[Federal Register Volume 73, Number 3 (Friday, January 4, 2008)]
[Notices]
[Pages 858-860]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-25459]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Salt Lake City Area Integrated Projects Firm Power, Colorado 
River Storage Project Transmission and Ancillary Services Rates--Rate 
Order No. WAPA-137

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of Proposed Power Rates.

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SUMMARY: The Western Area Power Administration (Western) is proposing 
adjustments to the Salt Lake City Area Integrated Projects (SLCA/IP) 
firm power rates and the Colorado River Storage Project (CRSP) 
Transmission and Ancillary Services Rates. The SLCA/IP consists of the 
CRSP, Collbran, and Rio Grande projects, which were integrated for 
marketing and ratemaking purposes on October 1, 1987, and two 
participating projects of the CRSP that have power facilities, the 
Dolores and Seedskadee projects. The current rates, under Rate Schedule 
SLIP-F8, expire September 30, 2010, but are not sufficient to meet the 
SLCA/IP revenue requirements. The proposed rates will provide 
sufficient revenue to pay all annual costs, including operation, 
maintenance, and replacements (OM&R), interest expenses, and the 
required repayment of investment within the allowable period.
    The only proposed changes to the CRSP Transmission and Ancillary 
Services Rates are to change the expiration dates to September 30, 
2010, in alignment with the SLCA/IP firm power rates.
    Western will prepare a brochure that provides detailed information 
on the rates to all interested parties. The proposed rates under Rate 
Schedules SLIP-F9, SP-PTP7, SP-NW3, SP-NFT6, SP-CF1, SP-SD3, SP-RS3, 
SP-EI3, SP-FR3, and SP-SSR3 are scheduled to go into effect on October 
1, 2008. Publication of this Federal Register notice begins the formal 
process for the proposed rates.

DATES: The consultation and comment period begins today and will end 
April 3, 2008. Western will present a detailed explanation of the 
proposed rates at a public information forum to be held on February 5, 
2008, at 1:30 p.m. Western will accept oral and written comments at a 
public comment forum to be held on March 4, 2008, at 1:30 p.m. Western 
will accept written comments any time during the consultation and 
comment period.

ADDRESSES: Send written comments to Mr. Bradley S. Warren, CRSP 
Manager, Colorado River Storage Project Management Center, Western Area 
Power Administration, 150 East Social Hall Avenue, Suite 300, Salt Lake 
City, UT 84111-1580, (801) 524-5493, e-mail [email protected]. Western 
will post information about the rate process on its Web site under the 
``FY 2009 SLCA/IP Rate Adjustment'' section located at: http://www.wapa.gov/CRSP/ratescrsp/default.htm.
    Western will post official comments received by letter and e-mail 
to its Web site after the close of the comment period. Western must 
receive written comments by the end of the consultation and comment 
period to ensure consideration in Western's decision process. The 
public information forum and public comment forum will be held at the 
Radisson Hotel Salt Lake City Airport, 2177 West North Temple, Salt 
Lake City, UT 84116-3196.

FOR FURTHER INFORMATION CONTACT: Ms. Carol A. Loftin, Rates Manager, 
Colorado River Storage Project Management Center, Western Area Power 
Administration, 150 East Social Hall Avenue, Suite 300, Salt Lake City, 
UT 84111-1580, (801) 524-6380, e-mail [email protected].

SUPPLEMENTARY INFORMATION: The proposed rates for SLCA/IP firm power 
are designed to return an annual amount of revenue to meet the 
repayment of power investment, payment of interest, purchased power, 
OM&R expenses, and the repayment of irrigation assistance costs as 
required by law.
    The Deputy Secretary of Energy approved Rate Schedule SLIP-F8 for 
firm power service on August 1, 2005.\1\ Rate Schedule SLIP-F8 became 
effective on October 1, 2005, for a 5-year period ending September 30, 
2010. Under Rate Schedule SLIP-F8, the energy rate is 10.43 mills per 
kilowatthour (mills/kWh), and the capacity rate is $4.43 per 
kilowattmonth (kWmonth). The composite rate is 25.28 mills/kWh. The 
Deputy Secretary of Energy also approved a rate extension for the CRSP 
Transmission and Ancillary Services Rates through September 30, 
2010.\2\
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    \1\ Rate Order No. WAPA-117, 70 FR 47823, August 15, 2005. FERC 
confirmed and approved the rate schedules on June 13, 2006, under 
FERC Docket No. EF05-5171-000 (115 FERC 62,271). Approved Rate 
Schedule SLIP-F8 became effective on October 1, 2005, for a 5-year 
period ending September 30, 2010.
    \2\ Rate Order WAPA-132, 72 FR 37758, July 11, 2007. Extended 
Rate Schedules SP-PTP6, SP-NW2, SP-NFT5, SP-SD2, SP-RS2, SP-E12, SP-
FR2, and SP-SSR1 for transmission and ancillary services were 
previously submitted as Rate Order No. WAPA-99, 67 FR 60656 
(September 26, 2002), and approved by FERC on November 14, 2003 (105 
FERC 62,093).

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[[Page 859]]

Firm Power Rates

    The proposed rates are expected to become effective October 1, 
2008. The proposed rates revenue requirements are based on the FY 2009 
work plans for Western and the Bureau of Reclamation (Reclamation). 
These work plans form the bases for the FY 2009 Congressional budgets 
for the two agencies. The most current work plans will be included in 
the Rate Order submission. The FY 2006 historical data are the latest 
available for the rate proposal. The final ratesetting study will 
include the FY 2007 historical data as it becomes available.
    The rate increase results primarily from the increase in the 
operation, maintenance, purchase power expense, and interest expense 
from the continued drought in the Upper Colorado River region. As in 
the prior rate adjustment for firm power, Western will determine 
firming energy purchase expense by using Median Hydrology. The table 
below displays the current and proposed firm power rates.

