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[Federal Register Volume 89, Number 224 (Wednesday, November 20, 2024)]
[Notices]
[Pages 91731-91739]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-26933]

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DEPARTMENT OF ENERGY

Western Area Power Administration

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

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of rate order.

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SUMMARY: The formula rates for the Upper Great Plains (UGP) region's 
Pick-Sloan Missouri Basin Program (P-SMBP)--Eastern Division (ED) firm 
power service, firm peaking power service, and sale of surplus products 
have been confirmed, approved, and placed into effect on an interim 
basis (Provisional Formula Rates). These new formula rates replace the 
existing formula rates for these services under Rate Schedules P-SED-
F14, Firm Power Service; P-SED-FP14, Firm Peaking Power Service; and P-
SED-M2, Sale of Surplus Products, which expire on December 31, 2027. 
The P-SMBP--ED firm power service composite rate is increasing over a 
2-year period with a 7.5 percent increase on January 1, 2025, and an 
additional 6.2 percent increase on January 1, 2026. There are no 
changes to the formula rate for sale of surplus products.

DATES: The Provisional Formula Rates under Rate Schedules P-SED-F15, 
Firm Power Service; P-SED-FP15, Firm Peaking Power Service; and Rate 
Schedule P-SED-M3, Sale of Surplus Products, are effective on the first 
day of the first full billing period beginning on or after January 1, 
2025, and will remain in effect through December 31, 2029, pending 
confirmation and approval by the Federal Energy Regulatory Commission 
(FERC) on a final basis or until superseded.

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

SUPPLEMENTARY INFORMATION: On June 29, 2023, FERC confirmed and 
approved Formula Rate Schedules P-SED-F14, P-SED-FP14, and P-SED-M2, 
under Rate Order No. WAPA-203, on a final basis through December 31, 
2027.\1\ Western Area Power Administration (WAPA) published a Federal 
Register notice (Proposed FRN) on June 28, 2024 (89 FR 53989), 
proposing adjustments to increase the base component and decrease the 
drought adder component of the P-SMBP--ED firm power service and firm 
peaking power service rate using a two-step rate adjustment where 
roughly 50 percent of the total increase is being applied in step 1 
(January 2025) and the remaining 50 percent is being applied in step 2 
(January 2026), and to put new 5-year rate schedules in place. The 
Proposed FRN also initiated a 60-day public consultation and comment 
period and set forth the dates and locations of the virtual public 
information and public comment forums.
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    \1\ Order Confirming and Approving Rate Schedule on a Final 
Basis, FERC Docket No. EF23-2-000 (2023).
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Legal Authority

    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-S3-2024, effective August 30, 2024, 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. This rate action is issued under 
Redelegation Order No. S3-DEL-WAPA1-2023 and Department of Energy 
procedures for public participation in rate adjustments set forth at 10 
CFR part 903.\2\
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    \2\ 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
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    Following review of UGP's proposal, Rate Order No. WAPA-213, which 
provides the formula rates for the P-SMBP--ED firm power service, firm 
peaking power service, and sale of surplus products, is hereby 
confirmed, approved, and placed into effect on an interim basis. WAPA 
will submit Rate Order No. WAPA-213 to FERC for confirmation and 
approval on a final basis.

Department of Energy

Administrator, Western Area Power Administration

    In the Matter of: Western Area Power Administration, Upper Great 
Plains Region, Rate Adjustment for the Pick-Sloan Missouri Basin 
Program--Eastern Division, Firm Power Service, Firm Peaking Power 
Service, and Sale of Surplus Products Formula Rates, Rate Order No. 
WAPA-213

Order Confirming, Approving, and Placing The Formula Rates for the 
Pick-Sloan Missouri Basin Program--Eastern Division into Effect on an 
Interim Basis

    The formula rates in Rate Order No. WAPA-213 are established 
following section 302 of the Department of Energy

[[Page 91732]]

(DOE) Organization Act (42 U.S.C. 7152).\1\
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    \1\ This Act transferred to, and vested in, the Secretary of 
Energy the power marketing functions of the Secretary of the 
Department of the Interior and the Bureau of Reclamation 
(Reclamation) under the Reclamation Act of 1902 (ch. 1093, 32 Stat. 
388), as amended and supplemented by subsequent laws, particularly 
section 9(c) of the Reclamation Project Act of 1939 (43 U.S.C. 
485h(c)) and section 5 of the Flood Control Act of 1944 (16 U.S.C. 
825s); and other acts that specifically apply to the projects 
involved.
---------------------------------------------------------------------------

