[Federal Register Volume 88, Number 167 (Wednesday, August 30, 2023)]
[Notices]
[Pages 59909-59912]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-18748]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Formula Rates for Central Valley Project Power, Transmission, and 
Ancillary Services; and California-Oregon Transmission Project 
Transmission Service--Rate Order No. WAPA-207

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of proposed power, transmission, and ancillary services 
formula rates.

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SUMMARY: The Sierra Nevada Region (SN) of the Western Area Power 
Administration (WAPA) proposes new formula rates for the Central Valley 
Project (CVP) power, transmission, and ancillary services; and 
California-Oregon Transmission Project (COTP) transmission service. The 
existing formula rates for these services expire on September 24, 2024, 
and December 31, 2024. SN proposes to keep the same formula rates, 
without adjustments, for these services. SN proposes no material 
changes aside from updating the effective dates.

DATES: A consultation and comment period will begin August 30, 2023 and 
end November 28, 2023. SN will present a detailed explanation of the 
proposed formula rates at a public information forum that will be held 
on November

[[Page 59910]]

15, 2023, at 10 a.m. PST to no later than 12:30 p.m. PST. SN will host 
a public comment forum on November 15, 2023, at 1:30 p.m. to no later 
than 3:30 p.m. PST. The public information forum and the public comment 
forum will be conducted via Microsoft Teams. Instructions for 
participating in the forums will be posted on SN's website at least 14 
days prior to the public information and comment forums at: https://www.wapa.gov/regions/SN/rates/Pages/Rate-Case-2024-WAPA-207.aspx.

ADDRESSES: Written comments and requests to be informed of Federal 
Energy Regulatory Commission (FERC) actions concerning the proposed 
formula rates submitted by SN to FERC for approval should be sent to 
Bryan W. Griess, Acting Regional Manager, Sierra Nevada Region, Western 
Area Power Administration, 114 Parkshore Drive, Folsom, CA 95630, or 
email: <a href="/cdn-cgi/l/email-protection#da899488f788bbaebf99bba9bf9aadbbaabbf4bdb5ac"><span class="__cf_email__" data-cfemail="5d0e130f700f3c29381e3c2e381d2a3c2d3c733a322b">[email protected]</span></a>. SN will post information about the 
proposed formula rates and written comments received to its website at: 
https://www.wapa.gov/regions/SN/rates/Pages/Rate-Case-2024-WAPA-207.aspx.

FOR FURTHER INFORMATION CONTACT: Autumn Wolfe, Rates Manager, Sierra 
Nevada Region, Western Area Power Administration, (916) 353-4686 or 
email: <a href="/cdn-cgi/l/email-protection#14475a4639467560715775677154637564753a737b62"><span class="__cf_email__" data-cfemail="ffacb1add2ad9e8b9abc9e8c9abf889e8f9ed1989089">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: On December 2, 2011, FERC approved and 
confirmed Rate Schedules for CVP power, transmission, and ancillary 
services; COTP transmission; and Pacific Alternating Current Intertie 
(PACI) transmission under Rate Order No. WAPA-156. That rate order was 
extended by Rate Order Nos. WAPA-173 and WAPA-185. These rates are set 
to expire on September 30, 2024.\1\ The formula rate schedules are:
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    \1\ See Docket No. EF11-9-00 (137 FERC ] 62,201) (2011). 
Extended by Docket No. EF16-3-000 (156 FERC ] 62,039) (2016). 
Extended by Docket No. EF19-4-000 (168 FERC ] 62,150) (2019).

<bullet> CV-F13--Base Resource and First Preference Power
<bullet> CPP-2--Custom Product Power
<bullet> CV-T3--Firm and Non-Firm Point-to-Point Transmission Service
<bullet> CV-NWT5--Network Integration Transmission Service
<bullet> COTP-T3--Firm and Non-Firm Point-to-Point Transmission Service
<bullet> PACI-T3--Firm and Non-Firm Point-to-Point Transmission Service 
(to be handled in a separate rate case)
<bullet> CV-TPT7--Third-Party Transmission Service
<bullet> CV-UUP1--Unreserved Use Penalties
<bullet> CV-RFS4--Regulation and Frequency Response
<bullet> CV-SPR4--Spinning Reserves
<bullet> CV-SUR4--Supplemental Reserves

    On April 27, 2021, the FERC confirmed and approved Rate Order No. 
WAPA-194, which placed into effect formula rates for the Energy 
Imbalance Market (EIM) services, Sale of Surplus Products, and 
revisions to existing rate schedules for Energy Imbalance and Generator 
Imbalance services. These rates are set to expire on December 31, 
2024.\2\ The formula rate schedules are:
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    \2\ See Docket No. EF21-1-000 (86 FERC ] 11760) (2021).

