Federal Register, Volume 87 Issue 242 (Monday, December 19, 2022)

[Federal Register Volume 87, Number 242 (Monday, December 19, 2022)]
[Notices]
[Pages 77628-77633]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-27473]

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DEPARTMENT OF THE INTERIOR

Bureau of Indian Affairs

[2231A2100DD/AAKC001030/A0A501010.999900]

San Carlos Irrigation Project--Power Division, Arizona Power Rate
Adjustment

AGENCY: Bureau of Indian Affairs, Interior.

ACTION: Notice.

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SUMMARY: The Bureau of Indian Affairs (BIA) has adjusted its electric
power rates for the Power Division of San Carlos Irrigation Project
(SCIP/PD).

DATES: The 2023 electric power rates are effective on January 18, 2023.

FOR FURTHER INFORMATION CONTACT: For details about SCIP/PD, please
contact Ferris Begay, Project Manager, San Carlos Irrigation Project,
13805 N Arizona Blvd., Coolidge, AZ 85128, (520) 723-6225.

SUPPLEMENTARY INFORMATION: A Notice of Proposed Rate Adjustment was
published in the Federal Register on February 10, 2022 (87 FR 7863) to
propose adjustments to the electric power rates at SCIP/PD. The public
and interested parties were provided an opportunity to submit written
comments during the 60-day period that ended April 11, 2022.

Did BIA defer or change any proposed rate increases?

Yes. BIA will not implement the proposed 2022 rates. The final 2023
rates will be implemented as proposed.

Did BIA receive any comments on the proposed electric power rate
adjustments?

Yes. BIA received nine (9) written comment submissions related to
the proposed rate adjustments for SCIP/PD.

What issues were of concern to the commenters?

Written comments relating the proposed rate adjustment were
received by letter and email. BIA's summary of the issues and BIA's
responses are provided below:
Comment: Commenters state a general opposition to the proposed
electric power rate adjustments.
Response: As noted when rates were proposed in the Federal Register
on February 10, 2022 (87 FR 7863), BIA is required to establish power
assessment rates that recover the costs to administer, operate,
maintain, and rehabilitate our projects. As owner of SCIP/PD, it is our
responsibility to ensure adequate resources are made available to meet
the requirements noted above. BIA's authority to assess rates dates to
the Act of March 7, 1928 (45 Stat. 210-212) as amended, and 25 U.S.C.
385c, and is addressed in BIA's regulations at 25 CFR 175. BIA must
systematically review and evaluate power assessment rates and adjust
them, when necessary, to reflect the full cost to operate and perform
all appropriate maintenance to ensure safe and reliable service. If
this review and adjustment is not accomplished, a rate deficiency can
accumulate over time. Rate deficiencies force BIA to raise assessment
rates in larger increments over shorter periods than would have
otherwise been necessary.
SCIP/PD's assessment rates remained the same from 2007 to 2021 and
did not keep up with the full cost of providing electrical service, the
costs of system improvements, and the significant increase in purchased
power costs. As a result, SCIP/PD exhausted its reserve fund in 2021.
These circumstances required BIA to review and evaluate its assessment
rates, implement a purchased power cost adjustment, and propose
electric power rate adjustments to reflect the full cost to operate and
perform all appropriate maintenance to ensure safe and reliable
service. The SCIP/PD budget, upon which the proposed electric power
rate adjustment is based, was prepared in accordance with BIA financial
guidelines. BIA considers the following items when determining a power
project's budget: operation and maintenance costs, maintenance of
reserve funds, repair and replacement costs, defraying

[[Page 77629]]

