[Federal Register Volume 87, Number 101 (Wednesday, May 25, 2022)]
[Notices]
[Pages 31878-31881]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-11024]


-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Western Area Power Administration


Pick-Sloan Missouri Basin Program--Eastern Division-Rate Order 
No. WAPA-203

AGENCY: Western Area Power Administration, DOE.

[[Page 31879]]


ACTION: Notice of proposed firm power service and sale of surplus 
products formula rates.

-----------------------------------------------------------------------

SUMMARY: The Upper Great Plains Region (UGP) of the Western Area Power 
Administration (WAPA) proposes revised formula rates for the Pick-Sloan 
Missouri Basin Program--Eastern Division (P-SMBP--ED) firm power, firm 
peaking power service, and sale of surplus products. The existing 
formula rates for these services, under Rate Schedules P-SED-F13, P-
SED-FP13, and P-SED-M1, expire on December 31, 2022. UGP is proposing 
to update the formula rates for firm power service under Rate Schedule 
P-SED-F14, firm peaking power service under Rate Schedule P-SED-FP14, 
and sale of surplus products under Rate Schedule P-SED-M2, effective 
January 1, 2023, through December 31, 2027.

DATES: A consultation and comment period will begin May 25, 2022 and 
end August 23, 2022. UGP will present a detailed explanation of the 
proposed P-SMBP--ED formula rates and other modifications at a public 
information forum that will be held on June 15, 2022, at 8:30 a.m. MDT 
to no later than 10:30 a.m. MDT. UGP will host a public comment forum 
on June 29, 2022, at 11:00 a.m. MDT to no later than noon MDT.
    The public information forum and the public comment forum will be 
conducted via WebEx. Instructions for participating in the forums will 
be posted on UGP's website at least 14 days prior to the public 
information and comment forums at: www.wapa.gov/regions/UGP/Rates/Pages/2023-firm-rate-adjustment.aspx.
    UGP will accept 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 
rates submitted by WAPA to FERC for approval should be sent to: Lloyd 
Linke, Regional Manager, Upper Great Plains Region, Western Area Power 
Administration, 2900 4th Avenue North, 6th Floor, Billings, MT 59101-
1266, or email [email protected]. UGP will post information about 
the proposed formula rates and written comments received to its website 
at: www.wapa.gov/regions/UGP/rates/Pages/2023-firm-rate-
adjustment.aspx.

FOR FURTHER INFORMATION CONTACT: Linda Cady-Hoffman, Rates Manager, 
Upper Great Plains Region, Western Area Power Administration, 2900 4th 
Avenue North, 6th Floor, Billings, MT 59101-1266, telephone (406) 255-
2920, email [email protected] [email protected]">or[email protected].

SUPPLEMENTARY INFORMATION: On April 16, 2018, FERC confirmed and 
approved Formula Rate Schedules P-SED-F13, P-SED-FP13, and P-SED-M1, 
under Rate Order No. WAPA-180, on a final basis through December 31, 
2022.\1\ These schedules apply to firm power, firm peaking power 
service, and the sale of surplus products.
---------------------------------------------------------------------------

    \1\ Order Confirming and Approving Rate Schedules on a Final 
Basis, FERC Docket No. EF18-2-000, 163 FERC ] 62,039 (2018).
---------------------------------------------------------------------------

    UGP intends the proposed formula rates to go into effect January 1, 
2023. The proposed formula rates would remain in effect until December 
31, 2027, or until WAPA supersedes or changes the formula rates through 
another public rate process pursuant to 10 CFR part 903, whichever 
occurs first.
    The proposed formula rates would provide sufficient revenue to 
recover annual operation, maintenance, and replacement (OM&R) expenses, 
interest expense, irrigation assistance, and capital repayment 
requirements while ensuring repayment of the project within the cost 
recovery criteria set forth in Department of Energy (DOE) Order RA 
6120.2. For more information on the proposed rates, please see the 
customer brochure located on UGP's website at: www.wapa.gov/regions/UGP/rates/pages/2023-firm-rate adjustment.aspx.