<bullet> CV-EIM1S--EIM Administrative Service Charge
<bullet> CV-EIM4S--EIM Energy Imbalance Service
<bullet> CV-EIM9S--EIM Generator Imbalance Service
<bullet> CV-SSP2--Sale of Surplus Products
<bullet> CV-EID5--Energy Imbalance Service
<bullet> CV-GID2--Generator Imbalance Service

    The proposed rates continue the formula-based methodology that 
includes an annual update to the financial, load, and other data in the 
rate formulas. SN intends the proposed formula-based rates to go into 
effect October 1, 2024. The proposed formula rates would remain in 
effect until September 30, 2029, or until WAPA supersedes or changes 
the formula rates through another public rate process pursuant to 10 
CFR part 903, whichever occurs first.
    The proposed formula rates would provide sufficient revenue to 
recover annual costs within the cost recovery criteria set forth in 
Department of Energy (DOE) Order RA 6120.2. SN proposed rate schedules 
are located on our website at: https://www.wapa.gov/regions/SN/rates/Pages/Rate-Case-2024-WAPA-207-Proposed-Rate-Schedules.aspx. For more 
detailed information on the proposed rate formulas, example 
calculations and cost comparisons, please visit the customer Proposed 
Rate Brochure located on SN's website at: https://www.wapa.gov/regions/SN/rates/Documents/Rate-Order-WAPA-207-Proposed-Rate-Brochure.pdf.

Proposed Power Revenue Requirement and Allocation to Preference 
Customers

    Before the start of each Fiscal Year (FY), SN would continue to 
calculate and publish an annual Power Revenue Requirement (PRR) to 
determine the total cost of power. The total cost of power is allocated 
to SN's preference customers, namely, First Preference (FP) customers 
based on their FP percentages, and the remaining amount to Base 
Resource (BR) customers based on their BR allocation, adjusted for 
programs, such as hourly exchange. The Trinity River Division Act of 
1955 (69 Stat. 719) and the Flood Control Act of 1962 (76 Stat. 1173, 
1191-1192) accorded first preference to CVP power to customers in 
Trinity, Tuolumne, and Calaveras Counties. A BR customer, under the 
2004 and 2025 Marketing Plans, is an entity that has executed a BR 
contract and is allocated a percentage of the BR.
    SN prepares a Power Repayment Study (PRS) each FY to determine if 
revenue will be sufficient to repay, within the required periods, all 
costs assigned to the commercial power function. Generally, the PRR 
includes Operation and Maintenance (O&M) expenses, purchased power for 
Project Use and FP customers' loads, interest, and other expenses 
(including any other statutorily required costs or charges), investment 
repayment, and the Washoe Project annual PRR. Revenues from Project 
Use, transmission, ancillary services, and other services offset 
expenses in the PRR; and the remainder is collected from BR and FP 
customers. The PRR is reviewed during March of each year; and if such 
review results in a change of $5 million or more to the annual PRR, 
collections are adjusted over the remaining 6-month period. The PRR is 
an estimate of revenues and expenses including investment and repayment 
projections from the PRS. Any variance from estimate to actual will 
increase or decrease annual project repayment. Project repayment is 
measured over the long term to ensure repayment is met and to maintain 
rate stability.
    For SN to meet the load requirements beyond delivered BR for Full 
Load Service (FLS) customers and Variable Resource (VR) customers, SN 
may make Supplemental Power (SP) purchases pursuant to the Custom 
Product Power (CPP) rate schedule. FLS and VR customers who contract 
with SN for such service will pay all SP costs. FLS customers pay a 
portfolio management charge according to their contract, whereas VR 
customers pay a scheduling charge per the rate schedule.

Proposed Transmission and Ancillary Services Revenue Requirements and 
Formula Rates

    At least annually, SN will publish the CVP transmission rates for 
Point-to-Point and Network Integration Transmission Service (NITS), the 
COTP transmission rates, and CVP regulation and frequency response 
service rates. SN prepares a detailed cost-of-service study to 
determine the costs, by project,

