[Federal Register Volume 86, Number 161 (Tuesday, August 24, 2021)]
[Notices]
[Pages 47304-47306]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-18172]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Boulder Canyon Project

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice concerning fiscal year 2022 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) 2022 under Rate 
Schedule BCP-F10. The base charge increased 2.9 percent from $65.4 
million in FY 2021 to $67.4 million in FY 2022. The change is primarily 
the result of an increase in the Bureau of Reclamation's (Reclamation) 
replacement costs, an increase in the Western Area Power 
Administration's (WAPA) operations and maintenance (O&M) expenses and 
replacement costs, and a decrease in prior year carryover funds from FY 
2021.

DATES: The FY 2022 base charge and rates will be effective October 1, 
2021 and will remain in effect through September 30, 2022.

FOR FURTHER INFORMATION CONTACT: Jack D. Murray, Acting 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 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 WAPA and 
Reclamation projected costs of investment repayment, interest, 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 2021 BCP base charge and rates 
expire on September 30, 2021.

                                       Comparison of Base Charge and Rates
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                                               FY 2021           FY 2022        Amount change    Percent change
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Base Charge ($).........................       $65,443,462       $67,355,778        $1,912,316               2.9
Composite Rate (mills/kWh)..............             18.10             20.63              2.53              14.0
Energy Rate (mills/kWh).................              9.05             10.32              1.27              14.0
Capacity Rate ($/kW-Mo).................             $1.69             $2.03             $0.34              20.1
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[[Page 47305]]

    Reclamation's FY 2022 budget is increasing by $1.6 million to $81.7 
million, a 2 percent increase from FY 2021. While O&M costs are 
decreasing by $4.4 million compared to FY 2021, there was a minimal 
increase of $44,000 for post-retirement benefits and replacement costs 
are increasing by $4.4 million due to the addition of new projects and 
the inclusion of projects that were previously deferred due to the 
COVID-19 pandemic. Visitor services costs are also increasing by $1.5 
million in FY 2022, primarily due to a $1 million reallocation of 
expenses from administrative and general expenses in O&M 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 by $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 and higher O&M expenses 
of $520,000 account for this increase. The increase in O&M expenses is 
primarily due to the following: 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 O&M 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 $2.7 million, a $1.7 million decrease from FY 2021.
    While the base charge is increasing 2.9 percent, the composite and 
energy rates are both increasing 14 percent and the capacity rate is 
increasing 20.1 percent from FY 2021. Projections of energy and 
capacity are decreasing in FY 2022 due to the ongoing drought in the 
Lower Colorado River Basin. Reclamation and WAPA work collaboratively 
each year to minimize budget increases to moderate the financial impact 
of the drought to the rates. For FY 2022, Reclamation and WAPA were 
able to reduce previously formulated budgets and defer projects to 
decrease costs by $4 million. Without this decrease in costs, the base 
charge would have increased approximately $5.9 million instead of $1.9 
million.

Public Notice and Comment

    The notice of the proposed FY 2022 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 15, 2021, a Federal Register notice (86 FR 19881) 
announced the proposed base charge and rates and initiated the 90-day 
public consultation and comment period.
    2. On May 17, 2021, WAPA held a public information forum by web 
conference. WAPA and Reclamation representatives explained the proposed 
base charge and rates and answered questions. Presentation materials 
and supplemental information requested by customers were posted to 
WAPA's website.
    3. On June 14, 2021, 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 14, 2021, the public consultation and comment period 
ended with WAPA receiving no comments.

Certification of Rates

    WAPA's Administrator certified that the FY 2022 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 2022 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 ``adjust[ment], 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 
[p]roject.'' WAPA's Administrator provided all BCP contractors an 
opportunity to comment 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 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 become 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 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 the . . 
. Western Area Power Administration.'' By Redelegation Order No. S4-
DEL-OE1-2021, effective March 25, 2021, the Acting Under Secretary for 
Science (and Energy) redelegated the same authority to the Assistant 
Secretary for Electricity. Based upon the governing terms of the 
existing BCP Electric Service Contract, the Acting Assistant Secretary 
for Electricity is approving 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 as set forth at 10 CFR part 903 and 10 CFR part 904.\2\
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    \2\ 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
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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 2022 base charge and rates for BCP 
electric service, under Rate Schedule BCP-F10, into effect on a final 
basis through September 30, 2022.

Ratemaking Procedure Requirements

Environmental Compliance

    WAPA has determined this action fits within the following 
categorical exclusions listed in appendix B to subpart D of 10 CFR 
1021: B4.3 (Electric power marketing rate changes) and B4.4 (Power 
marketing services and activities). Categorically excluded projects and 
activities do not require preparation of either an environmental impact 
statement (EIS) or an environmental assessment (EA).\3\ A

[[Page 47306]]

copy of the categorical exclusion determination is available on WAPA's 
website at https://www.wapa.gov/regions/DSW/Environment/Pages/environment.aspx.
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    \3\ The determination was done in compliance with the National 
Environmental Policy Act (NEPA) of 1969, as amended, 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 August 18, 
2021, by Patricia A. Hoffman, Acting 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 19, 2021.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2021-18172 Filed 8-23-21; 8:45 am]
BILLING CODE 6450-01-P