[Federal Register Volume 88, Number 74 (Tuesday, April 18, 2023)]
[Notices]
[Pages 23669-23671]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-08127]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Boulder Canyon Project

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of proposed fiscal year 2024 Boulder Canyon Project base 
charge and rates for electric service.

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SUMMARY: The Desert Southwest Region (DSW) of the Western Area Power 
Administration (WAPA) proposes an adjustment to the base charge and 
rates for fiscal year (FY) 2024 Boulder Canyon Project (BCP) electric 
service under Rate Schedule BCP-F11. The proposal would increase the 
base charge 3.5 percent from $66.8 million in FY 2023 to $69.1 million 
in FY 2024. The change is primarily the result of a decrease in prior 
year carryover funds from FY 2023. The proposed base charge and rates 
would go into effect on October 1, 2023, and remain in effect through 
September 30, 2024. Publication of this Federal Register notice will 
initiate the public process.

DATES: A consultation and comment period begins today and will end July 
17, 2023. DSW will present a detailed explanation of the proposed FY 
2024 base charge and rates at a public information forum that will be 
held on May 18, 2023, from 10 a.m. Mountain Standard Time to no later 
than 12 p.m. Mountain Standard Time, or until the last comment is 
received. DSW will also host a public comment forum that will be held 
on June 20, 2023, from 10 a.m. Mountain Standard Time to no later than 
12 p.m. Mountain Standard Time, or until the last comment is received. 
DSW will conduct both the public information forum and the public 
comment forum via Webex. Instructions for participating in the forums 
will be posted on DSW's website at least 14 days prior to the public 
information and comment forums at: www.wapa.gov/regions/DSW/Rates/Pages/boulder-canyon-rates.aspx. DSW will accept written comments any 
time during the consultation and comment period.

ADDRESSES: Written comments and requests to be informed of Federal 
Energy Regulatory Commission (FERC) actions concerning the proposed 
base charge and rates should be sent to: Jack D. Murray, Regional 
Manager, Desert

[[Page 23670]]

Southwest Region, Western Area Power Administration, P.O. Box 6457, 
Phoenix, AZ 85005-6457, or [email protected]. DSW will post 
information concerning the rate process and written comments received 
to its website at: www.wapa.gov/regions/DSW/Rates/Pages/boulder-canyon-rates.aspx.

FOR FURTHER INFORMATION CONTACT: Tina Ramsey, Rates Manager, Desert 
Southwest Region, Western Area Power Administration, (602) 605-2565, or 
[email protected].

SUPPLEMENTARY INFORMATION: Hoover Dam,\1\ authorized by the Boulder 
Canyon Project Act of 1928, as amended (43 U.S.C. 617, et seq.), 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 the Bureau of Reclamation (Reclamation), 
WAPA markets and delivers hydropower from the Hoover Dam power plant 
through high-voltage transmission lines and substations to customers in 
Arizona, Southern California, and Southern Nevada.
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    \1\ 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 rate-setting methodology for BCP calculates an annual base 
charge rather than a unit rate for Hoover Dam hydropower. The base 
charge recovers an annual revenue requirement that includes projected 
costs of investment repayment, interest, operations, maintenance, 
replacements, payments to states, and Hoover Dam visitor services. Non-
power revenue projections such as water sales, Hoover Dam visitor 
revenue, ancillary services, and late fees help offset these projected 
costs. Hoover power customers 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.
    On September 12, 2022, the Deputy Secretary of Energy confirmed, 
approved, and placed Rate Schedule BCP-F11 into effect on an interim 
basis (87 FR 57189). The rates remain in effect until: (1) FERC 
confirms and approves them on a final basis; (2) subsequent rates are 
confirmed and approved; or (3) such rates are superseded. On September 
13, 2022, WAPA submitted Rate Schedule BCP-F11 to FERC, which, pending 
final confirmation and approval by FERC, will be in effect for a five-
year period ending September 30, 2027.\2\ Rate Schedule BCP-F11 and the 
BCP Electric Service Contracts require WAPA to determine the annual 
base charge and rates for the next fiscal year before October 1 of each 
year. The FY 2023 BCP base charge and rates expire on September 30, 
2023.
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    \2\ See FERC Docket No. EF22-4-000.

