[Federal Register Volume 85, Number 169 (Monday, August 31, 2020)]
[Notices]
[Pages 53809-53811]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-19116]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Boulder Canyon Project

AGENCY: Western Area Power Administration, Energy (DOE).

ACTION: Notice concerning fiscal year 2021 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) 2021 under Rate 
Schedule BCP-F10. The base charge decreased 1.5 percent from $66.4 
million in FY 2020 to $65.4 million in FY 2021. The reduction is 
primarily the result of an increase in prior year carryover funds.

DATES: The FY 2021 base charge and rates will be effective October 1, 
2020 and will remain in effect through September 30, 2021.

FOR FURTHER INFORMATION CONTACT: Tracey A. LeBeau, Regional Manager, 
Desert Southwest Region, Western Area Power Administration, P.O. Box 
6457, Phoenix, AZ 85005-6457, (602) 605-2525, or [email protected]; or 
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

[[Page 53810]]

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 Western Area Power Administration (WAPA) and Bureau of 
Reclamation (Reclamation) projected costs of investment repayment, 
interest, operations and maintenance (O&M), replacements, payments to 
States, and Hoover Dam visitor services. Non-power revenue projections 
such as water sales, Hoover Dam visitor center 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 Contract require 
WAPA to determine the annual base charge and rates for the next FY 
before October 1 of each year. The FY 2020 BCP base charge and rates 
expire on September 30, 2020.

                                       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     $65,443,462       -$975,940            -1.5
Composite Rate (mills/kWh)......................           18.08           18.10            0.02             0.1
Energy Rate (mills/kWh).........................            9.04            9.05            0.01             0.1
Capacity Rate ($/kW-Mo).........................            1.75            1.69           -0.06            -3.4
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    A $3 million increase in prior year carryover funds significantly 
contributed to the FY 2021 base charge reduction of 1.5 percent from 
the FY 2020 base charge. In addition, Reclamation's FY 2021 budget 
increased by $470,000 to $76.2 million, a 0.6 percent increase from FY 
2020. The difference between Reclamation's $3.2 million decrease in O&M 
expenses and a $3.4 million increase in replacement costs accounts for 
most of the budget increase. WAPA's FY 2021 budget decreased by 
$370,000 to $8.4 million, a 4.2 percent decline from FY 2020. A 
reduction in O&M expenses and the elimination of WAPA's contingency 
funds resulted in the budget decrease.
    Although there is a 1.5 percent reduction to the FY 2021 base 
charge, the composite and energy rates are both slightly increasing 
from FY 2020 due to a forecasted decrease in energy from the long-term 
drought in the Lower Colorado River Basin. The capacity rate, which 
represents a 3.4 percent reduction from the FY 2020 rate, is decreasing 
due to changes in capacity projections and the FY 2021 base charge.

Public Notice and Comment

    The notice of the proposed FY 2021 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 6, 2020, a Federal Register notice (85 FR 19144) 
announced the proposed base charge and rates and initiated the 90-day 
public consultation and comment period.
    2. On May 6, 2020, WAPA held a public information forum by web 
conference. WAPA and Reclamation representatives explained the proposed 
base charge and rates, answered questions, and posted the presentation 
materials to WAPA's website.
    3. On June 5, 2020, WAPA held a public comment forum by web 
conference to provide customers and interested parties an opportunity 
to comment for the record. WAPA received no comments during this forum.
    4. On July 6, 2020, the public consultation and comment period 
ended with WAPA receiving two comment letters. The comments appear 
below, paraphrased where appropriate without compromising their 
meaning.
    Comment: Both commenters thanked WAPA and Reclamation for their 
efforts to decrease the BCP base charge and electric service rates for 
FY 2021 amid the COVID-19 pandemic. They applauded efforts by 
Reclamation to mitigate revenue losses due to the pandemic's effects on 
tourism.
    Response: WAPA and Reclamation acknowledge the comments. Non-power 
revenue projections decreased by $4 million since publication of the 
proposed base charge and rates due to the closing of the Hoover Dam 
visitor center as a result of the pandemic. Reclamation reduced FY 2021 
O&M and replacement costs by $4 million to maintain the proposed 
decrease to the FY 2021 base charge.
    Comment: A commenter had concerns about future costs for the 
landfill mitigation, post-retirement benefit costs, and the potential 
for a continued decrease in Hoover Dam visitor center tourism revenue.
    Response: WAPA and Reclamation will continue to work with the BCP 
contractors on moderating future costs.
    Comment: A commenter requested that future maintenance schedules be 
adjusted to minimize capacity downtime in the summer.
    Response: Reclamation plans to continue to limit routine 
maintenance from May through October to provide maximum available 
capacity to the BCP contractors.

Certification of Rates

    WAPA's Administrator certified that the FY 2021 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 2021 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 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. WAPA's Administrator provided all BCP contractors an 
opportunity to comment

[[Page 53811]]

on the proposed base charge adjustment consistent with the procedures 
for public participation in rate adjustments as required under 10 CFR 
904.7(e) and the BCP Electric Service Contract. The BCP Electric 
Service Contract goes on to state that in years other than the first 
and fifth years of a rate schedule approved by the Deputy Secretary on 
a provisional basis and by FERC 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, and the 
Secretary of Energy may therefore exercise the Deputy Secretary's 
contractual authority in this context. 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. By Redelegation Order No. 00-002.10-5, effective July 8, 2020, 
the Assistant Secretary for Electricity delegated to WAPA's 
Administrator the same authority with respect to WAPA. However, based 
upon the governing terms of existing BCP Electric Service Contract, the 
Assistant Secretary for Electricity is approving the FY 2021 base 
charge and rates for BCP electric service. This rate action is issued 
under the Redelegation Orders and Department of Energy (DOE) procedures 
for public participation in rate adjustments set forth at 10 CFR part 
903 and 10 CFR part 904.\3\
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    \3\ 50 FR 37835 (Sept. 18, 1985); 85 FR 19144 (Apr. 6, 2020).
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    Following DOE's review of WAPA's proposal, and as authorized by 
applicable provisions of the BCP Electric Service Contract, I hereby 
confirm, approve, and place the FY 2021 base charge and rates for BCP 
electric service, under Rate Schedule BCP-F10, into effect on a final 
basis through September 30, 2021.

Ratemaking Procedure Requirements

Environmental Compliance

    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), WAPA 
has determined that this action is categorically excluded from 
preparing an environmental assessment or an environmental impact 
statement.

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 August 24, 
2020, by Bruce J. Walker, Assistant Secretary, Office of Electricity, 
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 August 26, 2020.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2020-19116 Filed 8-28-20; 8:45 am]
BILLING CODE 6450-01-P