emergency expenses, ensuring continuous operation of the system, and
other expenses.
SCIP/PD's present assessment rates do not allow us to collect
enough revenues to meet our financial and statutory requirements. SCIP/
PD's costs have risen in part due to changing economics, decreased
availability of power supplies, increased purchased power costs, rising
natural gas prices, and weather-related and climate events.
Additionally, because SCIP/PD's service area is rural, the electrical
system has a large amount of overhead power lines with limited
redundancy and constant exposure to weather elements. Based on
increased purchased power costs and expenses associated with operating,
maintaining, and rehabilitating SCIP/PD, the need for the proposed
electric power rate increase is clear and justified.
Comment: Seven commenters state no rate increase should be made at
this time because of the COVID-19 pandemic and state of the economy.
One commenter suggested delaying the rate increase until after this
year's hot summer months.
Response: While the Federal Register on February 10, 2022 (87 FR
7863) stated we intended to implement rates in June 2022, BIA will not
implement the proposed 2022 rates. The final 2023 rates will be
implemented as proposed. Unfortunately, the costs associated with
operating and maintaining SCIP/PD have increased during the COVID-19
pandemic. Moreover, the current state of the economy and inflation have
accelerated SCIP/PD's rising purchased power, supplies, materials, and
equipment expenses. We simply cannot sustain SCIP/PD if we do not
implement the rate increases.
Comment: Three commenters state the proposed electric power rate
increases are inappropriate on top of the 2021 purchased power cost
adjustment.
Response: SCIP/PD's present electric power rates were implemented
in 2006, and BIA proposed to increase these rates. All power costs are
included in our proposed 2023 electric power rates. Separately, in
September 2021, BIA implemented a purchased power cost adjustment of
$.031 per kilowatt-hour on top of our electric power rates. The 2021
adjustment was necessary because the price of BIA's purchased power
increased by 218% over a one-year period. The 2021 adjustment will end
when the proposed 2023 rates become effective. Purchased power cost
adjustments do not follow the procedure for adjusting electric power
rates because unforeseen increases in the cost of purchased power are:
(a) not under our control; (b) determined by current market rates; and
(c) subject to market fluctuations that can occur at an undetermined
time and frequency.
Comment: Five commenters object to the rate increases for
residential customers because their monthly bills are already too high.
Commenters estimate residential bills will increase by at least $41 per
month.
Response: Under the proposed 2023 rates, the average residential
bill will increase by $4.08 or 3.2% per month. During SCIP/PD's peak
summer month, the average residential bill will increase by $14.23 or
7.2% per month. The below tables display the average residential
monthly bills under the present and proposed 2023 rates. Bill increases
will be higher for residential customers with above average energy
consumption and demand.

------------------------------------------------------------------------
Present Proposed
rates 2023 rates
------------------------------------------------------------------------
Average residential bill
------------------------------------------------------------------------
900 kilowatt-hours.............................. $127.90 $131.98
% Increase...................................... .......... 3.2%
$ Increase...................................... .......... $4.08
------------------------------------------------------------------------
Average residential bill in peak summer month
------------------------------------------------------------------------
1,474 kilowatt-hours............................ $197.35 $211.59
% Increase...................................... .......... 7.2%
$ Increase...................................... .......... $14.23
------------------------------------------------------------------------

Comment: Two commenters object to the rate increases for small and
large commercial customers. One commenter estimates their commercial
bills will increase by 46%.
Response: Under the proposed 2023 commercial rates, the average
commercial monthly bill will increase by 15-20%. For commercial
customers with the heaviest energy consumption and demand, their
monthly bills may increase by more than 46%. The below graphs display a
range of bill increases under the proposed 2023 small and large
commercial rates.

[[Page 77630]]

[GRAPHIC] [TIFF OMITTED] TN19DE22.001

[GRAPHIC] [TIFF OMITTED] TN19DE22.002

[[Page 77631]]

