[Federal Register Volume 83, Number 146 (Monday, July 30, 2018)]
[Notices]
[Pages 36586-36588]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-16248]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Boulder Canyon Project

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of proposed fiscal year 2019 base charge and rates for 
electric service.

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SUMMARY: Western Area Power Administration (WAPA) is proposing to 
calculate formula rates for fiscal year (FY) 2019 Boulder Canyon 
Project (BCP) electric service. The expiration of the FY 2018 base 
charge and rates on September 30, 2018, requires this action. The 
proposed base charge will provide sufficient revenue to recover all 
annual costs and repay investment obligations within the allowable 
period. The proposed base charge and rates are scheduled to become 
effective on October 1, 2018, and will remain in effect through 
September 30, 2019. Publication of this Federal Register notice will 
initiate the public process.

DATES: The consultation and comment period begins today and will end 
October 29, 2018. WAPA will present a detailed explanation of the 
proposed FY 2019 base charge and rates at a public information forum 
that will be held on August 29, 2018, from 10:00 a.m. to 12:00 p.m. 
Mountain Standard Time (MST) in Phoenix, Arizona. WAPA will also host a 
public comment forum that will be held on September 28, 2018, from 
10:00 a.m. to 12:00 p.m. MST in Phoenix, Arizona. Written comments will 
be accepted any time during the consultation and comment period.

ADDRESSES: The public information forum and public comment forum will 
be held at WAPA's Desert Southwest Customer Service Regional Office 
located at 615 South 43rd Avenue, Phoenix, Arizona 85009. Send written 
comments to Mr. Ronald E. Moulton, Regional Manager and Senior Vice 
President, Desert Southwest Customer Service Region, Western Area Power 
Administration, P.O. Box 6457, Phoenix, Arizona 85005-6457, or email 
[email protected]. WAPA will post information about the rate process 
and written comments received on its website at: http://www.wapa.gov/regions/DSW/Rates/Pages/boulder-canyon-rates.aspx. Written comments 
must be received by the end of the consultation and comment period to 
be considered by WAPA in its decision process.
    As access to federal facilities is controlled, any U.S. citizen 
wishing to attend a public forum at WAPA must

[[Page 36587]]

present an official form of picture identification (ID), such as a U.S. 
driver's license, U.S. passport, U.S. government ID, or U.S. military 
ID at the time of the meeting. Foreign nationals should contact Ms. 
Tina Ramsey, Rates Manager, Desert Southwest Customer Service Region, 
Western Area Power Administration, at (602) 605-2565 or email at 
[email protected] in advance of a forum to obtain the necessary form for 
admittance to the Desert Southwest Customer Service Regional Office.

FOR FURTHER INFORMATION CONTACT: Ms. Tina Ramsey, Rates Manager, Desert 
Southwest Customer Service Region, Western Area Power Administration, 
P.O. Box 6457, Phoenix, Arizona 85005-6457, (602) 605-2565, or email 
[email protected].

SUPPLEMENTARY INFORMATION: 
    Hoover Dam, authorized by the Boulder Canyon Project Act (45 Stat. 
1057, December 21, 1928), sits on the Colorado River along the Arizona-
Nevada border. Hoover Dam's power plant has 19 generating units (two 
for plant use) and an installed capacity of 2,078.8 megawatts (4,800 
kilowatts for plant use). High-voltage transmission lines and 
substations deliver this power to southern Nevada, Arizona, and 
southern California, where it is marketed and sold by WAPA in 
collaboration with the Bureau of Reclamation (Reclamation).
    The rate-setting methodology for BCP calculates an annual base 
charge rather than a unit rate for power. Though WAPA determines a unit 
rate for comparative purposes, BCP contractors are billed the base 
charge in proportion to their allocation of BCP power.
    Rate Schedule BCP-F10 was confirmed and approved by the Federal 
Energy Regulatory Commission (FERC) for a five-year period ending 
September 30, 2022.\1\ Rate Schedule BCP-F10 requires the base charge 
and rate formulas be calculated annually based on current financial and 
hydrology data. The base charge is designed to recover an annual 
revenue requirement that includes investment repayment, interest, 
operations, maintenance and replacements, payments to states, and 
Hoover Dam visitor services. The total costs are offset by projected 
revenue from water sales, the Hoover Dam visitor services, ancillary 
services, and late fees. The annual revenue requirement is the base 
charge for electric service divided equally between capacity and 
energy. The annual composite rate is the base charge divided by annual 
energy sales.
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    \1\ EF18-1-000 (June 6, 2018).

