461.0 845.2 384.2
Interest.................................................... 556.3 516.5 (39.8)
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Total Expenses.......................................... 2,301.0 3,026.2 725.2
Principal Payments:
Capitalized Expenses (Deficits)............................. 113.4 111.2 (2.2)
Original Project and Additions.............................. 187.2 38.2 (149.0)
Irrigation Aid.............................................. 45.7 0.0 (45.7)
Replacements................................................ 72.9 10.2 (62.7)
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Total Principal Payments................................ 419.2 159.6 (259.6)
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Total Revenue Distribution.............................. 2,720.2 3,185.8 465.6
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Sale of Surplus Products Rate Discussion
The sale of surplus products rate schedule is formula-based,
providing for P-SMBP--ED Marketing Office to sell P-SMBP--ED surplus
energy and demand products. If P-SMBP--ED 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
[[Page 70813]]
Schedule P-SED-M1 is being superseded by the Provisional Rate Schedule
P-SED-M2 and continues to allow for the sale of energy, frequency
response, regulation, and reserves.
Comments
UGP received 2 oral and 16 written submissions during the public
consultation and comment period. Comments expressed have been
paraphrased and/or combined, where appropriate, without compromising
the meaning of the comments:
A. Comment: The customer association, member utility, and the
action agency commented that 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. The action agency understands the full rate
increase of 16.3 percent is necessary in 2023.
Response: The Regions appreciate the commentors' recognition of the
specific costs and repayment obligations of the PRS and the need for
the rate adjustments. The Regions are committed to developing rates
that are the lowest possible, consistent with sound business
principles.
B. Comment: The action agency commented that they understand the
need to cover expenses necessary to provide firm, reliable service that
is sustainable, and wants to ensure that proper planning is in place in
order to guarantee the solvency of the system and not get into the
situation the P-SMBP--ED experienced during the last drought.
Response: UGP appreciates the commentor's understanding of the
impacts of drought conditions in the P-SMBP--ED. UGP intends to
continue transparency and data sharing to encourage a strong working
relationship with our Customers as we continue to provide products that
are reliable and sustainable and meet repayment obligations of the
power system.
C. Comment: Several Customers commented that this rate adjustment
is substantial for the communities they serve, and they would have
preferred for this increase to be implemented in multiple stages rather
than one large increase beginning in 2023. They stated perhaps this
could have been achieved by starting a few years earlier in planning
for rate adjustments.
Response: The 10-month timeline associated with a public process is
a major factor when initiating rate adjustments. Given the required
timeline, in addition to the timing of the data to effectively evaluate
impacts to the rate, UGP was as timely as could be when initiating this
rate adjustment. UGP did notify Customers in both the spring 2021 and
fall 2021 Drought Adder review letters that the rate schedules were
expiring December 31, 2022, and that we would be in a formal rate
process in 2022 to put new rates in place.
D. Comment: The action agency and customer association commented
that they recommend the Rate's 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.
E. Comment: The action agency commented they prefer WAPA return to
meeting with Customers/customer groups in person, as many in the
industry have been meeting face-to-face for several months (post-
COVID), and that it is important to have those in-person meetings to
deal with issues more fully as this is the means to further
understanding and to more efficiently resolve issues.
Response: Customer meeting attendance is outside the scope of this
rate process; however, the Regions appreciate the comments and strive
to communicate as broadly as possible with our Customers. It is the
Regions' observation that the virtual meetings held for this rate
process had greater attendance than when in person meetings were held
prior to March 2020.
F. Comment: The action agency commented that the Regions should
provide for more comprehensive and rigorous scenario analysis as part
of the PRS and show details related to the assumptions and the results
to Customers/customer groups. It also was noted that the new PRS system
utilized by WAPA does not have the transparency promised and has not
been as successful or open to customer access through the PRS customer
portal.
Response: UGP intends to continue transparency and data sharing to
encourage a strong working relationship with our Customers/customer
groups. The PRS software tool is outside the scope of this rate
process; however, WAPA's Information Technology (IT) and Rates staff
have been evaluating the concerns with the PRS software. IT has
contacted the vendor to address the issues and developed a plan to
hopefully address the interface issue for external entity interfacing.
