[Federal Register Volume 79, Number 236 (Tuesday, December 9, 2014)]
[Notices]
[Pages 73067-73070]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-28866]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Colorado River Storage Project--Rate Order No. WAPA-169

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of Proposed Salt Lake City Area Integrated Projects Firm 
Power Rate and Colorado River Storage Project Transmission and 
Ancillary Services Rates.

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SUMMARY: Western Area Power Administration (Western) is proposing 
adjustments to the Salt Lake City Area Integrated Projects (SLCA/IP) 
Firm Power Rate and the Colorado River Storage Project (CRSP) 
Transmission and Ancillary Services Rates. The SLCA/IP consists of the 
CRSP, Collbran,

[[Page 73068]]

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 Schedules SLIP-F9, SP-PTP7, SP-
NW3, SP-NFT6, SP-SD3, SP-RS3, SP-EI3, SP-FR3, and SP-SSR3 will expire 
September 30, 2015. The proposed rates, under Rate Schedules SLIP-F10, 
SP-PTP8, SP-NW4, SP-NFT7, SP-SD4, SP-RS4, SP-EI4, SP-FR4, SP-SSR4, and 
SP-UU1 are scheduled to be placed into effect on an interim basis on 
October 1, 2015, and will remain in effect through September 30, 2020, 
or until superseded. These rates will provide sufficient revenue to pay 
all annual costs, including operation, maintenance, replacements 
(OM&R), interest expenses, and the required repayment of investment 
within the allowable period.
    Western will prepare a brochure that provides detailed information 
on the rates and will make it available to all interested parties. 
Publication of this Federal Register notice (FRN) begins the formal 
process for the proposed rates.

DATES: The consultation and comment period closes on March 13, 2015. 
Western will present a detailed explanation of the proposed rates at a 
public information forum to be held on January 15, 2015, 11:30 a.m. 
MST, in Salt Lake City, Utah. Western will accept oral and written 
comments at a public comment forum to be held on February 5, 2015, 
11:30 a.m. MST, in Salt Lake City, Utah. 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: Ms. Lynn 
C. Jeka, 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, telephone (801) 524-6372, 
email [email protected] or [email protected]. Western will post 
information regarding this rate process on its Web page located at: 
http://www.wapa.gov/crsp/ratescrsp/WAPA-169.htm. Western will post 
official comments received by letter and email to its Web page 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 location of the public 
information forum and the comment forum is the Holiday Inn & Suites 
Salt Lake City Airport West, 5001 Wiley Post Way, Salt Lake City, Utah.

FOR FURTHER INFORMATION CONTACT: Mr. Rodney G. Bailey, Power Marketing 
Manager, Colorado River Storage Project Management Center, Western Area 
Power Administration, 150 East Social Hall Avenue, Suite 300, Salt Lake 
City, UT 84111-1580, telephone (801) 524-4007, email [email protected].

SUPPLEMENTARY INFORMATION: The proposed rates for SLCA/IP Firm Power 
and CRSP Transmission and Ancillary Services will collect annual 
revenue sufficient to recover annual OM&R expenses, interest expense, 
irrigation assistance, and capital requirements, ensuring repayment of 
the project within the cost recovery criteria set forth in DOE Order RA 
6120.2.
    The Deputy Secretary of Energy approved Rate Schedules SLIP-F9 for 
SLCA/IP Firm Power and SP-PTP7, SP-NW3, SP-NFT6, SP-SD3, SP-RS3, SP-
EI3, SP-FR3, and SP-SSR3 for CRSP Transmission and Ancillary Services 
on August 1, 2008 \1\ for a 5-year period ending on September 30, 2013. 
The Deputy Secretary of Energy approved Rate Order WAPA-161 \2\ on 
September 6, 2013, extending the rates through September 30, 2015.
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    \1\ Rate Order No. WAPA-137, 73 FR 52980, September 12, 2008. 
FERC confirmed and approved the rate schedules on June 19, 2009, 
under FERC Docket No. EF08-5171-000 (127 FERC ] 62,220).
    \2\ Rate Order No. WAPA-161, 78 FR 56692, September 13, 2013.
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Firm Power Rate

