[Federal Register Volume 84, Number 94 (Wednesday, May 15, 2019)]
[Notices]
[Pages 21771-21772]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-10057]


-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Western Area Power Administration


Falcon and Amistad Projects--Rate Order No. WAPA-186

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of rate order extending firm power formula rate.

-----------------------------------------------------------------------

SUMMARY: The Under Secretary of Energy approves, on an interim basis, 
the extension of the existing Falcon and Amistad Projects' (Projects) 
firm power formula rate through June 7, 2024 and will submit them to 
the Federal Energy Regulatory Commission (FERC) for confirmation and 
approval on a final basis. The existing firm power formula rate is set 
to expire June 7, 2019. This rate extension makes no change to the 
existing formula rate.

DATES: The firm power formula rate will be placed into effect on an 
interim basis June 8, 2019.

FOR FURTHER INFORMATION CONTACT: Mr. Steven R. Johnson, Colorado River 
Storage Project (CRSP) Manager, CRSP Management Center, Western Area 
Power Administration, 299 South Main Street, Suite 200, Salt Lake City, 
UT 84111; (970) 252-3000; email [email protected], or Mr. Thomas 
Hackett, Rates Manager, CRSP Management Center, (801) 524-5503 or email 
[email protected].

SUPPLEMENTARY INFORMATION: 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 Western Area Power 
Administration's (WAPA) 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, or to remand or disapprove such 
rates, to FERC. In Delegation Order No. 00-002.00Q, effective November 
1, 2018, the Secretary of Energy also delegated to the Under Secretary 
of Energy the authority to confirm, approve, and place into effect on 
an interim basis power and transmission rates for WAPA. This extension 
is issued in accordance with the Delegation Order and DOE rate 
extension procedures at 10 CFR 903.23(a).
    The Falcon and Amistad Dams are features of international water 
storage projects located on the Rio Grande between Texas and Mexico. 
Under the terms of Contract No. 7-07-50-P0890, dated August 9, 1977, as 
amended (Contract), WAPA markets the power from these dams to South 
Texas Electric Cooperative, Inc. (STEC). The firm power formula rate 
for the Projects was approved by the Federal Power Commission, 
predecessor of FERC, in Docket No. E-9566 on August 12, 1977 (59 FPC 
1653), for a 5-year period effective on the date of initial operation 
of Amistad Power Plant, June 8, 1983.\1\
---------------------------------------------------------------------------

    \1\ FERC subsequently approved multiple 5-year rate extensions 
of the same formula rate, most recently on April 9, 2015, in Docket 
No. EF14-9-000, which extended the rate through June 7, 2019 (151 
FERC ] 62,027).
---------------------------------------------------------------------------

    WAPA calculates the annual installment to be paid by STEC for the 
power generated at the Falcon and Amistad power plants on or before 
August 31 of the year preceding the fiscal year to which it pertains, 
and identifies this amount in a rate schedule. WAPA uses each annual 
installment to pay the annual amortized portion of the United States' 
investment in the Falcon and Amistad hydroelectric facilities, with 
interest, and the associated operation, maintenance, and administrative 
costs. This repayment schedule is not dependent upon the power and 
energy made available for sale or the rate of generation each year. 
STEC, as the sole customer that takes service from the Projects, 
submitted a letter in support of this rate extension.
    Following DOE's review of WAPA's proposal,\2\ I hereby approve Rate 
Order No. WAPA-186 on an interim basis, which extends, without 
adjustment, the Projects' firm power formula rate through June 7, 2024. 
Rate Order No. WAPA-186 will be submitted to FERC for confirmation and 
approval on a final basis.
---------------------------------------------------------------------------

    \2\ WAPA's proposal was published on December 26, 2018 (83 FR 
66,257).


Dated: May 8, 2019.
Mark W. Menezes,
Under Secretary of Energy.

DEPARTMENT OF ENERGY

UNDER SECRETARY

    In the matter of: Western Area Power Administration Extension 
for Falcon and Amistad Projects' Firm Power Formula Rate)

Rate Order No. WAPA-186

ORDER CONFIRMING, APPROVING, AND PLACING THE FALCON AND AMISTAD 
PROJECTS' FIRM POWER FORMULA RATE INTO EFFECT ON AN INTERIM BASIS
    This Rate Order extends a firm power formula rate. The extension is 
undertaken pursuant to section 302 of the Department of Energy (DOE) 
Organization Act (42 U.S.C. 7152), which transferred to, and vested in, 
the Secretary of Energy the power marketing functions of the Secretary 
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 specifically includes ``the 
transmission and disposition of the electric power and energy generated 
at Falcon Dam and Amistad Dam, international storage reservoir projects 
on the Rio Grande, pursuant to the Act of June 18, 1954, as amended by 
the Act of December 23, 1963.''
    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 the Administrator of the Western Area Power 
Administration (WAPA); (2) the authority to confirm, approve, and place 
into effect such rates 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, or to remand or disapprove such rates, to the 
Federal Energy Regulatory