G. Comment: The action agency, 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.
H. 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.
I. 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
[[Page 70814]]
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 has not been modified in subsequent
rate orders.
J. 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.
K. Comment: The customer association commented that they support
the comments of their member utilities and fellow customer groups.
Response: The Regions appreciate the commentor's 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 RMR for the LAP rate
process are recognized as being addressed in RMR's Rate Order No. WAPA-
202.
L. 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 P-SMBP--ED
firm power service under Rate Schedule P-SED-F14, P-SMBP--ED firm
peaking power service under Rate Schedule P-SED-FP14, and P-SMBP--ED
sale of surplus products under Rate Schedule P-SED-M2 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 Upper Great Plains Regional
Office located at 2900 4th Avenue North, 6th Floor, Billings, Montana.
Many of these documents are also available on UGP's website at
www.wapa.gov/regions/UGP/rates/Pages/2023-firm-rate-adjustment.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.\5\ A
copy of the categorical exclusion determination is available on WAPA's
website at www.wapa.gov/regions/UGP/Environment/Pages/CX2022.aspx.
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\5\ 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-203. 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 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 P-SED-F14 (Supersedes Rate Schedule P-SED-F13): Effective
January 1, 2023
United States Department of Energy, Western Area Power Administration
Upper Great Plains Region Pick-Sloan Missouri Basin Program--Eastern
Division
Firm Power Service (Approved Under Rate Order No. WAPA-203)
Effective
The first day of the first full billing period beginning on or
after January 1, 2023, through December 31, 2027, or until superseded
by another rate schedule, whichever occurs earlier.
Available
Within the marketing area served by the Eastern Division of the
Pick-Sloan Missouri Basin Program, within Montana, North Dakota, South
Dakota, Minnesota, Iowa, and Nebraska.
Applicable
To the power and energy delivered to customers as firm power
service, as established in the contract for service.
Character
Alternating current, 60 hertz, three phase, delivered and metered
at the voltages and points established by contract.
Formula Rate and Charge Components
Rate = Base component + Drought Adder component
Monthly Charge as of January 1, 2023, under the Rate:
CAPACITY CHARGE: $6.20 for each kilowatt per month (kWmonth) of
billing capacity.
[[Page 70815]]
ENERGY CHARGE: 15.27 mills for each kilowatt-hour (kWh) for all
energy delivered as firm power service.
BILLING CAPACITY: The billing capacity will be as defined by the
power sales contract.
Charge Components
Base Component: A fixed-revenue requirement that includes operation
and maintenance expense, investments and replacements, interest on
investments and replacements, normal timing 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. As of January 1, 2023, the Base component
revenue requirement is $213.8 million and the charges under the
formulas are:
[GRAPHIC] [TIFF OMITTED] TN21NO22.018
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 $30.0 million and the
charges under the formulas are:
[GRAPHIC] [TIFF OMITTED] TN21NO22.019
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 Pick-Sloan Missouri Basin
Program Power Repayment Study (PRS) composite rate. Any planned
incremental upward adjustment to the Drought Adder component greater
than the equivalent of 2 mills/kWh to the PRS composite rate will
require a public process.
The annual review process is initiated in early summer when the
Upper Great Plains Region (UGP) reviews the Drought Adder component and
provides notice of any estimated change to the Drought Adder component
charge under the formula. In October, UGP 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. UGP will
inform customers of updates by letter and post updates to UGP's
external website.
Adjustments
For Billing of Unauthorized Overruns: For each billing period in
which there is a contract violation involving an unauthorized overrun
of the contractual firm power and/or energy obligations, such overrun
shall be billed at 10 times the formula rate.
For Power Factor: None. Customers will be required to maintain a
power factor within the range of 95-percent leading and 95-percent
lagging, measured at the point of interconnection.
