[Federal Register Volume 89, Number 125 (Friday, June 28, 2024)]
[Notices]
[Pages 53989-53992]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-14275]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Pick-Sloan Missouri Basin Program--Eastern Division--Rate Order 
No. WAPA-213

AGENCY: Western Area Power Administration, Department of Energy (DOE).

ACTION: Notice of proposed firm power service and sale of surplus 
products formula rates.

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SUMMARY: The Upper Great Plains (UGP) region of the Western Area Power 
Administration (WAPA) proposes revised formula rates for the Pick-Sloan 
Missouri Basin Program (P-SMBP)--Eastern Division (ED) firm power, firm 
peaking power service, and sale of surplus products. The existing 
formula rates for these services, under Rate Schedules P-SED-F14 and P-
SED-FP14, and sale of surplus products, under formula rate schedule P-
SED-M2, do not expire until December 31, 2027; however, the existing 
firm power and firm peaking power service rates no longer provide 
sufficient revenue to recover interest expense and repay investments. 
The formula rate for sale of surplus products is not changing but is 
being included in Rate Order No. WAPA-213 (WAPA-213) in order to make 
these rate schedules effective for the same time frame.

DATES: A consultation and comment period will begin June 28, 2024 and 
end August 27, 2024. Due to not receiving final Fiscal Year (FY) 2023 
financial data until late January, holding subsequent rate impact 
discussions with customers between February and April, and the 
subsequent time frame required

[[Page 53990]]

for completion of the Federal Register notice workflow process, the 
publication of this proposal was not possible prior to the June 2024 
time frame. As such, and in order to continue with the existing January 
2025 implementation date, the time frame of the consultation and 
comment period has been shortened from the standard 90 days to 60 days. 
This shortened time frame is allowed under 10 CFR 903.14(a), which 
states that, ``. . . periods may be shortened for good cause shown.''
    UGP will present a detailed explanation of the proposed P-SMBP--ED 
formula rates and other modifications at a public information forum 
that will be held on August 7, 2024, at 8:30 MDT to no later than 10:30 
MDT. UGP will also host a public comment forum on August 7, 2024, at 
11:00 MDT to no later than noon MDT. The public information forum and 
the public comment forum will only be conducted virtually. Instructions 
for participating in the forums will be posted on UGP's website at 
least 14 days prior to the public information and comment forums at: 
www.wapa.gov/about-wapa/regions/ugp/ugp-rates/2025-firm-rate-adjustment.
    UGP will accept 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 UGP to FERC for approval should be sent to: 
Lloyd Linke, Regional Manager, Upper Great Plains Region, Western Area 
Power Administration, 2900 4th Avenue North, 6th Floor, Billings, MT 
59101-1266, or email: [email protected]. UGP will post information 
about the proposed formula rates and written comments received to its 
website at: www.wapa.gov/about-wapa/regions/ugp/ugp-rates/2025-firm-rate-adjustment.

FOR FURTHER INFORMATION CONTACT: Linda Cady-Hoffman, Rates Manager, 
Upper Great Plains Region, Western Area Power Administration, 2900 4th 
Avenue North, 6th Floor, Billings, MT 59101-1266, telephone (406) 255-
2920, email [email protected] or [email protected].

SUPPLEMENTARY INFORMATION: On June 29, 2023, FERC confirmed and 
approved Rate Schedules P-SED-F14, P-SED-FP14, and P-SED-M2 under Rate 
Order No. WAPA-203 (WAPA-203) on a final basis through December 31, 
2027.\1\ These schedules apply to firm power, firm peaking power 
service, and the sale of surplus products. UGP intends for the proposed 
formula rates under P-SED-F15, P-SED-FP15, and P-SED-M3 to go into 
effect January 1, 2025. The proposed formula rates schedules would 
remain in effect until December 31, 2029, or until WAPA supersedes or 
changes the formula rates through another public rate process pursuant 
to 10 CFR part 903, whichever occurs first.
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    \1\ Order Confirming and Approving Rate Schedules on a Final 
Basis, FERC Docket No. EF23-2-000, (2023).
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    The proposed formula rates would provide sufficient revenue to 
recover annual operation, maintenance, and replacement (OM&R) expenses, 
interest expense, irrigation assistance, and capital repayment 
requirements while ensuring repayment of the project within the cost 
recovery criteria set forth in Department of Energy (DOE) Order RA 
6120.2. For more information on the proposed rates, please see the 
customer brochure located on UGP's website at: www.wapa.gov/about-wapa/regions/ugp/ugp-rates/2025-firm-rate-adjustment.