    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 Western Area Power Administration 
(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 the 
Federal Energy Regulatory Commission (FERC). By Delegation Order No. 
S1-DEL-S3-2024, effective August 30, 2024, 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. This rate action is issued under 
Redelegation Order No. S3-DEL-WAPA1-2023 and DOE procedures for public 
participation in rate adjustments set forth at 10 CFR part 903.\2\
---------------------------------------------------------------------------

    \2\ 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
---------------------------------------------------------------------------

Acronyms, Terms, and Definitions

    As used in this Rate Order, the following acronyms, terms, and 
definitions apply:
    Base: A component of the firm power and firm peaking power rate 
design that is a fixed revenue requirement that includes operation and 
maintenance expenses (O&M), investments and replacements, interest on 
investments and replacements, normal timing power purchases, and 
transmission costs.
    Capacity: The electric capability of a generator, transformer, 
transmission circuit, or other equipment. It is expressed in kilowatts 
(kW) or megawatts (MW).
    Composite Rate: The Power Repayment Study (PRS) rate for commercial 
firm power, which is the total annual revenue requirement for capacity 
and energy divided by the total annual energy sales. It is expressed in 
mills per kilowatt-hour (mills/kWh) and used only for comparison 
purposes.
    Corps of Engineers Annual Operating Plan (AOP): The United States 
Army Corps of Engineers (USACE) water management guidelines designed to 
meet the reservoir regulation objectives.
    Customer: An entity with a contract that is receiving Pick-Sloan 
Missouri Basin Program--Eastern Division (P-SMBP--ED) firm power 
service from WAPA.
    Customer Rate Brochure: A document prepared for public distribution 
explaining the rationale and background for the information contained 
in the Proposed FRN and in this rate order.
    Deficit(s): Deferred or unrecovered annual and/or interest 
expenses.
    Demand: The rate at which electric energy is delivered to or by a 
system or part of a system, generally expressed in kilowatts (kW) or 
megawatts (MW), at a given instant or averaged over any designated 
interval of time.
    Drought Adder: A component of the firm power and firm peaking power 
rate design that is a formula-based revenue requirement that includes 
future power purchases above normal timing power purchases, previous 
purchase power drought-related Deficits, and interest on the purchase 
power drought-related Deficits.
    Energy: Measured in terms of the work it is capable of doing over a 
period of time. Electric energy is expressed in kilowatt-hours (kWh) or 
megawatt-hours (MWh).
    Energy Charge: The charge under the rate schedule for energy. It is 
expressed in mills per kilowatt-hour and applied to each kilowatt-hour 
delivered to each Customer.
    Firm: Power intended to be available at all times during the period 
covered by a guaranteed commitment to deliver, even under adverse 
conditions.
    FRN: Federal Register Notice--a document published in the Federal 
Register in order for WAPA to provide information of public interest.
    FY: WAPA's fiscal year; October 1 to September 30.
    kW: Kilowatt--the electrical unit of capacity that equals 1,000 
watts.
    kWh: Kilowatt-hour--the electrical unit of energy that equals 1,000 
watts in 1 hour.
    kW-month: Kilowatt-month--the electrical unit of the monthly amount 
of capacity.
    mills/kWh: Mills per kilowatt-hour--the unit of charge for energy 
(equal to one tenth of a cent or one thousandth of a dollar).
    Microsoft Teams: Microsoft Teams is an online secure invite-only 
meeting platform used by WAPA. The general website is 
www.microsoft.com/en-us/microsoft-teams/group-chat-software.
    NEPA: National Environmental Policy Act of 1969, as amended.
    Non-timing Power Purchases: Power purchases related to drought 
conditions, not related to operational constraints.
    Normal Timing Power Purchases: Power purchases related to 
operational constraints (e.g., management of endangered species 
habitat, water quality, navigation, balancing authority purposes, 
market events, etc.), not associated with drought conditions.
    O&M: Operation and maintenance expenses.
    Order RA 6120.2: DOE Order outlining Power Marketing Administration 
financial reporting and rate-making procedures.
    Power: Capacity and energy.
    Power Factor: The ratio of real to apparent power at any given 
point and time in an electrical circuit. Generally, it is expressed as 
a percentage.
    Power Repayment Study (PRS): Defined in Order RA 6120.2 as a study 
portraying the annual repayment of power production and transmission 
costs of a power system through the application of revenues over the 
repayment period of the power system. The study shows, among other 
items, estimated revenues and expenses, year by year, over the 
remainder of the power system's repayment period (based upon conditions 
prevailing over the cost evaluation period), the estimated amount of 
Federal investment amortized during each year, and the total estimated 
amount of Federal investment remaining to be amortized.
    Preference: The provisions of Reclamation Law that require WAPA to 
first make Federal Power available to certain entities. For example, 
section 9(c) of the Reclamation Project Act of 1939 (43 U.S.C. 485h(c)) 
states that preference in the sale of Federal Power shall be given to 
municipalities and other public corporations or agencies and also to 
cooperatives and other nonprofit organizations financed in whole or in 
part by loans made under the Rural Electrification Act of 1936.
    Provisional Formula Rates: Formula rates confirmed, approved, and 
placed into effect on an interim basis by the Secretary of Energy or 
his/her designee.
    Rate-setting PRS: The PRS used for the rate adjustment.
    Regions: WAPA's Rocky Mountain (RM) region, WAPA's Upper Great 
Plains (UGP) region.
    Revenue Requirement: The revenue required by the PRS to recover 
annual expenses (such as O&M, purchase power, transmission service, 
interest,

