[Federal Register Volume 88, Number 125 (Friday, June 30, 2023)]
[Notices]
[Pages 42355-42358]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-13974]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Desert Southwest Region--Rate Order No. WAPA-209

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of proposed formula rates for transmission and firm 
electric service.

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SUMMARY: The Desert Southwest Region (DSW) of the Western Area Power 
Administration (WAPA) proposes new formula rates for firm and nonfirm 
point-to-point (P2P) and network integration (Network) transmission 
service. DSW also proposes to revise the existing formula rates for 
Parker-Davis Project (PDP) firm electric service (FES) and firm 
transmission service of Salt Lake City Area/Integrated Projects (SLCA/
IP) power. The proposed new formula rates and revisions to existing 
formula rates would combine the transmission service rates of the 
Central Arizona Project (CAP), the southern portion of the Pacific 
Northwest-Pacific Southwest Intertie Project (Intertie), and PDP; and 
the facilities use charge for the Electrical District No. 5 to Palo 
Verde Hub Project (ED5-PVH). DSW's proposed formula rates will be 
effective January 1, 2024, through September 30, 2028. Publication of 
this Federal Register notice begins the formal process for the proposed 
formula rates.

DATES: The consultation and comment period begins June 30, 2023 and 
will end September 28, 2023.
    DSW will present a detailed explanation of the proposed formula 
rates and other modifications at a public information forum that will 
be held on August 7, 2023 from 10 a.m. to no later than 12 p.m. 
Mountain Standard Time (MST), or until the last comment is received. 
DSW will host a public comment forum that will be held on August 29, 
2023, from 10 a.m. to no later than 12 p.m. MST, or until the last 
comment is received. The public information forum and the public 
comment forum will be conducted

[[Page 42356]]

virtually. 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/OTR.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 
formula rates submitted by WAPA to FERC for approval should be sent to: 
Jack D. Murray, Regional Manager, Desert Southwest Region, Western Area 
Power Administration, P.O. Box 6457, Phoenix, AZ 85005-6457, or email: 
[email protected]. DSW will post information about the proposed 
formula rates, other changes, and written comments received to its 
website at: www.wapa.gov/regions/DSW/Rates/Pages/OTR.aspx.

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

SUPPLEMENTARY INFORMATION: FERC approved and confirmed the following 
Rate Schedules under the applicable Rate Orders on a final basis 
through the dates indicated below:

