[Federal Register Volume 74, Number 142 (Monday, July 27, 2009)]
[Notices]
[Pages 37025-37027]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-17801]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Western Area Power Administration


Boulder Canyon Project

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of base charge and rates.

-----------------------------------------------------------------------

SUMMARY: The Deputy Secretary of Energy approved the Fiscal Year (FY) 
2010 Base Charge and Rates (Rates) for Boulder Canyon Project (BCP) 
electric service provided by the Western Area Power Administration 
(Western). The Rates will provide sufficient revenue to pay all annual 
costs, including interest expense, and repay investments within the 
allowable period.

DATES: The Rates will be effective the first day of the first full 
billing period beginning on or after October 1, 2009. These Rates will 
stay in effect through September 30, 2010, or until superseded by other 
rates.

FOR FURTHER INFORMATION CONTACT: Mr. Jack Murray, Rates Manager, Desert 
Southwest Customer Service Region, Western Area Power Administration, 
P.O. Box 6457, Phoenix, AZ 85005-6457, (602) 605-2442, e-mail 
[email protected].

SUPPLEMENTARY INFORMATION: Rate Schedule BCP-F7, Rate Order No. WAPA-
120, effective October 1, 2005 through September 30, 2010, allows for 
an annual recalculation of the rates.\1\ This notice sets forth the 
recalculated rates for FY 2010.
---------------------------------------------------------------------------

    \1\ \\ FERC confirmed and approved Rate Order No. WAPA-120 on 
June 22, 2006, in Docket No. EF05-5091-000, See United States 
Department of Energy, Western Area Power Administration, Boulder 
Canyon Project, 115 FERC ] 61.362 (June 22, 2006).
---------------------------------------------------------------------------

    Under Rate Schedule BCP-F7, the existing composite rate effective 
on October 1, 2008 was 18.62 mills per kilowatthour (mills/kWh). The 
base charge was $70,213,497, the energy rate was 9.31 mills/kWh, and 
the capacity rate was $1.73 per kilowattmonth (kWmonth). The re-
calculated rates for BCP electric service, to be effective October 1, 
2009, will result in an overall composite rate of 18.93 mills/kWh. The 
proposed rates were calculated using the FY 2010 Final Master Schedule. 
This resulted in an increase of approximately 1.70 percent when 
compared with the existing BCP electric service composite rate. The 
increase is due to a decrease in the projected energy sales and an 
increase in the annual revenue requirement. The FY 2010 base charge is 
increasing to $70,681,340. The major contributing factors to the base 
charge increase is the increase in annual operation and maintenance 
expenses and uprating program payments. The FY 2010 energy rate of 9.47 
mills/kWh is approximately a 1.70 percent increase from the existing 
energy rate of 9.31 mills/kWh. The increase in the energy rate is due 
to a decrease in the projected energy sales resulting from a decrease 
in projected water releases. The FY 2010 capacity rate of $1.76/kWmonth 
reflects an increase of approximately 1.22 percent compared to the 
existing capacity rate of $1.73/kWmonth. The increase in the capacity 
rate is due to a decrease in the projected capacity sales resulting 
from dropping lake elevations. Another factor contributing to the 
increase in both the energy and capacity rates is the increase in the 
annual revenue requirement. The following summarizes the steps taken by 
Western to ensure involvement of all Interested Parties in determining 
the Rates:
    1. A Federal Register notice was published on February 2, 2009 (74 
FR 5839), announcing the proposed rate adjustment process, initiating a 
public consultation and comment period, announcing public information 
and public comment forums, and presenting procedures for public 
participation.
    2. Discussion of the proposed Rates was initiated at an informal 
BCP Contractor meeting held March 11, 2009 in Phoenix, Arizona. At this 
informal meeting, representatives from Western and the Bureau of 
Reclamation (Reclamation) explained the basis for

[[Page 37026]]

estimates used to calculate the Rates and held a question and answer 
session.
    3. At the public information forum held on April 1, 2009, in 
Phoenix, Arizona, Western and Reclamation representatives explained the 
proposed Rates for FY 2010 in greater detail and held a question and 
answer session.
    4. A public comment forum held on April 22, 2009, in Phoenix, 
Arizona, provided the public an opportunity to comment for the record. 
No individuals commented at this forum.
    5. Western received two comment letters during the 90-day 
consultation and comment period. The consultation and comment period 
ended May 4, 2009. All comments were considered in developing the Rates 
for FY 2010. Written comments were received from: Colorado River 
Commission of Nevada, Las Vegas, Nevada; Irrigation & Electrical 
Districts Association of Arizona, Phoenix, Arizona.
    Comments and responses, paraphrased for brevity when not affecting 
the meaning of the statements, are presented below.

Post 9-11 Security Cap

    Comment: A BCP Contractor indicated they are reviewing and will 
provide comments to Reclamation's Directive and Standard regarding 
Reimbursability of Security Costs (Directive) and whether the Directive 
is implemented or not, Western and Reclamation should continue to 
provide detailed reports to the BCP customers regarding post 9-11 
security costs so that the customers will be able to follow how the law 
is being applied to the Boulder Canyon Project as well as all 
Reclamation projects.
    Response: Western and Reclamation appreciate the BCP Contractors' 
concern regarding the Directive. Regardless of the final implementation 
of the Directive, Reclamation and Western are committed to continue to 
provide information regarding the reimbursability of security costs to 
Boulder Canyon Project.