[[Page 91733]]

and deferred expenses) and repay Federal investments and replacements 
and other assigned costs.

Effective Date

    The Provisional Formula Rate Schedules P-SED-F15, Firm Power 
Service; P-SED-FP15, Firm Peaking Power Service; and P-SED-M3, Sale of 
Surplus Products, will take effect on the first day of the first full 
billing period beginning on or after January 1, 2025, and will remain 
in effect through December 31, 2029, pending approval by FERC on a 
final basis or until superseded.

Public Notice and Comment

    UGP followed the Procedures for Public Participation in Power and 
Transmission Rate Adjustments and Extensions, 10 CFR part 903, in 
developing these formula rates. UGP took the following steps to involve 
interested parties in the rate process:
    1. On June 28, 2024, a Federal Register notice (89 FR 53989) 
(Proposed FRN) announced the proposed formula rates and launched the 
60-day public consultation and comment period.
    2. On July 2, 2024, UGP notified Preference Customers and 
interested parties of the proposed rates and provided a copy of the 
published Proposed FRN.
    3. On August 7, 2024, UGP held a public information forum via 
Microsoft Teams. UGP's representatives explained the proposed formula 
rates, answered questions, and gave notice that more information was 
available in the Customer Rate Brochure.
    4. On August 7, 2024, UGP held a public comment forum via Microsoft 
Teams to provide an opportunity for Customers and other interested 
parties to comment for the record.
    5. UGP established a public website to post information about the 
rate process. The website is located at: www.wapa.gov/about-wapa/regions/ugp/ugp-rates/2025-firm-rate-adjustment.
    6. During the 60-day consultation and comment period, which ended 
on August 27, 2024, UGP received three oral comment submissions and 20 
written comment letters. The comments and UGP's responses are addressed 
in the ``Comments'' section. All comments have been considered in the 
preparation of this Rate Order.
    Oral comments were received from the following organizations:

City of Orange City, Iowa (member utility)
Mid-West Electric Consumers Association, Colorado (customer 
association)
Missouri River Energy Services, South Dakota (action agency)

    Written comments were received from the following organizations:

East River Electric Power Cooperative, South Dakota (member utility)
Mid-West Electric Consumers Association, Colorado (customer 
association)
Missouri River Energy Services, South Dakota (action agency)
City of Alton, Iowa (member utility)
City of Benson, Minnesota (member utility)
City of Denison, Iowa (member utility)
City of Detroit Lakes, Minnesota (member utility)
City of Hawarden, Iowa (member utility)
City of Lake Park, Iowa (member utility)
City of Madison, Minnesota (member utility)
City of Orange City, Iowa (member utility)
City of Rock Rapids, Iowa (member utility)
City of Sauk Centre, Minnesota (member utility)
City of Sioux Center, Iowa (member utility)
City of Valley City, North Dakota (member utility)
City of Vermillion, South Dakota (member utility)
City of Wadena, Minnesota (member utility)
City of Watertown, South Dakota (member utility)
City of Willmar, Minnesota (member utility)
City of Worthington, Minnesota (member utility)

Power Repayment Study--Firm Power Service Rate Discussion

    A PRS is prepared each FY to determine if revenues will be 
sufficient to repay, within the required time, all costs assigned to 
the Pick-Sloan Missouri Basin Program (P-SMBP). Repayment criteria are 
based on applicable laws and legislation as well as policies including 
Order RA 6120.2. To meet the Cost Recovery Criteria outlined in Order 
RA 6120.2, UGP developed a rate adjustment to demonstrate sufficient 
revenues will be collected under the Provisional Formula Rates to meet 
future obligations. The Revenue Requirement for P-SMBP is recovered by 
both the UGP in the P-SMBP--ED rates and by RM in the Loveland Area 
Projects (LAP) rate. The Revenue Requirement and composite rate for P-
SMBP--ED firm power service is being increased using a two-step 
adjustment, where roughly 50 percent of the total increase is being 
applied in step 1 (January 2025) and the remaining 50 percent is being 
applied in step 2 (January 2026), as indicated in Table 1:

