[Federal Register Volume 85, Number 66 (Monday, April 6, 2020)]
[Notices]
[Pages 19144-19146]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-07154]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Boulder Canyon Project

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of proposed fiscal year 2021 Boulder Canyon Project base 
charge and rates for electric service.

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SUMMARY: Western Area Power Administration (WAPA) is proposing an 
adjustment to the base charge and rates for fiscal year (FY) 2021 
Boulder Canyon Project (BCP) electric service under Rate Schedule BCP-
F10. The proposal would reduce the base charge 1.2 percent from $66.4 
million in FY 2020 to $65.6 million for FY 2021. The reduction is 
primarily the result of an increase in prior year carryover funds and 
non-power revenue projections for the Hoover Dam visitor center. The 
proposed base charge and rates would go into effect on October 1, 2020, 
and remain in effect through September 30, 2021. Publication of this 
Federal Register notice will initiate the public process.

DATES: The consultation and comment period begins today and will end 
July 6, 2020. WAPA will present a detailed explanation of the proposed 
FY 2021 base charge and rates at a public information forum that will 
be held on May 6, 2020, from 10:30 a.m. to 12:30 p.m. Mountain Standard 
Time. WAPA will also host a public comment forum that will be held on 
June 5, 2020, from 10:30 a.m. to 12:30 p.m. Mountain Standard Time. 
WAPA will conduct both the public information forum and the public 
comment forum via WebEx. Instructions for participating in the forums 
via WebEx will be posted on WAPA's website at least 14 days prior to 
the public information and comment forums at https://www.wapa.gov/regions/DSW/Rates/Pages/boulder-canyon-rates.aspx. WAPA will accept 
written comments any time during the consultation and comment period.

ADDRESSES: Send written comments to Ms. Tracey A. LeBeau, Regional 
Manager, Desert Southwest Region, Western Area Power Administration, 
P.O. Box 6457, Phoenix, Arizona 85005-6457, or email 
[email protected]. WAPA will post information concerning the rate 
process and written comments received on its website at https://www.wapa.gov/regions/DSW/Rates/Pages/boulder-canyon-rates.aspx.

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

SUPPLEMENTARY INFORMATION: Hoover Dam,\1\ 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. The Hoover Dam 
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), 
WAPA markets and delivers

[[Page 19145]]

hydropower from the Hoover Dam power plant through high voltage 
transmission lines and substations to Arizona, Southern California, and 
Southern Nevada.
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    \1\ Hoover Dam was known as Boulder Dam from 1933 to 1947, but 
was renamed Hoover Dam by an April 30, 1947 joint resolution of 
Congress. See Act of April 30, 1947, H.J. Res. 140, ch. 46, 61 Stat. 
56-57.
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    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. Hoover power customers are billed a percentage of the base 
charge in proportion to their power allocation. A unit rate is 
calculated for comparative purposes but is not used to determine the 
charge 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.\2\ Rate Schedule BCP-F10 and the BCP 
Electric Service Contract require WAPA to determine the annual base 
charge and rates for the next fiscal year before October 1 of each 
year. The FY 2020 BCP base charge and rates expire on September 30, 
2020.
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    \2\ Order Confirming and Approving Rate Schedule on a Final 
Basis, FERC Docket No. EF18-1-000, 163 FERC ] 62,154 (2018).

