[Federal Register Volume 87, Number 180 (Monday, September 19, 2022)]
[Notices]
[Pages 57189-57193]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-20189]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Boulder Canyon Project--Rate Order No. WAPA-204

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of rate order concerning Boulder Canyon Project formula 
rates for electric service and fiscal year 2023 base charge and rates.

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SUMMARY: The Deputy Secretary confirmed, approved, and placed into 
effect on an interim basis the Boulder Canyon Project (BCP) formula 
rates for electric service in Rate Schedule BCP-F11 and the fiscal year 
(FY) 2023 base charge and rates under Rate Schedule BCP-F11. The 
existing formula rates under Rate Schedule BCP-F10 and the current base 
charge and rates expire on September 30, 2022. Rate Schedule BCP-F11 
does not change the formula rates, which are set forth in the governing 
terms of the BCP Electric Service Contract (ESC). While the formula 
rates remain unchanged, the FY 2023 base charge for BCP electric 
service decreased 0.8 percent from $67.4 million in FY 2022 to $66.8 
million in FY 2023.

DATES: The BCP formula rates under Rate Schedule BCP-F11 are effective 
the first day of the first billing period beginning on or after October 
1, 2022, and will remain in effect through September 30, 2027. The BCP 
FY 2023 base charge and rates will be effective October 1, 2022, and 
remain in effect through September 30, 2023. Based upon the governing 
terms of the existing BCP ESC, the Deputy Secretary has provisionally 
approved the BCP formula rates for electric service in Rate Schedule 
BCP-F11 and the FY 2023 base charge and rates for BCP under Rate 
Schedule BCP-F11, pending confirmation and approval by the Federal 
Energy Regulatory Commission (FERC) on a final basis or until 
superseded.

FOR FURTHER INFORMATION CONTACT: Jack D. Murray, Regional Manager, 
Desert Southwest Region, Western Area Power Administration, P.O. Box 
6457, Phoenix, Arizona 85005-6457, or Tina Ramsey, Rates Manager, 
Desert Southwest Region, Western Area Power Administration, (602) 605-
2565, or email: [email protected].

SUPPLEMENTARY INFORMATION: On June 6, 2018, FERC confirmed and approved 
Rate Schedule BCP-F10, under Rate Order No. WAPA-178, on a final basis 
through September 30, 2022.\1\ Western Area Power Administration (WAPA) 
published a Federal Register notice (Proposed FRN) on April 13, 2022 
(87 FR 21881), proposing to renew the existing formula rates for 
electric service as Rate Schedule BCP-F11 and to calculate the FY 2023 
base charge and rates under Rate Schedule BCP-F11. The Proposed FRN 
also initiated a public consultation and comment period and set forth 
the date and location of the public information and public comment 
forums.
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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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    Consistent with the formulas set forth in the BCP ESC, WAPA is 
renewing the formula rates for electric service as Rate Schedule BCP-
F11, which would be effective October 1, 2022, through September 30, 
2027, pending confirmation and approval by FERC on a final basis or 
until superseded. The formula rates will continue to provide sufficient 
revenue to recover all annual costs, including interest expense. Rate 
Schedule BCP-F11 and the BCP ESC require WAPA to calculate the annual 
base charge and rates for the next fiscal year before October 1 of each 
year based on formulas that are set for a five-year period.

[[Page 57190]]

Legal Authority

    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 Bureau of Reclamation. 
Those functions include actions that specifically apply to the BCP.
    Pursuant to the BCP ESC, the renewed rate formula under Rate 
Schedule BCP-F11 and calculated base charge and rates for FY 2023 shall 
become effective, provisionally, upon approval by the Deputy Secretary 
of Energy subject to final approval by FERC. 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-RATES-2016, 
effective November 19, 2016, the Secretary of Energy delegated: (1) the 
authority to develop power and transmission rates to the WAPA 
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. Based upon the governing terms of the existing BCP ESC, the 
Deputy Secretary will approve the formula rates and the FY 2023 base 
charge and rates for BCP electric service. This rate action is issued 
under the Delegation Order and DOE's procedures for public 
participation in rate adjustments set forth at 10 CFR parts 903 and 
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 review of WAPA's proposal, I hereby confirm, approve and 
place Rate Order No. WAPA-204, which provides the formula rates for BCP 
electric service and calculates the base charge and rates for FY 2023, 
into effect on an interim basis. WAPA will submit Rate Order No. WAPA-
204 to FERC for confirmation and approval on a final basis.