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                                                                                            Dates
               Rate schedules                       Rate order Nos.        -------------------------------------
                                                                                 Approval          Expiration
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CAP-FT3 \1\................................  WAPA-193.....................         12/10/2020         12/31/2025
INT-FT5 \2\................................  WAPA-192.....................           3/2/2021          9/30/2023
PD-FT7 \3\.................................  WAPA-184.....................          1/31/2019          9/30/2023
CAP-NFT3 \1\...............................  WAPA-193.....................         12/10/2020         12/31/2025
INT-NFT4 \2\...............................  WAPA-192.....................           3/2/2021          9/30/2023
PD-NFT7 \3\................................  WAPA-184.....................          1/31/2019          9/30/2023
CAP-NITS3 \1\..............................  WAPA-193.....................         12/10/2020         12/31/2025
INT-NTS4 \4\...............................  WAPA-200.....................         10/25/2022          9/30/2026
PD-NTS4 \4\................................  WAPA-200.....................         10/25/2022          9/30/2026
PD-F7 \3\..................................  WAPA-184.....................          1/31/2019          9/30/2023
PD-FCT7 \3\................................  WAPA-184.....................          1/31/2019          9/30/2023
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    Rate Schedules CAP-FT3, INT-FT5, and PD-FT7 apply to long-term and 
short-term firm P2P transmission service. Rate Schedules CAP-NFT3, INT-
NFT4, and PD-NFT7 apply to nonfirm P2P transmission service. Rate 
Schedules CAP-NITS3, INT-NTS4, and PD-NTS4 apply to Network 
transmission service. Rate Schedules PD-F7 and PD-FCT7 apply to PDP FES 
and transmission service of SLCA/IP power, respectively. Existing rate 
schedules do not apply to ED5-PVH; rather, since the project began 
commercial operation in 2015, DSW has charged for the use of ED5-PVH 
facilities through a contractual arrangement with customers.\5\ The 
facilities use charge for ED5-PVH is designed to recover all costs 
incurred by WAPA in connection with the project including debt service, 
operation, maintenance, replacements, and extraordinary repairs.
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    \1\ Order Confirming and Approving Rate Schedules on a Final 
Basis, Docket No. EF20-10-000.
    \2\ Order Confirming and Approving Rate Schedules on a Final 
Basis, Docket No. EF20-9-000.
    \3\ Order Confirming and Approving Rate Schedules on a Final 
Basis, Docket No. EF19-1-000.
    \4\ Order Confirming and Approving Rate Schedules on a Final 
Basis, Docket No. EF21-6-000.
    \5\ The ED5-PVH is a 109-mile transmission project completed 
under WAPA's Transmission Infrastructure Program (TIP). TIP was 
established to implement Section 402 of the American Recovery and 
Reinvestment Act and manage WAPA's $3.25 billion borrowing authority 
to support projects facilitating the delivery of renewable resources 
in the western United States. Public Law 111-5 (Feb. 17, 2009).
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    The rates for transmission service on CAP, Intertie, and PDP, and 
the facilities use charge for ED5-PVH, have substantially converged 
over the last several years. DSW proposes to combine the rates and 
charge into ``One Transmission Rate'' (OTR), which would be applicable 
to these projects. The OTR would provide benefits to DSW's customers by 
allowing more efficient scheduling and use of each project's 
transmission facilities, eliminating multiple charges (rate pancaking) 
among the transmission systems, and providing rate and financial 
stability by having a larger revenue requirement and more diverse 
customer base.
    Although the transmission service rates and facilities use charge 
would be combined under the OTR, the projects will remain separate for 
financial accounting and repayment purposes. The proposed formula rates 
under the OTR would provide sufficient revenue to recover annual 
operation, maintenance, and replacement costs, interest expense, and 
capital repayment requirements while ensuring repayment of the projects 
within the cost recovery criteria set forth in Department of Energy 
(DOE) Order RA 6120.2.
    To implement the OTR, DSW is proposing new rate schedules 
containing formula rates for firm and nonfirm P2P and Network 
transmission service. These new schedules will supersede the existing 
rate schedules for CAP, Intertie, and PDP transmission service and 
replace the contractual charge for the use of ED5-PVH facilities. DSW 
also proposes to make changes to the existing formula rates for PDP FES 
and firm transmission service of SLCA/IP power so they align with the 
new proposed rate schedule for firm P2P transmission service.
    DSW's proposed formula rates for firm and nonfirm P2P and Network 
transmission service under the OTR, along with PDP FES and firm 
transmission service of SLCA/IP power, would go into effect on January 
1, 2024, and remain in effect through September 30, 2028, or until DSW 
changes the formula rates through another public rate process pursuant 
to 10 CFR part 903, whichever occurs first. Since Rate Schedules INT-
FT5, PD-FT7, INT-NFT4, PD-NFT7, PD-F7, and PD-FCT7 expire on September 
30, 2023, DSW has initiated a separate rate action to extend these rate 
schedules to provide time to complete the public process for the OTR.

Firm Point-to-Point Transmission Service

    DSW proposes a new rate schedule, DSW-FT1, for long-term and short-
term firm P2P transmission service on CAP, Intertie, PDP, and ED5-PVH. 
This new rate schedule will contain formulas to calculate the rates for 
firm P2P transmission service. For long-term

[[Page 42357]]

transmission service (one year or longer), the annual rate for each 
kilowatt per year (kW-year) will be equal to the combined annual 
transmission revenue requirement (ATRR) of each project, which is the 
amount of revenue that each project needs to cover the costs associated 
with its transmission system, divided by the combined anticipated long-
term capacity reservations for each project, rounded to the nearest 12-
cent increment. For short-term transmission service (up to one year), 
the maximum rate for each kilowatt will be equal to the annual long-
term rate divided by the applicable period of time (i.e., monthly, 
weekly, daily and hourly) and rounded to five decimal places.
    These long-term and short-term rates will be calculated annually 
using updated financial and capacity reservation information, as 
applicable. This new rate schedule will supersede Rate Schedules CAP-
FT3, INT-FT5, and PD-FT7.

Nonfirm Point-to-Point Transmission Service

    DSW proposes a new rate schedule, DSW-NFT1, for nonfirm P2P 
transmission service on CAP, Intertie, PDP, and ED5-PVH. This new rate 
schedule will contain a formula to calculate the rate for nonfirm P2P 
transmission service. The nonfirm rate will be calculated by dividing 
the annual long-term rate for firm P2P transmission service by 8,760 
hours and rounding to five decimal places. The rate will be calculated 
annually using updated information, as applicable. This new rate 
schedule will supersede Rate Schedules CAP-NFT3, INT-NFT4, and PD-NFT7.

Network Transmission Service

    DSW proposes a new rate schedule, DSW-NTS1, for Network 
transmission service on CAP, Intertie, PDP, and ED5-PVH. This new rate 
schedule will contain a formula to calculate the monthly charge for 
Network transmission service. The monthly charge will be determined by 
multiplying the customer's load ratio share, the ratio of the 
customer's network load to the transmission provider's total load, 
times one twelfth (\1/12\) of the combined ATRR of each project. The 
combined ATRR will be calculated annually using updated financial 
information. This new rate schedule will supersede Rate Schedules CAP-
NITS3, INT-NTS4, and PD-NTS4.