Firm Power and Firm Peaking Power Services

    The P-SMBP Fiscal Year 2021 Power Repayment Study (PRS) revenue 
requirement and current water conditions are the determining factors 
for this proposed rate adjustment.
    The base component costs for the P-SMBP have increased primarily 
due to: (1) Increased OM&R from WAPA and the generating agencies; (2) 
increased purchase power, including during the severe winter weather 
event in February 2021 (Winter Storm Uri); (3) pricing volatility; and 
(4) the loss of certain balancing authority revenues for services that 
WAPA no longer provides after joining the Western Energy Imbalance 
Service Market. Winter Storm Uri was not a water or generation issue; 
therefore, its costs only impact the base component.
    The driver behind the P-SMBP drought adder component increase is 
the Army Corps of Engineers Annual Operating Plan projecting less than 
average generation for the next several years in the P-SMBP mainstem 
dams. Uncertainties with water inflows, hydro generation, and 
replacement energy prices continue to pose potential risks for meeting 
firm power contractual commitments.
    The net effect of these adjustments to the base and drought adder 
components results in an overall increase to the P-SMBP--ED rate. A 
comparison of the current and proposed revenue requirements is shown in 
Table 1:

                          Table 1--Summary of Current and Proposed Revenue Requirements
----------------------------------------------------------------------------------------------------------------
                                                          Current under P-  Proposed under P-
                                                           SED-F13 as of      SED-F14 as of
                   Firm power service                     January 1, 2018    January 1, 2023     Percent change
                                                           (in million $)     (in million $)
----------------------------------------------------------------------------------------------------------------
P-SMBP--ED Revenue Requirement)........................             $230.1             $268.4               16.6
Pick-Sloan--WD \1\.....................................               50.8               58.6               15.4
----------------------------------------------------------------------------------------------------------------
\1\ The Pick-Sloan--WD revenue requirement is recovered by the Loveland Area Projects rate schedules, which are
  to be adjusted accordingly in proposed Rate Order No. WAPA-202.

    Under the current rate methodology, rates for PSMBP--ED firm power 
and firm peaking power service are designed to recover an annual 
revenue requirement that includes investment repayment, interest, 
purchase power, OM&R, and other expenses within the allowable period. 
The annual revenue requirement continues to be allocated equally 
between demand and energy.
    A comparison of the current and proposed rates is shown in Table 2:

[[Page 31880]]



                                 Table 2--Summary of Current and Proposed Rates
----------------------------------------------------------------------------------------------------------------
                                                                   Current under  Proposed under
                                                                   P-SED-F13/ P-   P-SED-F14/ P-
                       Firm power service                         SED-FP13 as of  SED-FP14 as of  Percent change
                                                                    January 1,      January 1,
                                                                       2018            2023
----------------------------------------------------------------------------------------------------------------
P-SMBP--ED Composite Rate (mills/kilowatt-hour).................           24.00           27.91            16.3
Firm Demand ($/kilowatt-month)..................................           $5.25           $6.20            18.1
Firm Energy (mills/kilowatt-hour)...............................           13.27           15.27            15.1
Firm Peaking Demand ($/kilowatt-month)..........................           $4.75           $5.70            20.0
Firm Peaking Energy \1\ (mills/kilowatt-hour)...................           13.27           15.27            15.1
----------------------------------------------------------------------------------------------------------------
\1\ Firm Peaking Energy is normally returned. This charge will be assessed in the event Firm Peaking Energy is
  not returned.

    As a part of the current and proposed rate schedules, UGP provides 
a formula-based adjustment of the drought adder component, with an 
annual increase of up to 2 mills per kilowatt-hour (kWh) each year. The 
2 mills/kWh cap places a limit on the amount the drought adder 
component can be adjusted upward relative to associated drought costs 
included in the drought adder formula rate for any one-year cycle. 
Continuing to identify the firm power service revenue requirement using 
base and drought adder components will assist UGP in the presentation 
of future impacts of droughts, demonstrate repayment of drought-related 
costs in the PRS, and allow UGP to be more responsive to changes caused 
by drought-related expenses. UGP will continue to charge and bill its 
customers firm power and firm peaking power service rates for energy 
and demand, which are the sum of the base and drought adder components.
    The proposed adjustment updates the base component with present 
costs from a revenue requirement of $230.1 million to $235.4 million 
and increases the drought adder revenue requirement. For rate year 2023 
the drought adder revenue requirement increases from zero to $33.0 
million.
    A comparison of the current and proposed components is shown in 
Table 3:

