[Federal Register Volume 79, Number 235 (Monday, December 8, 2014)]
[Notices]
[Pages 72670-72677]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-28677]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Pick-Sloan Missouri Basin Program--Eastern Division-Rate Order 
No. WAPA-166

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of Order Concerning Firm Power Rates.

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SUMMARY: The Deputy Secretary of Energy confirmed and approved Rate 
Order No. WAPA-166 and Rate Schedules P-SED-F12 and P-SED-FP12, placing 
firm power and firm peaking power rates for the Western Area Power 
Administration (Western) Pick-Sloan Missouri Basin Program--Eastern 
Division (P-SMBP--ED) into effect on an interim basis.

DATES: Rate Schedules P-SED-F12 and P-SED-FP12 will be placed into 
effect on an interim basis on the first day of the first full billing 
period beginning on or after January 1, 2015, and will remain in effect 
until the Federal Energy Regulatory Commission (FERC) confirms, 
approves, and places the rate schedules or substitute rates in effect 
on a final basis through December 31, 2019, or until the rate schedules 
are superseded.

FOR FURTHER INFORMATION CONTACT: Mr. Robert J. Harris, Regional 
Manager, Upper Great Plains Region, Western Area Power Administration, 
2900 4th Avenue North, Billings, MT 59101-1266, telephone (406) 255-
2800, email [email protected], or Ms. Linda Cady-Hoffman, Rates Manager, 
Upper Great Plains Region, Western Area Power Administration, 2900 4th 
Avenue North, Billings, MT 59101-1266, telephone (406) 255-2920, email 
[email protected].

SUPPLEMENTARY INFORMATION: Rate Schedules P-SED-F11 and P-SED-FP11 were 
approved under Rate Order No. WAPA-147 for the period beginning January 
1, 2010, and ending December 31, 2014.\1\ Under the current rate 
methodology, rates for P-SMBP--ED firm power and firm peaking power 
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 total 
annual revenue requirement for P-SMBP--ED remains $320.2 million for 
firm power and firm peaking power service. In addition, the overall 
capacity and energy charges are not changing, as the existing charges 
in the current rate schedules for firm power and firm peaking power 
continue to provide sufficient revenue to meet the P-SMBP--ED repayment 
obligations. The Rate Schedules continue to be formula based. An 
incremental upward adjustment to the Drought Adder greater than the 
equivalent of 2 mills/kWh to the Power Repayment Study (PRS) composite 
rate will require a public process. The Drought Adder may be adjusted 
downward pursuant to the formula without a public process.
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    \1\ WAPA-147 was approved by the Deputy Secretary of Energy on 
December 14, 2009 (74 FR 67197 (Dec 18, 2009)), and confirmed and 
approved by FERC on a final basis on September 10, 2010, in Docket 
No. EF10-2-000. See United States Department of Energy, Western Area 
Power Administration (Pick-Sloan Missouri Basin Program--Eastern 
Division), 132 FERC ] 62,159.
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    Rate Schedules P-SED-F11 and P-SED-FP11 are being superseded by 
Rate Schedules P-SED-F12 and P-SED-FP12, respectively. Under Rate 
Schedule P-SED-F12, the firm capacity charge will remain $7.65/
kilowattmonth (kWmonth), and the firm energy charge will remain 19.05 
mills/kilowatthour (kWh). Under Rate Schedule P-SED-FP12, the firm 
peaking power services capacity charge will remain $6.90/kWmonth, and 
the energy charge will remain 19.05 mills/kWh as of January 1, 2015. 
Firm Peaking Energy is normally returned. A Firm Peaking Energy charge 
of 19.05 mills/kWh will be assessed in the event energy is not 
returned. The Base and Drought Adder components associated with these 
charges are shown in Table 1 below:

