[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