                                                    Table 3--Summary of P-SMBP--ED Charge Components
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                          Current charges under rate schedules P-SED-F13   Proposed charges under rate schedules P-SED-
                                               and P-SED-FP13 as of January 1, 2018          F14 and P-SED-FP14 as of January 1, 2023
                                         ------------------------------------------------------------------------------------------------ Percent change
                                                           Drought adder                                   Drought adder
                                          Base component     component     Total charge   Base component     component     Total charge
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firm Demand ($/kilowatt-month)..........           $5.25           $0.00           $5.25           $5.45           $0.75           $6.20            18.1
Firm Energy (mills/kWh).................           13.27            0.00           13.27           13.36            1.91           15.27            15.1
Firm Peaking Demand ($/kilowatt-month)..           $4.75           $0.00           $4.75           $5.00           $0.70           $5.70              20
Firm Peaking Energy \1\ (mills/kWh).....           13.27            0.00           13.27           13.36            1.91           15.27            15.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Firm peaking energy is normally returned. This charge will be assessed in the event firm peaking energy is not returned.

Sale of Surplus Products

    The Sale of Surplus Products rate schedule is formula based, 
providing for P-SMBP--ED Marketing to sell P-SMBP--ED surplus energy 
and demand products. If P-SMBP--ED surplus products are available, as 
specified in the rate schedule, the charge will be based on market 
rates plus administrative costs. The customer will be responsible for 
acquiring transmission service necessary to deliver the product(s) for 
which a separate charge may be incurred. The proposed Rate Schedule, P-
SED-M2, continues to allow for the sale of energy, frequency response, 
regulation, and reserves.

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.\2\ The proposed action is a 
major rate adjustment, as defined by 10 CFR 903.2(d). In accordance 
with 10 CFR 903.15(a) and 10 CFR 903.16(a), UGP will hold public 
information and public comment forums for this rate adjustment. UGP 
will review and consider all timely public comments at the conclusion 
of the consultation and comment period and adjust the proposal as 
appropriate. The rates will then be approved on an interim basis.
---------------------------------------------------------------------------

    \2\ 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
---------------------------------------------------------------------------

    WAPA is establishing the formula rates for P-SMPB--ED in accordance 
with section 302 of the DOE Organization Act (42 U.S.C. 7152).\3\
---------------------------------------------------------------------------

    \3\ 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 section 5 of the Flood Control Act of 1944 (16 U.S.C. 
825s); and other acts that specifically apply to the projects 
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, to remand or to 
disapprove such rates to FERC. By Delegation Order No. S1-DEL-S4-2022, 
effective March 14, 2022, 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 for Science (and Innovation). By 
Redelegation Order No.S4-DEL-OE1-2021-2, effective December 8, 2021, 
the Under Secretary for Science (and Innovation) redelegated

[[Page 31881]]

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.00-002.10-05, effective July8, 2020, the 
Assistant Secretary for Electricity further redelegated the authority 
to confirm, approve, and place such rates into effect on an interim 
basis to WAPA's Administrator. This redelegation order, despite 
predating the December 2021 and March 2022 delegations, remains valid.

Availability of Information

    All brochures, studies, comments, letters, memorandums, or other 
documents that UGP initiates or uses to develop the proposed formula 
rates will be available for inspection and copying at the Upper Great 
Plains Regional Office, located at 2900 4th Avenue North, 6th Floor, 
Billings, Montana. Many of these documents and supporting information 
are also available on UGP's website at: www.wapa.gov/regions/UGP/rates/
Pages/2023-firm-rate-adjustment.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\
---------------------------------------------------------------------------

    \4\ 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).
---------------------------------------------------------------------------

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 May 4, 
2022, by Tracey A. LeBeau, 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 May 18, 2022.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2022-11024 Filed 5-24-22; 8:45 am]
BILLING CODE 6450-01-P