                               Comparison of Current and Proposed Firm Power Rates
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                                                                                   Proposed rate
                                                         Current rate October    October 1, 2008-       Change
                     Rate schedule                         1, 2006-September    September 30, 2013    (percent)
                                                           30, 2010  SLIP-F8          SLIP-F9
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Base Rate:
    Energy: (mills/kWh)................................                 10.43                 11.95           15
    Capacity: ($kW/month)..............................                  4.43                  5.08           15
Composite Rate: (mills/kWh)............................                 25.28                 28.85           14
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Cost Recovery Charge (CRC)

    In setting its firm power rate, Western forecasts generation 
available from the SLCA/IP units and projects the firming energy 
purchase expense over the ratesetting period. These firming expense 
projections are included in the annual revenue requirement of the firm 
power rate. Over the last several years, both hydropower generation and 
power prices have been highly volatile. This volatility has caused 
actual purchased power expenses to be significantly higher than 
forecasted and has resulted in cost recovery issues for the SLCA/IP. To 
adequately recover expenses in times of financial hardship, Western 
will continue to calculate the cost recovery charge as in the current 
rate (SLIP-F8).
    The CRC is an additional charge on all Sustainable Hydropower 
energy deliveries (long-term SLCA/IP hydropower capacity with energy) 
that may, at times, be applicable when cost recovery is at risk due to 
low hydropower generation and high prices for firming power. The 
conditions that would trigger the CRC, as well as a more detailed 
formula methodology of how and when the CRC would apply, will be 
discussed in further detail in the rate brochure and at the information 
forum.
    An environmental impact statement is being conducted by Reclamation 
for ``Colorado River Interim Guidelines for Lower Basin Shortages and 
Coordinated Operations for Lakes Powell and Mead'' is in process, and 
the preferred alternative will more than likely result in less water 
releases during certain drought criteria. Therefore, Western has also 
included a mechanism that allows Western to re-calculate the CRC if the 
annual water release from Glen Canyon Dam falls below that of 8.23 
million acre-feet.

Transmission and Ancillary Service Rates

    Western is not proposing at this time to change the formula-based 
rate for Firm Point-to-Point, Network, and non-firm Transmission 
Services or Ancillary Services that have been offered in both the WACM 
and the WALC control areas. These are being included in this rate 
process, however, to extend these formula rates through September 30, 
2013, along with the firm power rates.

Legal Authority

    Since the proposed rates constitute a major rate adjustment as 
defined by 10 CFR Part 903, Western will hold both a public information 
forum and a public comment forum. After reviewing public comments and 
making possible amendments or adjustments to its proposed rates, 
Western will recommend the Deputy Secretary of Energy approve the 
proposed rates on an interim basis.
    Western is establishing firm electric service rates for SLCA/IP 
under the Department of Energy Organization Act (42 U.S.C. 7152); the 
Reclamation Act of 1902 (ch. 1093, 32 Stat. 388), as amended and 
supplemented by subsequent laws, particularly section 9(c) of the 
Reclamation Project Act of 1939 (43 U.S.C. 485h(c)); and other acts 
that specifically apply to the projects involved.
    By Delegation Order No. 00-037.00, effective December 6, 2001, the 
Secretary of Energy delegated: (1) The authority to develop power and 
transmission rates to Western's Administrator; (2) the authority to 
confirm, approve, and place such rates into effect on an interim basis 
to the Deputy Secretary of Energy; and (3) the authority to confirm, 
approve, and place into effect on a final basis, to remand, or to 
disapprove such rates to the Federal Energy Regulatory Commission 
(FERC). Existing Department of Energy (DOE) procedures for public 
participation in power rate adjustments (10 CFR Part 903) were 
published on September 18, 1985 (50 FR 37835).

Availability of Information

    All brochures, studies, comments, letters, memorandums, or other 
documents that Western initiates or uses to develop the proposed rates 
are available for inspection and copying at the Colorado River Storage 
Project Management Center, 150 East Social Hall Avenue, Suite 300, Salt 
Lake City, Utah. Many of these documents and supporting information are 
also available on its Web site under the ``FY 2009 SLCA/IP Rate 
Adjustment'' section located at http://www.wapa.gov/CRSP/ratescrsp/default.htm.

Ratemaking Procedure Requirements

Environmental Compliance

    In compliance with the National Environmental Policy Act (NEPA) of 
1969, 42 U.S.C. 4321, et seq.; the Council on Environmental Quality 
Regulations for implementing NEPA (40 CFR Part 1500-1508); and DOE NEPA 
Implementing Procedures and Guidelines (10 CFR Part 1021), Western has 
determined that this action is categorically excluded from the 
preparation of an environmental assessment or an environmental impact 
statement.

Determination Under Executive Order 12866

    Western has an exemption from centralized regulatory review under 
Executive Order 12866; accordingly, no

[[Page 860]]

clearance of this notice by the Office of Management and Budget is 
required.

    Dated: December 5, 2007.
Timothy J. Meeks,
Administrator.
 [FR Doc. E7-25459 Filed 1-3-08; 12:05 pm]
BILLING CODE 6450-01-P