[Federal Register Volume 88, Number 57 (Friday, March 24, 2023)]
[Notices]
[Pages 17837-17840]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-06142]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Olmsted Powerplant Replacement Project--Rate Order No. WAPA-205

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of rate order concerning electric power service formula 
rate.

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SUMMARY: The formula rate for the Colorado River Storage Project (CRSP) 
Management Center's (MC) Olmsted Powerplant Replacement Project 
(Olmsted Project) has been confirmed, approved, and placed into effect 
on an interim basis (Provisional Formula Rate). The new formula rate, 
under Rate Schedule Olmsted F-2, replaces the existing formula rate for 
this service, under Rate Schedule Olmsted F-1, which expires on May 6, 
2023. A change was made to the definition of Formula Rate in the Rate 
Schedule F-2 to reflect that the Annual Revenue Requirement is 
multiplied by the Customer's allocation percentage. The new formula 
rate under Rate Schedule Olmsted F-2 is effective May 1, 2023, through 
April 30, 2028.

DATES: The provisional formula rate under Rate Schedule Olmsted F-2 is 
effective on the first day of the first full billing period beginning 
on or after May 1, 2023, and will remain in effect through April 30, 
2028, pending confirmation and approval by the Federal Energy 
Regulatory Commission (FERC) on a final basis or until superseded.

FOR FURTHER INFORMATION CONTACT: Rodney Bailey, CRSP Manager, CRSP 
Management Center, Western Area Power Administration, 1800 South Rio 
Grande Avenue, Montrose, CO 81401, or email: CRSPMC-rate-adj.gov, or 
Thomas Hackett, Rates Manager, CRSP Management Center, Western Area 
Power Administration, 801-524-5503, or email: [email protected].

SUPPLEMENTARY INFORMATION: On August 30, 2018, FERC confirmed and 
approved Rate Schedule F-1 under Rate Order No. WAPA-177 on a final 
basis through May 6, 2023.\1\ This schedule applies to the Olmsted 
Project electric power service. Western Area Power Administration 
(WAPA) published a Federal Register notice (Proposed FRN) on November 
10, 2022 (87 FR 67894), proposing no changes to the existing formula 
rate under Rate Order WAPA-177, but establishing a new rate period for 
the formula Rate Schedule Olmsted

[[Page 17838]]

F-2. The Proposed FRN also initiated a 30-day public consultation and 
comment period on the new rate schedule.
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    \1\ Order Confirming and Approving Rate Schedule on a Final 
Basis, FERC Docket No. EF18-4-000, 164 FERC ] 62,116 (2018).
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Legal Authority

    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. By Delegation Order No. S1-
DEL-S3-2022-2, effective June 13, 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 Infrastructure. 
By Redelegation Order No. S3-DEL-WAPA1-2022, effective June 13, 2022, 
the Under Secretary for Infrastructure further redelegated the 
authority to confirm, approve, and place such rates into effect on an 
interim basis to WAPA's Administrator. This rate action is issued under 
Redelegation Order No. S3-DEL-WAPA1-2022 and Department of Energy 
procedures for public participation in rate adjustments set forth at 10 
CFR part 903.\2\
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    \2\ 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
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    Following a review of CRSP MC's proposal, Rate Order No. WAPA-205, 
which provides the formula rate for the Olmsted Powerplant Replacement 
Project, is hereby confirmed, approved, and placed into effect on an 
interim basis. WAPA will submit Rate Order No. WAPA-205 to FERC for 
confirmation and approval on a final basis.

Department of Energy Administrator, Western Area Power Administration

In the Matter of: Western Area Power Administration, Colorado River 
Storage Project Management Center, Rate Adjustment for the Olmsted 
Powerplant Replacement Project, Electric Power Service Formula Rate
Rate Order No. WAPA-205

Order Confirming, Approving, and Placing the Formula Rate for the 
Olmsted Powerplant Replacement Project Into Effect on an Interim Basis

    The formula rate in Rate Order No. WAPA-205 is established 
following section 302 of the Department of Energy (DOE) Organization 
Act (42 U.S.C. 7152).\1\
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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 
(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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    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 Western Area Power Administration 
(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 the 
Federal Energy Regulatory Commission (FERC). By Delegation Order No. 
S1-DEL-S3-2022-2, effective June 13, 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 Infrastructure. 
By Redelegation Order No.S3-DEL-WAPA1-2022, effective June 13, 2022, 
the Under Secretary for Infrastructure further redelegated the 
authority to confirm, approve, and place such rates into effect on an 
interim basis to WAPA's Administrator. This rate action is issued under 
Redelegation Order No. S3-DEL-WAPA1-2022 and DOE procedures for public 
participation in rate adjustments set forth at 10 CFR part 903.\2\
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    \2\ 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
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Acronyms, Terms, and Definitions

