[Federal Register Volume 84, Number 47 (Monday, March 11, 2019)]
[Notices]
[Pages 8714-8715]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-04343]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Boulder Canyon Project

AGENCY: Western Area Power Administration, DOE.

ACTION: Fiscal Year 2019 Boulder Canyon Project base charge and rates 
for electric service.

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SUMMARY: The Deputy Secretary of Energy approves, on a final basis, the 
Boulder Canyon Project (BCP) base charge and rates for Fiscal Year (FY) 
2019 under Rate Schedule BCP-F10. Under Rate Schedule BCP-F10, the BCP 
base charge and rates are calculated annually.

DATES: The FY 2019 base charge and rates will be effective April 1, 
2019 and will remain in effect through September 30, 2019.

FOR FURTHER INFORMATION CONTACT:  Mr. Ronald E. Moulton, Senior Vice 
President and Regional Manager, or Ms. Tina Ramsey, Rates Manager, 
Desert Southwest Region, Western Area Power Administration, P.O. Box 
6457, Phoenix, AZ 85005-6457, (602) 605-2525, or [email protected].

SUPPLEMENTARY INFORMATION: Hoover Dam, authorized by the Boulder Canyon 
Project Act of 1928, as amended (43 U.S.C. 617 et seq.), 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). In 
collaboration with the Bureau of Reclamation (Reclamation), the Western 
Area Power Administration (WAPA) markets and delivers hydropower from 
Hoover Dam's power plant through high-voltage transmission lines and 
substations to Arizona, Southern California, and Southern Nevada.
    The rate-setting methodology for BCP calculates an annual base 
charge rather than a unit rate for Hoover Dam hydropower. The base 
charge recovers an annual revenue requirement that includes projected 
costs from investment repayment, interest, operations, maintenance and 
replacements, payments to States, and Hoover Dam visitor services. Non-
power revenue projections such as water sales, Hoover Dam visitor 
services, ancillary services, and late fees help offset these projected 
costs. Customers are billed a percentage of the base charge in 
proportion to their Hoover power allocation. A unit rate is calculated 
for comparative purposes but is not used to determine charges for 
service.
    On June 6, 2018, the Federal Energy Regulatory Commission (FERC) 
confirmed and approved Rate Schedule BCP-F10 for a five-year period 
ending September 30, 2022.\1\ Rate Schedule BCP-F10 and the BCP 
Electric Service Agreement require WAPA to determine the annual base 
charge and rates for the next fiscal year before October 1 of each 
year. The FY 2018 BCP base charge and rates expired on September 30, 
2018. Therefore, the Administrator of the WAPA approved rates for 
short-term sales of BCP electric service until the Deputy Secretary of 
Energy approved the final base charge and rates.
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    \1\ Order Confirming and Approving Rate Schedule on a Final 
Basis, FERC Docket No. EF18-1-000, 163 FERC ] 62,154 (2018).

[[Page 8715]]



                                       Comparison of Base Charge and Rates
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                                                      FY 2018         FY 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 FY 2019 base charge for BCP electric service decreased by $7.2 
million to $69.7 million; a 9.3% reduction. This FY 2019 decrease 
follows a one-time increase to the FY 2018 base charge due to 
Reclamation's collection of $15 million in working capital in FY 2018. 
There is no need to collect working capital in the FY 2019 base charge, 
but other factors--namely, a $5.1 million decrease in non-power revenue 
and Reclamation's deferment of $2.7 million in BCP operations and 
maintenance costs from FY 2018 to FY 2019--placed upward pressure on 
the base charge. This necessitated a $7.8 million offset against the 
$15 million decrease in the FY 2019 base charge, resulting in an 
overall decrease of $7.2 million in the FY 2019 base charge compared to 
the FY 2018 base charge. WAPA's costs remain relatively flat and do not 
result in a measurable effect on the base charge.
    The notice of the proposed FY 2019 base charge and rates for 
electric service was published consistent with procedures set forth in 
10 CFR part 903 and 18 CFR part 300. WAPA took the following steps to 
involve the public in the rate adjustment process:
    1. WAPA published a Federal Register \2\ notice announcing the 
proposed formula rates, initiating the 90-day public consultation and 
comment period, setting forth the date and location of public 
information and public comment forums, and outlining the procedures for 
public participation.
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    \2\ 83 FR 36,586 (July 30, 2018).
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    2. On August 29, 2018, WAPA held a public information forum in 
Phoenix, Arizona. WAPA's representatives explained the proposed changes 
to the formula rates, answered questions, and provided handouts.
    3. On September 28, 2018, WAPA held a public comment forum in 
Phoenix, Arizona, to provide attendees an opportunity to comment and 
ask questions for the record.
    4. WAPA posted information about this public process at https://www.wapa.gov/regions/DSW/Rates/Pages/boulder-canyon-rates.aspx.
    5. The consultation and comment period ended on October 29, 2018, 
and WAPA received one comment. The comment appears below, paraphrased 
where appropriate without compromising its meaning.
    Comment: A commenter requested that the rate process administered 
by WAPA be accomplished in a timely manner and prior to October 1.
    Response: WAPA experienced delays in implementing the BCP rate 
process due, in part, to the beginning of a new BCP marketing period on 
October 1, 2018. The true-up of financial balances between the previous 
and current BCP contractors, for example, took longer than anticipated. 
WAPA notes that required administrative actions associated with the new 
marketing period have been implemented.
    Following DOE's review of WAPA's proposal, I hereby approve on a 
final basis the FY 2019 base charge and rates for BCP electric service 
under Rate Schedule BCP-F10 through September 30, 2019.

    Dated: March 1, 2019.
Mark W. Menezes,
Under Secretary of Energy.
[FR Doc. 2019-04343 Filed 3-8-19; 8:45 am]
BILLING CODE 6450-01-P