Firm Power and Firm Peaking Power Services

    The P-SMBP FY 2023 Power Repayment Study (PRS) revenue requirement, 
changes to future workplans, and projected water conditions are the 
determining factors for this proposed rate adjustment.
    The base component costs for the P-SMBP have increased primarily 
due to increased OM&R from WAPA and the generating agencies.
    The driver behind the P-SMBP drought adder component decrease is 
the United States Army Corps of Engineers' (USACE) 2024 Annual 
Operating Plan (AOP) projecting less than average generation, though it 
is better than generation projected in the WAPA-203 January 2023 rate. 
Planned repayment of both the base and drought deficits are in the same 
time frame (2027) as they were projected to be repaid under WAPA-203. 
Uncertainties with water inflows, hydro generation, and replacement 
energy prices continue to pose potential risks for meeting firm power 
contractual commitments.
    The net effect of these adjustments to the base and drought adder 
components results in an overall increase to the P-SMBP--ED revenue 
requirement. Under Rate Schedules P-SED-F15 and P-SED-FP15, UGP is 
proposing a two-step rate adjustment. For the base component, the 
revenue requirements and associated charges for each step would be set 
values. For the drought adder component, UGP is proposing estimated 
revenue requirements based on the USACE's 2024 AOP and drought costs 
projected in the Final FY 2023 PRS for the first and second steps. UGP 
will follow the previously established ``annual drought adder 
adjustment process'' to determine if these estimated values for the 
January 2025 and 2026 rate years require adjustment. If a drought adder 
component change is required for January 2025, a modified drought adder 
revenue requirement and the associated charges for January 2025, and 
possibly new estimates for January 2026, will be included in the 
publication of the notice of rate order WAPA-213 and become effective 
January 1, 2025. UGP will also inform customers of updates by letter 
and post updates to UGP's external website.
    A comparison of the current and proposed revenue requirements is 
shown in Table 1:

[[Page 53991]]



                     Table 1--Summary of Current and Two-Step Proposal Revenue Requirements
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                                                                                  Proposed under
                                   Current under  Proposed under                     P-SED-F15
                                   P-SED-F14 as      P-SED-F15      First step    second step as    Second step
       Firm power service           of Jan. 1,     first step as  percent change    of Jan. 1,    percent change
                                     2023 (in       of Jan. 1,                       2026 (in
                                    million $)       2025 (in                     million $) \2\
----------------------------------------------------million $)--------------------------------------------------
Total Revenue Requirement \1\...          $268.4          $288.1             7.4          $306.0             6.2
Base Component..................           235.4           264.5            12.4           292.4            10.5
Drought Adder Component \2\.....            33.0            23.6           -28.5            13.6           -42.4
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\1\ Proposed values are estimates only based on using final base and estimated drought adder components.
\2\ Proposed values are estimates that may change during the existing annual drought adder adjustment process.

    Under the current rate methodology, rates for P-SMBP--ED firm power 
and firm peaking power service are designed to recover an annual 
revenue requirement that includes investment repayment, interest, 
purchase power, OM&R, and other expenses within the allowable period. 
The annual revenue requirement continues to be allocated equally 
between demand and energy.
    A comparison of the current and proposed rates is shown in Table 2:

                             Table 2--Summary of Current and Two-Step Proposal Rates
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                                                  Proposed under                  Proposed under
                                   Current under   P-SED-F15/ P-                   P-SED-F15/ P-
  P-SMBP--ED firm power service    P-SED-F14/ P-  SED-FP15 as of    First step    SED-FP15 as of    Second step
                                  SED-FP14 as of   Jan. 1, 2025   percent change   Jan. 1, 2026   percent change
                                   Jan. 1, 2023         \1\                             \1\
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P-SMBP--ED Composite Rate (mills/          27.91           30.00             7.5           31.87             6.2
 kilowatt-hour).................
Firm Demand ($/kilowatt-month)..           $6.20           $6.60             6.5           $7.00             6.1
Firm Energy (mills/kilowatt-               15.27           16.55             8.4           17.60             6.3
 hour)..........................
Firm Peaking Demand ($/kilowatt-           $5.70           $6.05             6.1           $6.40             5.8
 month).........................
Firm Peaking Energy \2\ (mills/            15.27           16.55             8.4           17.60             6.3
 kilowatt-hour).................
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\1\ Proposed values are estimates only based on using final base and estimated drought adder components.
\2\ Firm Peaking Energy is normally returned. This charge will be assessed in the event Firm Peaking Energy is
  not returned.