    As used in this Rate Order, the following acronyms, terms, and 
definitions apply:
    Allocation: A portion of the Olmsted Project assigned to a 
particular customer.
    Capital Repayment: The total amount of principal and interest 
applied to repay capital projects.
    Customer: An entity with a contract receiving an allocation of the 
Olmsted Project generation.
    Customer Rate Brochure: A document prepared for public distribution 
explaining the rationale and background for the information contained 
in this rate order.
    Energy: Measured in terms of the work it can do over time. Electric 
energy is expressed in kilowatt-hours or megawatt-hours.
    FY: WAPA's fiscal year; October 1 to September 30.
    Installments: Annual Revenue Requirement billed to customers in 12 
equal monthly amounts.
    Marketable Energy: The generation made available for sale.
    NEPA: National Environmental Policy Act of 1969, as amended.
    O&M: Operation and maintenance expenses.
    OM&R: Operation, maintenance, and replacement expenses.
    Order RA 6120.2: DOE Order outlining the power marketing 
administration financial reporting and rate-making procedures.
    Power: Energy (there is no capacity for Olmsted as it is an Energy 
only project).
    Power Repayment Study (PRS): Defined in Order RA 6120.2 as a study 
portraying the annual repayment of power production and transmission 
costs of a power system through the application of revenues over the 
repayment period of the power system. The study shows, among other 
items, estimated revenues and expenses, year by year, over the 
remainder of the power system's repayment period (based upon conditions 
prevailing over the cost evaluation period), the estimated amount of 
Federal investment amortized during each year, and the total estimated 
amount of Federal investment remaining to be amortized.
    Provisional Formula Rate: A formula rate confirmed, approved, and 
placed into effect on an interim basis by the Secretary or his/her 
designee.
    Revenue Requirement: The revenue required by the PRS to recover 
annual expenses (such as operation and maintenance, interest, and 
deferred expenses) and repay Federal investments and other assigned 
costs.

Effective Date

    The Provisional Formula Rate Schedule Olmsted F-2 will take effect 
on the first day of the first full billing period beginning on or after 
May 1, 2023, and will remain in effect through April 30, 2028, pending 
approval by FERC on a final basis or until superseded.

Public Notice and Comment

    CRSP MC followed the Procedures for Public Participation in Power 
and Transmission Rate Adjustments and Extensions, 10 CFR part 903, in 
developing this formula rate. The steps CRSP MC took to involve 
interested parties in the rate process included:
    1. On November 10, 2022, a Federal Register notice (87 FR 67894) 
(Proposed FRN) announced the proposed formula rate and launched a 30-
day public consultation and comment period.
    2. On November 10, 2022, CRSP MC notified Customers and interested 
parties of the proposed rate and

[[Page 17839]]

provided a copy of the published Proposed FRN.
    3. CRSP MC provided a website that contained all dates, letters, 
presentations, the FRN, a Customer Rate Brochure, and other information 
about this rate process. The website is located at www.wapa.gov/regions/CRSP/rates/Pages/rate-order-205.aspx.
    4. The 30-day consultation and comment period ended on December 12, 
2022. CRSP MC received no oral or written comments.

Power Repayment Study--Electric Power Service Formula Rate

    CRSP MC prepares a PRS each FY to determine if revenues will be 
sufficient to repay, within the required time, all costs assigned to 
the Olmsted Project. Repayment criteria are based on applicable laws, 
legislation, and policies, including Order RA 6120.2. To meet the Cost 
Recovery Criteria outlined in Order RA 6120.2, CRSP MC developed a 
formula rate to demonstrate that sufficient revenues will be collected 
under the Provisional Formula Rate to meet future obligations.
    A change was made to the definition of Formula Rate in the Rate 
Schedule F-2 to reflect that the Annual Revenue Requirement is 
multiplied by the Customer's allocation percentage. Each customer will 
continue to be billed for its proportional share of the Olmsted Project 
Revenue Requirement. The Revenue Requirement is calculated every FY and 
is payable in 12 monthly Installments. CRSP MC will forecast Olmsted 
Project FY expenses by preparing a PRS, which will include estimates of 
future OM&R, associated interest expenses, and other assigned costs. 
This repayment schedule does not depend on the energy made available 
for sale or the year's generation amount. The amount of each monthly 
installment is established in advance and submitted to the Customers on 
or before August 31 of the year preceding the appropriate FY. Customers 
are to pay reimbursable investment and the OM&R of the Olmsted Project 
and, in return, will receive all marketable Energy produced.
    CRSP MC will calculate the revenue requirement based on two years 
of data. The calculation also includes an adjustment. The adjustment is 
the surplus or deficit in the last historic year when actual costs and 
repayment obligations are subtracted from revenues. This surplus or 
deficit is combined with the projected revenue requirement year costs 
to arrive at the annual revenue requirement. Each customer's annual 
installment pays the annual amortized portion of the United States' 
investment in the Olmsted Project with interest and the associated 
OM&R.
    To date, all investments not currently in progress (or in progress 
and not yet complete), are accounted for as Construction in Progress 
costs and have not been transferred to plant accounts for 
capitalization. Once transferred, an amortization schedule will be 
calculated for repayment. Historical financial data is available 
through FY 2021. Current projections are based on the FY 2024 
Reclamation and WAPA work plans received in February 2022, as indicated 
in Table 1. WAPA will update these projections on the website as data 
becomes available.