PDP Firm Electric Service

    DSW proposes to revise Rate Schedule PD-F7 so the transmission 
charge aligns with the proposed new rate schedule, DSW-FT1, for long-
term and short-term firm P2P transmission service on CAP, Intertie, 
PDP, and ED5-PVH. No changes are being proposed to the energy or 
capacity charges. DSW also proposes to make other minor changes to Rate 
Schedule PD-F7. Specifically, the rate schedule will be modified to 
indicate that recently approved Rate Schedule DSW-UU1 \6\ will apply to 
unauthorized transmission overruns. In addition, the section on 
transmission losses will be deleted because it only pertained to 
deliveries made with meters located at distribution voltage, a 
situation that no longer exists for DSW. The revised rate schedule, PD-
F8, will supersede PD-F7.
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    \6\ Order Confirming and Approving Rate Schedules on a Final 
Basis, FERC Docket No. EF21-6-000.
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PDP Transmission Service of SLCA/IP Power

    DSW proposes to revise Rate Schedule PD-FCT7 to align with the 
proposed new rate schedule, DSW-FT1, for long-term and short-term firm 
P2P transmission service on CAP, Intertie, PDP, and ED5-PVH. DSW also 
proposes to make minor changes to sections of Rate Schedule PD-FCT7 
addressing adjustment for losses and overrun of capacity. Specifically, 
the new rate schedule will be modified to reflect that recently 
approved Rate Schedules DSW-TL1 and DSW-UU1 \7\ will apply to 
transmission losses service and unreserved use, respectively. The 
revised rate schedule, PD-FCT8, will supersede PD-FCT7.
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    \7\ Ibid.
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Table of Rate Schedules

    The table below provides a crosswalk from the existing rate 
schedules to the proposed rate schedules.

                             Rate Schedules
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                 Existing                             Proposed
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CAP-FT3, INT-FT5 & PD-FT7.................  DSW-FT1.
CAP-NFT3, INT-NFT4 & PD-NFT7..............  DSW-NFT1.
CAP-NITS3, INT-NTS4 & PD-NTS4.............  DSW-NTS1.
PD-F7.....................................  PD-F8.
PD-FCT7...................................  PD-FCT8.
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Prepayment of Service

    DSW proposes long-term firm P2P and Network transmission service 
under Rate Schedules DSW-FT1 and DSW-NTS1 be prepaid one month in 
advance and credited in a subsequent month. The Intertie and PDP long-
term firm P2P transmission customers currently prepay for service and 
will experience no change. As discussed below, CAP long-term firm P2P 
and PDP Network transmission customers and ED5-PVH facilities use 
customers will start prepaying for service when the rate schedules 
become effective.
    The monthly prepayment for long-term firm P2P transmission service 
will be based on the capacity reserved. The monthly prepayment for 
Network transmission service will be based on the most recent bill. 
Since transmission customers that currently do not prepay for service 
will have two payments each month during the first two months, one for 
service in arrears and one for prepayment, DSW proposes an optional 
four-month transitional period to phase in prepayments. With a 
transitional period, the two additional payments that are necessary 
during the first two months will be evenly distributed over the first 
four months to help mitigate the potential financial burden on 
customers.

Legal Authority

    Existing DOE procedures for public participation in power and 
transmission rate adjustments (10 CFR part 903) were published on 
September 18, 1985, and February 21, 2019.\8\ The proposed action 
constitutes a major rate adjustment, as defined by 10 CFR 903.2(d). In 
accordance with 10 CFR 903.15(a) and 10 CFR 903.16(a), 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 formula rates will then be approved on an 
interim basis.
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    \8\ 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
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    WAPA is establishing the formula rates for transmission and firm 
electric service in accordance with section 302 of the DOE Organization 
Act (42 U.S.C. 7152).\9\
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    \9\ 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 projects 
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 WAPA's 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

[[Page 42358]]

into effect on a final basis, or to remand or disapprove such rates, to 
FERC. By Delegation Order No. S1-DEL-S3-2023, effective April 10, 2023, 
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-
WAPA1-2023, effective April 10, 2023, 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.

Availability of Information

    All brochures, studies, comments, letters, memorandums, or other 
documents that DSW initiates or uses to develop the proposed formula 
rates are available on WAPA's website at www.wapa.gov/regions/DSW/Rates/Pages/OTR.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.\10\
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    \10\ In compliance with the National Environmental Policy Act 
(NEPA) of 1969, as amended, 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.

Signing Authority

    This document of the Department of Energy was signed on June 5, 
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 June 27, 2023.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2023-13974 Filed 6-29-23; 8:45 am]
BILLING CODE 6450-01-P