[[Page 21772]]

Commission (FERC). By Delegation Order No. 00-002.00Q, effective 
November 1, 2018, the Secretary of Energy also delegated the authority 
to confirm, approve, and place such rates into effect on an interim 
basis to the Under Secretary of Energy. This Rate Order's extension is 
issued under the latter Delegation Order and DOE's rate extension 
procedures as codified at 10 CFR 903.23(a).\3\
---------------------------------------------------------------------------

    \3\ 84 FR 5347 (2019).
---------------------------------------------------------------------------

BACKGROUND

    On April 9, 2015, FERC confirmed, approved, and placed into effect 
Rate Order No. WAPA-164 for a 5 year period through June 7, 2019.\4\ On 
December 26, 2018, pursuant to 10 CFR 903.23(a), WAPA filed a notice in 
the Federal Register proposing to extend, without adjustment, the 
Falcon and Amistad Projects' (Projects) firm power formula rate as Rate 
Order No. WAPA-186.\5\ Consistent with the regulations at 10 CFR 
903.23(a), WAPA held a consultation and comment period. WAPA received 
no comments during the consultation and comment period. WAPA did 
receive a letter from South Texas Electric Cooperative, the sole 
customer that takes service from the Projects, in support of extending 
the firm power formula rate, dated November 15, 2018.
---------------------------------------------------------------------------

    \4\ Order Confirming and Approving Rate Schedule on a Final 
Basis, FERC Docket No. EF14-9-000, 151 FERC ] 62,027 (2015).
    \5\ 83 FR 66257 (2018).
---------------------------------------------------------------------------

DISCUSSION

    The existing formula rate provides sufficient revenue to recover 
annual expenses, interest, and capital replacements within the cost 
recovery criteria set forth in DOE Order RA 6120.2. Annual expenses 
generally include operational expenses, such as salaries and benefits 
as well as incidental equipment costs. Equipment replacements and 
maintenance beyond recurring activities are considered capital 
replacements; these costs, along with the initial Federal investment in 
the Projects, are amortized with interest and repaid to the U.S. 
Department of the Treasury. A reconciliation of estimates to actual 
expenses is accomplished at the end of the rate period, and any 
differences are included in the following year's revenue requirement.
    The requested extension period under Rate Order No. WAPA-186, June 
8, 2019 through June 7, 2024, includes no adjustment to the formula 
rate.

ORDER

    In view of the above, and under the authority delegated to me, I 
hereby extend, on an interim basis, WAPA's existing firm power formula 
rate through June 7, 2024. This rate shall remain in effect on an 
interim basis, pending FERC's confirmation and approval of this 
extension, or substitute rates, on a final basis.

 Dated: May 8, 2019

Mark W. Menezes
Under Secretary of Energy
Rate Schedule Falcon and Amistad Projects' Firm Power Formula Rate

UNITED STATES DEPARTMENT OF ENERGY

WESTERN AREA POWER ADMINISTRATION

COLORADO RIVER STORAGE PROJECT MANAGEMENT CENTER

Falcon and Amistad Projects

Firm Power Formula Rate Calculation

EFFECTIVE:

    The first day of the first full billing period beginning on or 
after June 8, 1983, through June 7, 1988, or until superseded by 
another formula, whichever occurs earlier. Note: Extension of this firm 
power formula rate, for 5-year increments, was first approved by the 
Federal Power Commission, predecessor of the Federal Energy Regulatory 
Commission (FERC), on August 12, 1977. FERC has subsequently approved 
the firm power formula rate on July 20, 1988, September 29, 1993, June 
7, 1998, January 31, 2005, December 17, 2009, and April 9, 2015, for 
service through June 7, 2019. Rate Order No. WAPA-186 extends this 
formula rate calculation through June 7, 2024.

Available:

    In the area served by the Falcon and Amistad Projects (Projects).

Applicable:

    To preference customers who are under contract with Western Area 
Power Administration (WAPA) to receive electric service from the 
Projects.

Formula Rate:

    The existing formula rate provides sufficient revenue to recover 
annual expenses, interest, and capital replacements within the cost 
recovery criteria set forth in DOE Order RA 6120.2. Annual expenses 
generally include operational expenses, such as salaries and benefits 
as well as incidental equipment costs. Equipment replacements and 
maintenance beyond recurring activities are considered capital 
replacements; these costs, along with the initial Federal investment in 
the Projects, are amortized with interest and repaid to the U.S. 
Department of the Treasury. A reconciliation of estimates to actual 
expenses is accomplished at the end of the rate period, and any 
differences are included in the following year's revenue requirement.

Billing:

    WAPA bills the South Texas Electric Cooperative, the sole customer 
that takes service from the Projects, on a monthly basis. Each monthly 
charge is equal to one twelfth of the Projects' annual rate 
installment, rounded to the penny.

[FR Doc. 2019-10057 Filed 5-14-19; 8:45 am]
 BILLING CODE 6450-01-P