                                                    Table 1--Summary of P-SMBP--ED Charge Components
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Existing charges under Rate Schedules           Provisional charges under Rate Schedules
                                                        effective  (January 1, 2010) P-SED-F11/P-SED-  effective  (January 1, 2015) P-SED-F12/P-SED-FP12
                                                      ----------------------FP11------------------------------------------------------------------------
                                                            Base        Drought Adder                                    Drought Adder
                                                          component       component     Total charge   Base  component     component       Total charge
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firm Capacity ($/kWmonth)............................           $3.80           $3.85           $7.65            $4.90            $2.75            $7.65
Firm Energy (mills/kWh)..............................            9.53            9.52           19.05            12.33             6.72            19.05
Firm Peaking Capacity ($/kWmonth)....................           $3.45           $3.45           $6.90            $4.45            $2.45            $6.90
Firm Peaking Energy (mills/kWh) \1\..................            9.53            9.52           19.05            12.26             6.79            19.05
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Firm Peaking Energy is normally returned. This charge will be assessed in the event firm peaking energy is not returned.

    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.
    Under Delegation Order Nos. 00-037.00A and 00-001.00E and in 
compliance with 10 CFR part 903 and 18 CFR part 300, I hereby confirm, 
approve, and place Rate Order No. WAPA-166, P-SMBP--ED firm power and 
firm peaking power rates, into effect on an interim basis
    (Provisional Rates). The new Rate Schedules P-SED-F12 and P-SED-
FP12 will be promptly submitted to FERC for confirmation and approval 
on a final basis.

    Dated: December 2, 2014.
Elizabeth Sherwood-Randall,
Deputy Secretary of Energy.

DEPARTMENT OF ENERGY

DEPUTY SECRETARY

In the matter of:

Western Area Power Administration
Rate Adjustment for the Pick-Sloan Missouri Basin Program--Eastern 
Division
Rate Order No. WAPA-166


[[Page 72671]]


ORDER CONFIRMING, APPROVING, AND PLACING THE PICK-SLOAN MISSOURI BASIN 
PROGRAM--EASTERN DIVISION FIRM POWER AND FIRM PEAKING POWER SERVICE 
RATES INTO EFFECT ON AN INTERIM BASIS
    These firm and firm peaking power service rates for the Pick-Sloan 
Missouri Basin Program--Eastern Division (P-SMBP--ED) are established 
in accordance with section 302 of the Department of Energy (DOE) 
Organization Act (42 U.S.C. 7152). 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 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 project 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 the Administrator of Western Area Power 
Administration (Western); (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 DOE 
procedures for public participation in power rate adjustments (10 CFR 
part 903) were published on September 18, 1985.

Acronyms and Definitions

    As used in this Rate Order, the following acronyms and definitions 
apply:

Base.............................................  A fixed revenue requirement that includes operation and
                                                    maintenance expense, investments and replacements, interest
                                                    on investments and replacements, normal timing purchase
                                                    power (purchases due to operational constraints, not
                                                    associated with drought), and transmission costs.
Capacity.........................................  The electric capability of a generator, transformer,
                                                    transmission circuit, or other equipment. It is expressed in
                                                    kilowatts.
Capacity Charge..................................  The charge under the rate schedule for capacity. It is
                                                    expressed in dollars per kilowattmonth.
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 kilowatthour and used
                                                    for comparison purposes.
CROD.............................................  Contract Rate of Delivery. The maximum amount of capacity and
                                                    energy allocated to a Preference Customer for a period
                                                    specified under a contract.
Deficits.........................................  Deferred or unrecovered annual and/or interest expenses.
DOE Order RA 6120.2..............................  An order outlining power marketing administration financial
                                                    reporting and rate-making procedures.
Drought Adder....................................  A formula-based revenue requirement that includes future
                                                    purchase power above timing purchases, previous purchase
                                                    power drought deficits, and interest on the purchase power
                                                    drought deficits.
Energy...........................................  Measured in terms of the work it is capable of doing over a
                                                    period of time. Energy is expressed in kilowatthours.
Energy Charge....................................  The charge under the rate schedule for energy. It is
                                                    expressed in mills per kilowatthour and applied to each
                                                    kilowatthour delivered to each customer.
Firm.............................................  A type of product and/or service available at the time
                                                    requested by the customer.
FY...............................................  Fiscal year; October 1 to September 30.
kW...............................................  Kilowatt_the electrical unit of capacity that equals 1,000
                                                    watts.
kWh..............................................  Kilowatthour_the electrical unit of energy that equals 1,000
                                                    watts in 1 hour.
kWmonth..........................................  Kilowattmonth_the electrical unit of the monthly amount of
                                                    capacity.
mills/kWh........................................  Mills per kilowatthour_the unit of charge for energy (equal
                                                    to one tenth of a cent or one thousandth of a dollar).
MW...............................................  Megawatt_the electrical unit of capacity that equals 1
                                                    million watts or 1,000 kilowatts.
Non-timing Power Purchases.......................  Power purchases that are not related to operational
                                                    constraints such as management of endangered species,
                                                    species habitat, water quality, navigation, control area
                                                    purposes, etc.
O&M..............................................  Operation and Maintenance.
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.
Preference.......................................  The provisions of Reclamation Law that require Western 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 Rate.................................  A rate that has been confirmed, approved, and placed into
                                                    effect on an interim basis by the Deputy Secretary of
                                                    Energy.
Revenue Requirement..............................  The revenue required by PRS to recover annual expenses (such
                                                    as O&M, purchase power, transmission service expenses,
                                                    interest, and deferred expenses) and repay Federal
                                                    investments and other assigned costs.
 

Effective Date

    The Provisional Rates will take effect on the first day of the 
first full billing period beginning on or after January 1, 2015, and 
will remain in effect until December 31, 2019, pending approval by FERC 
on a final basis.

Public Notice and Comment

    Western followed the Procedures for Public Participation in Power 
and Transmission Rate Adjustments and Extensions, 10 CFR part 903, in 
developing these rates. The steps Western took to involve interested 
parties in the minor rate process were:
    1. On April 17, 2014, Western mailed a notice announcing an 
informal public meeting would be held via webinar on May 2, 2014, to 
discuss the rate process for the expiring firm power rates for the P-
SMBP--ED. The focus of the webinar was to provide an update on the FY 
2013 PRS, discuss the Base and Drought

[[Page 72672]]

Adder component true up, and plan for the upcoming rate adjustment 
process.
    2. A Federal Register notice (FRN), published on August 8, 2014 (79 
FR 46434), announced the proposed rates for P-SMBP--ED and began the 
30-day public consultation and comment period.
    3. On August 8, 2014, Western mailed letters to all P-SMBP--ED 
Preference Customers and interested parties transmitting the FRN 
published on August 8, 2014.
    4. Western provided a Web page that contains all dates, customer 
letters, presentations, the FRN, and all other information about this 
rate process. The Web page is located at http://www.wapa.gov/ugp/rates/2015FirmRateAdjust.
    5. During the consultation and comment period, which ended 
September 8, 2014, Western received three comment letters. All formally 
submitted comments have been considered in the preparation of this Rate 
Order.

Comments

    Written comments were received from the following interested 
parties:

Mid-West Electric Consumers Association
Missouri River Energy Services
Rodger Otstot

