82_FR_30982 82 FR 30856 - Loveland Area Projects-Rate Order No. WAPA-179

82 FR 30856 - Loveland Area Projects-Rate Order No. WAPA-179

DEPARTMENT OF ENERGY
Western Area Power Administration

Federal Register Volume 82, Issue 126 (July 3, 2017)

Page Range30856-30858
FR Document2017-13980

The Western Area Power Administration (WAPA) is proposing revised rates for the Loveland Area Projects (LAP) firm electric service and modifications to the existing rate schedule for Sale of Surplus Products. Current firm electric service rates, under Rate Schedule L-F10, are in effect through December 31, 2019, and the formula rate for the sale of surplus products, under Rate Schedule L- M1, is in effect through September 30, 2021. LAP consists of the Fryingpan-Arkansas Project (Fry-Ark) and the Pick-Sloan Missouri Basin Program (P-SMBP)--Western Division (WD), which were integrated for marketing and rate-making purposes in 1989. WAPA is proposing to lower the overall LAP firm electric service charges by 14 percent, as a result of rebalancing the charge components in formula-based Rate Schedule L-F10 by reducing the drought adder component and increasing the base component. The proposed rates will provide sufficient revenue to pay all annual costs, including interest expense, and repay investments within the allowable periods. In addition, WAPA is proposing to modify Rate Schedule L-M1, which allows for the sale of generation and generation-related products in excess of LAP's firm electric service obligations, to add ``energy'' as a surplus product. WAPA will prepare a brochure providing detailed information on these proposed rates prior to the public information forums listed below. This brochure will be posted to WAPA's Web site at: https:// www.wapa.gov/regions/RM/rates/Pages/2018-Rate-Adjustment_-Firm- Power.aspx. If approved, the proposed rates under Rate Schedules L-F11 and L-M2 would become effective on January 1, 2018, and would remain in effect through December 31, 2022, or until superseded. Publication of this Federal Register notice begins the formal process for the proposed rate adjustment and proposed rate modifications.

Federal Register, Volume 82 Issue 126 (Monday, July 3, 2017)
[Federal Register Volume 82, Number 126 (Monday, July 3, 2017)]
[Notices]
[Pages 30856-30858]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-13980]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Loveland Area Projects--Rate Order No. WAPA-179

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of proposed firm electric service and Sale of Surplus 
Products rates.

-----------------------------------------------------------------------

SUMMARY: The Western Area Power Administration (WAPA) is proposing 
revised rates for the Loveland Area Projects (LAP) firm electric 
service and modifications to the existing rate schedule for Sale of 
Surplus Products. Current firm electric service rates, under Rate 
Schedule L-F10, are in effect through December 31, 2019, and the 
formula rate for the sale of surplus products, under Rate Schedule L-
M1, is in effect through September 30, 2021. LAP consists of the 
Fryingpan-Arkansas Project (Fry-Ark) and the Pick-Sloan Missouri Basin 
Program (P-SMBP)--Western Division (WD), which were integrated for 
marketing and rate-making purposes in 1989.
    WAPA is proposing to lower the overall LAP firm electric service 
charges by 14 percent, as a result of rebalancing the charge components 
in formula-based Rate Schedule L-F10 by reducing the drought adder 
component and increasing the base component. The proposed rates will 
provide sufficient revenue to pay all annual costs, including interest 
expense, and repay investments within the allowable periods. In 
addition, WAPA is proposing to modify Rate Schedule L-M1, which allows 
for the sale of generation and generation-related products in excess of 
LAP's firm electric service obligations, to add ``energy'' as a surplus 
product. WAPA will prepare a brochure providing detailed information on 
these proposed rates prior to the public information forums listed 
below. This brochure will be posted to WAPA's Web site at: https://
www.wapa.gov/regions/RM/rates/Pages/2018-Rate-Adjustment_-Firm-
Power.aspx. If approved, the proposed rates under Rate Schedules L-F11 
and L-M2 would become effective on January 1, 2018, and would remain in 
effect through December 31, 2022, or until superseded. Publication of 
this Federal Register notice begins the formal process for the proposed 
rate adjustment and proposed rate modifications.

DATES: The consultation and comment period will begin July 3, 2017 and 
end October 2, 2017. WAPA will present a detailed explanation of the 
proposed rates and other modifications at public information forums on 
the following dates and times:
    1. August 22, 2017, 9:00 a.m. to 10:30 a.m. MDT, Denver, Colorado.
    2. August 23, 2017, 9:00 a.m. to 10:30 a.m. CDT, Sioux Falls, South 
Dakota.
    WAPA will accept oral and written comments at public comment forums 
on the following dates and times:
    1. August 22, 2017, 11:00 a.m. to no later than 12 noon MDT, 
Denver, Colorado.
    2. August 23, 2017, 11:00 a.m. to no later than 12 noon CDT, Sioux 
Falls, South Dakota.
    WAPA will accept written comments anytime during the consultation 
and comment period.

