[Federal Register Volume 85, Number 13 (Tuesday, January 21, 2020)]
[Notices]
[Pages 3367-3370]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-00890]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Proposed Salt Lake City Area Integrated Projects Firm Power Rate 
and Colorado River Storage Project Transmission and Ancillary Services 
Rates--Rate Order No. WAPA-190

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of proposed firm power rate and transmission and 
ancillary services formula rates.

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SUMMARY: Western Area Power Administration (WAPA) proposes a new Salt 
Lake City Area Integrated Projects (SLCA/IP) firm power rate and 
revised Colorado River Storage Project (CRSP) transmission and 
ancillary services formula rates. The existing rates for these services 
expire on September 30, 2020. Currently, there is a 4.25 percent 
projected decrease to the firm power composite rate. WAPA also proposes 
modifications to the Cost Recovery Charge (CRC) formula. WAPA proposes 
changes to the annual transmission revenue requirement. WAPA also 
proposes to add generator imbalance service to the energy imbalance 
rate schedule and implement a new rate schedule for the sale of surplus 
products.

DATES: A consultation and comment period will begin January 21, 2020 
and end April 20, 2020. WAPA will present a detailed explanation of the 
proposed rates and modifications at a public information forum on the 
following date and time: March 12, 2020, 11 a.m. MDT to 1 p.m. MDT. 
WAPA will accept oral and written comments at a public comment forum on 
the following date and time: March 12, 2020, 1:30 p.m. to no later than 
3 p.m. MDT. WAPA will accept written comments any time during the 
consultation and comment period.

ADDRESSES: Written comments and requests to be informed about Federal 
Energy Regulatory Commission (FERC) actions concerning the proposed 
rates submitted by WAPA to FERC for approval should be sent to: Mr. 
Steven Johnson, CRSP Manager, Colorado River Storage Project Management 
Center,

[[Page 3368]]

Western Area Power Administration, 299 South Main Street, Suite 200, 
Salt Lake City, UT 84111, (801) 524-6372, or email: [email protected] 
or [email protected]. WAPA will post information about the 
proposed rates and written comments received to its website at: https://www.wapa.gov/regions/CRSP/rates/Pages/rates.aspx.
    The public information and comment forum location is 299 South Main 
Street, 23rd Floor Conference Room, Salt Lake City, Utah.

FOR FURTHER INFORMATION CONTACT: Mr. Thomas Hackett, Rates Manager, 
Colorado River Storage Project Management Center, Western Area Power 
Administration, (801) 524-5503, or email: [email protected].

SUPPLEMENTARY INFORMATION: On December 29, 2016, FERC approved and 
confirmed, under Rate Order No. WAPA-169 on a final basis through 
September 30, 2020,\1\ the following Rate Schedules: SLIP-F10 for SLCA/
IP Firm Power, SP-PTP8 for Firm Point-To-Point Transmission Service, 
SP-NW4 for Network Integration Transmission Service, SP-NFT7 for Non-
Firm Point-To-Point Transmission Service, SP-SD4 for Scheduling, System 
Control, and Dispatch Service, SP-RS4 for Reactive Supply and Voltage 
Control from Generation and Other Sources Service, SP-EI4 for Energy 
Imbalance Service, SP-FR4 for Regulation and Frequency Response 
Service, SP-SSR4 for Operating Reserves--Spinning and Supplemental 
Reserve Services, and SP-UU1 for Unreserved Use Penalties. FERC 
subsequently approved and confirmed, under Rate Order No. WAPA-174 \2\ 
on a final basis through September 30, 2021, the following Rate 
Schedules: L-AS1 for Scheduling, System Control, and Dispatch Service, 
L-AS2 for Reactive Supply and Voltage Control from Generation or Other 
Sources Service, and L-AS3 for Regulation and Frequency Response 
Service, which superseded Rate Schedules SP-SD4, SP-RS4, and SP-FR4, 
respectively.
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    \1\ Order Confirming and Approving Rate Schedules on a Final 
Basis, FERC Docket Nos. EF15-10-000, 155 FERC ] 61,042 (2016).
    \2\ WAPA-174 was approved by the Deputy Secretary of Energy on 
August 12, 2016 (81 FR 56632). FERC Order Confirming and Approving 
Rate Schedules on a Final Basis, FERC Docket No. EF16-5-000, 158 
FERC ] 62,181 (2017).
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    The proposed firm power rate is a fixed rate, and WAPA will 
continue to use the formula-based methodology for the proposed 
transmission and ancillary services rates, which include an annual 
update to the applicable financial and load data. WAPA intends the 
proposed rates to be effective October 1, 2020. The charges under the 
formula rates will be annually updated each October 1 thereafter. The 
proposed rates will remain in effect until September 30, 2025, or until 
WAPA supersedes or changes the rates through another public rate 
process pursuant to 10 CFR part 903, whichever occurs first.
    The proposed rates will provide WAPA with sufficient revenue to 
recover annual Operation, Maintenance and Replacement (OM&R) expenses, 
interest expense, irrigation assistance, and capital repayment 
requirements while ensuring repayment of the project within the cost 
recovery criteria set forth in Department of Energy (DOE) Order 
Resource Application 6120.2.