Department of Energy

Deputy Secretary

In the Matter of: Western Area Power Administration, Desert 
Southwest Region, Rate Adjustment for the Boulder Canyon Project 
Formula Rates for Electric Service
Rate Order No. WAPA-204

Order Confirming, Approving and Placing the Boulder Canyon Project 
Formula Rates for Electric Service Into Effect on an Interim Basis and 
Calculation of Fiscal Year 2023 Base Charge and Rates

    The Boulder Canyon Project (BCP) formula rates for electric service 
and fiscal year (FY) 2023 base charge and rates are established 
following section 302 of the Department of Energy (DOE) Organization 
Act (42 U.S.C. 7152).\1\ 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 the Bureau of 
Reclamation (Reclamation). Those functions include actions that 
specifically apply to the BCP.
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    \1\ 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 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.
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    Pursuant to the BCP Electric Service Contract (ESC), the renewed 
rate formula under Rate Schedule BCP-F11 and calculated base charge and 
rates for FY 2023 shall become effective, provisionally, upon approval 
by the Deputy Secretary of Energy subject to final approval by the 
Federal Energy Regulatory Commission (FERC). 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-RATES-2016, 
effective November 19, 2016, the Secretary of Energy delegated: (1) the 
authority to develop power and transmission rates to the Administrator 
of Western Area Power Administration (WAPA); (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. This Rate Order is issued under the 
Delegation Order and DOE's procedures for public participation in rate 
adjustments set forth at 10 CFR parts 903 and 904, subject to final 
approval by FERC.

Effective Date

    Rate Schedule BCP-F11 will take effect on October 1, 2022, and will 
remain in effect through September 30, 2027, and the BCP FY 2023 base 
charge and rates will be effective October 1, 2022, and remain in 
effect through September 30, 2023, pending confirmation and approval by 
FERC on a final basis or until superseded.

Public Notice and Comment

    The notice of the proposed renewal of formula rates in Rate 
Schedule BCP-F11 and the proposed FY 2023 base charge and rates for 
electric service were published consistent with procedures set forth in 
10 CFR part 903 and 10 CFR part 904. Following are the steps WAPA took 
to involve contractors and other interested parties in the rate 
process:
    1. On April 13, 2022, a Federal Register notice (87 FR 21881) 
(Proposed FRN) announced the proposed renewal of the formula rates and 
the proposed FY 2023 base charge and rates and launched the 90-day 
public consultation and comment period.
    2. On April 13, 2022, WAPA notified contractors and interested 
parties of the proposed rates and provided a copy of the published 
Proposed FRN.
    3. On May 13, 2022, WAPA held a public information forum (PIF) via 
video conference. Reclamation and WAPA's representatives explained the 
proposed formula rates for electric service and the proposed FY 2023 
base charge and rates and answered questions.
    4. On June 8, 2022, WAPA posted responses to questions from the PIF 
about Renewable Energy Certificates (RECs) and to a letter received 
with additional questions and comments about RECs.
    5. On June 13, 2022, WAPA held a public comment forum (PCF) via 
video conference to provide an opportunity for contractors and other 
interested parties to comment for the record.
    6. WAPA provided a website that contains important dates, 
correspondence, presentations, comments, responses, FRNs, and other 
information about this rate process. The BCP website is located at 
www.wapa.gov/regions/DSW/Rates/Pages/boulder-canyon-rates.aspx.
    7. During the 90-day consultation and comment period, which ended 
on July 12, 2022, WAPA received four oral comments and four written 
comments. WAPA's responses to comments received prior to the PCF were 
posted on the BCP website. WAPA's responses to comments received during 
or after the PCF are included below. All comments have been considered 
in the preparation of this Rate Order.
    Oral comments were received from the following organizations:

Augustine Tribe of Cahuilla Indians

[[Page 57191]]