ADDRESSES: Written comments and requests to be informed of Federal 
Energy Regulatory Commission (FERC) actions concerning the proposed 
rates submitted by WAPA to FERC for approval should be sent to: Michael 
D. McElhany, Acting Regional Manager, Rocky Mountain Region, Western 
Area Power Administration, 5555 East Crossroads Boulevard, Loveland, CO 
80538-8986 or email [email protected]. Information regarding the rate 
process is posted on WAPA's Web site at: https://www.wapa.gov/regions/
RM/rates/Pages/2018-Rate-Adjustment_-Firm-Power.aspx. WAPA will post 
official comments received via letter and email to its Web site after 
the close of the comment period. WAPA must receive written comments by 
the end of the consultation and comment period to ensure they are 
considered in WAPA's decision process.
    Public information and comment forum locations are:
    1. Denver--Embassy Suites, 7001 Yampa Street, Denver, Colorado.
    2. Sioux Falls--Holiday Inn, 100 West 8th Street, Sioux Falls, 
South Dakota.

FOR FURTHER INFORMATION CONTACT: Mrs. Sheila D. Cook, Rates Manager, 
Rocky Mountain Region, Western Area Power Administration, 5555 East 
Crossroads Boulevard, Loveland, CO 80538-8986, telephone (970) 461-
7211, email [email protected] or [email protected].

SUPPLEMENTARY INFORMATION: 

Firm Electric Service

    On December 2, 2014, the Deputy Secretary of Energy approved, on an 
interim basis, Rate Schedule L-F10 under Rate Order No. WAPA-167 for 
the period beginning January 1, 2015, and ending December 31, 2019 (79 
FR 72663-72670 (Dec. 8, 2014)).\1\ This Rate Schedule is formula-based, 
providing for downward adjustments to the drought adder component.\2\ 
On January

[[Page 30857]]

1, 2017, the drought adder component of the LAP effective rate schedule 
was adjusted downward recognizing repayment of drought costs included 
in the drought adder component of the approved formula rates. The 
formula-based drought adder component needs to be adjusted down to zero 
in 2018. Such adjustment can be made using the approved annual drought 
adder adjustment process; however, since any adjustment to the base 
component must be done through a public rate process, WAPA now proposes 
to adjust both the base and drought adder components in Rate Schedule 
L-F10 through a rate adjustment process. WAPA proposes to adjust the 
formula-based drought adder component down to zero in 2018, while the 
base component will be adjusted upward to address present costs. The 
Fry-Ark and P-SMBP Fiscal Year 2016 Power Repayment Studies (PRS) 
revenue requirements and current water conditions are the determining 
factors for this proposed rate adjustment.
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    \1\ FERC confirmed and approved Rate Order WAPA-167 on a final 
basis on June 25, 2015, in Docket No. EF15-4-000. See United States 
Department of Energy, Western Area Power Administration (Loveland 
Area Projects), 151 FERC ] 62,222.
    \2\ The drought adder component is a formula-based revenue 
requirement that includes future purchase power above timing 
purchases, previous purchase power drought deficits, and interest on 
the purchase power drought deficits. See 72 FR 64061 (November 14, 
2007). The drought adder was added as a component to the energy and 
capacity rates in Rate Order No. WAPA-134, which was approved by the 
Deputy Secretary on an interim basis on November 14, 2007, (72 FR 
64061). FERC confirmed and approved Rate Order WAPA-134 on a final 
basis on May 16, 2008, in Docket No. EF08-5181. See United States 
Department of Energy, Western Area Power Administration (Loveland 
Area Projects), 123 FERC ] 62,137. Western reviews the drought adder 
each September to determine if drought costs differ from those 
projected in the Power Repayment Study and whether an adjustment to 
the drought adder is necessary. See 72 FR at 64065. The drought 
adder may be adjusted downward using the approved annual drought 
adder adjustment process, whereas an incremental upward adjustment 
to the drought adder component greater than the equivalent of 2 
mills/kWh requires a public rate process. See 72 FR at 64065.
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    The proposed annual revenue requirement for LAP firm electric 
service is $64.1 million. The existing charges in the current rate 
schedule are being reduced, as indicated in Table 1:

                     Table 1--Summary of Current and Proposed Revenue Requirement and Rates
----------------------------------------------------------------------------------------------------------------
                                                                     Current--
                                                                    under L-F10     Proposed--
                                                                   with adjusted  under L-F11 as
                      Firm electric service                        drought adder   of January 1,  Percent change
                                                                   as of January       2018
                                                                      1, 2017
----------------------------------------------------------------------------------------------------------------
LAP Revenue Requirement (million $).............................           $74.5           $64.1             -14
LAP Composite Rate (mills/kWh)..................................           36.56           31.44             -14
Firm Energy Rate (mills/kWh)....................................           18.28           15.72             -14
Firm Capacity Rate ($/kWmonth)..................................           $4.79           $4.12             -14
----------------------------------------------------------------------------------------------------------------