SLCA/IP Firm Power Rate

    Under the current Rate Schedule SLIP-10, the energy rate is 12.19 
mills per kilowatthour (mills/kWh), and the capacity rate is $5.18 per 
kilowattmonth ($/kWmonth). The composite rate of all charges, used for 
reference only as a comparison against other wholesale power rates, is 
29.42 mills/kWh.
    The revenue requirement for the proposed rate is based upon the 
most current data available, specifically the fiscal year (FY) 2018 
historical financial data and the FY 2021 work plans for WAPA and the 
Bureau of Reclamation (Reclamation). WAPA plans to use the FY 2019 
historical financial data and FY 2022 work plans, if available, in the 
final rate setting study and rate order submission.

                          Table 1--Comparison of Existing and Proposed Firm Power Rates
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                                                  Existing rate under      Proposed rate under
                                                rate schedule  SLIP-F10   rate schedule SLIP-F11
                 Rate schedule                    effective October 1,     effective October 1,     Change  (%)
                                                          2015                     2020
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Base Rate:
    Firm Energy: (mills/kWh)..................                    12.19                    11.79           -3.28
    Firm Capacity: ($kW/month)................                     5.18                     5.01           -3.28
    Composite Rate \3\: (mills/kWh)...........                    29.42                    28.17           -4.25
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    Currently, WAPA uses Reclamation's April, 24-month, long-term, 
average hydrological study in combination with Reclamation's August 
Colorado River Simulation System (CRSS) model traces to forecast 5 
years of firming-energy purchase requirements. WAPA proposes using the 
most-probable water releases reported in Reclamation's August 24-Month 
Study to determine the first year of firming-energy-purchase 
projections. For subsequent years, WAPA will continue to use 
Reclamation's August CRSS model traces to estimate energy purchase 
projections while using a rolling median value to minimize 
fluctuations. In addition, WAPA proposes projecting the required 
firming-energy purchases, for a period that overlaps the years in which 
a subsequent rate would become effective, in order to avoid gaps in the 
forecasts.
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    \3\ The composite rate is used for reference only as a 
comparison against other wholesale power rates.
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    Finally, WAPA plans to remove the $4 million per year in purchase 
power out years in the current rate schedule, which was previously used 
as a broad-cost estimate of operational energy purchases for the Energy 
Marketing and Management Office in Montrose, Colorado. Improved 
modeling tools that incorporate outages and scheduled maintenance 
produce more accurate estimates of purchase power expenses have 
rendered this requirement obsolete.

