[Federal Register Volume 85, Number 148 (Friday, July 31, 2020)]
[Notices]
[Pages 46083-46086]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-16683]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Central Valley Project--Rate Order No. WAPA-194

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of proposed formula rates for Energy Imbalance Market 
services, Sale of Surplus Products, and revisions to existing Energy 
Imbalance and Generator Imbalance rate schedules.

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SUMMARY: Western Area Power Administration (WAPA) proposes new formula 
rates and revisions to the existing Energy Imbalance (EI) and Generator 
Imbalance (GI) rate schedules for the Central Valley Project (CVP). The 
new rates are associated with two events: Participation in the 
California Independent System Operator's (CAISO) Energy Imbalance 
Market (EIM) and aligning CVP's Sale of Surplus Products (SSP) with 
other WAPA regions.

DATES: A consultation and comment period will begin July 31, 2020 and 
end October 29, 2020. WAPA will present a detailed explanation of the 
proposed formula rates and other modifications at a public information 
forum that will be held on August 17, 2020, from 9 a.m. to 12 p.m. PDT. 
WAPA also will host a public comment forum on August 17, 2020, starting 
at 1 p.m. which will remain open until all comments are acknowledged, 
or no later than 4 p.m. PDT. WAPA will conduct both the public 
information forum and 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/SN/rates/Pages/Rate-Case-2021-WAPA-194.aspx. WAPA will accept written comments any time during the 
consultation and comment period.

ADDRESSES: Written comments and requests to be informed of Federal 
Energy Regulatory Commission (FERC) actions concerning the proposed 
formula rates and other changes submitted by WAPA to FERC for approval 
should be sent to: Ms. Sonja Anderson, Regional Manager, Sierra Nevada 
Region, Western Area Power Administration, 114 Parkshore Drive, Folsom, 
California 95630, or email: [email protected]. WAPA will post 
information about the proposed formula rates, other changes and written 
comments received to its website at: https://www.wapa.gov/regions/SN/rates/Pages/Rate-Case-2021-WAPA-194.aspx.

FOR FURTHER INFORMATION CONTACT: Ms. Autumn Wolfe, Rates Manager, 
Sierra Nevada Region, Western Area Power Administration, (916) 353-4686 
or email: [email protected].

SUPPLEMENTARY INFORMATION: To accommodate WAPA's participation in EIM 
as a Transmission Provider within the Balancing Authority of Northern 
California (BANC) Balancing Authority Area (BAA), WAPA is proposing new 
formula rate schedules for: (1) EIM Administrative Service (CV-EIM1S), 
(2) EIM EI Service (CV-EIM4S), and (3) EIM GI Service (CV-EIM9S). WAPA 
is planning to participate in the EIM through BANC as the Balancing 
Authority and EIM Entity for the WAPA Sub-Balancing Authority Area 
(Sub-BAA). EIM settles EI and GI services differently than WAPA's 
existing rate schedules for similar services. In EIM, CAISO 
economically dispatches energy under its EIM Tariff to meet the 
imbalances for loads and resources over multiple BAAs. CAISO provides a 
centralized, automated, and region-wide dispatch for imbalances. The 
proposed new EIM Administrative Services formula rate would allow WAPA 
to pass through administrative costs incurred by WAPA resulting from 
its participation in EIM as a Transmission Provider. The proposed new 
formula rates and cost allocation for Administrative, EI and GI 
services would be in effect when WAPA is participating in the EIM, and 
to the extent WAPA incurs associated settlements during market 
suspension or contingency.
    In no relation to EIM, WAPA proposes revising existing rate 
schedules for EI services (CV-EID4) and GI services (CV-GID1). WAPA 
proposes to settle EI services financially rather than with energy. The 
proposed component one modification to both EI and GI schedules is: 
``[EI service/GI service] is applied to deviations as follows unless 
otherwise dictated by contract or policy: (1) Deviations within the 
bandwidth will be tracked and settled financially, at the greater of 
the California Independent System Operator market price, or WAPA's 
actual cost.'' The GI schedule further adds to component one: ``to the 
extent that an entity incorporates intermittent resources, deviations 
will be charged as follows unless otherwise dictated by contract or