Extension of Consultation and Comment Period

    Comment: An Interested Party requested the comment period for this 
rate proceeding be extended 30 days. The reason given for this 
suggestion was due to the possibility that some of the security cost 
data provided by Reclamation to Western for inclusion in the base 
charge calculation could be declared non-reimbursable expenditures once 
Reclamation implements their Directive.
    Response: Prior to finalizing an annual rate package, the rate 
process allows time for Western and Reclamation to determine if it is 
necessary to revise any costs that are included in the calculation of 
the proposed base charge and rates. If Reclamation's Directive is 
implemented prior to finalizing the calculation of the proposed FY 2010 
base charge and rates, and if the implementation results in changes to 
the security costs included in the proposed FY 2010 base charge and 
rates, Western will in turn revise the data prior to finalizing the 
proposed rates. If Reclamation's Directive is not implemented prior to 
the calculation of the proposed base charge and rates being finalized, 
any costs subsequently deemed non-reimbursable that were included in 
the FY 2010 rates will be carried forward and reduce the FY 2011 base 
charge and rates. Western and Reclamation are committed to coordinate 
very closely regarding any necessary revisions to the FY 2010 base 
charge and rates. Therefore there is no need to reopen or extend the 
public process.

BCP Electric Service Rates

    BCP electric service rates are designed to recover an annual 
revenue requirement that includes operation and maintenance expenses, 
payments to states, visitor services, the uprating program, 
replacements, investment repayment and interest expense. Western's 
Power Repayment Study (PRS) allocates the projected annual revenue 
requirement for electric service equally between capacity and energy.

Availability of Information

    Information about this base charge and rate adjustment, including 
PRS, comments, letters, memorandums, and other supporting material 
developed or maintained by Western that was used to develop the FY 2010 
BCP Rates, is available for public review in the Desert Southwest 
Customer Service Regional Office, Western Area Power Administration, 
615 South 43rd Avenue, Phoenix, Arizona. The information is also 
available on Western's Web site at http://www.wapa.gov/dsw/pwrmkt/BCP/RateAdjust.htm.

Ratemaking Procedure Requirements

    BCP electric service rates are developed under the Department of 
Energy Organization Act (42 U.S.C. 7101-7352), through which the power 
marketing functions of the Secretary of the Interior and Reclamation 
under the Reclamation Act of 1902 (ch. 1093, 32 Stat. 388), as amended 
and supplemented by subsequent enactments, 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 project involved, were transferred to 
and vested in the Secretary of Energy, acting by and through Western.
    By Delegation Order No. 00-037.00, effective December 6, 2001, the 
Secretary of Energy delegated: (1) The authority to develop long-term 
power and transmission rates on a non-exclusive basis 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 FERC. 
Existing Department of Energy procedures for public participation in 
electric service rate adjustments are located at 10 CFR part 903, 
effective September 18, 1985 (50 FR 37835), and 18 CFR part 300. DOE 
procedures were followed by Western in developing the rate formula 
approved by FERC on June 22, 2006, at 115 FERC ] 61362.\2\
---------------------------------------------------------------------------

    \2\ The existing ratesetting formula was established in Rate 
Order No. WAPA-70 on April 19, 1996, in Docket No. EF96-5091-000 at 
75 FERC ] 62050, for the period beginning November 1, 1995, and 
ending September 30, 2000. Rate Order No. WAPA-94, extending the 
existing ratesetting formula beginning on October 1, 2000, and 
ending September 30, 2005, was approved on July 31, 2001, in Docket 
No. EF00-5092-000 at 96 FERC ] 61171. Rate Order No. WAPA-120, 
extending the existing ratesetting formula for another five-year 
period beginning on October 1, 2005, and ending September 30, 2010, 
was approved on June 22, 2006, in Docket No. EF05-5091-000 at 115 
FERC ] 61362.
---------------------------------------------------------------------------

    The Boulder Canyon Project Implementation Agreement requires that, 
prior to October 1 of each rate year, Western determines the annual 
rates for the next fiscal year. The rates for the first rate year, and 
each fifth rate year thereafter, become effective provisionally upon 
approval by the Deputy Secretary of Energy (Deputy Secretary) subject 
to final approval by FERC. For all other rate years, the rates become 
effective on a final basis upon approval by the Deputy Secretary. 
Because FY 2010 is an interim year these rates become effective on a 
final basis upon approval by the Deputy Secretary.
    Western will continue to provide annual rates to the BCP 
Contractors by October 1 of each year using the same ratesetting 
formula. The rates are reviewed annually and adjusted upward or 
downward to assure sufficient revenues are collected to achieve payment 
of all costs and financial obligations associated with the project. 
Each fiscal year, Western prepares a PRS for the BCP to update actual 
revenues

[[Page 37027]]

and expenses including interest, estimates of future revenues, 
expenses, and capitalized costs.
    The BCP ratesetting formula includes a base charge, an energy rate, 
and a capacity rate. The ratesetting formula was used to determine the 
BCP FY 2010 Rates.
    Western proposed a FY 2010 base charge of $70,681,340, an energy 
rate of 9.47 mills/kWh, and a capacity rate of $1.76/kWmonth.
    Consistent with procedures set forth in 10 CFR part 903 and 18 CFR 
part 300, Western held a consultation and comment period. The notice of 
the proposed FY 2010 Rates for electric service was published in the 
Federal Register on February 2, 2009 (74 FR 5839).
    Under Delegation Order Nos. 00-037.00 and 00-001.00C, and in 
compliance with 10 CFR part 903 and 18 CFR part 300, I hereby approve 
the FY 2010 Rates for BCP Electric Service on a final basis under Rate 
Schedule BCP-F7 through September 30, 2010.

    Dated: July 20, 2009.
Daniel B. Poneman,
Deputy Secretary.
[FR Doc. E9-17801 Filed 7-24-09; 8:45 am]
BILLING CODE 6450-01-P