[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]


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

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.

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

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

    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.).

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