[[Page 59911]]

that support the transfer capability of each transmission system and 
the cost that supports the generation capability of the CVP system. 
Generally, the costs allocated through the cost-of-service study for 
the transmission systems include O&M, interest, and depreciation 
expenses. SN's costs for scheduling, system control and dispatch 
service associated with CVP and COTP transmission service are included 
and recovered through the respective transmission system's Revenue 
Requirement. Third-party transmission service costs are passed through 
directly to each requesting customer.
    SN proposes the Unreserved Use Penalties continue to be assessed at 
200 percent of the effective point-to-point transmission rate when 
transmission service is used and not reserved or when used in excess of 
the reservation. The required spinning and supplemental reserves 
charges are based on a price consistent with the California Independent 
System Operator's (CAISO) market price plus all costs incurred for the 
sale of these reserves. Customers who have a contractual obligation to 
provide spinning and supplemental reserves and do not fulfill their 
obligation will be assessed a penalty equal to the greater of SN's 
actual cost or 150 percent of the market price.
    For Energy Imbalance (EI) service, when the EIM is suspended, 
customers outside of their contractual bandwidth (under delivery) will 
pay the greater of 150 percent of the market price or SN's actual cost. 
Given SN's EI customers are and will continue to operate under existing 
agreements, SN will continue its existing rate methodology for EI. SN 
proposes the GI rate use the same tiered methodology as SN's proposed 
EI service rate.

Proposed Sale of Surplus Products Formula Rates

    The proposed rates would be for the sale of surplus energy and/or 
capacity products. This includes Energy, Frequency Response Reserve, 
Regulation, Reserves, and Resource Sufficiency. If CVP surplus products 
are available, SN could make the product(s) available for sale, 
provided entities enter into separate agreement(s) which would specify 
the terms of sale(s).

Proposed EIM Service Formula Rates

    SN will continue participation in the EIM as a Transmission Service 
Provider (TSP) within the Balancing Authority of Northern California 
(BANC) Balancing Authority Area (BAA). SN is proposing continued 
formula rate schedules for: (1) EIM Administrative Service, (2) EIM EI 
Service, and (3) EIM GI Service. In EIM, CAISO economically dispatches 
energy under its EIM Tariff to meet the imbalances for loads and 
resources over multiple BAAs. CAISO provides a centralized, automated, 
and region-wide dispatch for imbalances. The EIM Administrative 
Services formula rate continues to allow SN to pass through 
administrative costs incurred by SN resulting from its participation in 
EIM as a Participating Resource Scheduling Coordinator (PRSC). The 
formula rates and cost allocation for Administrative, EI, and GI 
services would be in effect when SN is participating in the EIM, and to 
the extent SN incurs associated settlements during market suspension or 
contingency.

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.\3\ 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), SN will hold public 
information and public comment forums for this rate adjustment. SN 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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    \3\ 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
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    SN is establishing the formula rates for COTP and CVP transmission, 
CVP power, and other related services in accordance with section 302 of 
the DOE Organization Act (42 U.S.C. 7152).\4\
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    \4\ This Act transferred to, and vested in, the Secretary of 
Energy the power marketing functions of the Secretary of the 
Department of the Interior and the Bureau of Reclamation 
(Reclamation) under the Reclamation Act of 1902 (ch. 1093, 32 Stat. 
388), as amended and supplemented by subsequent laws, particularly 
section 9(c) of the Reclamation Project Act of 1939 (43 U.S.C. 
485h(c)), and other acts that specifically apply to the projects 
involved.
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    By Delegation Order No. S1-DEL-RATES-2016, effective November 19, 
2016, the Secretary of Energy delegated: (1) the authority to develop 
power and transmission rates to 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 further redelegated the 
authority to confirm, approve, and place such rates into effect on an 
interim basis to WAPA's Administrator.

Availability of Information

    All brochures, studies, comments, letters, memorandums, or other 
documents that SN initiates or uses to develop the proposed formula 
rates are available for inspection and copying at the Sierra Nevada 
Region, located at 114 Parkshore Drive, Folsom, California. Many of 
these documents and supporting information are also available on SN's 
website at: https://www.wapa.gov/regions/SN/rates/Pages/Rate-Case-2024-WAPA-207.aspx.

Ratemaking Procedure Requirements

Environmental Compliance

    SN 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.\5\
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    \5\ 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 August 24, 
2023, by Tracey A. LeBeau, Administrator, Western Area Power 
Administration, pursuant to delegated authority from the Secretary of 
Energy. That document, with the original signature and date, is 
maintained by DOE. For administrative purposes only, and in compliance 
with requirements of the Office of the Federal Register, the 
undersigned DOE Federal Register Liaison Officer has been authorized to 
sign and submit the document in electronic format for publication, as 
an official document of the Department of Energy. This administrative 
process in no way alters the legal effect of this document upon 
publication in the Federal Register.


[[Page 59912]]


    Signed in Washington, DC, on August 25, 2023.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2023-18748 Filed 8-29-23; 8:45 am]
BILLING CODE 6450-01-P


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