    Under the current rate methodology, rates for LAP firm electric 
service are designed to recover an annual revenue requirement that 
includes investment repayment, interest, purchase power, operation and 
maintenance, and other expenses within the allowable period. The annual 
revenue requirement continues to be allocated equally between capacity 
and energy.
    WAPA is proposing to place Rate Schedule L-F11 into effect for the 
5-year period beginning January 1, 2018, through December 31, 2022. The 
proposed adjustment updates the base component with present costs and 
reduces the drought adder component to zero, as the drought-related 
debts are projected to be fully repaid in 2018.
    Base component costs for the P-SMBP--WD have increased primarily 
due to inflationary annual and capital cost increases associated with 
incorporating three new out-year projections into the 5-year cost 
evaluation period into the current rate-setting PRS. Additional details 
of the P-SMBP PRS are explained in the P-SMBP--Eastern Division Rate 
Order No. WAPA-180.
    Base component costs for Fry-Ark have decreased, even though the 
three new out-year projections for annual expenses and capital costs 
within the 5-year cost evaluation period include inflation. This 
decrease is caused by the annual expense projections in the current 
Fry-Ark rate-setting PRS being an average of $0.3 million per year 
lower than the annual expense projections in the previous rate-setting 
PRS. In addition to lower annual expenses, ancillary service revenue 
projections have also increased an average of $1.1 million per year 
over the previous projections; resulting in a net revenue increase of 
approximately $1.4 million per year. This net revenue helps offset the 
revenue requirement for firm electric service.
    The net effect of these adjustments to the drought adder and base 
components results in an overall decrease to the LAP rate. A comparison 
of the current and proposed revenue requirements is shown in Table 2:

                          Table 2--Summary of Current and Proposed Revenue Requirements
----------------------------------------------------------------------------------------------------------------
                                                                     Current--
                                                                    under L-F10     Proposed--
                                                                   with adjusted  under L-F11 as
                      Firm electric service                        drought adder   of January 1,  Percent change
                                                                   as of January       2018
                                                                      1, 2017
----------------------------------------------------------------------------------------------------------------
LAP Revenue Requirement (million $).............................           $74.5           $64.1             -14
Pick-Sloan--WD..................................................            59.2            50.8             -14
Fry-Ark.........................................................            15.3            13.3             -13
----------------------------------------------------------------------------------------------------------------

    As a part of the current and proposed rate schedules, WAPA provides 
for a formula-based adjustment of the drought adder component of up to 
2 mills/kWh. The 2 mills/kWh cap places a limit on the amount the 
drought adder component can be adjusted relative to associated drought 
costs to recover costs attributable to the drought adder formula rate 
for any one-year cycle. Continuing to identify the firm electric 
service revenue requirement using base and drought adder components 
will assist WAPA in the presentation of future impacts of droughts, 
demonstrate repayment of drought-related costs in the PRSs, and allow 
WAPA to be more responsive to changes caused by drought-related 
expenses. WAPA will continue to charge and bill its customers firm 
electric service rates for energy and capacity, which are the sum of 
the base and drought adder components. A comparison of the current and 
proposed components is shown in Table 3:

[[Page 30858]]



                                                        Table 3--Summary of LAP Charge Components
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Existing charges under rate schedule L-F10     Proposed charges under rate schedule L-F11 as
                                               with adjusted drought adder as of January 1,                 of January 1, 2018
                                             ----------------------2017----------------------------------------------------------------------   Percent
                                                               Drought adder                                   Drought adder                    change
                                              Base component     component     Total charge   Base component     component     Total charge
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firm Capacity (/kWmonth)....................           $3.92           $0.87           $4.79           $4.12              $0           $4.12         -14
Firm Energy (mills/kWh).....................           14.95            3.33           18.28           15.72               0           15.72         -14
--------------------------------------------------------------------------------------------------------------------------------------------------------

Sale of Surplus Products

    On August 12, 2016, the Deputy Secretary of Energy approved, on an 
interim basis, Rate Schedule L-M1 under Rate Order No. WAPA-174, for 
the period beginning October 1, 2016, and ending September 30, 2021 (81 
FR 56632-56652 (August 22, 2016)).\3\ This Rate Schedule is formula-
based, providing for LAP Marketing to sell LAP surplus energy and 
capacity products. If LAP 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 
transmission service necessary to deliver the product(s) for which a 
separate charge may be incurred. The rate schedule currently allows for 
the sale of reserves, regulation, and frequency response. WAPA is 
proposing to add ``energy'' as a fourth surplus product offered under 
this rate schedule. WAPA is proposing to place Rate Schedule L-M2 into 
effect for the 5-year period beginning January 1, 2018, through 
December 31, 2022.
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    \3\ FERC confirmed and approved Rate Order WAPA-174 on a final 
basis on March 9, 2017, in Docket Nos. EF16-5-000 and EF16-5-001. 
See United States Department of Energy, Western Area Power 
Administration (Loveland Area Projects), 158 FERC ] 62,181.
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Legal Authority

