82 FR 27813 - Boulder Canyon Project-Rate Order No. WAPA-178

DEPARTMENT OF ENERGY
Western Area Power Administration

Federal Register Volume 82, Issue 116 (June 19, 2017)

Western Area Power Administration (WAPA) is proposing to update the rate-setting formulas for electric service for the Boulder Canyon Project (BCP) under proposed Rate Schedule BCP-F10, and adjust the annual calculation for the fiscal year (FY) 2018 base charge and rates. The expiration of the current base charge and rates on September 30, 2017, and beginning of the new 50-year marketing period on October 1, 2018, require these actions. The current base charge under Rate Schedule BCP-F9 is not sufficient to cover all annual costs including operation and maintenance, replacements, and interest expense; and repay investment obligations within the allowable period. After collaborating with the BCP contractors, WAPA proposes an FY 2018 base charge that includes a one-time $15 million working capital fund primarily for the Bureau of Reclamation (Reclamation) for the new marketing period. The FY 2019 base charge is expected to decrease by $15 million after the collection of working capital in FY 2018. The proposed base charge will provide sufficient revenue to cover all annual costs and repay investment obligations within the allowable period. WAPA will post proposed Rate Schedule BCP-F10 and a detailed rate package that identifies the reasons for the base charge and rates adjustment on its Web site during the consultation and comment period. The proposed base charge and rates are scheduled to become effective on October 1, 2017, and will remain in effect through September 30, 2018. Publication of this Federal Register notice initiates the formal public process to implement the proposed rate-setting formulas and the FY 2018 base charge and rates.

[Federal Register Volume 82, Number 116 (Monday, June 19, 2017)]
[Notices]
[Pages 27813-27814]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-12700]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Boulder Canyon Project--Rate Order No. WAPA-178

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of proposed rate-setting formulas for electric service 
and adjustment of fiscal year 2018 base charge and rates.

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SUMMARY: Western Area Power Administration (WAPA) is proposing to 
update the rate-setting formulas for electric service for the Boulder 
Canyon Project (BCP) under proposed Rate Schedule BCP-F10, and adjust 
the annual calculation for the fiscal year (FY) 2018 base charge and 
rates. The expiration of the current base charge and rates on September 
30, 2017, and beginning of the new 50-year marketing period on October 
1, 2018, require these actions.
    The current base charge under Rate Schedule BCP-F9 is not 
sufficient to cover all annual costs including operation and 
maintenance, replacements, and interest expense; and repay investment 
obligations within the allowable period. After collaborating with the 
BCP contractors, WAPA proposes an FY 2018 base charge that includes a 
one-time $15 million working capital fund primarily for the Bureau of 
Reclamation (Reclamation) for the new marketing period. The FY 2019 
base charge is expected to decrease by $15 million after the collection 
of working capital in FY 2018. The proposed base charge will provide 
sufficient revenue to cover all annual costs and repay investment 
obligations within the allowable period. WAPA will post proposed Rate 
Schedule BCP-F10 and a detailed rate package that identifies the 
reasons for the base charge and rates adjustment on its Web site during 
the consultation and comment period. The proposed base charge and rates 
are scheduled to become effective on October 1, 2017, and will remain 
in effect through September 30, 2018. Publication of this Federal 
Register notice initiates the formal public process to implement the 
proposed rate-setting formulas and the FY 2018 base charge and rates.

DATES: The consultation and comment period begins today and will end 
September 18, 2017. WAPA will present a detailed explanation of the 
proposed rate-setting formulas and the FY 2018 base charge and rates at 
a public information forum that will be held on July 19, 2017, at 10:00 
a.m. Mountain Standard Time (MST) in Phoenix, Arizona. WAPA will accept 
oral and written comments at a public comment forum that will be held 
on August 18, 2017, at 10:00 a.m. MST in Phoenix, Arizona. WAPA will 
accept written comments any time during the consultation and comment 
period.

ADDRESSES: The public information forum and public comment forum will 
be held at WAPA's Desert Southwest Customer Service Regional Office 
located at 615 South 43rd Avenue, Phoenix, Arizona 85009. Send written 
comments to Mr. Ronald E. Moulton, Regional Manager, Desert Southwest 
Customer Service Region, Western Area Power Administration, P.O. Box 
6457, Phoenix, Arizona 85005-6457, email [email protected]. WAPA will 
post information about the rate process, as well as comments received 
via letter and email on its Web site at: http://www.wapa.gov/regions/DSW/Rates/Pages/boulder-canyon-rates.aspx. Written comments must be 
received by the end of the consultation and comment period to be 
considered by WAPA in its decision process.
    United States (U.S.) citizens who want to attend a forum 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. Foreign nationals who want to attend a forum must contact Mr. Scott 
Lund, Rates Manager, at (602) 605-2442 or email [email protected] 30 days 
in advance of a forum to obtain the necessary clearance.