SCIP/PD's present rates decline, meaning power gets less expensive
as more power is consumed. SCIP/PD's proposed 2023 rates are flat,
meaning each kilowatt-hour consumed is the same price. Flat rates are
common in the electric power industry and encourage conservation. SCIP/
PD's move to a flat rate structure is reflective of changes in the
present market for purchasing power, which is impacted by power supply
scarcity and higher fuel prices. Flat rates ensure all energy consumed
is evenly priced and reflective of SCIP/PD's cost of purchasing power.
Under the present rates, SCIP/PD's heaviest consumers benefit from
the declining block energy tiers. For example, a typical small
commercial customer--with 15 kilowatt of demand that consumes energy
for 75% of the hours in a month--will use energy priced at SCIP/PD's
cheapest energy tier of $.09 per kilowatt-hour. Whereas a small
commercial customer--with 15 kilowatt of demand that consumes energy
for 25% of the hours in a month--is unlikely to use energy priced at
SCIP/PD's cheapest energy tier and instead pays $.013 per kilowatt-
hour. Under the proposed 2023 rates, all small commercial customers
will pay $0.1412 per kilowatt-hour regardless of hours consumed in a
month.
To keep residential and small commercial rates similar to
surrounding utilities, SCIP/PD's heaviest consumers will experience the
greatest bill increases under the 2023 rates. We believe large
commercial and industrial customers are better able to absorb rate
increases than SCIP/PD's residential and small commercial customers.
Comment: Five commenters object to proposed increases considering
SCIP/PD's frequent power outages and unreliable service.
Response: SCIP/PD's power outages are the result of aging
infrastructure, vandalism, wildlife, vehicular accidents, planned
maintenance, and extreme weather events. In particular, the power
system's overhead wires and aging poles make the system highly exposed
to monsoon events. We use customer collections to routinely improve and
replace SCIP/PD's infrastructure. From 2018 to 2021, we improved and
rehabilitated our Coolidge area infrastructure. From 2022 to 2025,
SCIP/PD is targeting improvements or rehabilitation to our
infrastructure near Hayden, Oracle, Casa Grande, Coolidge, and
Florence.
SCIP/PD is required to maintain a reserve fund to be available for
making repairs and replacements, defraying emergency expenses, and
ensuring continuous operation of the power system. In 2021, SCIP/PD
depleted its reserve fund to pay for increased purchase power costs.
The intent of the 2023 rate increase is to replenish SCIP/PD's reserve
fund.
Comment: One commenter states BIA did not provide any accompanying
data to explain or justify the increase, nor did BIA provide sufficient
time for comments.
Response: In addition to the information provided in the proposed
rate notice in the Federal Register on February 10, 2022 (87 FR 7863),
BIA held two virtual public meetings on March 3 and 16. The PowerPoint
presentation from the meetings was immediately made available on SCIP/
PD's website at https://www.bia.gov/programs-services/power-utilities/scip-power. In addition, BIA held stakeholder meetings with San Carlos
Irrigation and Drainage District, Gila River Indian Community, and San
Carlos Apache Tribe. During all these meetings, BIA provided ample time
for participants to ask questions and request clarification. The 60-day
comment period provided ample time to review the information underlying
the proposed rate increases and for comments. In response to comments
from the San Carlos Apache Tribe (Tribe), SCIP/PD provided the Tribe
with information specific to customer electric use and costs on the San
Carlos Apache Reservation; this occurred over the course of two
meetings with the Tribe's representatives and written correspondence.
Comment: One commenter states SCIP/PD's billing process and system
need to be improved and modernized. The commenter suggests more
convenient ways to pay their bill, such as online or through budget
billing.
Response: SCIP/PD recently upgraded its billing and payment options
to improve customer experience and convenience. Customers can sign up
for E-Billing using the Service Request on the BIA's web page: https://www.bia.gov/programs-services/power-utilities/scip-power. Bills can be
paid online through https://www.pay.gov/public/form/start/20893585 at
no charge with a credit or debit card, Automated Clearing House (ACH)
electronic check (bank account), Amazon Pay, or PayPal. Bills can be
paid over the phone with a debit or credit card by calling toll free
(800) 648-8659. Payments can also be deposited in a secure 24-hour drop
box outside of SCIP/PD's lobby door, or payments can be made via US
Mail.
Budget billing is a program offered by some power utilities and
establishes a set amount paid by the customer each month to mitigate
large utility bills in months of high electricity use. Although budget
billing is not currently offered by SCIP/PD, BIA will continue
improving our customer service, service delivery, and interfaces that
are expected of a modern utility.
Comment: One commenter recommended use of residential solar panels
for SCIP/PD customers.
Response: SCIP/PD allows customer-owned distributed generation from
roof-top or ground-mount solar panels to interconnect to the SCIP/PD
grid. Interconnect requests are evaluated on a case-by-case basis.
SCIP/PD does not purchase excess generation from its customers.
Comment: The San Carlos Apache Tribe (Tribe) raised several
objections related to our duties to the Tribe and its members in a
April 11, 2022, comment letter.
Response: Some of the Tribe's comments have been addressed in the
comments above. We also responded to the Tribe's comments regarding
Reservation-specific rate impacts during government-to-government
consultation and by letter to the Tribe's Chairman.

Does this notice affect me?

This notice affects you if we provide you electric service. SCIP/PD
provides service to customers located within the San Carlos Indian
Reservation, Gila River Indian Reservation, and to areas in Gila,
Maricopa, Pima, and Pinal counties in Arizona. SCIP/PD provides power
for residential, governmental, irrigation, commercial, and industrial
uses, and approximately 83 percent of SCIP/PD's customers are non-
Indians.

What authorizes you to issue this notice?