    The proposed rates constitute a major rate adjustment, as defined 
by 10 CFR 903.2(e); therefore, WAPA will hold public information and 
public comment forums for this rate adjustment, pursuant to 10 CFR 
903.15 and 903.16. WAPA will review all timely public comments and make 
amendments or adjustments to the proposals as appropriate. Proposed 
rates will be forwarded to the Deputy Secretary of Energy for approval 
on an interim basis.
    WAPA is establishing firm electric service rates and sale of 
surplus products formula rates under the Department of Energy (DOE) 
Organization Act (42 U.S.C. 7152); the Reclamation Act of 1902 (ch. 
1093, 32 Stat. 388), as amended and supplemented by subsequent 
enactments, 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 specifically applicable to the 
projects 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 FERC. Existing DOE procedures for public 
participation in power rate adjustments (10 CFR part 903) were 
published on September 18, 1985 (50 FR 37835).

Availability of Information

    All brochures, studies, comments, letters, memorandums, or other 
documents WAPA initiates or uses to develop the proposed rates will be 
available for inspection and copying at the Rocky Mountain Regional 
Office located at 5555 East Crossroads Boulevard, Loveland, Colorado. 
These documents and supporting information will be posted on WAPA's Web 
site as they become available under the ``2018 Rate Adjustment--Firm 
Power'' section located at: https://www.wapa.gov/regions/RM/rates/
Pages/2018-Rate-Adjustment_-Firm-Power.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: June 27, 2017.
Mark A. Gabriel,
Administrator.
[FR Doc. 2017-13980 Filed 6-30-17; 8:45 am]
 BILLING CODE 6450-01-P



                                                30856                           Federal Register / Vol. 82, No. 126 / Monday, July 3, 2017 / Notices

                                                interventions in lieu of paper, using the               integrated for marketing and rate-                     Power Administration, 5555 East
                                                FERC Online links at http://                            making purposes in 1989.                               Crossroads Boulevard, Loveland, CO
                                                www.ferc.gov. To facilitate electronic                     WAPA is proposing to lower the                      80538–8986 or email lapfirmadj@
                                                service, persons with Internet access                   overall LAP firm electric service charges              wapa.gov. Information regarding the rate
                                                who will eFile a document and/or be                     by 14 percent, as a result of rebalancing              process is posted on WAPA’s Web site
                                                listed as a contact for an intervenor                   the charge components in formula-based                 at: https://www.wapa.gov/regions/RM/
                                                must create and validate an                             Rate Schedule L–F10 by reducing the                    rates/Pages/2018-Rate-Adjustment---
                                                eRegistration account using the                         drought adder component and                            Firm-Power.aspx. WAPA will post
                                                eRegistration link. Select the eFiling                  increasing the base component. The                     official comments received via letter
                                                link to log on and submit the                           proposed rates will provide sufficient                 and email to its Web site after the close
                                                intervention or protests.                               revenue to pay all annual costs,                       of the comment period. WAPA must
                                                   Persons unable to file electronically                including interest expense, and repay                  receive written comments by the end of
                                                should submit an original and 5 copies                  investments within the allowable                       the consultation and comment period to
                                                of the intervention or protest to the                   periods. In addition, WAPA is                          ensure they are considered in WAPA’s
                                                Federal Energy Regulatory Commission,                   proposing to modify Rate Schedule L–                   decision process.
                                                888 First Street NE., Washington, DC                    M1, which allows for the sale of                          Public information and comment
                                                20426.                                                  generation and generation-related                      forum locations are:
                                                   The filings in the above-referenced                  products in excess of LAP’s firm electric                 1. Denver—Embassy Suites, 7001
                                                proceeding are accessible in the                        service obligations, to add ‘‘energy’’ as              Yampa Street, Denver, Colorado.
                                                Commission’s eLibrary system by                         a surplus product. WAPA will prepare                      2. Sioux Falls—Holiday Inn, 100 West
                                                clicking on the appropriate link in the                 a brochure providing detailed                          8th Street, Sioux Falls, South Dakota.
                                                above list. They are also available for                 information on these proposed rates                    FOR FURTHER INFORMATION CONTACT: Mrs.
                                                electronic review in the Commission’s                   prior to the public information forums                 Sheila D. Cook, Rates Manager, Rocky
                                                Public Reference Room in Washington,                    listed below. This brochure will be                    Mountain Region, Western Area Power
                                                DC. There is an eSubscription link on                   posted to WAPA’s Web site at: https://                 Administration, 5555 East Crossroads
                                                the Web site that enables subscribers to                www.wapa.gov/regions/RM/rates/Pages/                   Boulevard, Loveland, CO 80538–8986,
                                                receive email notification when a                       2018-Rate-Adjustment---Firm-                           telephone (970) 461–7211, email
                                                document is added to a subscribed                       Power.aspx. If approved, the proposed                  lapfirmadj@wapa.gov or scook@
                                                docket(s). For assistance with any FERC                 rates under Rate Schedules L–F11 and                   wapa.gov.
                                                Online service, please email                            L–M2 would become effective on                         SUPPLEMENTARY INFORMATION:
                                                FERCOnlineSupport@ferc.gov. or call                     January 1, 2018, and would remain in
                                                (866) 208–3676 (toll free). For TTY, call                                                                      Firm Electric Service
                                                                                                        effect through December 31, 2022, or
                                                (202) 502–8659.                                         until superseded. Publication of this                    On December 2, 2014, the Deputy
                                                  Dated: June 27, 2017.                                 Federal Register notice begins the                     Secretary of Energy approved, on an
                                                                                                        formal process for the proposed rate                   interim basis, Rate Schedule L–F10
                                                Kimberly D. Bose,
                                                                                                        adjustment and proposed rate                           under Rate Order No. WAPA–167 for
                                                Secretary.
                                                                                                        modifications.                                         the period beginning January 1, 2015,
                                                [FR Doc. 2017–13952 Filed 6–30–17; 8:45 am]                                                                    and ending December 31, 2019 (79 FR
                                                BILLING CODE 6717–01–P                                  DATES:  The consultation and comment                   72663–72670 (Dec. 8, 2014)).1 This Rate
                                                                                                        period will begin July 3, 2017 and end                 Schedule is formula-based, providing
                                                                                                        October 2, 2017. WAPA will present a                   for downward adjustments to the
                                                DEPARTMENT OF ENERGY                                    detailed explanation of the proposed                   drought adder component.2 On January
                                                                                                        rates and other modifications at public
                                                Western Area Power Administration                       information forums on the following                       1 FERC confirmed and approved Rate Order
                                                                                                        dates and times:                                       WAPA–167 on a final basis on June 25, 2015, in
                                                Loveland Area Projects—Rate Order                          1. August 22, 2017, 9:00 a.m. to 10:30              Docket No. EF15–4–000. See United States
                                                No. WAPA–179                                            a.m. MDT, Denver, Colorado.                            Department of Energy, Western Area Power
                                                                                                                                                               Administration (Loveland Area Projects), 151 FERC
                                                AGENCY:  Western Area Power                                2. August 23, 2017, 9:00 a.m. to 10:30              ¶ 62,222.
                                                Administration, DOE.                                    a.m. CDT, Sioux Falls, South Dakota.                      2 The drought adder component is a formula-

