[Federal Register Volume 79, Number 153 (Friday, August 8, 2014)]
[Pages 46430-46431]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-18811]



Western Area Power Administration

Loveland Area Projects--Rate Order No. WAPA-167

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of Proposed Power Rates.


SUMMARY: The Western Area Power Administration (Western) Loveland Area 
Projects' (LAP) Rate Schedule L-F9 expires December 31, 2014. LAP 
consists of the Fryingpan-Arkansas Project (Fry-Ark) and the Pick-Sloan 
Missouri Basin Program (P-SMBP)--Western Division, which were 
integrated for marketing and rate-making purposes in 1989. Western is 
proposing modifications to the charge components in Rate Schedule L-F9 
in order to true up the base and drought adder charges, which require a 
minor rate adjustment process. The revenue requirement and the total 
rate charges in the firm electric service rate schedule are not 
changing from Rate Schedule L-F9 and will continue to provide 
sufficient revenue to pay all annual costs, including interest expense, 
and repay investments within the allowable periods. If approved, the 
proposed Rate Schedule L-F10 will become effective on January 1, 2015, 
and will remain in effect through December 31, 2019. Publication of 
this Federal Register notice begins the formal process for the proposed 
rate schedule.

DATES: The consultation and comment period will begin today and will 
end September 8, 2014. Western will accept written comments any time 
during the consultation and comment period.

ADDRESSES: Written comments and requests to be informed of Federal 
Energy Regulatory Commission (FERC) actions concerning the rates 
submitted by Western to FERC for approval should be sent to: Mr. 
Bradley S. Warren, Regional Manager, Rocky Mountain Region, Western 
Area Power Administration, 5555 East Crossroads Boulevard, Loveland, CO 
80538-8986 or email [email protected]. Information about the rate 
process is posted on Western's Web site at https://www.wapa.gov/rm/ratesRM/2015/default.htm. Western will post official comments received 
via letter and email 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 they are considered in 
Western's decision process.

FOR FURTHER INFORMATION CONTACT: Ms. Sheila D. Cook, Rates Manager, 
Rocky Mountain Region, Western Area Power Administration, 5555 East 
Crossroads Boulevard, Loveland, CO 80538-8986, telephone (970) 461-
7211, email [email protected] or [email protected].

SUPPLEMENTARY INFORMATION: On December 16, 2009, the Deputy Secretary 
of Energy approved, on an interim basis, Rate Schedule L-F9 under Rate 
Order No. WAPA-146 for the period beginning January 1, 2010, and ending 
December 31, 2014 (74 FR 67191-67197 (Dec. 18, 2009)).\1\ The existing 
charges in the current rate schedule for LAP firm electric service 
continue to provide sufficient revenue to meet the LAP repayment 
obligations. The total annual revenue requirement for LAP remains $84.5 
million for firm electric service and the overall capacity and energy 
charges are not changing, as indicated in the following Table 1:

    \1\ FERC confirmed and approved Rate Order WAPA-146 on a final 
basis on June 18, 2010, in Docket No. EF10-1-000. See United States 
Department of Energy, Western Area Power Administration (Loveland 
Area Projects), 131 FERC ] 62,247.

                               Table 1--Comparison of Existing and Proposed Rates
                                                Existing rate  (January   Proposed rate (January  Percent change
             Firm electric service                   1, 2010) L-F9            1, 2015) L-F10            (%)
LAP Revenue Requirement (million).............                    $84.5                    $84.5               0
LAP Composite Rate (mills/kWh)................                    41.42                    41.42               0
Firm Energy Rate (mills/kWh)..................                    20.71                    20.71               0
Firm Capacity Rate ($/kWmonth)................                    $5.43                    $5.43               0

[[Page 46431]]