             Table 1--Comparison of Existing and Provisional Revenue Requirements and Composite Rate
----------------------------------------------------------------------------------------------------------------
                                                    Provisional                     Provisional
                                  Existing under   under P-SED-                    under P-SED-
    P-SMBP firm power service      P-SED-F14 as   F15 first step    First Step      F15 second      Second step
                                    of Jan. 1,     as of Jan. 1,  Percent Change    step as of    percent change
                                       2023          2025 \1\                      Jan. 1, 2026
----------------------------------------------------------------------------------------\2\---------------------
Total Revenue Requirement (in             $268.4          $288.1             7.4          $306.0             6.2
 million $).....................
P-SMBP--ED Composite Rate (mills/          27.91           30.00             7.5           31.87             6.2
 kWh)...........................
----------------------------------------------------------------------------------------------------------------
\1\ Provisional values are estimates only based on using set/final Base and estimated Drought Adder components.
\2\ Provisional values are estimates that may change during the existing annual drought adder adjustment
  process.

Firm Power Service--Existing and Provisional Formula Rates

    Under the existing and provisional rate methodology, rates for P-
SMBP--ED firm power and firm peaking power services are designed to 
recover an annual Revenue Requirement that includes investment and 
replacement repayment (including aid to irrigation), interest, purchase 
power, O&M, and other expenses within the allowable period. The annual 
Revenue Requirement continues to be allocated equally between demand 
and energy.

Base and Drought Adder Components

    As a part of the existing and provisional rate schedules, UGP 
provides for a formula-based adjustment

[[Page 91734]]

of the Drought Adder component, with an annual increase of up to 2 
mills/kWh. The 2 mills/kWh cap places a limit on the amount the Drought 
Adder component can be adjusted upward relative to associated drought 
costs included in the Drought Adder formula rate for any 1-year cycle. 
The Drought Adder component may be adjusted downward by any amount. 
Continuing to identify the firm power service Revenue Requirement using 
Base and Drought Adder components will assist the Regions in presenting 
future impacts of droughts, demonstrate repayment of drought-related 
costs in the PRS, and allow the Regions to be more responsive to 
changes caused by drought-related expenses. UGP will continue to charge 
and bill its customers firm power and firm peaking power service rates 
for energy and demand, which are the sum of the Base and Drought Adder 
components.
    Under Rate Schedule P-SED-F15, UGP will continue to identify its P-
SMBP--ED firm power service Revenue Requirement using Base and Drought 
Adder components. The Base component is a fixed Revenue Requirement 
that includes annual O&M, investment and replacement repayment, and 
associated interest, Normal Timing Power Purchases, and transmission 
costs. UGP cannot adjust the Base component without a public process. 
The Drought Adder component is a formula-based Revenue Requirement that 
includes costs attributable to drought conditions in the Regions. The 
Drought Adder component includes costs associated with future Non-
timing Power Purchases to meet firm power service contractual 
obligations not covered with available system generation due to a 
drought, previously incurred Deficits due to purchased power debt that 
resulted from Non-timing Power Purchases made during a drought, and the 
interest associated with drought-related Deficits. The Drought Adder 
component is designed to repay drought-related Deficits within 10 years 
from the time the Deficit was incurred, using balloon-payment 
methodology. For example, a drought-related Deficit incurred in FY 2024 
would be repaid by FY 2034.
    The annual Revenue Requirement calculation will continue to be 
summarized by the following formula: Annual Revenue Requirement = Base 
Revenue Requirement + Drought Adder Revenue Requirement.

Annual Drought Adder Adjustment Process

    The Regions review the inputs for the P-SMBP Base and Drought Adder 
components after the annual PRS is complete, generally in the first 
quarter of the calendar year. If an adjustment to the P-SMBP Base 
component is necessary, or if an incremental upward adjustment to the 
P-SMBP PRS Drought Adder component greater than the equivalent of 2 
mills/kWh to the P-SMBP Composite Rate is necessary, the Regions will 
initiate a public process pursuant to 10 CFR part 903 prior to making 
an adjustment.
    In accordance with the approved annual Drought Adder adjustment 
process, the PRS Drought Adder component is reviewed annually in early 
summer to determine if drought costs differ from those projected in the 
PRS. In October, the Regions will determine if a change to the Drought 
Adder component is necessary, either incremental or decremental. Any 
incremental adjustment to the Drought Adder component, up to 2 mills/
kWh, or any decremental adjustment will be implemented in the following 
January billing cycle. Although decremental adjustments to the Drought 
Adder component will occur as drought costs are repaid, the adjustments 
cannot result in a negative Drought Adder component. Implementing the 
Drought Adder component adjustment on January 1 of each year will help 
keep the drought-related Deficits from escalating as quickly, will 
lower the interest expense due to drought-related Deficits, will 
demonstrate responsible Deficit management, and will provide prompt 
drought-related Deficit repayments.

