[Federal Register Volume 84, Number 164 (Friday, August 23, 2019)]
[Notices]
[Pages 44294-44295]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-18220]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Boulder Canyon Project

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice concerning fiscal year 2020 Boulder Canyon Project base 
charge and rates for electric service.

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SUMMARY: The Assistant Secretary for Electricity confirms, approves, 
and places into effect, on a final basis, the Boulder Canyon Project 
(BCP) base charge and rates for fiscal year (FY) 2020 under Rate 
Schedule BCP-F10. The base charge decreased by $3.3 million to $66.4 
million, a 4.8% reduction from FY 2019. The reduction is primarily the 
result of an increase in non-power revenue projections for the Hoover 
Dam visitor center.

DATES: The FY 2020 base charge and rates will be effective October 1, 
2019, and will remain in effect through September 30, 2020.

FOR FURTHER INFORMATION CONTACT: Mr. Ronald E. Moulton, Regional 
Manager, Desert Southwest Region, Western Area Power Administration, 
P.O. Box 6457, Phoenix, AZ 85005-6457, (602) 605-2525, or 
[email protected]; or Ms. Tina Ramsey, Rates Manager, Desert Southwest 
Region, Western Area Power Administration, (602) 605-2565, or 
[email protected].

SUPPLEMENTARY INFORMATION: On June 6, 2018, the Federal Energy 
Regulatory Commission (FERC) confirmed and approved Rate Schedule BCP-
F10 under Rate Order No. WAPA-178 on a final basis through September 
30, 2022.\1\ 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 of investment repayment, interest, operations, maintenance, 
replacements, payments to States, and Hoover Dam visitor services. Non-
power revenue projections such as water sales, Hoover Dam visitor 
revenue, 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. Rates are calculated for 
comparative purposes but are not used to determine the charges for 
service.
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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).
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    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 2019 BCP base charge 
and rates expire on September 30, 2019.

                                       Comparison of Base Charge and Rates
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                                                      FY 2019         FY 2020      Amount change  Percent change
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Base Charge ($).................................     $69,741,657     $66,419,402     -$3,322,255            -4.8
Composite Rate (mills/kWh)......................           18.92           18.08           -0.84            -4.4
Energy Rate (mills/kWh).........................            9.46            9.04           -0.42            -4.4
Capacity Rate ($/kW-Mo).........................           $1.88           $1.75          -$0.13            -6.9
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    A $5.1 million increase in non-power revenue projections primarily 
resulting from the resumption of typical revenues following completion 
of renovations to the Hoover Dam visitor center and $1.3 million in 
prior year carryover contributed to the FY 2020 base charge reduction.
    The Bureau of Reclamation's FY 2020 budget is increasing by $3.7 
million. Higher operation and maintenance expenses of $1.8 million and 
replacement costs of $1.4 million account for most of this increase. 
WAPA's FY 2020 budget is decreasing by $600,000 due to a $400,000 
reduction in dispatching and substation maintenance expenses and a 
$200,000 reduction in replacement costs.
    The FY 2020 composite and energy rates are decreasing by 4.4 
percent. The reduction of the base charge contributes to these 
decreases. The capacity rate is decreasing by 6.9 percent. This decline 
is due to a reduction in the base charge and an increase in capacity 
projections.

Public Notice and Comment

    The notice of the proposed FY 2020 base charge and rates for 
electric service was published consistent with procedures set forth in 
10 CFR part 903 and 10 CFR part 904. WAPA took the following steps to 
involve customers and interested parties in the rate process:
    1. On April 9, 2019, a Federal Register notice (84 FR 14111) 
announced the proposed base charge and rates and initiated the 90-day 
public consultation and comment period.
    2. On May 9, 2019, WAPA held a public information forum in Phoenix, 
Arizona. WAPA's representatives explained the proposed base charge and 
rates, provided handouts, and were available to answer questions.
    3. On June 10, 2019, WAPA held a public comment forum in Phoenix, 
Arizona, to provide an opportunity for customers and interested parties 
to comment and ask questions for the record.
    4. On July 8, 2019, the consultation and comment period ended, and 
WAPA received four comments. The comments appear below, paraphrased 
where appropriate without compromising their meaning.
    Comment: A commenter thanked WAPA for lowering its FY 2020 
operations and maintenance budget and requested additional detail on 
the budget.
    Response: WAPA's operations and maintenance budget for FY 2020 is 
$8,307,206 and is comprised of facility expense totaling $2,491,204 and 
systemwide expense totaling $5,816,002. Further detail on the budget is 
included in WAPA's Ten-Year Operating Plan, which is available on 
WAPA's website.
    Comment: A commenter asked for information about Reclamation's 
administrative and general expense refund adjustment.
    Response: Reclamation receives a credit from appropriations for its 
post-911 security contract costs. Reclamation