Project Description

    The Pick-Sloan Missouri Basin Program (P-SMBP), originally the 
Missouri River Basin Project, was authorized by Congress in the Flood 
Control Act of 1944. The multipurpose program provides authorization 
for construction of certain public works and improvements on rivers and 
harbors for flood control, generation of hydropower, resources for 
water supply and irrigation, aids to navigation, preservation of water 
quality, enhancement of fish and wildlife, and creation of recreation 
opportunities.
    In addition to the multipurpose water projects authorized by 
Section 9 of the Flood Control Act of 1944, certain other existing 
projects have been integrated with the P-SMBP for power marketing, 
operation, and repayment purposes. The Colorado-Big Thompson, Kendrick, 
and Shoshone Projects were combined with the P-SMBP in 1954, followed 
by the North Platte Project in 1959. These projects were referred to as 
the ``Integrated Projects'' of the P-SMBP. The Flood Control Act of 
1944 also authorized the inclusion of the Fort Peck Project with the P-
SMBP for operation and repayment purposes.
    P-SMBP power is marketed by two Western regions. The Upper Great 
Plains Region (UGPR) markets the Eastern Division (P-SMBP--ED) and the 
Rocky Mountain Region (RMR) markets the Western Division (P-SMBP--WD) 
through the Loveland Area Projects (LAP). The P-SMBP power is marketed 
to approximately 360 firm power customers by UGPR and approximately 53 
firm power customers by RMR.

Power Repayment Study--Firm Power Rate

    Western prepares a PRS each FY to determine if revenues will be 
sufficient to repay, within the required time, all costs assigned to 
the P-SMBP. Repayment criteria are based on Western's applicable laws 
and legislation, as well as policies including DOE Order RA 6120.2. To 
meet Cost Recovery Criteria outlined in DOE Order RA 6120.2, a revised 
study and rate adjustment has been developed to demonstrate that 
sufficient revenues will be collected under Provisional Rates to meet 
future obligations. The PRS revenue requirement and Composite Rate 
remains unchanged, as indicated in Table 1:

                    Table 1--Comparison of P-SMBP--ED Revenue Requirement and Composite Rate
----------------------------------------------------------------------------------------------------------------
                                                           Existing             Provisional
                                                         Requirements           Requirements          Percent
                                                      (January 1, 2010)      (January 1, 2015)        Change
----------------------------------------------------------------------------------------------------------------
P-SMBP_ED Revenue Requirement ($ in millions).....                $320.2                 $320.2                0
P-SMBP_ED Composite Rate (mills/kWh)..............                  33.25                  33.25               0
----------------------------------------------------------------------------------------------------------------

    The P-SMBP--ED annual revenue requirement equals $332.8 million and 
is comprised of a Base revenue requirement, less a 5 percent discount 
for facility credits, resulting in a total revenue requirement of 
$320.2 million.

Existing and Provisional Rates

P-SMBP--ED

    Under Rate Schedule P-SED-F12, the firm capacity charge remains 
$7.65/kWmonth and the firm energy charge remains 19.05 mills/kWh. Under 
Rate Schedule P-SED-FP12, the firm peaking capacity charge remains 
$6.90/kWmonth. Firm Peaking Energy is normally returned. A Firm Peaking 
Energy charge of 19.05 mills/kWh will be assessed in the event energy 
is not returned. These Rate Schedules are formula based to provide for 
an annual adjustment to the Drought Adder component. An 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 
Drought Adder may be adjusted downward pursuant to the formula without 
a public process. The overall capacity and energy charges are not 
changing, as indicated in the following Table 2:

                   Table 2--Comparison of Existing and Provisional P-SMBP--ED Firm Power Rates
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                                                       Existing Charges     Provisional Charges
                                                    Under  Rate Schedules   Under Rate Schedules
                Firm power service                   Effective  (January    Effective  (January       Percent
                                                     1, 2010)  P-SED-F11/   1, 2015)  P-SED-F12/      Change
                                                          P-SED-FP11             P-SED-FP12
----------------------------------------------------------------------------------------------------------------
Firm Capacity ($/kWmonth).........................                  $7.65                  $7.65               0
Firm Energy (mills/kWh)...........................                  19.05                  19.05               0
Firm Peaking Capacity ($/kWmonth).................                  $6.90                  $6.90               0

[[Page 72673]]

 
Firm Peaking Energy (mills/kWh) \1\...............                  19.05                  19.05               0
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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.