                                                ACTION: Notice of proposed firm electric
                                                                                                           WAPA will accept oral and written                   based revenue requirement that includes future
                                                service and Sale of Surplus Products                    comments at public comment forums on                   purchase power above timing purchases, previous
                                                                                                        the following dates and times:                         purchase power drought deficits, and interest on
                                                rates.                                                                                                         the purchase power drought deficits. See 72 FR
                                                                                                           1. August 22, 2017, 11:00 a.m. to no                64061 (November 14, 2007). The drought adder was
                                                SUMMARY:    The Western Area Power                      later than 12 noon MDT, Denver,                        added as a component to the energy and capacity
                                                Administration (WAPA) is proposing                      Colorado.                                              rates in Rate Order No. WAPA–134, which was
                                                                                                           2. August 23, 2017, 11:00 a.m. to no                approved by the Deputy Secretary on an interim
                                                revised rates for the Loveland Area                                                                            basis on November 14, 2007, (72 FR 64061). FERC
                                                Projects (LAP) firm electric service and                later than 12 noon CDT, Sioux Falls,                   confirmed and approved Rate Order WAPA–134 on
                                                modifications to the existing rate                      South Dakota.                                          a final basis on May 16, 2008, in Docket No. EF08–
                                                schedule for Sale of Surplus Products.                     WAPA will accept written comments                   5181. See United States Department of Energy,
                                                                                                        anytime during the consultation and                    Western Area Power Administration (Loveland Area
                                                Current firm electric service rates, under                                                                     Projects), 123 FERC ¶ 62,137. Western reviews the
                                                Rate Schedule L–F10, are in effect                      comment period.                                        drought adder each September to determine if
                                                through December 31, 2019, and the                      ADDRESSES: Written comments and
sradovich on DSK3GMQ082PROD with NOTICES




                                                                                                                                                               drought costs differ from those projected in the
                                                formula rate for the sale of surplus                    requests to be informed of Federal                     Power Repayment Study and whether an
                                                                                                                                                               adjustment to the drought adder is necessary. See
                                                products, under Rate Schedule L–M1, is                  Energy Regulatory Commission (FERC)                    72 FR at 64065. The drought adder may be adjusted
                                                in effect through September 30, 2021.                   actions concerning the proposed rates                  downward using the approved annual drought
                                                LAP consists of the Fryingpan-Arkansas                  submitted by WAPA to FERC for                          adder adjustment process, whereas an incremental
                                                                                                                                                               upward adjustment to the drought adder
                                                Project (Fry-Ark) and the Pick-Sloan                    approval should be sent to: Michael D.                 component greater than the equivalent of 2 mills/
                                                Missouri Basin Program (P–SMBP)—                        McElhany, Acting Regional Manager,                     kWh requires a public rate process. See 72 FR at
                                                Western Division (WD), which were                       Rocky Mountain Region, Western Area                    64065.