[[Page 46084]]

policy: (1) Deviations within the bandwidth will be tracked and settled 
financially at the greater of the California Independent System 
Operator market price or WAPA's actual cost.'' The revised EI services 
(CV-EID5) and GI services (CV-GID2) rate schedules would remain in 
effect when the EIM has been suspended.
    In addition to the changes to accommodate EIM, WAPA Sierra Nevada 
Region (SN) is proposing a new rate schedule for the sale of surplus 
products (CV-SSP1) to make its practices consistent with other WAPA 
regions. This new formula rate would be for the sale of surplus energy 
and capacity products such as: Energy, regulation, reserves, frequency 
response, and resource sufficiency.
    The proposed rates will provide WAPA with sufficient revenue to 
recover annual Operation, Maintenance and Replacement (OM&R) expenses, 
interest expense, aid to irrigation, 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.
    WAPA's proposed formula rates would go into effect on April 1, 2021 
and remain in effect until December 31, 2024, or until WAPA changes the 
formula rates through another public rate process pursuant to 10 CFR 
part 903, whichever occurs first.

EIM Administrative Service Charge

    WAPA proposes a new rate schedule, CV-EIM1S. This rate would apply 
under Schedule 1S of the WAPA Tariff. Rates under CV-EIM1S would apply 
when WAPA, as Transmission Provider, is participating in EIM and when 
EIM has not been suspended. EIM Administrative service and associated 
rates would apply in addition to the services provided under Schedule 1 
of the WAPA Tariff, which are incorporated in existing WAPA 
transmission service rates. To the extent WAPA incurs EIM 
Administrative service related charges during periods of market 
suspension or contingency, as described in Section 11 of Attachment S 
to the WAPA Tariff, Schedule 1S and CV-EIM1S shall also apply to ensure 
that WAPA, as Transmission Provider, remains revenue-neutral for its 
participation in EIM.
    EIM Administrative service recovers the administrative costs for 
participating in the EIM by WAPA as a Transmission Provider including, 
but not limited to, such administrative charges as may be incurred by 
WAPA from the EIM Market Operator (MO) and those MO charges passed 
through by the EIM Entity.
    Unless such charges are allocated to the Transmission Customer 
directly by the EIM Entity, all Transmission Customers purchasing Long-
Term Firm Point-to-Point Transmission Service, Short-Term Firm Point-
to-Point Transmission Service, Non-Firm Point-to-Point Transmission 
Service, or Network Integration Transmission Service from WAPA would be 
required to acquire EIM Administrative Service from WAPA.
    Under the proposal, the EIM MO's administrative service charge, as 
defined in the MO Tariff, would be included in this rate. This rate 
also includes administrative charges assessed to WAPA by the EIM Entity 
based on net energy load within the WAPA Sub-BAA. The new proposed 
formula rate for EIM Administrative Service Charge would be sub-
allocated to WAPA's Transmission Customers based on load ratio share 
for the time period in which WAPA incurs EIM administrative costs.
    WAPA's costs for EIM start up, including software, hardware, or 
other features, to implement EIM, would not be included as 
administrative costs under this schedule. WAPA proposes to treat its 
startup costs for EIM under the cost allocations procedures discussed 
under the Energy Imbalance Market Cost Allocation heading below.

EIM Energy Imbalance (EI) Service

    WAPA proposes a new rate schedule, CV-EIM4S. This rate would apply 
under Schedule 4S of the WAPA Tariff. Rates under CV-EIM4S would apply 
when WAPA, as Transmission Provider, is participating in EIM and when 
EIM has not been suspended. In accordance with Section 11 of Attachment 
S to the WAPA Tariff, Schedule 4 of the WAPA Tariff would apply when 
WAPA is not participating in EIM or when EIM has been suspended. To the 
extent WAPA incurs EIM EI service related charges from the EIM Entity 
during periods of market suspension or contingency, as described in 
Section 11 of Attachment S to the WAPA Tariff, Schedule 4S and CV-EIM4S 
would also apply to ensure that WAPA, as Transmission Provider, remains 
revenue-neutral for its participation in the EIM.
    EI service is provided when a difference occurs between the 
scheduled and the actual delivery of energy to a load located within 
the WAPA Sub-BAA. WAPA offers this service when transmission service is 
used to serve load within the WAPA Sub-BAA.
    Unless subsequently imposed by the MO as part of the MO Tariff and 
promulgated by WAPA through rate proceedings, there would be no 
incremental transmission charge assessed for transmission use related 
to EIM EI service. Transmission Customers must have transmission 
service rights, as set forth in Attachment S of WAPA's Open Access 
Transmission Tariff (OATT).
    The formula rate for EI service is the deviation of the 
Transmission Customer's metered load compared to the load component of 
the Base Schedule settled as Uninstructed Imbalance Energy (UIE) for 
the period of the deviation at the applicable Load Aggregation Point 
(LAP) price where the load is located.
    Unless such charges are allocated to the Transmission Customer 
directly by the EIM Entity, a Transmission Customer would be 
responsible for any pass-through charges/credits associated with 
applicable EI service charges allocated to WAPA, as Transmission 
Provider, for its participation in the EIM, in accordance with this 
rate schedule. WAPA would sub-allocate load charges based on a 
Transmission Customer's load ratio share.