Cost Recovery Charge

    WAPA would continue to use the CRC, if necessary, as a mechanism to 
adequately recover and maintain a sufficient balance in the Upper 
Colorado River Basin Fund (Basin Fund) \4\ in the event projected 
expenses significantly exceed projected revenue estimates. The CRC is 
an additional surcharge on all

[[Page 3369]]

Sustainable Hydro Power (SHP) \5\ energy deliveries. The CRC may be 
implemented when, among other things, the Basin Fund's cash balance is 
at risk due to low hydropower generation, high prices for firming 
power, and funding for capitalized investments. The volatility of 
hydropower generation and power prices continues to be a concern for 
cost-recovery issues for the SLCA/IP. The CRC is based only on Basin 
Fund cash analysis and is independent of the Power Repayment Study 
calculations.
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    \4\ Upper Colorado River Basin Fund was established through the 
CRSP Act of 1956, to receive revenues collected in connection with 
the projects, to be made available for defraying the project's costs 
of operation, maintenance, and emergency expenditures.
    \5\ SHP Energy--Sustainable Hydro Power energy is the minimum 
quantity of firm energy, expressed in kWh, that each Salt Lake City 
Area Integrated Projects firm electric service customer/contractor 
is entitled to receive each Winter Season and each Summer Season as 
set forth in the respective firm electric service contract with each 
customer/contractor.
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    WAPA proposes to move the CRC from a FY timeline to a calendar year 
(CY) timeline and to use Reclamation's August 24-month Study to 
calculate projected purchase power expenses. This aligns the purchase 
power projections for the CRC with those in the firm power rate. This 
proposal would change the annual notification date from May 1 to 
October 1. WAPA would provide its customers with information concerning 
the anticipated CRC and allow them 45 days to request a waiver or 
accept the CRC. The established CRC would be in effect for 12 months 
from the date implemented. If circumstances dictate the need to 
reassess an enacted CRC, the updated CRC would supersede the previous 
CRC and remain in effect for 12 months.
    The CRC is implemented at WAPA's discretion based on the balance of 
the Basin Fund and WAPA's ability to meet contractual requirements.\6\ 
The minimum Basin Fund carryover balance is $40 million.
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    \6\ See Table 3.

                    Table 3--CRC Implementation Tiers
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                      Criteria, if the Basin Fund
      Tier               beginning balance is:              Review
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i...............  Greater than $150 million with an   Annually.
                   expected decrease to below $75
                   million.
ii..............  Less than $150 million but greater
                   than $120 million with an
                   expected 50 percent decrease in
                   the next CY.
iii.............  Less than $120 million but greater
                   than $90 million with an expected
                   40 percent decrease in the next
                   CY.
iv..............  Less than $90 million but greater   Semi-Annual (May/
                   than $60 million with an expected   November).
                   25 percent decrease in the next
                   CY.
v...............  Less than $60 million but greater   Monthly.
                   than $40 million with an expected
                   decrease to below $40 million in
                   the next CY.
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    WAPA also reserves the right to consider a CRC if annual water 
releases from Glen Canyon Dam fall below 8.23 million acre-feet 
regardless of the Basin Fund balance.
    Customers can accept either the CRC or WL, not a combination of the 
two. For these customers, WAPA will establish an energy waiver level 
(WL) using the CRC formula. The WL provides WAPA the ability to reduce 
purchase power expenses by scheduling less energy than its contractual 
obligations. For those customers who agree to schedule no more energy 
than their proportionate share of the WL, WAPA will waive the CRC for 
that year.
    WAPA also proposes modifications in SLIP-F11 to account for lost 
revenue associated with the decreased energy deliveries that occur when 
a customer requests the WL. The details of the calculations will be 
provided in the customer brochure prior to the public information 
forum. WAPA also proposes to decrease a customer's monthly SHP capacity 
allocation proportionally under the WL to match the monthly energy 
reduction.