                                          Table 1--Actual & Projected Investment and O&M, and Capital Repayment
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                           FY                                  2022            2023            2024            2025            2026            2027
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Capital Repayment.......................................        $385,144        $408,263        $408,973        $408,898        $408,821        $408,742
CUWCD Olmsted O&M.......................................         709,657       1,029,299       1,017,876         483,559         562,421         543,187
USBR O&M................................................          27,500          10,000          27,500          27,500          10,000          10,000
WAPA O&M................................................          17,357          19,177          19,560          19,951          20,350          20,757
Provo Facility Use......................................         118,841         118,841         118,841         118,841         118,841         118,841
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    FY Totals...........................................       1,258,498       1,585,580       1,575,250       1,058,749       1,120,434       1,101,527
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    The FY 2023 annual revenue requirement includes all projected FY 
2023 OM&R requiring repayment through FY 2023. Annual installments are 
established in advance by WAPA and submitted to the Olmsted Project 
customers on August 31, before the new FY. The FY 2024 annual 
installment will include all actual OM&R requiring repayment from the 
FY 2022 final financial data, the projected FY 2025 OM&R work plan, and 
amortized payments on capital investments plus interest. Subsequent 
annual installment updates will use updated financial data from 
appropriate conforming years.

Comments

    CRSP MC received no oral or written comments during the public 
consultation and comment period.

Certification of Rates

    I have certified that the Provisional Formula Rate for the Olmsted 
Project electric power service under Rate Schedule Olmsted F-2 is the 
lowest possible rate, consistent with sound business principles. The 
Provisional Formula Rate was developed following administrative 
policies and applicable laws.

Availability of Information

    Information about this rate adjustment, including the Customer Rate 
Brochure, PRSs, comments, letters, memorandums, and other supporting 
materials used to develop the Provisional Formula Rate, is available 
for inspection and copying at the CRSP MC Regional Office, 1800 South 
Rio Grande Avenue, Montrose, CO. Many of these documents are also 
available on WAPA's website at www.wapa.gov/regions/CRSP/rates/Pages/rate-order-205.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). Categorically 
excluded projects and activities do not require the preparation of 
either an environmental impact statement or an environmental 
assessment.\3\ A copy of the categorical exclusion determination is 
available on WAPA's website at www.wapa.gov/regions/CRSP/rates/Pages/rate-order-205.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.

[[Page 17840]]

Submission to the Federal Energy Regulatory Commission

    The Provisional Formula Rate is 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, 
Rate Order No. WAPA-205. The rate will remain in effect on an interim 
basis until: (1) FERC confirms and approves it on a final basis; (2) a 
subsequent rate is confirmed and approved; or (3) such rate is 
superseded.

Signing Authority

    This document of the Department of Energy was signed on March 14, 
2023, 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 Office of the Federal Register requirements, 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 March 21, 2023.
Treena V. Garrett
Federal Register Liaison Officer, U.S. Department of Energy.

Rate Schedule Olmsted F-2
(Supersedes Rate Schedule F-1)

United States Department of Energy

Western Area Power Administration

Colorado River Storage Project Management Center

Olmsted Powerplant Replacement Project

Electric Power Service

(Approved Under Rate Order No. WAPA-205)

Effective
    The first day of the first, full billing period beginning on or 
after May 1, 2023, and extending through April 30, 2028, or until 
superseded by another rate schedule, whichever occurs earlier.
Available
    Within the marketing area served by the Colorado River Storage 
Project; parts of Northern Utah.
Applicable
    To the sale of total plant generation to all customers with an 
Olmsted Project allocation.
Character
    Alternating current, 60 hertz, three-phase, delivered and metered 
at the voltages and points established by contract.
Formula Rate
    Annual Revenue Requirement (Projected Operations, Maintenance, and 
Replacement Costs + Projected Interest + Projected Principal Payments 
 True-Up Adjustment) x Customer's Allocation Percentage.
Adjustments
    True-Up Adjustment: The surplus or deficit that occurred in the 
last historic year when actual costs and repayment obligations are 
subtracted from actual revenues.
    Adjustment for Power Factor: The customer will be required to 
maintain a power factor at all points of measurement between 95 percent 
lagging and 95 percent leading.
[FR Doc. 2023-06142 Filed 3-23-23; 8:45 am]
BILLING CODE 6450-01-P