[Federal Register Volume 62, Number 188 (Monday, September 29, 1997)]
[Notices]
[Pages 50922-50924]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-25749]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Boulder Canyon Project--Notice of Firm Power Service Base Charge

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of base charge.

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SUMMARY: Notice is given of the confirmation and approval by the Deputy 
Secretary of the Department of Energy (DOE) of the Base Charge and its 
components for the Boulder Canyon Project (BCP) firm power service. The 
Fiscal Year (FY) 1998 Base Charge and its components for BCP firm power 
are based on an Annual Revenue Requirement of $43,479,183. The Base 
Charge consists of an energy dollar amount of $22,527,359 and a 
capacity dollar amount of $20,951,824. This Base Charge and its 
components are used for calculating the monthly charges and forecast 
rates pursuant to Rate Schedule BCP-F5 as approved by the Federal 
Energy Regulatory Commission (FERC) on April 19, 1996 (Rate Order No. 
WAPA-70).

DATES: The Base Charge and its components, used in calculating the 
monthly charges and forecast rates pursuant to Rate Schedule BCP-F5, 
will be effective on the first day of the first full billing period 
beginning on or after October 1, 1997, and will be in effect through FY 
1998.

FOR FURTHER INFORMATION CONTACT:

Mr. J. Tyler Carlson, Regional Manager, Desert Southwest Customer 
Service Region, Western Area Power Administration, P.O. Box 6457, 
Phoenix, AZ 85005-6457, (602) 352-2453.
Mr. Joel K. Bladow, Assistant Administrator for Power Marketing 
Liaison, Western Area Power Administration, Room 8G-027, Forrestal 
Building, 1000 Independence Avenue, SW., Washington, DC 20585-0001, 
(202) 586-5581.

SUPPLEMENTARY INFORMATION: The Base Charge and its components were 
calculated in accordance with the methodology approved under Rate Order 
WAPA-70. The Procedures for Public Participation in Power and 
Transmission Rate Adjustments and Extensions, 10 CFR Part 903, have 
been followed by Western Area Power Administration (Western) in 
determining the Base Charge and its components. The following 
summarizes the steps taken by Western to ensure involvement of all 
interested parties in the determination of the Base Charge and its 
components:
    1. On April 18, 1997, a letter was mailed from Western's Desert 
Southwest Customer Service Regional Office to all BCP customers and 
other interested parties. The letter provided a copy of the BCP 
Proposed Rate Adjustment data, dated April 18, 1997.
    2. Discussion of the proposed Base Charge and its components was 
initiated at an informal BCP Contractor meeting held on May 6, 1997, in 
Phoenix, Arizona. At this informal meeting, representatives from 
Western and the Bureau of Reclamation (Reclamation) explained the basis 
for estimates used in the calculation of the Base Charge and its 
components. A question and answer session was convened for those 
persons attending.
    3. A Federal Register Notice (FRN) was published on May 7, 1997 (62 
FR 24913), officially announcing the proposed Base Charge adjustment 
process, initiating the public consultation and comment period, 
announcing the public information and public comment forums, and 
presenting procedures for public participation.
    4. At the public information forum held on May 15, 1997, in 
Phoenix, Arizona, Western and Reclamation representatives explained the 
proposed Base Charge and its components for Rate Year 1998 in greater 
detail. A question and answer session was convened for those persons 
attending. A response to a data request from the public information 
forum was mailed to the customers on June 2, 1997.
    5. A public comment forum was held on June 12, 1997, in Phoenix, 
Arizona, to give the public an opportunity to comment for the record. 
Three persons representing customers and customer groups made oral 
comments. A response to the comments and data requests from the public 
comment forum was mailed to the customers on July 18, 1997.
    6. Three comment letters were received during the 90-day 
consultation

[[Page 50923]]