    Under the current rate methodology, rates for P-SMBP--ED firm power 
and firm peaking power service are designed to recover an annual 
revenue requirement that includes investment repayment, interest, 
purchase power, O&M, and other expenses within the allowable period.
    Western is trueing up the Base and Drought Adder components of the 
rate schedules and placing new rate schedules into effect for the 5-
year period, beginning January 1, 2015, through December 31, 2019. The 
true-up updates the Base components to represent present costs and 
lowers the Drought Adder components to represent present drought costs. 
Over the past 5-year rate period, the P-SMBP costs included in the 
Drought Adder have decreased as the actual deficits were less than the 
projected deficits. Additionally, there have been drought costs repaid 
ahead of schedule, which decreased the drought deficit interest 
expense. Base costs increased during that same period due to a new 5-
year cost evaluation period, new investments and replacements, and 
inflationary costs.

P-SMBP--WD

    The P-SMBP--WD revenue requirement is incorporated into the LAP 
rate, along with the revenue requirement for the Fryingpan-Arkansas 
Project. The adjustment to the LAP rate is a separate formal rate 
process, which is documented in Rate Order No. WAPA-167. Rate Order No. 
WAPA-167 is also scheduled to go into effect on the first day of the 
first full billing period on or after January 1, 2015.

Certification of Rates

    Western's Administrator certified that the firm power and firm 
peaking power rates under Rate Schedules P-SED-F12 and P-SED-FP12 are 
the lowest possible rates consistent with sound business principles. 
The rates were developed following administrative policies and 
applicable laws.

P-SMBP--ED Firm Power Rate Discussion

    Western is required to establish power rates sufficient to recover 
O&M, purchased power and interest expenses, and repay power investment 
and irrigation aid. The P-SMBP--ED firm power and firm peaking power 
Base and Drought Adder components are updated to represent present 
costs. Under Rate Schedule P-SED-F12, Western will continue identifying 
its firm power service revenue requirement using Base and Drought Adder 
components. The Base component is a fixed revenue requirement that 
includes annual O&M expenses, investment repayment and associated 
interest, normal timing power purchases, and transmission costs. 
Western's normal timing power purchases are due to operational 
constraints (e.g., management of endangered species habitat, water 
quality, navigation, etc.) and are not associated with drought. The 
Base component cannot be adjusted by Western without a public process.
    The Drought Adder component is a formula-based revenue requirement 
that includes costs attributable to drought conditions within P-SMBP. 
The Drought Adder component includes costs associated with future Non-
timing Power Purchases to meet firm power 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 debt. The Drought Adder component is designed 
to repay Western's drought debt within 10 years from the time the debt 
was incurred, using balloon-payment methodology. For example, the 
drought debt incurred by Western in FY 2009 will be repaid by FY 2019.
    The annual revenue requirement calculation will continue to be 
summarized by the following formula: Annual Revenue Requirement = Base 
Revenue Requirement + Drought Adder Revenue Requirement. Both the Base 
and Drought Adder components recover portions of the firm power revenue 
requirement, firm peaking power, and associated 5 percent discount 
revenue necessary to equal the P-SMBP--ED revenue requirement. A 
comparison of the existing and provisional charge components is listed 
in Table 3.

                                                     Table 3--Summary of P-SMBP--ED Rate Components
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                                                               Existing Charges Under Rate Schedules         Provisional Charges Under Rate Schedules
                                                           Effective (January 1, 2010) P-SED-F11/ P-SED-   Effective (January 1, 2015) P-SED-F12/ P-SED-
                   Firm Power Service                    ----------------------FP11--------------------------------------------FP12---------------------
                                                                           Drought Adder                                   Drought Adder
                                                          Base Component     Component     Total Charge   Base Component     Component     Total Charge
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firm Capacity ($/kWmonth)...............................           $3.80           $3.85           $7.65           $4.90           $2.75           $7.65
Firm Energy (mills/kWh).................................            9.53            9.52           19.05           12.33            6.72           19.05
Firm Peaking Capacity ($/kWmonth).......................           $3.45           $3.45           $6.90           $4.45           $2.45           $6.90
Firm Peaking Energy (mills/kWh) \1\.....................            9.53            9.52           19.05           12.26            6.79           19.05
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Firm Peaking Energy is normally returned. This charge will be assessed in the event Firm Peaking Energy is not returned.