EIM Generator Imbalance (GI) Service

    WAPA proposes new rate schedule, CV-EIM9S. This rate would apply 
under Schedule 9S of the WAPA Tariff. Rates under CV-EIM9S would apply 
when WAPA, as Transmission Provider, is participating in EIM and when 
EIM has not been suspended. In accordance with Section 11 of Attachment 
S to the WAPA Tariff, Schedule 9 of the WAPA Tariff would apply when 
WAPA is not participating in the EIM and when the EIM has been 
suspended. To the extent WAPA incurs EIM GI Service related charges 
from the EIM Entity during periods of market suspension or contingency, 
as described in Section 11 of Attachment S to the WAPA Tariff, Schedule 
9S and CV-EIM9S would also apply to ensure WAPA, as Transmission 
Provider, remains revenue neutral for its participation in EIM.
    GI service is provided when a difference occurs between the output 
of a generator that is not an EIM Participating Resource located in the 
WAPA Sub-BAA, as reflected in the resource component of the 
Transmission Customer Base Schedule, and the delivery schedule from 
that generator to (1) another BAA, (2) the BANC BAA, or (3) a load 
within the WAPA Sub-BAA.
    Unless subsequently imposed by the MO as part of the MO Tariff and 
promulgated by WAPA through rate proceedings, there would be no 
incremental transmission charge assessed for transmission use related 
to

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EIM GI service. Transmission Customers must have transmission service 
rights, as set forth in Attachment S of WAPA's OATT.
    WAPA's formula rate for GI services does not have a direct rate 
component for GI services for Non-Participating Resources. WAPA expects 
all Participating Resources to directly settle with CAISO. However, if 
charges are allocated to the Transmission Provider by the EIM Entity, a 
Transmission Customer would be responsible for any pass-through 
charges/credits associated with applicable GI Service charges allocated 
to WAPA, as Transmission Provider, for its participation in EIM, in 
accordance with this rate schedule. Such charges may include those due 
to operational adjustments of any affected Interchange. WAPA would 
direct assign charges and/or sub-allocate charges based on the 
Transmission Customer's load ratio share. The EIM Entity does not allow 
Non-Participating Resources. In the event the EIM Entity modifies it 
procedures to allow Non-Participating Resources, WAPA may update this 
rate.

Sale of Surplus Products (SSP)

    WAPA-SN has traditionally marketed surplus products such as energy, 
regulation, and reserves through negotiated rates and under bilateral 
contracts. WAPA is proposing to add a new rate schedule, CV-SSP1, to 
make WAPA-SN's practices consistent with other WAPA regions. This 
proposed rate would be for the sale of surplus energy and/or capacity 
products. This includes: (1) Energy, (2) Frequency Response, (3) 
Regulation, (4) Reserves, and (5) Resource Sufficiency. If any surplus 
products are available, WAPA could make the product(s) available for 
sale, provided entities enter into separate agreement(s) which would 
specify the terms of sale(s).
    WAPA would determine the charge for each product at the time of 
sale to be the greater of WAPA's cost or market rates to include 
transmission charges. WAPA would use a separate agreement(s) to specify 
the terms of sale(s). The customer would be responsible for acquiring 
additional transmission service necessary to deliver the product(s), 
for which a separate charge may be incurred from the transmission 
provider.
    WAPA proposes to include two new products for sale: Frequency 
Response Reserve (FRR) and Resource Sufficiency. FRR is a new product 
requirement based on Reliability Standard BAL-003-1.1, as approved by 
North American Electric Reliability Corporation. FRR is used to serve 
load immediately in the event of a system contingency. Generating units 
that are on-line and generating at less than maximum output provide 
these reserves. FRR supplies capacity that is available immediately to 
serve load and is synchronized with the power system. BANC is 
implementing this requirement in April 2021, and WAPA therefore 
proposes inclusion of FRR in this proposed rate.
    Resource Sufficiency product supplies capacity for EIM balancing 
resources and load. WAPA bids energy into the EIM market for immediate 
dispatch. Resource Sufficiency is not a spin or regulation product. It 
is a new product available to BANC EIM members as a balancing product. 
WAPA's Merchant is responsible for and handles the supply of the 
product; as a result, WAPA proposes adjustments to the EIM base 
schedule market submission.