and comment period. The consultation and comment period ended August 5, 
1997. All submitted written comments have been considered in the 
preparation of this FRN. Most of the comments received during the 
public meetings dealt with Hydrology (surplus water), Realistic and 
Appropriate Costs, Rate Impacts and Philosophy, and Differences between 
Financial Documents. All comments were considered in developing the 
Base Charge for FY 1998. Additional written comments and responses, 
paraphrased for brevity, are presented below.
    Issue: Contractor raised concern with the status of dispute 
regarding the blind vendor services at Hoover and requested to be kept 
informed and provided with all pertinent correspondence.
    Response: Reclamation will continue to further evaluate the 
situation and will keep the contractors informed of the status to the 
blind vendor litigation.
    Issue: Contractor requested Western to ask Reclamation to convene 
dialogue with Contractor representatives aimed at accelerating delivery 
of a $5 million revenue stream to offset certain construction costs on 
the visitors facilities.
    Response: Western is committed to working with Reclamation in 
partnership with the Contractors to recover revenues as soon as 
possible to offset certain costs for the visitor facilities. 
Substantial progress has been made in meeting the $5 million revenue 
goal. Revenue opportunities, as well as expenses, are currently being 
discussed with the BCP Engineering and Operations Committee (E&OC) 
representatives utilizing the Revenue Subcommittee as the primary focal 
point of exploring new opportunities. As dialogue continues, 
Reclamation and Western will continue to support the E&OC process and 
welcome all suggestions for meeting the revenue goal as quickly as 
possible. Western will initiate an agenda item relating to this request 
at the October 1997 E&OC meeting.
    Issue: Contractors shared concern on the estimates of, and cost 
responsibility for, Highway 93 rehabilitation work.
    Response: Three bids received from local contractors were evaluated 
by a contract specialist and found to be reasonable. The evaluation 
revealed that the engineer's estimate appeared to be low in the areas 
of mobilization and removal/disposal of existing pavement. Mobilization 
bids were significantly higher. The low bidder plans to set up a batch 
plant on site. The engineer's estimate did not include cost 
consideration for offsite disposal requirements. Recognizing that cost 
estimates are not exact, cost estimating practices will be continually 
reviewed for improvement.
    The cost responsibility for rehabilitation of Highway 93 has been 
the topic of previous discussions and correspondence with the BCP E&OC 
representatives. Reclamation attempted to obtain separate funding for 
rehabilitation of the roadway with no results.
    The BCP E&OC was made aware of this effort by a letter dated June 
2, 1994. It is critical the subject work be accomplished due to concern 
for public safety. Because no alternate funding sources have been 
identified, funding must come from revenues authorized under the 
Boulder Canyon Project Act.
    Issue: The House and Senate committee reports on the Energy and 
Water Development Appropriation bills contain directions to Reclamation 
to involve customers in developing cost estimates prior to budget 
submission. Western is to initiate dialogue with Reclamation to ensure 
proper coordination with existing E&OC process.
    Response: Western will initiate this dialogue and believes that 
both Western and Reclamation are committed to ensure the congressional 
directives to Reclamation and the E&OC process are consistent.
    Issue: Contractor requested an assessment to determine 
justification for a specific replacement cost, and a reduction in costs 
for certain replacements.
    Response: The assessment regarding the Station Service Electrical 
item was initially in the 1995 Ten Year Operating Plan scheduled for 
FY97 and budgeted at $445,000. The scope of work was to replace the 
station service transformer and station service circuit breaker. The 
transformer was being replaced due to age, and the circuit breaker was 
being replaced due to problems operating the breaker and inability to 
procure repair parts. The station service transformer provides the only 
tie to system power to augment and stabilize frequency for station 
power. Hoover had experienced power fluctuations when operating 
isolated on station service power that tripped equipment and limited 
operation of equipment that drew large amounts of power such as cranes, 
elevators and pumps. It was felt, at that time, these problems could be 
eliminated by replacing the transformer and the circuit breaker.
    The first Technical Review Committee (Blue Ribbon Task Force) 
commented, unless testing showed the transformer was nearing the end of 
its service life, it should not be replaced. The committee also 
commented, replacing the transformer would not eliminate the problems 
encountered in running the plant isolated on station service. If the 
new transformer failed, instability would still be a problem.
    Reclamation agreed with these comments and focused on minimizing 
the need to run the plant isolated on station service. Funding of 
$300,000 was budgeted for FY98 to eliminate the station service breaker 
and to procure a spare single phase transformer. Eliminating the 
station service breaker and providing a tie to the existing circuit 
breakers was a lower cost alternative to purchasing a new circuit 
breaker. Purchasing a spare single phase transformer would eliminate 
long lead times in procuring a new transformer in case of an in-service 
failure. The Project believes that the probability of multiple failures 
of the single phase transformer is unlikely and would accept that risk.
    The Technical Review Committee that met in June 1997 questioned the 
need for a spare transformer since there were new governors on the 
Arizona station service generator and the Nevada station service 
generator that would likely correct frequency instability.
    Reclamation will be simulating operating the plant isolated on 
station service in September. Based on this simulation, the Project 
will assess the need for a spare transformer. Reclamation will report 
on this assessment and our decision on the transformer at the October 
1997 BCP E&OC meeting. If it is determined a spare transformer is not 
necessary, the program expenditures for the transformer would become 
carryover in the next fiscal year. The work to tie to existing circuit 
breakers also funded under this item would still proceed in FY 1998.
    A meeting with customer representatives was held August 13, 1997, 
to review the communication and control system upgrades related to the 
Reclamation Alternative Modular SCADA System (RAMS) in use at Hoover 
Dam. No changes will be made to estimated costs in the proposed FY 1998 
revenue requirements at this time, however, should the existing plans 
for future RAMS related investments be modified as a result of this 
review, changes to the items in the level of FY 1998 expenditures for 
these items may result. And lastly, the FY 1998 rate includes $150,000 
for the piping replacements. In Amendment No. 3 to Delegation Order No. 
0204-108, published November 10, 1993 (58 FR 59716), the Secretary of 
Energy (Secretary) delegated (1) the authority to develop long-term 
power and

[[Page 50924]]

transmission rates on a nonexclusive basis to the Administrator of 
Western; (2) the authority to confirm, approve, and place such rates 
into effect on an interim basis to the Deputy Secretary; 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) 
became effective on September 18, 1985 (50 FR 37835).
    These charges and rates are established pursuant to section 302(a) 
of the DOE Organization Act, 42 U.S.C. Sec. 7152(a), through which the 
power marketing functions of the Secretary of the Interior and 
Reclamation under the Reclamation Act of 1902, 43 U.S.C. Sec. 371 et 
seq, as amended and supplemented by subsequent enactments, particularly 
section 9(c) of the Reclamation Project Act of 1939, 43 U.S.C. 
Sec. 485h(c), and other acts specifically applicable to the project 
system involved, were transferred to and vested in the Secretary.

    Dated: September 19, 1997.
Elizabeth A. Moler,
Deputy Secretary.
[FR Doc. 97-25749 Filed 9-26-97; 8:45 am]
BILLING CODE 6450-01-P