Rate Schedule P-SED-FP14 (Supersedes Rate Schedule P-SED-FP13):
Effective January 1, 2023
United States Department of Energy, Western Area Power Administration
Upper Great Plains Region Pick-Sloan Missouri Basin Program--Eastern
Division
Firm Peaking Power Service (Under Rate Order No. WAPA-203)
Effective
The first day of the first full billing period beginning on or
after January 1, 2023, through December 31, 2027, or until superseded
by another rate schedule, whichever occurs earlier.
Available
Within the marketing area served by the Eastern Division of the
Pick-Sloan Missouri Basin Program, within Montana, North Dakota, South
Dakota, Minnesota, Iowa, and Nebraska.
Applicable
To the power sold to customers as firm peaking power service, as
established in the contract for service.
Character
Alternating current, 60 hertz, three phase, delivered and metered
at the voltages and points established by contract.
Formula Rate and Charge Components
Rate = Base component + Drought Adder component
Monthly Charge as of January 1, 2023, under the Rate:
CAPACITY CHARGE: $5.70 for each kilowatt per month (kWmonth) of the
effective contract rate of delivery for peaking power or the maximum
amount scheduled, whichever is greater.
ENERGY CHARGE: 15.27 mills for each kilowatt-hour (kWh) for all
energy scheduled for delivery without return.
Charge Components
Base Component: A fixed revenue requirement that includes operation
and maintenance expense, investments and replacements, interest on
investments and replacements, normal timing power purchases (purchases
due to operational constraints, not associated with
[[Page 70816]]
drought), and transmission costs. Any proposed change to the Base
component will require a public process. As of January 1, 2023, the
Base component revenue requirement is $21.6 million and the charges
under the formulas are:
[GRAPHIC] [TIFF OMITTED] TN21NO22.020
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 $3.0 million and the
charges under the formulas are:
[GRAPHIC] [TIFF OMITTED] TN21NO22.021
Annual Drought Adder Adjustment Process
The Drought Adder may be adjusted annually using the above formulas
for any costs attributed to drought of less than or equal to the
equivalent of 2 mills/kWh to the Pick-Sloan Missouri Basin Program
Power Repayment Study (PRS) composite rate. Any planned incremental
upward adjustment to the Drought Adder greater than the equivalent of 2
mills/kWh to the PRS composite rate will require a public process.
The annual review process is initiated in early summer when the
Upper Great Plains Region (UGP) reviews the Drought Adder component and
provides notice of any estimated change to the Drought Adder component
charge under the formula. In October, UGP 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. UGP will
inform customers of updates by letter and post updates to UGP's
external website.
BILLING CAPACITY: The billing capacity will be the greater of (1)
the highest 30-minute integrated capacity measured during the month up
to, but not in excess of, the delivery obligation under the power sales
contract, or (2) the contract rate of delivery.
Adjustments
Billing for Unauthorized Overruns: For each billing period in which
there is a contract violation involving an unauthorized overrun of the
contractual obligation for peaking capacity and/or energy, such overrun
shall be billed at 10 times the above rate.
Rate Schedule P-SED-M2 (Supersedes Rate Schedule P-SED-M1): Effective
January 1, 2023
United States Department of Energy, Western Area Power Administration
Upper Great Plains Region Pick-Sloan Missouri Basin Program--Eastern
Division
Sale of Surplus Products (Under Rate Order No. WAPA-203)
Effective
The first day of the first full billing period beginning on or
after January 1, 2023, through December 31, 2027, or until superseded
by another rate schedule, whichever occurs earlier.
Applicable
This rate schedule applies to Pick-Sloan Missouri Basin Program--
Eastern Division (P-SMBP--ED) Marketing and is applicable to the sale
of the following P-SMBP--ED surplus energy and capacity products:
energy, frequency response, regulation, and reserves. If any P-SMBP--ED
surplus energy and capacity products are available, the Upper Great
Plains Region (UGP) can make the product(s) available for sale,
providing entities enter into a separate agreement(s) with the UGP
Marketing Office 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 services necessary to
deliver the product(s), for which a separate charge may be incurred.
[FR Doc. 2022-25267 Filed 11-18-22; 8:45 am]
BILLING CODE 6450-01-P