Revenue Requirement Changes

    The Base component costs for the P-SMBP PRS have increased 
primarily due to increased O&M from WAPA and the generating agencies.
    The driver behind the P-SMBP Drought Adder component decrease is 
the USACE's 2024 AOP projecting less than average generation, despite 
the improvement to generation as projected in the WAPA-203 January 2023 
rates. Planned repayment of both the Base and Drought Adder Deficits 
are in the same time frame (2027) as they were projected to be repaid 
under WAPA-203. Uncertainties with water inflows, hydro generation, and 
replacement energy prices continue to pose potential risks regarding 
the ability to satisfy firm power contractual commitments.
    The net effect of these changes to the PRS Base and Drought Adder 
components results in an overall increase to the P-SMBP rate. To 
implement the required rate increase over a two-year period/in two 
steps, the Base component Revenue Requirements and associated charges 
for each step are set values. For the Drought Adder component, UGP is 
using estimated Revenue Requirements and associated charges for each 
step based on the USACE's 2024 AOP and drought costs projected in the 
Rate-Setting PRS. In accordance with the approved annual drought adder 
adjustment process, these Drought Adder estimates are subject to change 
based upon updated AOPs/generation models and revised drought costs. A 
comparison of the existing and provisional charge component Revenue 
Requirement for firm power service are shown in Table 2:

              Table 2--Comparison of Existing and Provisional Charge Component Revenue Requirements
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                                                    Provisional                     Provisional
                                  Existing under   under P-SED-                    under P-SED-
                                   P-SED-F14/ P-    F15/ P-SED-                     F15/ P-SED-
  P-SMBP--ED firm power service   SED-FP14 as of    FP15 first      First step      FP15 second     Second step
                                   Jan. 1, 2023     step as of    percent change    step as of    percent change
                                  (in million $)   Jan. 1, 2025                    Jan. 1, 2026
                                                      \1\ (in                         \1\ (in
----------------------------------------------------million $)----------------------million $)------------------
Base Component..................          $235.4          $264.5            12.4          $292.4            10.5
Drought Adder Component.........            33.0            23.6           -28.5            13.6           -42.4
----------------------------------------------------------------------------------------------------------------
\1\ Provisional values are estimates that may change during the existing annual Drought Adder adjustment
  process.

[[Page 91735]]

    A summary of the provisional charge components is shown in Table 3:

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

Statement of Revenue and Related Expenses

    The following Table 4 provides a summary of the projected revenue 
and expense data for the P-SMBP firm power service Revenue Requirement 
through the 5-year provisional rate approval periods:
BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TN20NO24.076

BILLING CODE 6450-01-C

Sale of Surplus Products Rate Discussion

    The sale of surplus products rate schedule is formula-based, 
providing for P-SMBP--ED Marketing Office to sell P-SMBP--ED surplus 
energy and demand products. If P-SMBP--ED surplus products are 
available, as specified in the rate schedule, the charge will be based 
on market rates plus administrative costs. The customer will be 
responsible for acquiring transmission service necessary to deliver the 
product(s) for which a

[[Page 91736]]

separate charge may be incurred. Rate Schedule P-SED-M2 is being 
superseded by the Provisional Rate Schedule P-SED-M3 and continues to 
allow for the sale of energy, frequency response, regulation, and 
reserves.