FOR FURTHER INFORMATION CONTACT: Mr. Scott Lund, Rates Manager, Desert 
Southwest Customer Service Region, Western Area Power Administration, 
P.O. Box 6457, Phoenix, Arizona 85005-6457, (602) 605-2442, or email 
[email protected].

SUPPLEMENTARY INFORMATION: BCP's base charge and rates for electric 
service are calculated annually based on formulas that are set for a 
five-year period. Since BCP begins a new 50-year marketing period in FY 
2018, WAPA is proposing to update the rate-setting formulas effective 
October 1, 2017 through September 30, 2022. Proposed Rate Schedule BCP-
F10 will update the existing forecast capacity rate formula to reflect 
BCP's current generating capacity of 2,074 megawatts. No other changes 
to the existing rate-setting formulas are proposed.
    The proposed FY 2018 base charge and rates for BCP electric service 
are designed to recover an annual revenue requirement that includes 
operation and maintenance and replacements costs, interest expense, 
investment repayments, payments to states, and visitor services 
expenses. The total costs are offset by the projected revenue from 
water sales, visitor services, ancillary services, and late fees. The 
annual revenue requirement is the base charge for electric service 
divided equally between capacity and energy. The annual composite rate 
is the base charge divided by annual energy sales.
    The proposed Rate Schedule BCP-F10 requires updated financial and 
hydrology data to calculate the annual base charge and rates. The 
proposed base charge for FY 2018 is $85,094,786 and the proposed 
composite rate is 24.39 mills/kilowatt-hour. The following table 
compares the existing and proposed base charge and composite rate:

[[Page 27814]]



                       Comparison of Existing and Proposed Base Charge and Composite Rate
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                                                  Existing  October 1,     Proposed  October 1,
                                                     2016  through            2017  through       Percent change
                                                   September 30, 2017       September 30, 2018
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Base Charge ($)...............................               69,662,289               85,094,786              22
Composite Rate (mills/kWh)....................                    19.63                    24.39              24
----------------------------------------------------------------------------------------------------------------

    The proposed FY 2018 base charge includes a one-time $15 million 
working capital fund primarily for Reclamation, which is an increase of 
approximately 22 percent compared to the FY 2017 base charge. Under the 
BCP Electric Service Contracts and Amended and Restated Implementation 
Agreements, Reclamation worked collaboratively with BCP contractors to 
establish the $15 million working capital fund for the new marketing 
period, to be collected in the FY 2018 base charge. The FY 2019 base 
charge is expected to decrease by $15 million after the collection of 
working capital in FY 2018 (subject to Reclamation's annual working 
capital evaluation). The working capital fund accounts for nearly all 
of the increase to the base charge. Increases in annual operation and 
maintenance and replacement costs, and decreases in debt service, 
uprating credits, non-power revenue, and carryover revenue account for 
the remaining increase to the base charge.
    The proposed FY 2018 composite rate represents an increase of 
approximately 24 percent compared to the FY 2017 composite rate. The 
increase in the proposed base charge accounts for the composite rate 
increase.
    This proposal, to be effective October 1, 2017, is preliminary and 
is subject to change upon publication of the final base charge and 
rates.

Legal Authority

    In establishing rate-setting formulas for electric service and the 
base charge and rates for BCP, WAPA will follow the formal public 
process set forth in 10 CFR parts 903 and 904, and review all comments 
it receives on the proposed base charge and rates before taking action.
    WAPA is proposing this action under the Department of Energy (DOE) 
Organization Act (42 U.S.C. 7101-7352); the Reclamation Act of 1902 
(ch. 1093, 32 Stat. 388), as amended and supplemented by subsequent 
enactments; and other acts that specifically apply to the project 
involved.
    By Delegation Order No. 00-037.00B 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 into effect on a final basis, to remand, or to 
disapprove such rates to the Federal Energy Regulatory Commission.

Availability of Information

    All brochures, studies, comments, letters, memorandums, or other 
documents WAPA initiates or uses to develop the proposed rate-setting 
formulas and the base charge and rates will be available for inspection 
and copying at the Desert Southwest Customer Service Regional Office, 
Western Area Power Administration, located at 615 South 43rd Avenue, 
Phoenix, Arizona 85009. Many of these documents and supporting 
information are available on WAPA's Web site at: http://www.wapa.gov/regions/DSW/Rates/Pages/boulder-canyon-rates.aspx.

Ratemaking Procedure Requirements

Environmental Compliance

    In compliance with the National Environmental Policy Act (NEPA) of 
1969, 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), 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.

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.

    Dated: May 4, 2017.
Mark A. Gabriel,
Administrator.
[FR Doc. 2017-12700 Filed 6-16-17; 8:45 am]
 BILLING CODE 6450-01-P