Transmission Services

Annual Transmission Revenue Requirement (ATRR)

    Under this proposal, WAPA would not change the existing formula 
rate for calculating the Annual Transmission Revenue Requirement 
(ATRR), which is applicable to both Network Integration and Point-to-
Point transmission services. The ATRR is the annual cost of the CRSP 
Transmission System, adjusted for Non-Firm Point-to-Point revenue 
credits, other miscellaneous charges or credits, and the prior year 
true-up. WAPA is, however, proposing to change the projection period 
for calculating the ATRR in order to recover transmission O&M costs on 
a current basis rather than on a historical basis. Using the current-
basis methodology would more accurately align cost recovery with cost 
incurrence. WAPA proposes to estimate transmission costs and loads for 
the current year in the annual rate calculation, thus changing how the 
inputs are developed rather than the formula rate itself. WAPA would 
then true-up cost estimates to actual costs and any revenue collected 
in excess of WAPA's actual net revenue requirement would be returned to 
customers through a credit against the transmission rates in a 
subsequent year. Actual revenues that collect less than the net revenue 
requirement would, likewise, need to be recovered through an increased 
revenue requirement in a subsequent year. The true-up procedure would 
help ensure WAPA recovers no more and no less than the actual 
transmission costs for the year.

Unreserved Use Penalties

    WAPA proposes no changes to the Unreserved Use penalty rate.

Ancillary Services

Energy Imbalance and Generator Imbalance Services

    WAPA proposes adding Generator Imbalance Service (GIS), Schedule 9 
to WAPA's Open Access Transmission Tariff to the Energy Imbalance 
Service Rate Schedule. GIS is provided to CRSP, as a Transmission 
Service Provider, by the Western Area Colorado Missouri Balancing 
Authority under Rate Schedule L-AS9.

Spinning and Supplemental Reserves

    WAPA proposes no changes to the Operating Reserves--Spinning and 
Supplemental Reserves Services formula rate.

Sale of Surplus Products (SP-SS1)

    WAPA proposes implementing a new rate schedule applicable to the 
sale of the following surplus energy and capacity products: Energy, 
regulation, reserves, and frequency response. WAPA would determine the 
charge for each product at the time of the sale based on market rates, 
plus applicable administrative costs, and would use separate 
agreement(s) to specify the terms of sale(s). The customer would be 
responsible for acquiring transmission

[[Page 3370]]

service necessary to deliver the product(s), for which a separate 
charge may be incurred.

Legal Authority

    Existing DOE procedures for public participation in power and 
transmission rate adjustments (10 CFR part 903) were published on 
September 18, 1985, and February 21, 2019.\7\
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    \7\ 50 FR 37835 (September 18, 1985) and 84 FR 5347 (February 
21, 2019).
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    The proposed action is a major rate adjustment, as defined by 10 
CFR 903.2(e). In accordance with 10 CFR 903.15(a) and 10 CFR 903.16(a), 
WAPA will hold public information and public comment forums for this 
rate adjustment. WAPA will review and consider all timely public 
comments at the conclusion of the consultation and comment period and 
make amendments or adjustments to the proposal as appropriate. Proposed 
rates will be forwarded to the Assistant Secretary for Electricity for 
approval on an interim basis.
    WAPA is proposing the SLCA/IP firm power rate and revised CRSP 
transmission and ancillary services formula rates in accordance with 
section 302 of the 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 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 other acts that specifically apply to the projects 
involved.
    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, or to remand or 
disapprove such rates to 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. By Redelegation Order 
No. 00-002.10D, effective June 4, 2019, the Under Secretary of Energy 
further delegated the authority to confirm, approve, and place such 
rates into effect on an interim basis to the Assistant Secretary for 
Electricity.

Availability of Information

    All brochures, studies, comments, letters, memoranda, or other 
documents that WAPA initiates or uses to develop the proposed rates are 
available for inspection and copying at the Colorado River Storage 
Project Management Center, 299 South Main Street, Suite 200, Salt Lake 
City, Utah. Many of these documents and supporting information are also 
available on WAPA's website at https://www.wapa.gov/regions/CRSP/rates/Pages/rates.aspx.

Ratemaking Procedure Requirements

Environmental Compliance

    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.\8\
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    \8\ 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).
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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: January 10, 2020.
Mark A. Gabriel,
Administrator.
[FR Doc. 2020-00890 Filed 1-17-20; 8:45 am]
BILLING CODE 6450-01-P