Comments

    UGP received 23 separate oral and/or written comments during the 
public consultation and comment period. The comments expressed have 
been paraphrased and/or combined, where appropriate, without 
compromising the meaning of the comments:
    A. Comment: The action agency commented that the rate adjustment is 
a $15 million cumulative increase for their member communities. The 
member utilities commented that the rate adjustment would have 
increases ranging from $30,000 to $490,000 annually in wholesale power 
supply costs depending on the customers' Contract Rate of Delivery 
(CROD).
    Response: WAPA recognizes the magnitude of the increased rate and 
its impact on its customers. WAPA is committed to continuing to adapt 
to rising industry costs while also providing power and energy to its 
customers at the lowest cost possible. WAPA does not take the increase 
in costs lightly and is committed to continuing to find ways to limit 
the impact of increasing industry costs as much as possible.
    B. Comment: The customer association, member utilities, and action 
agency commented that they understand a rate increase is necessary due 
to inflation on O&M and labor costs, along with increased debt 
principal costs and they support and appreciate the increase being 
implemented in two steps rather than one large 14 percent increase.
    Response: WAPA appreciates the recognition of the impacts many 
entities are facing due to increasing inflation and labor costs, the 
specific costs of the power repayment study, and the two-step 
implementation for the rate adjustment.
    C. Comment: The customer association, member utilities, and the 
action agency commented that they have a concern with the addition of 
new Full-Time Employees (FTE) when many positions within WAPA remain 
unfilled. The customers encourage WAPA to evaluate its internal 
processes for cost control, seeking efficiencies in workflow and 
staffing.
    Response: WAPA understands the concern raised with the addition of 
new FTEs and the impacts of the FTEs to the rate. WAPA is committed to 
finding ways to limit cost increases impacting its customers while 
still ensuring it has the positions needed to fulfill its mission.
    D. Comment: The action agency commented that they lack an 
understanding of any compromises made within the budgeting process to 
meet the WAPA Administrator's guidance stating tradeoffs need to be 
made. The action agency also stated they believe that this guidance 
could have been followed as an element of cost control.
    Response: WAPA appreciates the comment regarding the need for 
better cost control and that compromises in the budgeting process may 
be necessary to accomplish this effort. WAPA is committed to looking 
for ways to control its costs and will continue to communicate its 
funding priorities to its customers.
    E. Comment: The action agency and the customer association 
commented that they have concerns about the long-term viability of the 
P-SMBP going forward as it faces significant financial and operational 
issues in the future including: (1) USACE's plan of rehabilitation of 
the Missouri River; (2) dam safety repairs; (3) Aid-to-Irrigation 
payments coming due; and (4) environmental impact issues from non-
supporting stakeholders. They also expressed their concern that these 
issues could result in significant future rate impacts to the firm 
power customers and that WAPA needs to focus on cost control in the 
future.
    Response: WAPA appreciates the concerns regarding the long-term 
stability and affordability of the P-SMBP beyond the 5-year rate 
window. WAPA is committed to continuing to focus on the impact of 
rising costs and to mitigate those costs when possible.
    F. Comment: The customer organization commented that they 
appreciate WAPA engaging with the customers early in the ratemaking 
process, responding to Customer concerns and questions. The customer 
organization also commented that they encourage WAPA leadership to 
support their rates and finance teams who have long-standing working 
relationships with the customers.
    Response: WAPA appreciates the comment regarding WAPA's commitment 
to engaging with the Customers on the issues concerning the firm power 
rate.

Certification of Rates

    I have certified that the Provisional Formula Rates for P-SMBP--ED 
firm power service under Rate Schedule P-SED-F15, P-SMBP--ED firm 
peaking power service under Rate Schedule P-SED-FP15, and P-SMBP--ED 
sale of surplus products under Rate Schedule P-SED-M3 are the lowest 
possible rates, consistent with sound business principles. The 
Provisional Formula Rates were developed following administrative 
policies and applicable laws.

Availability of Information

    Information used by UGP to develop the Provisional Formula Rates is 
available for inspection and copying at the Upper Great Plains Regional 
Office located at 2900 4th Avenue North, 6th Floor, Billings, Montana. 
Many of these documents are also available on UGP's Rates website at: 
www.wapa.gov/about-wapa/regions/ugp/ugp-rates/2025-firm-rate-adjustment.

Ratemaking Procedure Requirements

Environmental Compliance

    WAPA has determined that this action fits within the following 
categorical exclusions listed in appendix B to subpart D of 10 CFR part 
1021: B4.3 (Electric power marketing rate changes).\3\ Categorically 
excluded projects and activities do not require preparation of either 
an environmental impact statement or an environmental assessment. A 
copy of the categorical exclusion determination is available on WAPA's 
Rates website at: www.wapa.gov/wp-content/uploads/2024/08/Rate-order-drought-adder-and-base-component-increases-for-2025-and-2026-CX-08302024.pdf.
---------------------------------------------------------------------------

    \3\ The determination was done in compliance with NEPA (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).
---------------------------------------------------------------------------

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.

Submission to the Federal Energy Regulatory Commission

    The Provisional Formula Rates herein confirmed, approved, and 
placed into effect on an interim basis, together with supporting 
documents, will be submitted to FERC for confirmation and final 
approval.

Order

    In view of the above and under the authority delegated to me, I 
hereby confirm, approve, and place into effect, on an interim basis, 
Rate Order No. WAPA-213. The rates will remain in effect on an interim 
basis until: (1) FERC

[[Page 91737]]

confirms and approves them on a final basis; (2) subsequent rates are 
confirmed and approved; or (3) such rates are superseded.