[[Page 72674]]

    Continuing to identify the firm electric service revenue 
requirement using Base and Drought Adder components will assist Western 
in presenting the effects of the drought within P-SMBP, demonstrating 
repayment of the drought-related costs, and allow Western to be more 
responsive to changes in drought-related expenses. Western will 
continue to charge and bill Customers firm power service charges for 
energy and capacity, which are the sum of the Base and Drought Adder 
components.
    Western reviews its firm electric service rates annually. Western 
will review the Base component after the annual PRS is completed, 
generally in the first quarter of the calendar year. If an adjustment 
to the Base component is necessary, Western will initiate a public 
process following 10 CFR part 903 before making an adjustment.
    In accordance with the original implementation of the Drought Adder 
component, Western will review the Drought Adder component each 
September to determine if drought costs differ from those projected in 
the PRS. If drought costs differ, Western will determine if an 
adjustment to the Drought Adder component is necessary. Western will 
notify customers by letter each October of the planned incremental or 
decremental adjustment and implement the adjustment in the 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. To give customers 
advance notice, Western will conduct a preliminary review of the 
Drought Adder component in early summer and notify customers by letter 
of the estimated change to the Drought Adder component for the 
following January. Western will verify the final Drought Adder 
component adjustment and notify customers by letter each October of any 
planned increase or decrease in this component. Implementing the 
Drought Adder component adjustment on January 1 of each year will help 
keep the drought deficits from escalating as quickly, will lower the 
interest expense due to drought deficits, will demonstrate responsible 
deficit management, and will provide prompt drought deficit repayments.
    Western's current and provisional rate schedules are formula based 
to provide for an annual adjustment to the Drought Adder component. An 
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 Drought Adder may be adjusted downward pursuant to 
the formula without a public process.

Statement of Revenue and Related Expenses

    The following Table 4 provides a summary of projected revenue and 
expense data for the total P-SMBP, including both the Eastern and 
Western Division's firm electric service revenue requirements through 
the 5-year rate approval period. The firm power rates for both 
divisions have been developed with the following revenues and expenses 
for the P-SMBP:

  Table 4--Total P-SMBP Firm Power Comparison of 5-Year Rate Period (FY 2015-2019) Total Revenues and Expenses
----------------------------------------------------------------------------------------------------------------
                                                         Existing Rate     Provisional Rate
                                                            ($000)              ($000)        Difference  ($000)
----------------------------------------------------------------------------------------------------------------
Total Revenues......................................          $2,625,336          $2,679,973             $54,637
----------------------------------------------------------------------------------------------------------------
Revenue Distribution
Expenses:
    O&M.............................................            $904,884          $1,082,969            $178,085
    Purchased Power.................................             440,038             164,049           (275,989)
    Interest........................................             650,671             561,528            (89,143)
    Transmission....................................              65,853              64,072             (1,781)
                                                     -----------------------------------------------------------
        Total Expenses..............................          $2,061,446          $1,872,618          $(188,828)
Principal Payments:
    Capitalized Expenses (Deficits) \1\.............            $483,252            $345,006          $(138,246)
    Original Project and Additions \1\..............              10,414             401,193             390,779
    Replacements \1\................................               4,825              61,156              56,331
    Irrigation Aid..................................              65,399                   0            (65,399)
                                                     -----------------------------------------------------------
        Total Principal Payments....................            $563,890            $807,355            $243,465
                                                     -----------------------------------------------------------
        Total Revenue Distribution..................          $2,625,336          $2,679,973             $54,637
----------------------------------------------------------------------------------------------------------------
\1\ Due to deficit conditions between 2001 and 2009, revenues generated in the cost evaluation period are
  applied toward repayment of deficits rather than repayment of project additions and replacements. All deficits
  are projected to be repaid by 2018.