City of Boulder City, Nevada
Colorado River Commission of Nevada
Law Firm of Clark Hill (representing: Pinal County Electrical District 
Number Six; Electrical District Number Seven of Maricopa County, 
Arizona; Maricopa County Municipal Water Conservation District Number 
One; Roosevelt Irrigation District; and Buckeye Water Conservation and 
Drainage District)

    Written comments were received from the following organizations, 
some of which submitted comments jointly:

Augustine Tribe of Cahuilla Indians
Arizona Municipal Power User's Association
Arizona Power Authority
Irrigation and Electrical Districts Association of Arizona
Law Firm of Clark Hill (representing: Pinal County Electrical District 
Number Six; Electrical District Number Seven of Maricopa County, 
Arizona; Maricopa County Municipal Water Conservation District Number 
One; Roosevelt Irrigation District; and Buckeye Water Conservation and 
Drainage District)

Comments

    The comments received during or after the PCF have been paraphrased 
herein, where appropriate, without compromising the meaning of the 
comments.
    Comment: Commenter (1) thanked Reclamation and WAPA for 
participation in the BCP Engineering and Operations Committee (E&OC), 
(2) agreed with additional consultation at future E&OC meetings to 
address drought impacts, and (3) stated the drought analysis developed 
by Reclamation and WAPA has helped to forecast and understand the 
drought impacts to hydropower customers of Federal projects in the 
Lower Colorado River Basin.
    Response: Reclamation and WAPA appreciate the positive feedback and 
will continue to work with customers as hydrological conditions change. 
To help the contractors with future planning specific to BCP, an E&OC 
work group will be formed to study the impacts of the continuing 
drought.
    Comment: Commenters stated they understood from the posted PIF 
responses that REC revenue projections for FY 2023 will be removed from 
the FY 2023 rates and supported this interim solution. They encouraged 
consultation with contractors on future treatment of REC revenues.
    Response: This is correct; the $800,000 projection for REC revenue 
previously included in the proposed FY 2023 base charge calculation has 
been removed. WAPA will work with the contractors and discuss options 
to directly provide benefits to those contractors who do not claim 
their RECs.
    Comment: Commenter (1) thanked Reclamation and WAPA for the 
opportunity to participate in developing the work plans and budget for 
the BCP and for the reduction in the base charge for FY 2023, (2) 
commended Reclamation and WAPA and the committees involved that support 
the goals in the BCP Implementation Agreement between Reclamation, 
WAPA, and the contractors, and (3) was appreciative that a work group 
is being established for contingency planning related to the drought.
    Response: Reclamation and WAPA appreciate the comment and will 
continue to work collaboratively with the contractors on contingency 
planning for the drought, provide information as it is available, and 
continue to ensure rates are the lowest possible consistent with sound 
business principles.
    Comment: Commenter stated the drought impact analysis has helped to 
provide an understanding of the water restrictions in response to the 
ongoing drought and the resulting generation impacts. Commenter agrees 
with having additional consultation at future E&OC meetings to address 
the continuing drought and its impact to the future base charge and 
rates.
    Response: Reclamation and WAPA will continue to work with 
contractors on the impacts of the ongoing drought and a work group will 
be formed to study the impacts as hydrological conditions change.

Background on Formula Rates and Base Charge and Rates

    Hoover Dam,\2\ authorized by the Boulder Canyon Project Act of 1928 
(45 Stat. 1057, December 21, 1928), 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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    \2\ 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 base charge recovers an annual revenue requirement that 
includes projected costs for investment repayment, interest, 
operations, maintenance, replacements, payments to States, and Hoover 
Dam visitor services. Non-power revenue projections from water sales, 
the Hoover Dam visitor center, ancillary services, and late fees help 
offset the projected costs. Hoover Dam power contractors are billed a 
percentage of the base charge in proportion to their power allocation. 
Unit rates are calculated for comparative purposes but are not used to 
determine the charges for service.