Signing Authority

    This document of the Department of Energy was signed on November 
12, 2024, by Tracey A. LeBeau, Administrator, Western Area Power 
Administration, pursuant to delegated authority from the Secretary of 
Energy. That document, with the original signature and date, is 
maintained by DOE. For administrative purposes only, and in compliance 
with requirements of the Office of the Federal Register, the 
undersigned DOE Federal Register Liaison Officer has been authorized to 
sign and submit the document in electronic format for publication, as 
an official document of the Department of Energy. This administrative 
process in no way alters the legal effect of this document upon 
publication in the Federal Register.

    Signed in Washington, DC, on November 14, 2024.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.

Rate Schedule P-SED-F15

(Supersedes Schedule P-SED-F14)

United States Department of Energy

Western Area Power Administration

Upper Great Plains Region

Pick-Sloan Missouri Basin Program--Eastern Division

Firm Power Service

(Approved Under Rate Order No. WAPA-213)

Effective

    First Step: Beginning on the first day of the first day of the 
first full billing period beginning on or after January 1, 2025, 
through December 31, 2025.
    Second Step: Beginning on January 1, 2026, through December 31, 
2029, or until superseded by another rate schedule, whichever occurs 
earlier.

Available

    Within the marketing area served by the Eastern Division of the 
Pick-Sloan Missouri Basin Program; within Montana, North Dakota, South 
Dakota, Minnesota, Iowa, and Nebraska.

Applicable

    To the power and energy delivered to customers as firm power 
service, as established in the contract for service.

Character

    Alternating current, 60 hertz, three phase, delivered and metered 
at the voltages and points established by contract.

Formula Rate and Charge Components

Rate = Base component + Drought Adder component

----------------------------------------------------------------------------------------------------------------
                                      First step January 1, 2025 monthly    Second step January 1, 2026 monthly
                                                   charges                                charges
                                   -----------------------------------------------------------------------------
                                                                                          Drought
                                        Base       Drought       Total         Base        adder        Total
                                     component      adder        charge     component    component    charge \2\
                                                  component                                 \1\
----------------------------------------------------------------------------------------------------------------
Firm Demand Charge ($/kilowatt-           $6.05        $0.55        $6.60        $6.70        $0.30        $7.00
 month)...........................
Firm Energy Charge (mills/kWh)....        15.21         1.34        16.55        16.80         0.80        17.60
----------------------------------------------------------------------------------------------------------------
\1\ Values are estimates that are subject to change during the annual Drought Adder adjustment process.
\2\ Values are estimates only based on final Base and estimated Drought Adder components.

    Billing Demand: The billing demand will be as defined by the power 
sales contract.
Charge Components
    Base Component: A fixed revenue requirement that includes operation 
and maintenance expense, investments and replacements, interest on 
investments and replacements, normal timing purchase power (purchases 
due to operational constraints, not associated with drought), and 
transmission costs. Any provisional change to the Base component will 
require a public process.
[GRAPHIC] [TIFF OMITTED] TN20NO24.077

    Drought Adder Component: A formula-based revenue requirement that 
includes future purchase power expense above timing purchases, previous 
purchase power drought deficits, and interest on the purchase power 
drought deficits. The second step revenue requirement is subject to 
change during the annual Drought Adder adjustment process starting in 
January 2026.

[[Page 91738]]

[GRAPHIC] [TIFF OMITTED] TN20NO24.078

Annual Drought Adder Adjustment Process
    The Drought Adder may be adjusted annually using the above formulas 
for any costs attributed to drought of less than or equal to the 
equivalent of 2 mills/kWh to the Power Repayment Study (PRS) composite 
rate. Any planned incremental upward adjustment to the Drought Adder 
greater than the equivalent of 2 mills/kWh to the PRS composite rate 
will require a public process.
    The annual review process is initiated in early summer when WAPA 
reviews the Drought Adder component and provides notice of any 
estimated change to the Drought Adder component charge under the 
formula. In October, WAPA will make a final determination of any change 
to the Drought Adder component charge, either incremental or 
decremental. If a Drought Adder component change is required, a 
modified Drought Adder revenue requirement and the associated charges 
will become effective the following January 1 and will be identified in 
a Drought Adder modification update. WAPA will inform customers of 
updates by letter and post updates to WAPA's external website.

Adjustments

    For Billing of Unauthorized Overruns: For each billing period in 
which there is a contract violation involving an unauthorized overrun 
of the contractual firm power and/or energy obligations, such overrun 
shall be billed at 10 times the formula rate.
    For Power Factor: None. Customers will be required to maintain a 
power factor at the point of delivery between 95-percent lagging and 
95-percent leading.

Rate Schedule P-SED-FP15

(Supersedes Schedule P-SED-FP14)

United States Department of Energy

Western Area Power Administration

Upper Great Plains Region

Pick-Sloan Missouri Basin Program--Eastern Division

Firm Peaking Power Service

(Approved Under Rate Order No. WAPA-213)

Effective

    First Step: Beginning on the first day of the first day of the 
first full billing period beginning on or after January 1, 2025, 
through December 31, 2025.
    Second Step: Beginning on January 1, 2026, through December 31, 
2029, or until superseded by another rate schedule, whichever occurs 
earlier.