    Under the current Rate Schedule SLIP-F9, the energy rate is 12.19 
mills per kilowatthour (mills/kWh), and the capacity rate is $5.18 per 
kilowattmonth (kWmonth). The composite rate is 29.62 mills/kWh.
    The proposed rates under Rate Schedule SLIP-F10 are intended to 
become effective October 1, 2015. The revenue requirements for the 
proposed rates are based on the fiscal year (FY) 2016 work plans for 
Western and the Bureau of Reclamation (Reclamation). These work plans 
form the basis for the FY 2016 Congressional budget requests for the 
two agencies. If available, the FY 2017 work plans will be included in 
the final rate order submission. The FY 2013 historical financial data 
are the latest available for the proposed rate. The final rate-setting 
study will include the FY 2014 historical financial data. As in the 
current Rate Schedule, Western will determine firming energy purchase 
expenses by using Reclamation's long-term, median hydrological studies. 
The August 2014, 24-month study is used for the proposed Rate Order, 
and the April 2015, 24-month study for the final Rate Order. This 
reflects the firming purchase power requirements between projected 
generation and contract obligations for FY 2016-FY 2020. In the 
existing SLIP-F9 Rate Schedule, $4 million a year is projected in the 
remaining out years to cover operational costs for the Energy Marketing 
and Management Office (EMMO) in Montrose, Colorado. The proposed Rate 
Schedule, SLIP-F10, will include the $4 million for the EMMO 
operational costs every year, not just the out years. Table 1 below 
displays the current and proposed Firm Power Rates.

                          Table 1--Comparison of Existing and Proposed Firm Power Rates
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                                                        Existing rate under  Proposed rate under
                                                        rate schedule SLIP-  rate schedule SLIP-      Change
                     Rate schedule                          F9 effective        F10 effective        (percent)
                                                          October 1, 2008      October 1, 2015
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Base Rate:
    Firm Energy: (mills/kWh)..........................                12.19                12.38             1.6
    Firm Capacity: ($kW/month)........................                 5.18                 5.26             1.5
Composite Rate: (mills/kWh)...........................                29.62                29.93             1.0
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[[Page 73069]]

Cost Recovery Charge

    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. The volatility of hydropower generation and power prices 
continue to be a concern for 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 (CRC) as in the 
current Rate Schedule SLIP-F9. The CRC is an additional charge on all 
sustainable hydropower (SHP) energy deliveries (long-term SLCA/IP 
hydropower capacity with energy) that may be implemented when, among 
other things, the Basin Fund's balance is at risk due to low hydropower 
generation, high prices for firming power, funding for capitalized 
investments, etc. Western will establish the energy waiver level (WL) 
per the formulas of the CRC. The WL provides Customers the ability for 
Western to reduce purchase power expenses by scheduling less energy 
than their contractual amounts. Customers may choose not to take the 
full SHP energy supplied using the WL. For those Customers who 
voluntarily schedule no more energy than their proportionate share of 
the WL, Western will waive the CRC for that year. 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 detail in the 
rate brochure and at the public information forum. Western will 
continue to include a mechanism that allows for re-calculation of the 
CRC if the annual water release from Glen Canyon Dam falls below 8.23 
million acre-feet.
    The proposed changes for the CRC will include ``tiers'' to quantify 
the need for a CRC-based on the balance of the Basin Fund and Western's 
ability to meet contractual agreements. The CRC will be implemented at 
the discretion of Western when the Basin Fund's balance meets the 
criteria in the tiers below. The Basin Fund Beginning Balance (BFBB) 
determines the applicable tier criteria. The minimum Basin Fund target 
balance is $40 million. In addition to the current process of an annual 
review for tiers one through three below and Customer notification in 
May for the upcoming FY, Western will conduct additional reviews as 
specified in tiers four and five below that are tailored to meet the 
urgency for cost recovery:
    CRSP has the option to charge or not charge a CRC if the BFBB is:
    i. Greater than $150 million with an expected decrease below $75 
million.
    ii. Less than $150 million but greater than $120 million with an 
expected 50-percent decrease.
    iii. Less than $120 million but greater than $90 million with an 
expected 40-percent decrease.
    iv. Less than $90 million but greater than $60 million with an 
expected 25-percent decrease, conduct semi-annual reviews in May and 
November.
    v. Less than $60 million but greater than $40 million with an 
expected decrease below $40 million; conduct monthly reviews.
    If it is determined during the additional reviews that a CRC is 
necessary, Customers will be notified that a CRC will be implemented in 
90 days. Western will provide its Customers with information concerning 
the anticipated CRC and give them 45 days to request a waiver or accept 
the CRC. The established CRC will be in effect for 12 months from the 
date implemented.