                                       Comparison of Base Charge and Rates
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                                                      FY 2023         FY 2024      Amount change  Percent change
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Base Charge ($).................................     $66,798,560     $69,134,285      $2,335,725             3.5
Composite Rate (mills/kWh)......................           22.43           23.94            1.51             6.7
Energy Rate (mills/kWh).........................           11.22           11.98            0.76             6.7
Capacity Rate ($/kW-Mo).........................           $2.17           $2.42           $0.25            11.5
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    The preliminary calculation of the FY 2024 base charge resulted in 
an 11 percent increase compared to FY 2023. In response to devolving 
hydrology and to mitigate this increase, Reclamation and WAPA 
coordinated to make budget reductions for both FY 2023 and FY 2024. 
This effort led to Reclamation reducing its FY 2022 carryover request 
in FY 2023 and both WAPA and Reclamation reducing their FY 2024 
budgets. As a result, the proposed FY 2024 base charge for BCP electric 
service is projected to increase from $66.8 million in FY 2023 to $69.1 
million in FY 2024, a 3.5 percent increase.
    Reclamation's FY 2024 budget is decreasing $962,000 from $84.7 
million to $83.7 million, a 1.1 percent decrease from FY 2023. 
Reflected in this budget, operations and maintenance (O&M) costs are 
decreasing $511,000 primarily due to the elimination of three positions 
and the associated travel and training costs. Several large projects 
are being delayed, decreasing replacements costs by $1.3 million. Post-
retirement benefits costs are increasing $104,000 based on a higher 5-
year average of recent actual expenses. Visitor services costs are 
increasing by $728,000 primarily due to costs for the National Park 
Services security agreement being realigned from security forces in O&M 
to visitor services.
    WAPA's FY 2024 budget is decreasing $100,000 to $8.6 million, a 1.1 
percent decrease from FY 2023. WAPA's O&M costs are increasing $680,000 
from FY 2023 due to higher labor projections for salaries, overtime, 
overhead, and benefits and an updated charging methodology from 
overhead to direct charging for power billing. WAPA's replacement costs 
are decreasing $820,000 from FY 2023 due to delaying previously planned 
circuit breaker and relay replacements until at least FY 2026. WAPA's 
post-retirement benefit costs are increasing $39,000 from FY 2023 due 
to a higher 5-year average of recent actual expenses.
    Costs for Reclamation and WAPA are offset by a slight increase of 
$18,000 in non-power revenue projections, due to a higher estimate for 
ancillary services revenues. Prior year carryover is projected to be 
$2.2 million, a $3.4 million decrease from FY 2023.
    The composite and energy rates are both increasing 6.7 percent from 
FY 2023, and the capacity rate is increasing 11.5 percent from FY 2023. 
These unit rate calculations use forecasted energy and capacity values, 
which have been decreasing due to the ongoing drought in the Lower 
Colorado River Basin. Forecasted energy and capacity values may be 
updated when determining the final base charge and rates if 
hydrological conditions change. With the uncertainty of hydrological 
conditions, Reclamation and WAPA will continue to work collaboratively 
to lessen the impact of the drought in future years.
    WAPA's proposed base charge and rates for FY 2024, which would be 
effective October 1, 2023, are preliminary and subject to change based 
on modifications to forecasts before publication of the final base 
charge and rates.

Legal Authority

    WAPA's proposal to calculate the base charge and rates for FY 2024

[[Page 23671]]

constitutes a major rate adjustment, as defined by 10 CFR 903.2(d). In 
accordance with 10 CFR 903.15, 10 CFR 903.16, and 10 CFR 904.7(e), DSW 
will hold public information and public comment forums for this rate 
adjustment. DSW will review and consider all timely public comments at 
the conclusion of the consultation and comment period and adjust the 
proposal as appropriate. The FY 2024 base charge and rates will then be 
approved on a provisional basis.
    WAPA is establishing rates for BCP electric service in accordance 
with section 302 of the 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 Reclamation. Those functions include 
actions that specifically apply to the BCP.
    Pursuant to the BCP Electric Service Contracts, the calculated base 
charge and rates for FY 2024 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 BCP Electric Service Contracts and Delegation Order No. 
S1-DEL-RATES-2016, the Deputy Secretary will provisionally approve the 
FY 2024 base charge and rates for BCP electric service, subject to 
final approval by FERC. 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.\3\
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    \3\ 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
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Availability of Information

    All brochures, studies, comments, letters, memorandums, or other 
documents that DSW initiates or uses to develop the proposed 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 and supporting information are also available 
on WAPA's website at: www.wapa.gov/regions/DSW/Rates/Pages/boulder-canyon-rates.aspx.

Ratemaking Procedure Requirements

Environmental Compliance

    WAPA is in the process of determining whether an environmental 
assessment or an environmental impact statement should be prepared or 
if this action can be categorically excluded from those 
requirements.\4\
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    \4\ In compliance with the National Environmental Policy Act of 
1969 (NEPA), 42 U.S.C. 4321 et seq., 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.

Signing Authority

    This document of the Department of Energy was signed on March 31, 
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 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 April 12, 2023.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2023-08127 Filed 4-17-23; 8:45 am]
BILLING CODE 6450-01-P