                                           VerDate Sep<11>2014   17:53 Jun 30, 2017   Jkt 241001   PO 00000   Frm 00041   Fmt 4703   Sfmt 4703   E:\FR\FM\03JYN1.SGM   03JYN1


                                                                                            Federal Register / Vol. 82, No. 126 / Monday, July 3, 2017 / Notices                                                                        30857

                                                1, 2017, the drought adder component                                        adjustment to the base component must                                     Power Repayment Studies (PRS)
                                                of the LAP effective rate schedule was                                      be done through a public rate process,                                    revenue requirements and current water
                                                adjusted downward recognizing                                               WAPA now proposes to adjust both the                                      conditions are the determining factors
                                                repayment of drought costs included in                                      base and drought adder components in                                      for this proposed rate adjustment.
                                                the drought adder component of the                                          Rate Schedule L–F10 through a rate
                                                                                                                                                                                                        The proposed annual revenue
                                                approved formula rates. The formula-                                        adjustment process. WAPA proposes to
                                                                                                                                                                                                      requirement for LAP firm electric
                                                based drought adder component needs                                         adjust the formula-based drought adder
                                                to be adjusted down to zero in 2018.                                        component down to zero in 2018, while                                     service is $64.1 million. The existing
                                                Such adjustment can be made using the                                       the base component will be adjusted                                       charges in the current rate schedule are
                                                approved annual drought adder                                               upward to address present costs. The                                      being reduced, as indicated in Table 1:
                                                adjustment process; however, since any                                      Fry-Ark and P–SMBP Fiscal Year 2016

                                                                               TABLE 1—SUMMARY OF CURRENT AND PROPOSED REVENUE REQUIREMENT AND RATES
                                                                                                                                                                                                      Current—       Proposed—
                                                                                                                                                                                                     under L–F10     under L–F11
                                                                                                                                                                                                    with adjusted                    Percent
                                                                                                        Firm electric service                                                                                           as of
                                                                                                                                                                                                    drought adder                    change
                                                                                                                                                                                                                      January 1,
                                                                                                                                                                                                    as of January       2018
                                                                                                                                                                                                       1, 2017

                                                LAP Revenue Requirement (million $) ........................................................................................                                $74.5           $64.1          ¥14
                                                LAP Composite Rate (mills/kWh) ................................................................................................                             36.56           31.44          ¥14
                                                Firm Energy Rate (mills/kWh) .....................................................................................................                          18.28           15.72          ¥14
                                                Firm Capacity Rate ($/kWmonth) ................................................................................................                             $4.79           $4.12          ¥14



                                                  Under the current rate methodology,                                         Base component costs for the P–                                         an average of $0.3 million per year
                                                rates for LAP firm electric service are                                     SMBP—WD have increased primarily                                          lower than the annual expense
                                                designed to recover an annual revenue                                       due to inflationary annual and capital                                    projections in the previous rate-setting
                                                requirement that includes investment                                        cost increases associated with                                            PRS. In addition to lower annual
                                                repayment, interest, purchase power,                                        incorporating three new out-year                                          expenses, ancillary service revenue
                                                operation and maintenance, and other                                        projections into the 5-year cost                                          projections have also increased an
                                                expenses within the allowable period.                                       evaluation period into the current rate-                                  average of $1.1 million per year over the
                                                The annual revenue requirement                                              setting PRS. Additional details of the P–                                 previous projections; resulting in a net
                                                continues to be allocated equally                                           SMBP PRS are explained in the P–                                          revenue increase of approximately $1.4
                                                between capacity and energy.                                                SMBP—Eastern Division Rate Order No.                                      million per year. This net revenue helps
                                                  WAPA is proposing to place Rate                                           WAPA–180.                                                                 offset the revenue requirement for firm
                                                Schedule L–F11 into effect for the 5-                                         Base component costs for Fry-Ark
                                                                                                                                                                                                      electric service.
                                                year period beginning January 1, 2018,                                      have decreased, even though the three
                                                through December 31, 2022. The                                              new out-year projections for annual                                         The net effect of these adjustments to
                                                proposed adjustment updates the base                                        expenses and capital costs within the 5-                                  the drought adder and base components
                                                component with present costs and                                            year cost evaluation period include                                       results in an overall decrease to the LAP
                                                reduces the drought adder component to                                      inflation. This decrease is caused by the                                 rate. A comparison of the current and
                                                zero, as the drought-related debts are                                      annual expense projections in the                                         proposed revenue requirements is
                                                projected to be fully repaid in 2018.                                       current Fry-Ark rate-setting PRS being                                    shown in Table 2:

                                                                                         TABLE 2—SUMMARY OF CURRENT AND PROPOSED REVENUE REQUIREMENTS
                                                                                                                                                                                                      Current—       Proposed—
                                                                                                                                                                                                     under L–F10     under L–F11
                                                                                                                                                                                                    with adjusted                    Percent
                                                                                                        Firm electric service                                                                                           as of
                                                                                                                                                                                                    drought adder                    change
                                                                                                                                                                                                                      January 1,
                                                                                                                                                                                                    as of January       2018
                                                                                                                                                                                                       1, 2017

                                                LAP Revenue Requirement (million $) ........................................................................................                                $74.5           $64.1          ¥14
                                                Pick-Sloan—WD ..........................................................................................................................                     59.2            50.8          ¥14
                                                Fry-Ark .........................................................................................................................................            15.3            13.3          ¥13



                                                   As a part of the current and proposed                                    formula rate for any one-year cycle.                                      drought-related expenses. WAPA will
                                                rate schedules, WAPA provides for a                                         Continuing to identify the firm electric                                  continue to charge and bill its customers
                                                formula-based adjustment of the                                             service revenue requirement using base                                    firm electric service rates for energy and
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                                                drought adder component of up to 2                                          and drought adder components will                                         capacity, which are the sum of the base
                                                mills/kWh. The 2 mills/kWh cap places                                       assist WAPA in the presentation of                                        and drought adder components. A
                                                a limit on the amount the drought adder                                     future impacts of droughts, demonstrate                                   comparison of the current and proposed
                                                component can be adjusted relative to                                       repayment of drought-related costs in                                     components is shown in Table 3:
                                                associated drought costs to recover costs                                   the PRSs, and allow WAPA to be more
                                                attributable to the drought adder                                           responsive to changes caused by




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                                                30858                           Federal Register / Vol. 82, No. 126 / Monday, July 3, 2017 / Notices

                                                                                               TABLE 3—SUMMARY OF LAP CHARGE COMPONENTS
                                                                                  Existing charges under rate schedule L–F10 with                Proposed charges under rate schedule L–F11 as
                                                                                   adjusted drought adder as of January 1, 2017                               of January 1, 2018                       Percent
                                                                                                                                                                                                       change
                                                                                        Base           Drought adder                                Base          Drought adder
                                                                                                                           Total charge                                               Total charge
                                                                                      component         component                                 component        component

                                                Firm Capacity (/kWmonth)                     $3.92               $0.87               $4.79               $4.12                   $0          $4.12             ¥14
                                                Firm Energy (mills/kWh) ....                 14.95                3.33               18.28               15.72                    0          15.72             ¥14



                                                Sale of Surplus Products                                the Reclamation Project Act of 1939 (43                  Determination Under Executive Order
                                                   On August 12, 2016, the Deputy                       U.S.C. 485h(c)) and section 5 of the                     12866
                                                Secretary of Energy approved, on an                     Flood Control Act of 1944 (16 U.S.C.                       WAPA has an exemption from
                                                interim basis, Rate Schedule L–M1                       825s); and other acts specifically                       centralized regulatory review under
                                                under Rate Order No. WAPA–174, for                      applicable to the projects involved.                     Executive Order 12866; accordingly, no
                                                the period beginning October 1, 2016,                      By Delegation Order No. 00–037.00B,                   clearance of this notice by the Office of
                                                and ending September 30, 2021 (81 FR                    effective November 19, 2016, the                         Management and Budget is required.
                                                56632–56652 (August 22, 2016)).3 This                   Secretary of Energy delegated: (1) The                    Dated: June 27, 2017.
                                                Rate Schedule is formula-based,                         authority to develop power and                           Mark A. Gabriel,
                                                providing for LAP Marketing to sell LAP                 transmission rates to WAPA’s                             Administrator.
                                                surplus energy and capacity products. If                Administrator; (2) the authority to
                                                LAP surplus products are available, as                                                                           [FR Doc. 2017–13980 Filed 6–30–17; 8:45 am]
                                                                                                        confirm, approve, and place such rates
                                                specified in the rate schedule, the                     into effect on an interim basis to the                   BILLING CODE 6450–01–P