                                       Comparison of Base Charge and Rates
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                                                      FY 2022         FY 2023      Amount change  Percent change
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Base Charge ($).................................     $67,355,778     $66,798,560      ($557,218)           (0.8)
Composite Rate (mills/kWh)......................           20.63           22.43            1.80             8.7
Energy Rate (mills/kWh).........................           10.32           11.22            0.90             8.7
Capacity Rate ($/kW-Mo).........................           $2.03           $2.17           $0.14             6.9
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    While the formula rates remain unchanged, the FY 2023 base charge 
for BCP electric service is decreasing from $67.4 million in FY 2022 to 
$66.8 million in FY 2023, a 0.8-percent decrease. Working together, 
Reclamation and WAPA conducted a mid-year review to lessen the 
financial impact of the drought to the rates and reduced costs by $2.1 
million from the initial proposal in the Proposed FRN.
    Reclamation's FY 2023 budget is increasing $2.9 million from $81.7 
million to $84.7 million, a 3.6-percent

[[Page 57192]]

increase from FY 2022. Reflected in this budget, operations and 
maintenance (O&M) costs are increasing $3.4 million primarily due to a 
higher overhead rate for salaries attributed to a reorganization and 
increased staffing needs to improve cybersecurity; an increase in 
services for IT support and equipment; trash disposal contract costs; 
fabrication of elevator doors; ammunition for security forces; and 
anticipated costs for the Workman's Compensation Program. Visitor 
services costs are increasing $490,000 due to higher projected contract 
costs for janitorial, memorabilia, ticketing, and trash disposal 
services. The increase for Reclamation is offset by a $1.1 million 
decrease in replacement costs primarily due to Reclamation's effort to 
level extraordinary maintenance project expenses. This results in 
reduced annual costs for the control center renovation project and the 
replacement of the A9 wicket gates, visitors center escalator, and 
wastewater treatment facility.
    WAPA's FY 2023 budget is decreasing $438,000 from $9.2 million to 
$8.7 million, a 4.8-percent decrease from FY 2022. Reflected in this 
budget, WAPA's O&M costs are decreasing by $842,000 due to a shift from 
O&M to capital work. The decreasing O&M costs are offset primarily by a 
$380,000 increase in WAPA's replacement budget for breaker and relay 
replacements in the Mead Substation 69-kilovolt yard.
    Costs for Reclamation and WAPA are offset by a slight increase of 
$68,000 in non-power revenue projections, due to a higher estimate for 
ancillary services revenues. Prior-year carryover is projected to be 
$5.6 million, a $3 million increase from FY 2022. This increase in 
carryover primarily is due to the $1.8 million reduction of FY 2022 O&M 
costs made during the mid-year review and the addition of $1 million in 
non-power revenues from the FY 2022 sale of RECs from FY 2021 and 
earlier years. The sale of these RECs occurred prior to contractors 
expressing a preference for a different treatment of revenue from RECs.
    Although the base charge is decreasing by 0.8 percent, the rates 
calculated for comparative purposes are increasing 6.9 percent and 8.7 
percent due to reduced energy and capacity from the ongoing drought in 
the Colorado River Basin. Reclamation and WAPA will continue to work 
collaboratively to lessen the impact of the drought in future years.

Certification of Rates

    WAPA's Administrator certified that the formula rates for BCP 
electric service under Rate Schedule BCP-F11 result in the lowest 
possible rates consistent with sound business principles, and the 
calculated FY 2023 base charge and rates under Rate Schedule BCP-F11 
are the lowest possible rates consistent with sound business 
principles. The formula rates and base charge and rates were developed 
following administrative policies and applicable laws.

Availability of Information

    Information about this rate adjustment, including studies, 
comments, letters, memorandums, and other supporting materials that 
were used to develop the formula rates for electric service and the 
base charge and rates are available for inspection and copying at the 
Desert Southwest Customer Service Regional Office, located at 615 South 
43rd Avenue, Phoenix, Arizona. Many of these documents are also 
available on WAPA's BCP website at www.wapa.gov/regions/DSW/Rates/Pages/boulder-canyon-rates.aspx.

Ratemaking Procedure Requirements

Environmental Compliance

    WAPA has determined that this action fits within the following 
categorical exclusions listed in appendix B to subpart D of 10 CFR 
1021.410: B4.3 (Electric power marketing rate changes) and B4.4 (Power 
marketing services and activities).\3\ Categorically excluded projects 
and activities do not require preparation of either an environmental 
impact statement or an environmental assessment. Specifically, WAPA has 
determined that this rulemaking is consistent with activities 
identified in B4, Categorical Exclusions Applicable to Specific Agency 
Actions (see 10 CFR part 1021, appendix B to subpart D, part B4). A 
copy of the categorical exclusion determination is available on WAPA's 
website at www.wapa.gov/regions/DSW/Environment/Pages/environment.aspx.
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    \3\ The determination was done in compliance with NEPA (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.