Basis for Rate Development

    The existing charges for firm power and firm peaking power under 
Rate Schedules F11 and FP11, which expire December 31, 2014, continue 
to provide sufficient revenue to meet the P-SMBP--ED repayment 
obligations. The total annual revenue requirement for P-SMBP--ED 
remains $320.2 million for firm power and firm peaking power service, 
and the overall capacity and energy charges are not changing. The 
Provisional Rates, under Rate Schedules F12 and FP12, will take effect 
on the first full billing period on or after January 1, 2015, and will 
remain in effect on an interim basis, pending FERC's confirmation and 
approval of the rate schedules or substitute rates on a final basis, 
through December 31, 2019, or until the rate schedules are superseded.

Comments

    Western received three comment letters during the public 
consultation and comment period. The comments expressed in these 
letters have been paraphrased, where appropriate, without compromising 
the meaning of the comments.

A. Comment: Two customer representatives recognized the need for true 
up of the Base and Drought Adder

[[Page 72675]]

charge components of the composite rate.
Response: Western agrees with the above comment. Rather than extend 
rates with out-of-date charge components, Western choose to do a minor 
rate adjustment to address trueing up the charge components.
B. Comment: One customer representative supported the rate 
modifications as proposed, and emphasized the need for continued cost 
control regarding the Base component. They stated the Base costs cannot 
grow unabated and replace the shrinking Drought Adder. The customer 
stressed that cost control is of paramount importance.
Response: Western agrees with the above comment. Western is committed 
to keeping the power rates at the lowest possible rates while maintain 
sound business principles. All budgeted O&M and capital improvements 
are vetted annually through customer work plan meetings to access the 
impacts to the rates.
C. Comment: One interested party expressed concern over the 
suballocation of the power allocation for the Pick-Sloan Missouri Basin 
Program. The customer feels the allocation is not being calculated in 
agreement with the ultimate development concept or in accordance with 
the repayment rules set forth in the Report of Financial Position, 
Missouri River Basin Project, dated December 1963.
Response: Compliance with applicable authority regarding suballocations 
for the Pick-Sloan Missouri Basin Program is beyond the scope of this 
minor rate adjustment process and public process. Western is in 
compliance with applicable authority. Moreover, any change in the cost 
allocations would require Congressional approval pursuant to the DOE 
Organization Act of 1977 (42 U.S.C. 7152(a)(3)).

Availability of Information

    All documents related to this action are available for inspection 
and copying at the Upper Great Plains Regional Office, located at 2900 
4th Avenue North, Billings, Montana. These documents are also available 
on Western's Web site located at http://www.wapa.gov/ugp/rates/
2015firmrateadjust.

Ratemaking Procedure Requirements:

Environmental Compliance

    In compliance with the National Environmental Policy Act (NEPA) of 
1969 (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), Western 
has determined this action is categorically excluded from preparing 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 clearance of this notice by the 
Office of Management and Budget is required.

Submission to the Federal Energy Regulatory Commission

    The Provisional 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 foregoing and under the authority delegated to me, I 
confirm and approve on an interim basis, effective on the first full 
billing period on or after January 1, 2015, Rate Schedules P-SED-F12 
and P-SED-FP12 for the Pick-Sloan Missouri Basin Program--Eastern 
Division Project of the Western Area Power Administration. These rate 
schedules shall remain in effect on an interim basis, pending FERC's 
confirmation and approval of the rate schedules or substitute rates on 
a final basis through December 31, 2019, or until the rate schedules 
are superseded.

    Dated: December 2, 2014.
Elizabeth Sherwood-Randall,
Deputy Secretary of Energy.
Rate Schedule P-SED-F12
(Supersedes Schedule P-SED-F11)
January 1, 2015

United States Department of Energy

Western Area Power Administration

Pick-Sloan Missouri Basin Program--Eastern Division

Montana, North Dakota, South Dakota, Minnesota, Iowa, Nebraska

SCHEDULE OF RATES FOR FIRM POWER SERVICE

(Approved Under Rate Order No. WAPA-166)

Effective:

    The first day of the first full billing period beginning on or 
after January 1, 2015, through December 31, 2019, or until superseded 
by another rate schedule.