Available

    Within the marketing area served by the Eastern Division of the 
Pick-Sloan Missouri Basin Program; within Montana, North Dakota, South 
Dakota, Minnesota, Iowa, and Nebraska.

Applicable

    To the power sold to customers as firm peaking power service, as 
established in the contract for service.

Character

    Alternating current, 60 hertz, three phase, delivered and metered 
at the voltages and points established by contract.

Formula Rate and Charge Components

Rate = Base component + Drought Adder component

----------------------------------------------------------------------------------------------------------------
                                 First step January 1, 2025 monthly        Second step January 1, 2026 monthly
                                               charges                                   charges
                             -----------------------------------------------------------------------------------
                                                                                         Drought
                                  Base         Drought                      Base          adder     Total charge
                                component       adder     Total charge    component     component        \2\
                                              component                                    \1\
----------------------------------------------------------------------------------------------------------------
Firm Peaking Demand Charge          $5.55         $0.50         $6.05         $6.10         $0.30         $6.40
 ($/kilowatt-month).........
----------------------------------------------------------------------------------------------------------------
\1\ Values are estimates that are subject to change during the annual Drought Adder adjustment process.
\2\ Values are estimates only based on final Base and estimated Drought Adder component.

Charge Components
    Base Component: A fixed revenue requirement that includes operation 
and maintenance expense, investments and replacements, interest on 
investments and replacements, normal timing purchase power (purchases 
due to operational constraints, not associated with drought), and 
transmission costs. Any provisional change to the Base component will 
require a public process.
[GRAPHIC] [TIFF OMITTED] TN20NO24.079

[[Page 91739]]

    Drought Adder Component: 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. The second step revenue requirement is subject to 
change during the annual Drought Adder adjustment processes starting in 
January 2026.
[GRAPHIC] [TIFF OMITTED] TN20NO24.080

Annual Drought Adder Adjustment Process
    The Drought Adder may be adjusted annually using the above formulas 
for any costs attributed to drought of less than or equal to the 
equivalent of 2 mills/kWh to the Power Repayment Study (PRS) composite 
rate. Any planned incremental upward adjustment to the Drought Adder 
greater than the equivalent of 2 mills/kWh to the PRS composite rate 
will require a public process.
    The annual review process is initiated in early summer when WAPA 
reviews the Drought Adder component and provides notice of any 
estimated change to the Drought Adder component charge under the 
formula. In October, WAPA will make a final determination of any change 
to the Drought Adder component charge, either incremental or 
decremental. If a Drought Adder component change is required, a 
modified Drought Adder revenue requirement and the associated charges 
will become effective the following January 1 and will be identified in 
a Drought Adder modification update. WAPA will inform customers of 
updates by letter and post updates to WAPA's external website.
Billing Demand
    The billing demand will be the greater of (1) the highest 30-minute 
integrated demand measured during the month up to, but not in excess 
of, the delivery obligation under the power sales contract, or (2) the 
contract rate of delivery.

Adjustments

    For Billing for Unauthorized Overruns: For each billing period in 
which there is a contract violation involving an unauthorized overrun 
of the contractual obligation for peaking demand and/or energy, such 
overrun shall be billed at 10 times the above rate.

Rate Schedule P-SED-M3

(Supersedes Rate Schedule P-SED-M2)

United States Department of Energy

Western Area Power Administration

Upper Great Plains Region

Pick-Sloan Missouri Basin Program--Eastern Division

Sale of Surplus Products

(Approved Under Rate Order No. WAPA-213)

Effective

    The first day of the first full billing period beginning on or 
after January 1, 2025, through December 31, 2029, or until superseded 
by another rate schedule, whichever occurs earlier.

Applicable

    This rate schedule applies to Eastern Division of the Pick-Sloan 
Missouri Basin Program marketing and is applicable to the sale of the 
following P-SMBP--ED surplus energy and capacity products: energy, 
frequency response, regulation, and reserves. If any P-SMBP--ED surplus 
energy and capacity products are available, UGP can make the product(s) 
available for sale, providing entities enter into a separate 
agreement(s) with UGP Marketing Office which will specify the terms of 
sale(s).

Formula Rate

    The charge for each product is determined at the time of the sale 
based on market rates, plus administrative costs. The customer will be 
responsible for acquiring transmission services necessary to deliver 
the product(s), for which a separate charge may be incurred.

[FR Doc. 2024-26933 Filed 11-19-24; 8:45 am]
BILLING CODE 6450-01-P
```