Our authority to issue this notice is vested in the Secretary of
the Interior (Secretary) by 5 U.S.C. 301; the Act of March 7, 1928 (45
Stat. 210-12), as amended; and 25 U.S.C. 385c. The Secretary has in
turn delegated this authority to the Assistant Secretary--Indian
Affairs under Part 209, Chapter 8.1A, of the Department of the
Interior's Departmental Manual.

What electric power rates are adjusted by this notice?

The rate table below contains the present and final 2023 electric
power rates for SCIP/PD. An asterisk immediately following the rate
category notes where the present rates are different from 2023 rates.

[[Page 77632]]

------------------------------------------------------------------------
Final 2023 rate
Rate category Present rate ($) ($)
------------------------------------------------------------------------
Residential
------------------------------------------------------------------------
Minimum monthly charge per bill-- 10.00............. 14.08.
includes up to 50 kilowatt-
hours *.
Each kilowatt-hour between 50 0.12.............. 0.1387.
and 500 *.
All additional kilowatt-hours *. 0.09.............. 0.1387.
Purchased power cost adjustment 0.031............. 0.00.
per kilowatt-hour [supcaret].
------------------------------------------------------------------------
Small Commercial
------------------------------------------------------------------------
Minimum monthly charge per bill-- 20.00............. 26.55.
includes up to 50 kilowatt-
hours *.
Each kilowatt-hour between 50 0.13.............. 0.1412.
and 950 *.
Each kilowatt-hour between 950 0.08.............. 0.1412.
and 9,000 *.
Each kilowatt-hour over 9,000 *. 0.06.............. 0.1412.
Demand charge per kilowatt...... 2.00.............. 2.00.
Purchased power cost adjustment 0.031............. 0.00.
per kilowatt-hour [supcaret].
------------------------------------------------------------------------
Large Commercial
------------------------------------------------------------------------
Minimum monthly charge per bill-- 50.00............. 55.00.
includes up to 500 kilowatt-
hours *.
Each kilowatt-hour between 500 0.095............. 0.101.
and 10,000 *.
Each kilowatt-hour over 10,000 * 0.065............. 0.101.
Demand charge per kilowatt *.... 3.00.............. 9.15.
Purchased power cost adjustment 0.031............. 0.00.
per kilowatt-hour [supcaret].
------------------------------------------------------------------------
Industrial
------------------------------------------------------------------------
Minimum monthly charge per bill. 250.00............ 250.00.
Each kilowatt-hour *............ 0.05.............. 0.0873.
Demand charge per kilowatt *.... 7.00.............. 11.29.
Purchased power cost adjustment 0.031............. 0.00.
per kilowatt-hour [supcaret].
------------------------------------------------------------------------
Dusk-to-Dawn Lighting (see note #1)
------------------------------------------------------------------------
Monthly charge for 150 watt 17.00 first light, 17.00 per light.
lights *. $15.40 next 4
lights, $13.75
six or more
lights.
Monthly charge for 250 watt 20.85 first light, 20.85 per light.
lights *. $19.00 next 4
lights, $16.35
six or more
lights.
Monthly charge for 400 watt 27.72 first light, No longer
lights *. $24.27 next 4 available.
lights, $20.85
six or more
lights.
------------------------------------------------------------------------
Commercial Pumps
------------------------------------------------------------------------
Minimum monthly charge per bill 25.00............. 29.69.
*.
Each kilowatt-hour *............ 0.039............. 0.0815.
Demand charge per kilowatt *.... 2.40.............. 4.25.
Purchased power cost adjustment 0.031............. 0.00.
per kilowatt-hour [supcaret].
------------------------------------------------------------------------
Irrigation Project Pumps (see note #2)
------------------------------------------------------------------------
Each kilowatt-hour *............ 0.035............. 0.05794.
------------------------------------------------------------------------
* Notes rate categories adjusted.
Note #1. The Dusk-to-Dawn Lighting rate applies to existing and
unmetered lights.
Note #2. The Irrigation Project Pumps rate has two components. The first
rate component is SCIP/PD's direct cost of transmission, distribution,
and administration; the final 2023 rate is $0.03183 per kilowatt-hour.
The second rate component is SCIP/PD's direct cost of purchased power;
this is $.02611 per kilowatt-hour. We are required to use our least
expensive source of power available, which is currently our Parker-
Davis Project power supply. The Parker-Davis Project power rate is
established annually by Western Area Power Administration.
[supcaret] The present electric rates listed in the rate table in the
Federal Register on February 10, 2022 (87 FR 7863) did not list the
purchased power cost adjustment implemented in September 2021. To
minimize confusion, the present rates in this notice's rate table have
been revised to reflect the 2021 purchased power cost adjustment.
Because changes to purchased power cost adjustments are unforeseen,
not under our control, determined by current market rates, and subject
to market fluctuations that can occur at an undetermined time and
frequency, purchased power cost adjustments are not included in the
procedure for adjusting electric power rates.