Energy Imbalance Market Cost Allocation

    WAPA is proposing a cost allocation methodology for EIM 
implementation costs and net EIM ongoing charges and/or benefits to 
flow through to the CVP Power Revenue Requirement (PRR). WAPA proposes 
BANC, WAPA, and Reclamation EIM implementation costs be recovered over 
a period not to exceed three years. WAPA has identified four separate 
categories to allocate ongoing charges and/or benefits: (1) Conforming 
loads; (2) non-conforming loads; (3) small loads; and (4) statutory 
loads.
    A conforming load is a type of load generally associated with a 
weather-based element, which is somewhat predictable based on given 
conditions. For conforming loads, WAPA proposes to allocate the net EIM 
ongoing cost and/or net benefits to the CVP PRR.
    A non-conforming load changes abnormally--such as a factory that 
consumes high demand intermittently. For non-conforming loads, WAPA 
proposes to allocate the net EIM ongoing charges and/or benefits 
directly to the customer(s) with the non-conforming load(s), in 
accordance with WAPA's applicable business practice posted on its Open 
Access Same-time Information System (OASIS), or at http://www.oasis.oati.com/wasn/index.html.
    For customers with loads less than one megawatt and are too small 
to identify, WAPA proposes to allocate EIM implementation costs and net 
ongoing charges and/or benefits to the CVP PRR. WAPA proposes to assign 
load charges and/or benefits for those customers with statutory 
obligations, such as Project Use, to the CVP PRR. Under this proposal, 
customers with small loads or with statutory obligations will not 
directly pay nor benefit from EIM charges.

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.\1\ The proposed action 
constitutes a minor 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.
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    \1\ 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
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    WAPA is establishing the formula rates for CVP 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 (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 project 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. 00-002.00S, 
effective January 15, 2020, 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. 00-002.10E, effective February 14, 2020, 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. By Redelegation Order No. 00-002.10-5, effective July 
8, 2020, the Assistant Secretary for Electricity further delegated the 
authority to confirm, approve, and place such rates

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into effect on an interim basis to WAPA's Administrator. This rate 
action is issued under Redelegation Order No. 00-002.10-05 and 
Department of Energy (DOE) procedures for public participation in rate 
adjustments set forth at 10 CFR part 903.

Availability of Information

    All brochures, studies, comments, letters, memorandums, or other 
documents that WAPA initiates or uses to develop the proposed formula 
rates are available on WAPA's website at https://www.wapa.gov/regions/SN/rates/Pages/Rate-Case-2021-WAPA-194.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.\2\
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    \2\ 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.
Signing Authority
    This document of the Department of Energy was signed on July 24, 
2020, by Mark A. Gabriel, Administrator, Western Area Power 
Administration, pursuant to delegated authority from the Secretary of 
Energy. That document, with the original signature and date, is 
maintained by DOE. For administrative purposes only, and in compliance 
with requirements of the Office of the Federal Register, the 
undersigned DOE Federal Register Liaison Officer has been authorized to 
sign and submit the document in electronic format for publication, as 
an official document of the Department of Energy. This administrative 
process in no way alters the legal effect of this document upon 
publication in the Federal Register.

    Signed in Washington, DC, on July 28, 2020.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2020-16683 Filed 7-30-20; 8:45 am]
BILLING CODE 6450-01-P