Submission to the Federal Energy Regulatory Commission

    The BCP formula rates for electric service in Rate Schedule BCP-F11 
and the FY 2023 base charge and rates under Rate Schedule BCP-F11 
herein confirmed, approved, and placed into effect on an interim basis, 
together with supporting documents, will be submitted to FERC for 
confirmation and final approval.

Order

    In view of the above and under the authority delegated to me, I 
hereby confirm, approve, and place into effect, on an interim basis, 
the BCP formula rates for electric service in Rate Schedule BCP-F11 and 
the FY 2023 base charge and rates under Rate Schedule BCP-F11. The 
rates will remain in effect on an interim basis until: (1) FERC 
confirms and approves them on a final basis; (2) subsequent rates are 
confirmed and approved; or (3) such rates are superseded.

Signing Authority

    This document of the Department of Energy was signed on September 
12, 2022, by David M. Turk, Deputy Secretary, 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 September 14, 2022.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.

Rate Schedule BCP-F11
(Supersedes Rate Schedule BCP-F10)

United States Department of Energy

Western Area Power Administration

Desert Southwest Region

Boulder Canyon Project

Schedule of Rates for Electric Service

(Approved Under Rate Order No. WAPA-204)

Effective
    The first day of the first full billing period beginning on or 
after October 1,

[[Page 57193]]

2022, and extending through September 30, 2027, or until superseded by 
another rate schedule, whichever occurs earlier.
Available
    In the marketing area serviced by the Boulder Canyon Project.
Applicable
    To power supplied by the Boulder Canyon Project through one meter, 
at one point of delivery, unless otherwise provided by contract.
Character and Conditions of Service
    Alternating current at 60 hertz, three-phase, delivered and metered 
at the voltages and points established by contract.
Base Charge
    The charge paid by each contractor for their allocated capacity and 
firm energy based on the annual revenue requirement. The base charge 
shall be composed of a capacity component and an energy component:
    Capacity Charge: Each month WAPA shall bill each contractor for a 
capacity charge equal to one-twelfth (1/12) of the capacity dollars 
multiplied by each contractor's contingent capacity percentage as 
provided by contract.
    Energy Charge: Each month WAPA shall bill each contractor for an 
energy charge equal to that period's monthly energy ratio, multiplied 
by the contractor's energy dollars as provided by contract.
Forecast Rates
    Energy: Shall be equal to the annual energy dollars divided by the 
lesser of the total master schedule energy or 4,501 megawatt-hours. 
This rate is applied to excess energy, unauthorized overruns, and water 
pump energy.
    Capacity: Shall be equal to the annual capacity dollars divided by 
2,074 megawatt-hours. This rate is applied to unauthorized overruns.
Calculated Energy Rate
    Within ninety (90) days after the end of the fiscal year, an energy 
rate shall be calculated. For any rate year in which energy deemed 
delivered is greater than 4,501 megawatt-hours, WAPA shall apply the 
calculated energy rate to each contractor's energy deemed delivered to 
determine the contractor's actual energy charge. A credit or debit 
shall be established for each contractor based on the difference 
between the contractor's energy dollars and the contractor's actual 
energy charge, to be applied in the month following the calculation or 
as soon as possible thereafter.
Lower Colorado River Basin Development Fund (Contribution Charge)
    The Contribution Charge is 4.5 mills for each kilowatt-hour 
measured or scheduled to an Arizona purchaser and 2.5 mills for each 
kilowatt-hour measured or scheduled to a California or Nevada 
purchaser, except for purchased power.
Billing for Unauthorized Overruns
    For each billing period in which there is a contract violation 
involving an unauthorized overrun of contractual power obligations, 
such overrun shall be billed at ten (10) times the forecast energy rate 
and forecast capacity rate. The Contribution Charge shall also be 
applied to each kilowatt hour of overrun.
Adjustments
    None.

[FR Doc. 2022-20189 Filed 9-16-22; 8:45 am]
BILLING CODE 6450-01-P