[Federal Register Volume 86, Number 71 (Thursday, April 15, 2021)]
[Notices]
[Pages 19881-19883]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-07702]


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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 2022 Boulder Canyon Project base 
charge and rates for electric service.

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SUMMARY: The Desert Southwest Region (DSW) of the Western Area Power 
Administration (WAPA) is proposing an adjustment to the base charge and 
rates for fiscal year (FY) 2022 Boulder Canyon Project (BCP) electric 
service under Rate Schedule BCP-F10. The proposal would increase the 
base charge 9 percent from $65.4 million in FY 2021 to $71.3 million in 
FY 2022. The change is primarily the result of an increase in Bureau of 
Reclamation's (Reclamation) replacement costs, an increase in WAPA's 
operations and maintenance expenses and replacement costs, and a 
decrease in prior year carryover funds from FY 2021. The proposed base 
charge and rates would go into effect on October 1, 2021 and remain in 
effect through September 30, 2022. Publication of this Federal Register 
notice will initiate the public process.

DATES: The consultation and comment period begins today and will end 
July 14, 2021. DSW will present a detailed explanation of the proposed 
FY 2022 base charge and rates at a public information forum that will 
be held on May 17, 2021, from 10 a.m. to 12 p.m. Mountain Standard 
Time. DSW will also host a public comment forum that will be held on 
June 14, 2021, from 10 a.m. to 12 p.m. Mountain Standard Time. DSW will 
conduct both the public information forum and the public comment forum 
via Webex. Instructions for participating in the forums will be posted 
on DSW'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. DSW will accept written comments any time during the 
consultation and comment period.

ADDRESSES: Send written comments to Mr. Jack D. Murray, Acting Regional 
Manager, Desert Southwest Region, Western Area Power Administration, 
P.O. Box 6457, Phoenix, Arizona 85005-6457, or [email protected]. DSW 
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

[[Page 19882]]

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 Reclamation, WAPA markets and delivers 
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 5 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 
2021 BCP base charge and rates expire on September 30, 2021.
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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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                                                                                                      Percent
                                                      FY 2021         FY 2022     Amount  change      change
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Base Charge ($).................................     $65,443,462     $71,315,922      $5,872,460             9.0
Composite Rate (mills/kWh)......................           18.10           19.72            1.62             9.0
Energy Rate (mills/kWh).........................            9.05            9.86            0.81             9.0
Capacity Rate ($/kW-Mo).........................           $1.69           $1.84            0.15             8.9
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    Reclamation's FY 2022 budget is increasing $3.6 million to $83.7 
million, a 4.4 percent increase from FY 2021. While operations and 
maintenance costs are decreasing $3.3 million compared to FY 2021, 
replacement costs are increasing $5.3 million due to the inclusion of 
projects that were deferred in FY 2020 and FY 2021 due to the COVID-19 
pandemic as well as the addition of projects that are beginning in FY 
2022. These projects include 480-volt switchgear replacement, water 
plant and wastewater plant controls replacement, wastewater treatment 
facility replacement, escalator replacement, additional tail bay stop 
log installation, central section HVAC replacement, Cisco optical 
networking services upgrade, and N7 unit oil system replacement. 
Visitor services costs also are increasing by $1.5 million in FY 2022, 
primarily due to a $1 million reallocation of expenses from 
administrative and general expenses in operations and maintenance to 
visitor services expenses. Higher labor projections in salaries, 
overtime, overhead, and benefits also contribute to the visitor 
services increase.
    WAPA's FY 2022 budget is increasing $762,000 to $9.2 million, a 9.1 
percent increase from FY 2021. A $247,000 increase in WAPA's 
replacement budget for communication equipment, as well as higher 
operations and maintenance expenses of $520,000, account for this 
increase. The increase in operations and maintenance expenses is 
primarily due to the Hoover-Mead transmission line lease costs, which 
were not budgeted in FY 2021; an updated distribution of labor costs 
resulting from the closure of the Navajo Generating Station near Page, 
Arizona; and higher labor projections for salaries, overtime, overhead, 
and benefits in power operations. The increase in replacements and 
operations and maintenance costs is offset by a modest decrease in 
facility expenses and post-retirement benefits.
    The cost increase for both Reclamation and WAPA is offset by a $2.1 
million increase in non-power revenue projections due to the added 
commercial use authorization for road-based tours. Prior year carryover 
is estimated to be $684,000, a $3.6 million decrease from FY 2021.
    The composite and energy rates are both increasing 9 percent from 
FY 2021. The composite and energy rates use a forecasted energy value. 
The capacity rate is increasing 8.9 percent from FY 2021 due to the 
increase in the base charge. Forecasted energy and capacity values may 
be updated when determining the final base charge if hydrological 
conditions change.
    This proposed rate adjustment, which would be effective October 1, 
2021, is preliminary and subject to change based on modifications to 
forecasts before publication of the final base charge and rates.

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, DSW will 
hold public information and public comment forums for this rate 
adjustment. DSW will review and consider all timely public comments at 
the conclusion of the consultation and comment period and make 
adjustments to the proposal as appropriate.
    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 for years other than 
the first year and each fifth year thereafter, when the rate schedule 
is 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 DOE 
Organization Act, the Secretary of Energy holds plenary authority over 
DOE affairs with respect to the Power Marketing Administrations, and 
the Secretary of Energy may therefore exercise the Deputy Secretary's

[[Page 19883]]

contractual authority in this context. By Delegation Order No. S1-DEL-
S4-2021, effective February 25, 2021, the Acting Secretary of Energy 
delegated to the Under Secretary for Science (and 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 
(to whom such authority was delegated by the Secretary of Energy in 
Delegation Order No. 00-002.00S from January 15, 2020 until that 
delegation was rescinded on February 25, 2021) redelegated 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 redelegated to WAPA's 
Administrator the same authority with respect to WAPA. However, based 
upon the governing terms of the existing BCP Electric Service Contract, 
the Assistant Secretary for Electricity will approve the FY 2022 base 
charge and rates for BCP electric service. This rate action is issued 
under the Redelegation Orders and DOE's procedures for public 
participation in rate adjustments set forth at 10 CFR parts 903 and 
904.\3\ The delegations and redelegations not affirmatively rescinded 
remain valid.
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    \3\ 50 FR 37835 (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 DSW 
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 action can be categorically excluded from those 
requirements.\4\
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    \4\ 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.

Signing Authority

    This document of the Department of Energy was signed on March 26, 
2021, by Tracey A. LeBeau, Administrator (Interim), 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 April 12, 2021.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2021-07702 Filed 4-14-21; 8:45 am]
BILLING CODE 6450-01-P