Proposed Formula Transmission Rate (SP-PTP8)

    Western proposes to change the method used to calculate the Annual 
Transmission Costs to recover transmission expenses and investments on 
a current basis rather than a historical basis. This will allow Western 
to more accurately match cost recovery with cost incurrence. Western 
will use projections to estimate transmission costs and load for the 
upcoming year in the annual rate calculation. Currently, the rate 
calculation for a year uses actual data from 2 years prior to that 
year. This is a change in the manner in which the inputs for the rate 
are developed, rather than a change to the formula rate itself.
    Western will ``true up'' the cost estimates with Western's actual 
costs. Revenue collected in excess of Western's actual net revenue 
requirement will be returned to Customers through a credit against 
rates in a subsequent year. Actual revenues that are less than the net 
revenue requirement would likewise be recovered in a subsequent year. 
The ``true-up'' procedure will ensure that Western recovers no more and 
no less than the actual transmission costs for the year.

Proposed Rate for Regulation and Frequency Response Service (SP-FR4)

    The current rate states ``[i]f the CRSP MC has regulation available 
for sale, the SLCA/IP firm power capacity rate, currently in effect, 
will be charged. If regulation is unavailable from SLCA/IP resources, 
the Western Area Lower Colorado or Western Area Colorado Missouri 
balancing authorities can provide the service, in accordance with their 
respective rate schedules.'' Western proposes to use a formula-based 
rate that will more accurately reflect the cost of the Regulation and 
Frequency Response Service rather than the SLCA/IP firm power capacity 
rate. The formula will be discussed in detail in the rate brochure and 
during the Information Forum.

Proposed Rate for Unreserved Use of Transmission Service (SP-UU1)

    Western is proposing to migrate from an Unauthorized Use Charge to 
an Unreserved Use of Transmission Service (Unreserved Use) Rate under 
the proposed Rate Schedule SP-UU1. Unreserved Use is provided when a 
transmission customer uses transmission service it has not reserved or 
exceeds its reserved capacity.
    Western proposes that a transmission customer that engages in 
Unreserved Use be assessed a penalty charge of 200 percent of Western's 
approved transmission service rate for Firm Point-to-Point transmission 
service as follows:
    (i) The Unreserved Use penalty for a single hour of unreserved use 
will be based upon the rate for daily firm point-to-point service.
    (ii) The Unreserved Use penalty for more than one assessment for a 
given duration (e.g., daily) will increase to the next longest duration 
(e.g., weekly).
    (iii) The Unreserved Use penalty charge for multiple instances of 
unreserved use (e.g., more than 1 hour) within a day will be based on 
the rate for daily firm point-to-point service. Multiple instances of 
unreserved use isolated to 1 calendar week will result in a penalty 
based on the charge for weekly firm point-to-point service. The penalty 
charge for multiple instances of unreserved use during more than 1 week 
during a calendar month will be based on the rate for monthly firm 
point-to-point service.
    A transmission customer that exceeds its firm reserved capacity at 
any point of receipt or point of delivery, or an eligible customer that 
uses transmission service at a point of receipt or point of delivery 
that it has not reserved will be required to pay, in addition to the 
Unreserved Use penalties, for all ancillary services identified in 
Western's Open Access Transmission Tariff based on the amount of 
transmission service it used and did not reserve.

[[Page 73070]]

Proposed Rates for Network Integration Transmission, Non-Firm Point-to-
Point Transmission, Scheduling-System Control and Dispatch, Reactive 
Supply and Voltage Control, Energy Imbalance, and Spinning and 
Supplemental Reserves (SP-NW4, SP-NFT7, SP-SD4, SP-RS4, SP-EI4, SP-
SSR4)

    Western is not proposing any formula changes to the existing Rate 
Schedules for Network Integration Transmission, Non-Firm Point-to-Point 
Transmission, Scheduling-System Control & Dispatch, Reactive Supply & 
Voltage Control, Energy Imbalance, and Spinning & Supplemental 
Reserves.

Legal Authority

    The proposed rates constitute a major rate adjustment, as defined 
by 10 CFR part 903, and Western will hold both a public information 
forum and a public comment forum. Western will review all timely public 
comments and make amendments or adjustments to the proposal as 
appropriate. A final 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 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. 00-037.00A, 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 brochures, studies, comments, letters, memorandums, and 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, UT. Many of these documents and supporting information are 
also available on Western's Web page, located at http://www.wapa.gov/crsp/ratescrsp/WAPA-169.htm.

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 
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: December 1, 2014.
Mark A. Gabriel,
Administrator.
[FR Doc. 2014-28866 Filed 12-8-14; 8:45 am]
BILLING CODE 6450-01-P