                                       Comparison of Base Charge and Rates
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                                                    Existing FY     Proposed FY
                                                       2018            2019        Amount change  Percent change
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Base Charge ($).................................     $76,910,193     $69,741,657    - $7,168,536           - 9.3
Composite Rate (mills/kWh)......................           19.98           18.92          - 1.06           - 5.3
Energy Rate (mills/kWh).........................            9.99            9.46          - 0.53           - 5.3
Capacity Rate ($/kW-Mo).........................           $1.99           $1.88         - $0.11           - 5.4
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    The Federal Register notice initiating the FY 2018 public process 
proposed a one-time $15 million working capital collection for 
Reclamation for the new 50-year marketing period beginning October 1, 
2017, which caused an increase to the base charge for FY 2018.\2\ At 
the time, WAPA anticipated a corresponding $15 million reduction to the 
base charge for FY 2019. During the FY 2018 public process, Reclamation 
and WAPA worked collaboratively with BCP customers to address customer 
concerns about the increase in the base charge resulting from the 
working capital collection. Reclamation and WAPA moderated the impact 
of the base charge increase by lowering some costs in FY 2018 and 
deferring other costs to FY 2019. The final result was a $7.2 million 
increase to the base charge rather than the $15 million increase 
originally proposed.
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    \2\ 82 FR 27814 (September 18, 2017).
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    The proposed FY 2019 base charge is decreasing $7.2 million from 
the FY 2018 base charge. This change is attributed to deferred costs, 
adjusted non-power revenue projections, and working capital. 
Reclamation's costs for operations, maintenance and replacements, and 
visitor services are increasing $2.7 million primarily as a result of 
deferrals from FY 2018, while WAPA's costs remain relatively flat. Non-
power revenue projections are decreasing $5.1 million due to decreased 
tourism projections while the Hoover Dam Visitor Center and elevators 
are being renovated. The $15 million working capital for the new 
marketing period was collected in FY 2018 and no further collections 
are necessary in FY 2019.
    Reclamation and WAPA will continue to review projections to further 
reduce the proposed FY 2019 base charge, thereby benefitting all BCP 
customers. A lower base charge will also help offset the impact of 
financial obligations from the previous marketing period, referred to 
as transitional items, assessed to new customers independent of the 
base charge calculation. Any resulting changes to the proposed FY 2019 
base charge will be presented at the public information forum.
    The proposed FY 2019 composite and energy rates decreased 5.3 
percent and the capacity rate decreased 5.4 percent compared to the FY 
2018 rates. The percentage decrease between the proposed base charge 
and rates differs due to energy and capacity projections.
    This proposal, to be effective October 1, 2018, is preliminary and 
subject to change based on modifications to forecasts before 
publication of the final base charge and rates.

Legal Authority

    The proposed formulas for electric service and the base charge and 
rates constitute a major rate adjustment, as defined by 10 CFR 
903.2(e); therefore WAPA will hold public information and public 
comment forums for this rate adjustment, pursuant to 10 CFR 903.15 and 
903.16. WAPA will review and consider all timely public comments and 
amend or adjust the proposal as appropriate. Proposed rates will be 
forwarded to the Deputy Secretary of Energy for approval.
    WAPA is proposing this action 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 Reclamation under the Reclamation Act of 1902 (ch. 1093, 32 Stat. 
388), as amended and supplemented by subsequent laws, particularly 
section

[[Page 36588]]

9(c) of the Reclamation Project Act of 1939 (43 U.S.C. 485h(c)); and 
other acts that specifically apply to the BCP.
    By Delegation Order No. 00-037.00B effective November 19, 2016, the 
Secretary of Energy delegated: (1) The authority to develop power and 
transmission rates to WAPA'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 rate adjustments (10 CFR 903) were published on 
September 18, 1985 (50 FR 37835).

Availability of Information

    All studies, comments, letters, memorandums, and other documents 
WAPA prepares or uses to develop the proposed base charge and rates 
will be available for inspection and copying at the Desert Southwest 
Customer Service Regional Office, Western Area Power Administration, 
located at 615 South 43rd Avenue, Phoenix, Arizona 85009. Many of these 
documents and supporting information are available on WAPA's website 
at: http://www.wapa.gov/regions/DSW/Rates/Pages/boulder-canyon-rates.aspx.

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), WAPA 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

    WAPA 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 20, 2018.
Mark A. Gabriel,
Administrator.
[FR Doc. 2018-16248 Filed 7-27-18; 8:45 am]
 BILLING CODE 6450-01-P