Available:

    Within the marketing area served by the Eastern Division of the 
Pick-Sloan Missouri Basin Program.

Applicable:

    To the power and energy delivered to customers as firm power 
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, 2015, under the Rate:

CAPACITY CHARGE:
    $7.65 for each kilowatt per month (kWmonth) of billing capacity.
ENERGY CHARGE:
    19.05 mills for each kilowatthour (kWh) for all energy delivered as 
firm power service.
    BILLING CAPACITY: The billing capacity will be as defined by the 
power sales contract.

    Base: A fixed revenue requirement that includes operation and 
maintenance expense, investments and replacements, interest on 
investments and replacements, normal timing purchase power (purchases 
due to operational constraints, not associated with drought), and 
transmission costs. The Base component charges are fixed amounts under 
this Rate Schedule, determined as follows:

[[Page 72676]]

[GRAPHIC] [TIFF OMITTED] TN08DE14.018

Process:

    Any proposed change to the Base component will require a public 
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 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 Drought Adder may be adjusted 
downward pursuant to the formulas without a public process.
    A revised Drought Adder charge may go into effect January 1 of each 
year based on the formula above. Western will notify customers annually 
in October of the revised monthly charges. Any change to the Drought 
Adder component will be identified in a revision to charges under this 
rate schedule.

Adjustments:

For Character and Conditions of Service:

Customers who receive deliveries at transmission voltage may, in some 
instances, be eligible to receive a 5 percent discount on capacity and 
energy charges when facilities are provided by the customer that 
results in a sufficient savings to Western to justify the discount. The 
determination of eligibility for receipt of the voltage discount shall 
be exclusively vested in Western.

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 at the 
point of delivery between 95-percent lagging and 95-percent leading.

Rate Schedule P-SED-FP12
(Supersedes Schedule P-SED-FP11)
January 1, 2015

United States Department of Energy

Western Area Power Administration

Pick-Sloan Missouri Basin Program--Eastern Division Montana, North 
Dakota, South Dakota, Minnesota, Iowa, Nebraska

SCHEDULE OF RATES FOR FIRM PEAKING POWER SERVICE

(Approved Under Rate Order No. WAPA-166)

Effective:

    The first day of the first full billing period beginning on or 
after January 1, 2015, through December 31, 2019, or until superseded 
by another rate schedule.

Available:

    Within the marketing area served by the Eastern Division of the 
Pick-Sloan Missouri Basin Program, to customers with generating 
resources, enabling them to use firm peaking power service.

Applicable:

    To the power sold to customers as firm peaking power 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, 2015, under the Rate:

CAPACITY CHARGE:
    $6.90 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:
    19.05 mills for each kilowatthour (kWh) for all energy scheduled 
for delivery without return.
    Base: A fixed revenue requirement that includes operation and 
maintenance expense, investments and replacements, interest on 
investments and replacements, normal timing purchase power (purchases 
due to operational constraints, not associated with drought), and 
transmission costs. The Base component charges are fixed amounts under 
this Rate Schedule, determined as follows:

[[Page 72677]]

[GRAPHIC] [TIFF OMITTED] TN08DE14.019

Process:

    Any proposed change to the Base component will require a public 
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 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 Drought Adder may be adjusted 
downward pursuant to the formulas without a public process.
    A revised Drought Adder charge may go into effect January 1 of each 
year based on the formula above. Western will notify customers annually 
in October of the revised monthly charges. Any change to the Drought 
Adder component will be identified in a revision to charges under this 
rate schedule.
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 formula rate.
[FR Doc. 2014-28677 Filed 12-5-14; 8:45 am]
BILLING CODE 6450-01-P