Consultation and Coordination With Tribal Governments (Executive Order
13175)

The Department of the Interior strives to strengthen its
government-to-government relationship with Indian Tribes through a
commitment to consultation with Indian Tribes and recognition of their
right to self-governance and Tribal sovereignty. We have evaluated this
notice under the Department's consultation policy and under the
criteria of Executive Order 13175 and have determined there to be
substantial direct effects on federally recognized Tribes because SCIP/
PD is located on or associated with Indian reservations. To fulfill its
consultation responsibility to Tribes and Tribal organizations, BIA
communicates, coordinates, and consults on a continuing basis with
these entities on issues of electric power delivery, electric power
availability, and costs of administration, operation, maintenance, and
construction of our utilities that concern them. This is accomplished
at the individual power utility by utility, agency, and regional
representatives, as

[[Page 77633]]

appropriate, in accordance with local protocol and procedures. This
notice is one component of our overall coordination and consultation
process to provide notice to, and request comments from, these entities
when we adjust electric power rates.

Actions Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use (Executive Order 13211)

These rate adjustments are not a significant energy action under
the definition in Executive Order 13211. A Statement of Energy Effects
is not required.

Civil Justice Reform (Executive Order 12988)

This notice complies with the requirements of Executive Order
12988. Specifically, in issuing this notice, the Department has taken
the necessary steps to eliminate drafting errors and ambiguity,
minimize potential litigation, and provide a clear legal standard for
affected conduct as required by section 3 of Executive Order 12988.

Regulatory Planning and Review (Executive Order 12866)

These rate adjustments are not a significant regulatory action and
do not need to be reviewed by the Office of Management and Budget under
Executive Order 12866.

Regulatory Flexibility Act

These rate adjustments are not a rule for the purposes of the
Regulatory Flexibility Act because they establish ``a rule of
particular applicability relating to rates.'' 5 U.S.C. 601(2).

Unfunded Mandates Reform Act of 1995

These rate adjustments do not impose an unfunded mandate on state,
local, or Tribal governments in the aggregate, or on the private
sector, of more than $130 million per year. They do not have a
significant or unique effect on State, local, or Tribal governments or
the private sector. Therefore, the Department is not required to
prepare a statement containing the information required by the Unfunded
Mandates Reform Act (2 U.S.C. 1531 et seq.).

Takings (Executive Order 12630)

These rate adjustments do not affect a taking of private property
or otherwise have ``takings'' implications under Executive Order 12630.
The rate adjustments do not deprive the public, State, or local
governments of rights or property.

Federalism (Executive Order 13132)

Under the criteria in section 1 of Executive Order 13132, these
rate adjustments do not have sufficient federalism implications to
warrant the preparation of a federalism summary impact statement
because they will not affect the States, the relationship between the
national government and the States, or the distribution of power and
responsibilities among the various levels of government. A federalism
summary impact statement is not required.

National Environmental Policy Act

The Department has determined that these rate adjustments do not
constitute a major Federal action significantly affecting the quality
of the human environment and that no detailed statement is required
under the National Environmental Policy Act of 1969, 42 U.S.C. 4321-
4370(d), pursuant to 43 CFR 46.210(i). In addition, the rate
adjustments do not present any of the 12 extraordinary circumstances
listed at 43 CFR 46.215.

Paperwork Reduction Act of 1995

These rate adjustments do not affect the collections of information
which have been approved by the Office of Information and Regulatory
Affairs, Office of Management and Budget (OMB) under the Paperwork
Reduction Act of 1995. The OMB Control Number is 1076-0021 and expires
December 31, 2022.

Unfunded Mandates Reform Act of 1995

Bryan Newland,
Assistant Secretary--Indian Affairs.
[FR Doc. 2022-27473 Filed 12-16-22; 8:45 am]
BILLING CODE 4337-15-P