[Federal Register Volume 89, Number 77 (Friday, April 19, 2024)]
[Notices]
[Pages 28767-28769]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-08387]


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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 2025 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 fiscal year (FY) 
2025 base charge and rates for Boulder Canyon Project (BCP) electric 
service under Rate Schedule BCP-F11. The proposed FY 2025 base charge 
is unchanged from FY 2024 and will remain at $74.3 million. The 
proposed base charge and rates would go into effect on October 1, 2024, 
and remain in effect through September 30, 2025. Publication of this 
Federal Register notice will initiate the public process.

DATES: A consultation and comment period begins today and will end July 
18, 2024. DSW will present a detailed explanation of the proposed FY 
2025 base charge and rates at a public information forum on May 20, 
2024, from 10 a.m. Mountain Standard Time to no later than 12 p.m. 
Mountain Standard Time. DSW will also host a public comment forum on 
June 18, 2024, from 10 a.m. Mountain Standard Time to no later than 12 
p.m. Mountain

[[Page 28768]]

Standard Time, or until the last comment is received.

ADDRESSES: The public information and public comment forums will be 
held virtually and in person at WAPA's Desert Southwest Regional Office 
located at 615 South 43rd Avenue, Phoenix, Arizona 85009. 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/about-wapa/regions/dsw/rates/boulder-canyon-project-rates. 
DSW will accept written comments any time during the consultation and 
comment period.
    As access to Federal facilities is controlled, any U.S. citizen 
wishing to attend a public forum at WAPA must present an official form 
of picture identification (ID), such as a U.S. driver's license, U.S. 
passport, U.S. Government ID, or U.S. military ID at the time of the 
meeting. Foreign nationals should contact Tina Ramsey, Rates Manager, 
Desert Southwest Region, Western Area Power Administration, (602) 605-
2565, or [email protected] in advance of a forum to obtain the 
necessary form for admittance to the Desert Southwest Regional Office. 
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 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/about-wapa/regions/dsw/rates/boulder-canyon-project-rates.

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) with installed 
capacity of 2,078.8 megawatts (4,800 kilowatts for plant use). In 
collaboration with the U.S. 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 for 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 March 31, 2023, FERC approved and confirmed Rate Schedule BCP-
F11, under Rate Order No. WAPA-204, on a final basis through September 
30, 2027.\2\ Rate Schedule BCP-F11 and the BCP Electric Service 
Contract require WAPA to determine the annual base charge and rates for 
the next fiscal year before October 1 of each year. The FY 2024 BCP 
base charge and rates expire on September 30, 2024.
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    \2\ Order Confirming and Approving Rate Schedule on a Final 
Basis, FERC Docket No. EF22-4-000.

                                       Comparison of Base Charge and Rates
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                                                 FY 2024            FY 2025        Amount change  Percent change
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Base Charge ($)...........................        $74,334,285        $74,334,285           $0.00             0.0
Composite Rate (mills/kWh)................              23.10              24.61            1.51             6.5
Energy Rate (mills/kWh)...................              11.55              12.30            0.75             6.5
Capacity Rate ($/kW-Mo)...................              $2.15              $2.19           $0.04             1.9
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    The proposed FY 2025 base charge for BCP electric service is 
projected to remain at $74.3 million, the same as FY 2024.
    Reclamation's FY 2025 budget is decreasing $700,000 from $87.9 
million to $87.2 million, a 0.8 percent decrease from FY 2024. 
Reflected in this budget, O&M costs are increasing $1.1 million 
primarily due to higher projected labor costs for salaries, benefits, 
and overhead. Several large projects are being delayed, decreasing 
replacements costs by $2.2 million. Post-retirement benefits costs are 
increasing $109,000 based on a higher five-year average of recent 
actual expenses. Visitor services costs are increasing by $270,000 
primarily due to higher projected labor costs for salaries, benefits, 
overhead, and overtime. The FY 2024 budget amounts cited for 
Reclamation do not include approximately $20.8 million in costs that 
are funded by prior year carryover from FY 2023.
    WAPA's FY 2025 budget is increasing approximately $600,000 to $10.1 
million, a 5.9 percent increase from FY 2024. WAPA's O&M costs are 
increasing $770,000 from FY 2024 due to higher labor projections for 
salaries, overtime, overhead, and benefits. The increase in O&M costs 
is offset by a $208,000 decrease in replacement costs and modest 
decreases in WAPA's post-retirement benefit costs and interest expenses 
due to lower 5-year averages of recent actual expenses. The FY 2024 
budget amounts for WAPA do not include approximately $282,000 in costs 
that are funded by prior year carryover from FY 2023.
    Non-power revenue projections for Reclamation and WAPA are 
decreasing $2.1 million due to lower estimated revenues for the 
Commercial Use Fee program and ancillary services. Prior year carryover 
is projected to be $4.1 million, a $1.9 million increase from FY 2024.
    The composite and energy rate are both increasing 6.5 percent and 
the capacity rate is increasing 1.9 percent from FY 2024. 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

[[Page 28769]]

final base charge and rates if hydrological conditions change.
    WAPA's proposed base charge and rates for FY 2025, which would be 
effective October 1, 2024, are preliminary and subject to change based 
on modifications to forecasts before publication of the final base 
charge and rates.

Legal Authority

    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.
    WAPA's proposal to calculate the base charge and rates for FY 2025 
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.
    DOE regulations governing charges for the sale of BCP power, 10 CFR 
904.7(e), require annual review of the BCP base charge and an 
``adjust[ment], either upward or downward, when necessary and 
administratively feasible, to assure sufficient revenues to effect 
payment of all costs and financial obligations associated with the 
[p]roject.'' This proposal is issued pursuant to Delegation Order No. 
S1-DEL-RATES-2016, effective November 19, 2016, in which the Secretary 
of Energy delegated the authority to develop power and transmission 
rates to WAPA's Administrator. The BCP Electric Service Contract states 
that for years other than the first year and each fifth year 
thereafter, when the rate schedule is approved by the Deputy Secretary 
of Energy on a provisional basis and by FERC on a final basis, 
adjustments to the base charge ``shall become effective upon approval 
by the Deputy Secretary of Energy.'' Accordingly, the Deputy Secretary 
of Energy would approve the final FY 2025 base charge and rates for BCP 
electric service, as authorized by the BCP Electric Service Contract 
and DOE's procedures for public participation in rate adjustments set 
forth at 10 CFR parts 903 and 904.\3\ The FY 2025 base charge will also 
be filed at FERC for informational purposes only.
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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 Regional Office, 
located at 615 South 43rd Avenue, Phoenix, Arizona. Many of these 
documents and supporting information are also available on DSW's 
website at: www.wapa.gov/about-wapa/regions/dsw/rates/boulder-canyon-project-rates.

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 April 12, 
2024, by Tracey A. LeBeau, Administrator, Western Area Power 
Administration, pursuant to delegated authority from the Secretary of 
Energy. The 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 16, 2024.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2024-08387 Filed 4-18-24; 8:45 am]
BILLING CODE 6450-01-P