[[Page 44295]]

has historically budgeted $200,000 annually for this credit, which was 
included in the administrative and general expense category. Due to the 
variability of the credit amount, Reclamation is no longer budgeting 
for this item beginning in FY 2020.
    Comment: A commenter asked for the balance of Post-Retirement 
Benefits (PRB) collections in the accounts for the current and previous 
marketing periods.
    Response: While there are not separate accounts for PRB 
collections, Reclamation and WAPA identified PRB balances for the two 
marketing periods requested. The PRB balance for the marketing period 
concluded in FY 2017 totals $30,929,279. As of the end of FY 2018, the 
PRB balance for the marketing period beginning in FY 2018 totals 
$1,729,545.
    Comment: A commenter asked why Reclamation's PRB budget increased 
in FY 2020.
    Response: There are three components of PRB: (1) Civil Service 
Retirement System and Federal Employee Retirement System costs, (2) 
Federal Employee Health Benefits (FEHB) costs, and (3) Federal Employee 
Group Life Insurance costs. PRB budget projections are calculated using 
a five-year average of expenditures. The five-year average included in 
the FY 2020 PRB budget rose primarily due to an increase in FEHB costs 
in FY 2018. PRB historical expenditures and projections are available 
on WAPA's website.

Certification of Rates

    WAPA's Administrator certified that the FY 2020 base charge and 
rates under Rate Schedule BCP-F10 are the lowest possible rates, 
consistent with sound business principles. The base charge and rates 
were developed following administrative policies and applicable laws.

Availability of Information

    Information about the rate process to establish the FY 2020 base 
charge and rates was made available on WAPA's website at https://www.wapa.gov/regions/DSW/Rates/Pages/boulder-canyon-rates.aspx.

Legal Authority

    10 CFR part 904.7(e) requires annual review of the BCP base charge 
and an adjustment, either upward or downward, when necessary and 
administratively feasible to assure sufficient revenues to effect 
payment of all costs and financial obligations associated with the 
project. The Administrator provided all Contractors an opportunity to 
comment on the proposed base charge adjustment consistent with the 
procedures for public participation in rate adjustments as required 
under 10 CFR part 904.7(e) and the BCP Electric Service Agreement. The 
BCP Electric Service Agreement goes on to state that in years other 
than the first and fifth years of a rate schedule approved by the 
Federal Energy Regulatory Commission on a final basis, adjustments to 
the base charge shall be effective upon approval by the Deputy 
Secretary of Energy. Under the Department of Energy Organization Act, 
the Secretary of Energy holds plenary authority over Department of 
Energy affairs with respect to the Power Marketing Administrations. By 
Delegation Order No. 00-002.00Q, effective November 1, 2018, the 
Secretary of Energy delegated to the Under Secretary of Energy the 
authority vested in the Secretary with respect to WAPA. By Redelegation 
Order No. 00-002.10D, effective June 4, 2019, the Under Secretary of 
Energy delegated to the Assistant Secretary for Electricity the same 
authority with respect to WAPA.\2\ This rate action is issued under the 
Redelegation Order and DOE's procedures for public participation in 
rate adjustments set forth at 10 CFR part 903 and 10 CFR part 904.\3\
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    \2\ Delegation Orders No. 00-002-00Q and 00-002.10D both clarify 
that this delegation of authority is ``In addition'' to the 
authority to approve and place into effect on an interim basis 
WAPA's power and transmission rates.
    \3\ 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
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    Following DOE's review of WAPA's proposal, I hereby confirm, 
approve, and place the FY 2020 base charge and rates for BCP electric 
service, under Rate Schedule BCP-F10, into effect on a final basis 
through September 30, 2020.

    Dated: August 19, 2019.
Bruce J. Walker,
Assistant Secretary for Electricity.
[FR Doc. 2019-18220 Filed 8-22-19; 8:45 am]
BILLING CODE 6450-01-P