                                       Comparison of Base Charge and Rates
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                                                      FY 2020         FY 2021      Amount change  Percent change
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Base Charge ($).................................     $66,419,402     $65,606,080      - $813,322           - 1.2
Composite Rate (mills/kWh)......................           18.08           18.83            0.75             4.1
Energy Rate (mills/kWh).........................            9.04            9.42            0.38             4.2
Capacity Rate ($/kW-Mo).........................           $1.75           $1.73         - $0.02           - 1.1
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    Reclamation's FY 2021 budget is increasing $4.5 million to $80.2 
million, a 5.9 percent increase from FY 2020. Higher operations and 
maintenance expenses ($2.6 million) and replacement costs ($1.7 
million) account for most of this increase. The rate impact of these 
increases to Reclamation's budget are more than offset, however, by an 
increase in prior year carryover ($2.8 million) and non-power revenue 
projections ($2 million) following completion of the Hoover Dam visitor 
center renovations.
    WAPA's FY 2021 budget is decreasing $400,000 to $8.4 million, a 4.2 
percent reduction from FY 2020. Lower operations and maintenance 
expenses ($300,000) and the elimination of WAPA's contingency fund 
($100,000) account for this decrease.
    While there is a 1.2 percent reduction to the FY 2021 base charge, 
the composite and energy rates are increasing 4.1 and 4.2 percent 
respectively from FY 2020. The composite and energy rates use a 
forecasted energy value, which decreased due to the long-term drought 
in the Lower Colorado River Basin. The capacity rate is a 1.1 percent 
reduction from FY 2020 due to the decrease in the base charge. 
Forecasted energy and capacity values may be updated when determining 
the final base charge due to changing hydrological conditions.
    This proposal, to be effective October 1, 2020, is preliminary and 
subject to change based on modifications to forecasts before 
publication of the final base charge and rates. In particular, the 
forecast of non-power revenue projections associated with the Hoover 
Dam visitor center may require modification due to social distancing 
requirements resulting from COVID-19.

Legal Authority

    This action constitutes a major rate adjustment as defined by 10 
CFR 903.2(e). Pursuant to 10 CFR 903.15 and 10 CFR 903.16, WAPA will 
hold public information and public comment forums for this rate 
adjustment. WAPA will review and consider all timely public comments 
and adjust the proposal, as appropriate, at the conclusion of the 
consultation and comment period.
    WAPA is establishing rates for BCP electric service in accordance 
with section 302 of the Department of Energy (DOE) Organization Act (42 
U.S.C. 7152). This provision transferred to, and vested in, the 
Secretary of Energy certain functions of the Secretary of the Interior, 
along with the power marketing functions of Reclamation. Those 
functions include actions that specifically apply to the BCP.
    The BCP Electric Service Contract states that in years other than 
the first and fifth years of a rate schedule approved by the FERC on a 
final basis, adjustments to the base charge shall be effective upon 
approval by the Deputy Secretary of Energy. Under the DOE Organization 
Act, the Secretary of Energy holds plenary authority over DOE affairs 
with respect to the Power Marketing Administrations. By Delegation 
Order No. 00-002.00S, effective January 15, 2020, 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-
002.10E, effective February 14, 2020, the Under Secretary of Energy 
delegated to the Assistant Secretary for Electricity the same authority 
with respect to WAPA.\3\ This rate action is issued under the 
Redelegation Order and DOE's procedures for public participation in 
rate adjustments set forth at 10 CFR parts 903 and 904.\4\
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    \3\ Delegation Orders No. 00-002-00S and 00-002.10E 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.
    \4\ 50 FR 37,835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 
2019).
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Availability of Information

    All studies, comments, letters, memoranda, and other documents WAPA 
initiates or uses to develop the proposed base charge and rates are 
available for inspection and copying at the Desert Southwest Customer 
Service Regional Office, Western Area Power Administration located at 
615 South 43rd Avenue, Phoenix, Arizona 85009. Many of these documents 
and supporting information are also available on WAPA's website at 
https://www.wapa.gov/regions/DSW/Rates/Pages/boulder-canyon-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

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action can be categorically excluded from those requirements.\5\
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    \5\ In compliance with the National Environmental Policy Act of 
1969 (NEPA), 42 U.S.C. 4321 et seq., 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: March 25, 2020.
Mark A. Gabriel,
Administrator.
[FR Doc. 2020-07154 Filed 4-3-20; 8:45 am]
 BILLING CODE 6450-01-P