                                                charge will be based on market rates                    Deputy Secretary of Energy; and (3) the
                                                plus administrative costs. The customer                 authority to confirm, approve, and place
                                                will be responsible for acquiring                                                                                DEPARTMENT OF ENERGY
                                                                                                        into effect on a final basis, to remand,
                                                transmission service necessary to                       or to disapprove such rates to FERC.                     Western Area Power Administration
                                                deliver the product(s) for which a                      Existing DOE procedures for public
                                                separate charge may be incurred. The                    participation in power rate adjustments                  Pick-Sloan Missouri Basin Program—
                                                rate schedule currently allows for the                  (10 CFR part 903) were published on                      Eastern Division-Rate Order No.
                                                sale of reserves, regulation, and                       September 18, 1985 (50 FR 37835).                        WAPA–180
                                                frequency response. WAPA is proposing
                                                to add ‘‘energy’’ as a fourth surplus                   Availability of Information                              AGENCY:  Western Area Power
                                                product offered under this rate                                                                                  Administration, DOE.
                                                schedule. WAPA is proposing to place                       All brochures, studies, comments,                     ACTION: Notice of Proposed Firm Power
                                                Rate Schedule L–M2 into effect for the                  letters, memorandums, or other                           Service and Sale of Surplus Products
                                                5-year period beginning January 1, 2018,                documents WAPA initiates or uses to                      Rates.
                                                through December 31, 2022.                              develop the proposed rates will be
                                                                                                        available for inspection and copying at                  SUMMARY:    Western Area Power
                                                Legal Authority                                         the Rocky Mountain Regional Office                       Administration (WAPA) is proposing
                                                  The proposed rates constitute a major                 located at 5555 East Crossroads                          revised rates for Pick-Sloan Missouri
                                                rate adjustment, as defined by 10 CFR                   Boulevard, Loveland, Colorado. These                     Basin Program—Eastern Division (P–
                                                903.2(e); therefore, WAPA will hold                     documents and supporting information                     SMBP—ED) firm power and firm
                                                public information and public comment                   will be posted on WAPA’s Web site as                     peaking power service, and a new
                                                forums for this rate adjustment,                        they become available under the ‘‘2018                   formula rate for sales of surplus
                                                pursuant to 10 CFR 903.15 and 903.16.                   Rate Adjustment—Firm Power’’ section                     products. Current firm power and firm
                                                WAPA will review all timely public                      located at: https://www.wapa.gov/                        peaking power service rates, under Rate
                                                comments and make amendments or                         regions/RM/rates/Pages/2018-Rate-                        Schedules P–SED–F12 and P–SED–
                                                adjustments to the proposals as                         Adjustment---Firm-Power.aspx.                            FP12, are in effect through December 31,
                                                appropriate. Proposed rates will be                                                                              2019.
                                                                                                        Ratemaking Procedure Requirements                           WAPA is proposing to lower the
                                                forwarded to the Deputy Secretary of
                                                Energy for approval on an interim basis.                Environmental Compliance                                 overall charges for firm power and firm
                                                  WAPA is establishing firm electric                                                                             peaking power service by 19 percent, as
                                                service rates and sale of surplus                          In compliance with the National                       a result of rebalancing the charge
                                                products formula rates under the                        Environmental Policy Act (NEPA) of                       components in formula-based Rate
                                                Department of Energy (DOE)                              1969, 42 U.S.C. 4321–4347; the Council                   Schedules P–SED–F12 and P–SED–FP12
                                                Organization Act (42 U.S.C. 7152); the                  on Environmental Quality Regulations                     by reducing the drought adder
                                                Reclamation Act of 1902 (ch. 1093, 32                   for implementing NEPA (40 CFR parts                      component, increasing the base
                                                Stat. 388), as amended and                              1500–1508); and DOE NEPA                                 component, and removing the voltage
                                                                                                        Implementing Procedures and                              discount. The proposed rates will
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                                                supplemented by subsequent
                                                enactments, particularly section 9(c) of                Guidelines (10 CFR part 1021), WAPA                      provide sufficient revenue to pay all
                                                                                                        is in the process of determining whether                 annual costs, including interest
                                                  3 FERC confirmed and approved Rate Order              an environmental assessment or an                        expense, and repay investments within
                                                WAPA–174 on a final basis on March 9, 2017, in          environmental impact statement should                    the allowable periods. In addition,
                                                Docket Nos. EF16–5–000 and EF16–5–001. See
                                                United States Department of Energy, Western Area
                                                                                                        be prepared or if this action can be                     WAPA is proposing a new formula rate
                                                Power Administration (Loveland Area Projects), 158      categorically excluded from those                        for the sale of surplus products under
                                                FERC ¶ 62,181.                                          requirements.                                            Rate Schedule P–SED–M1. This new


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Document Created: 2018-11-14 10:19:56
Document Modified: 2018-11-14 10:19:56
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
ActionNotice of proposed firm electric service and Sale of Surplus Products rates.
DatesThe consultation and comment period will begin July 3, 2017 and end October 2, 2017. WAPA will present a detailed explanation of the proposed rates and other modifications at public information forums on the following dates and times:
ContactMrs. Sheila D. Cook, Rates Manager, Rocky Mountain Region, Western Area Power Administration, 5555 East Crossroads Boulevard, Loveland, CO 80538-8986, telephone (970) 461- 7211, email [email protected] or [email protected]
FR Citation82 FR 30856 

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