    Under the current rate methodology, rates for LAP firm electric 
service are designed to recover an annual revenue requirement that 
includes investment repayment, interest, purchase power, operation and 
maintenance, and other expenses within the allowable period. The annual 
revenue requirement continues to be allocated equally between capacity 
and energy.
    Western is proposing to true up the base and drought adder 
components of the rate schedule and to place a new rate schedule into 
effect for the 5-year period beginning January 1, 2015, through 
December 31, 2019. The proposed true up updates the base component to 
represent present costs and lowers the drought adder component to 
represent present drought costs. Over the past 5-year rate period, the 
P-SMBP costs included in the LAP drought adder have decreased as the 
actual deficits taken were less than projected when the current charges 
were placed into effect. Additionally, there has been P-SMBP drought 
costs repaid ahead of schedule, which decreased the drought deficit 
interest expense. The portion of the LAP drought adder component coming 
from Fry-Ark ($200,000) is now going to $0, as Fry-Ark did not actually 
incur any deficits and Fry-Ark is not projecting any future non-timing 
purchases at this time. All historical drought-related costs for Fry-
Ark have been repaid. In addition, base costs for both P-SMBP and Fry-
Ark increased during that same period due to a new 5-year cost 
evaluation period, new investments and replacements, and inflationary 
costs. A comparison of the current and proposed components is listed in 
Table 2.

                                                         Table 2--Summary of LAP Rate Components
                                                           Existing charges under rate schedule L-F9 as    Proposed charges under rate schedule L-F10 as
---------------------------------------------------------               of January 1, 2010                              of January 1, 2015
                                                                           Drought adder                                   Drought adder
                                                          Base Component     component     Total charge   Base component     component     Total charge
Firm Capacity Rate (/kWmonth)...........................           $3.29           $2.14           $5.43           $3.92           $1.51           $5.43
Firm Energy Rate (mills/kWh)............................           12.54            8.17           20.71           14.95            5.76           20.71

    Over the last 5 years, Western has conducted its annual process of 
reviewing the sufficiency of the drought adder. With the rate schedule 
set to expire December 31, 2014, and the requirement of a public 
process to place a new rate schedule into effect, Western proposes to 
true up the base and drought adder components in the new rate schedule 
to current values. Updating the components does not change the overall 
charges, it only identifies what portion of the charge is driven by 
base and drought adder components.

Legal Authority

    The proposed modifications to the rate schedule for firm electric 
service, resulting in a true up of the base and drought adder 
components, as described above, constitute a minor rate adjustment, as 
defined by 10 CFR part 903.2(f). Western determined it is not necessary 
to hold a public information or public comment forum for this minor 
rate adjustment and, instead, held an informal public meeting via 
webinar, pursuant to 10 CFR part 903.17. Western will review all timely 
public comments and make amendments or adjustments to the proposal as 
appropriate. A proposed rate schedule will be forwarded to the Deputy 
Secretary of Energy for approval on an interim basis.
    Western is establishing firm electric service rates for LAP under 
the Department of Energy (DOE) 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 section 5 of 
the Flood Control Act of 1944 (16 U.S.C. 825s); and other acts that 
specifically apply to the projects involved.
    By Delegation Order No. 00-037.00A, effective October 25, 2013, 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 FERC. Existing DOE procedures for public 
participation in power rate adjustments (10 CFR part 903) were 
published on September 18, 1985.

Availability of Information

    All 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 Rocky Mountain Regional 
Office located at 5555 East Crossroads Boulevard, Loveland, Colorado. 
Many of these documents and supporting information are also available 
on Western's Web site under the ``2015 Firm Rate Adjustment'' section 
located at https://www.wapa.gov/rm/ratesRM/2015/default.htm.
    Western held an informal public meeting on May 2, 2014, via a 
webinar to inform customers, Native American tribes, stakeholders, and 
other interested parties about the adjustment. The webinar was recorded 
and posted to the above referenced Western Web site.

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 parts 1500-1508); and DOE 
NEPA Implementing Procedures and Guidelines (10 CFR part 1021), Western 
is in the process of determining whether an environmental assessment or 
an environmental impact statement should be prepared or if this action 
can be categorically excluded from those requirements.

Determination Under Executive Order 12866

    Western 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.

    Dated: July 23, 2014.
Mark A. Gabriel,
[FR Doc. 2014-18811 Filed 8-7-14; 8:45 am]