    As a part of the current and proposed rate schedules, UGP provides 
for a formula-based adjustment of the drought adder component, with an 
annual increase of up to 2 mills per kilowatt-hour (kWh). The 2 mills/
kWh cap places a limit on the amount the drought adder component can be 
adjusted upward relative to associated drought costs included in the 
drought adder formula rate for any one-year cycle. Continuing to 
identify the firm power service revenue requirement using base and 
drought adder components will assist UGP in the presentation of future 
impacts of droughts, demonstrate repayment of drought-related costs in 
the PRS, and allow UGP to be more responsive to changes caused by 
drought-related expenses. UGP will continue to charge and bill its 
customers firm power and firm peaking power service rates for energy 
and demand, which are the sum of the base and drought adder components.
    A summary of the proposed charge components is shown in Table 3:

                                           Table 3--Summary of P-SMBP--ED Two-Step Proposal Charge Components
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                                                           Proposed charges under rate schedules P-SED-    Proposed charges under rate schedules P-SED-
                                                          F15 and P-SED-FP15 first step as of January 1,   F15 and P-SED-FP15 second step as of January
                                                         ----------------------2025-------------------------------------------1, 2026-------------------
                                                                           Drought adder   Total charge                    Drought adder   Total charge
                                                          Base component   component \1\        \2\       Base component   component \1\        \2\
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Firm Demand ($/kilowatt-month)..........................           $6.05           $0.55           $6.60           $6.70           $0.30           $7.00
Firm Energy (mills/kWh).................................           15.21            1.34           16.55           16.80            0.80           17.60
Firm Peaking Demand ($/kilowatt-month)..................           $5.55           $0.50           $6.05           $6.10           $0.30           $6.40
Firm Peaking Energy \3\.................................           15.21            1.34           16.55           16.80            0.80           17.60
(mills/kWh).............................................
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\1\ Proposed values are estimates that may change during the existing annual drought adder adjustment process.
\2\ Proposed values are estimates only based on using final base and estimated drought adder components.
\3\ Firm peaking energy is normally returned. This charge will be assessed in the event firm peaking energy is not returned.

Sale of Surplus Products

    The Sale of Surplus Products rate schedule is formula-based, 
providing for P-SMBP--ED Marketing to sell P-SMBP--ED surplus energy 
and demand products. If P-SMBP--ED surplus products are available, as 
specified in the rate schedule, the charge will be based on market 
rates plus administrative costs. The customer will be responsible for 
acquiring

[[Page 53992]]

transmission service necessary to deliver the product(s) for which a 
separate charge may be incurred. The proposed Rate Schedule P-SED-M3 
continues to allow for the sale of energy, frequency response, 
regulation, and reserves.

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.\2\ The proposed action is 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), UGP will hold public 
information and public comment forums for this rate adjustment. UGP 
will review and consider all timely public comments at the conclusion 
of the consultation and comment period and adjust the proposal as 
appropriate. The rates will then be approved on an interim basis.
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    \2\ 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
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    WAPA is establishing the formula rates for P-SMPB--ED in accordance 
with section302 of the DOE Organization Act (42 U.S.C. 7152).\3\
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    \3\ 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 section 5 of the Flood Control Act of 1944 (16 U.S.C. 
825s); 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 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-S3-2023, 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 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 UGP initiates or uses to develop the proposed formula 
rates are available for inspection and copying at the Upper Great 
Plains Regional Office, located at 2900 4th Avenue North, 6th Floor, 
Billings, Montana. Many of these documents and supporting information 
are also available on UGP's website at: www.wapa.gov/about-wapa/regions/ugp/ugp-rates/2025-firm-rate-adjustment.

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 
(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 24, 
2024, 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 25, 2024.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2024-14275 Filed 6-27-24; 8:45 am]
BILLING CODE 6450-01-P