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[Federal Register Volume 89, Number 224 (Wednesday, November 20, 2024)]
[Notices]
[Pages 91723-91731]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-26932]

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DEPARTMENT OF ENERGY

Western Area Power Administration

Loveland Area Projects--Rate Order No. WAPA-212

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of rate.

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SUMMARY: The formula rates for the Rocky Mountain (RM) region's 
Loveland Area Projects (LAP) firm electric service and sale of surplus 
products have been confirmed, approved, and placed into effect on an 
interim basis (Provisional Formula Rates). LAP consists of the 
Fryingpan-Arkansas Project (Fry-Ark) and the Pick-Sloan Missouri Basin 
Program (P-SMBP)--Western Division, which were integrated for marketing 
and ratemaking purposes in 1989. These new formula rates replace the 
existing formula rates for these services under Rate Schedules L-F12, 
Firm Electric Service; and L-M3, Sale of Surplus Products, which expire 
on December 31, 2027. The LAP firm electric service composite rate is 
increasing over a 2-year period with an 8.8 percent increase on January 
1, 2025, and an additional 8.2 percent increase on January 1, 2026. 
There are no changes to the formula rate for sale of surplus products.

[[Page 91724]]

DATES: The Provisional Formula Rates under Rate Schedules L-F13, Firm 
Electric Service; and L-M4, 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Commission (FERC) on a final basis or until superseded.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: Barton V. Barnhart, Regional Manager, 
Rocky Mountain Region, Western Area Power Administration, 5555 East 
Crossroads Boulevard, Loveland, CO 80538-8986, or email: 
[email protected], or Sheila D. Cook, Rates Manager, Rocky Mountain 
Region, Western Area Power Administration, (970) 685-9562, or email: 
[email protected].

SUPPLEMENTARY INFORMATION: On September 12, 2023, FERC confirmed and 
approved Rate Schedules L-F12 and L-M3 under Rate Order No. WAPA-202 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 53992), proposing adjustments to increase 
the base component and decrease the drought adder component of the LAP 
firm electric 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 Schedules on a Final 
Basis, FERC Docket No. EF23-1-000 (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 in 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 RM's proposal, Rate Order No. WAPA-212, which 
provides the formula rates for LAP firm electric 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-212 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, Rocky Mountain 
Region, Rate Adjustment for the Loveland Area Projects, Firm Electric 
Service and Sale of Surplus Products, Formula Rates, Rate Order No. 
WAPA-212

Order Confirming, Approving, and Placing the Formula Rates for the 
Loveland Area Projects Into Effect on an Interim Basis

    The formula rates in Rate Order No. WAPA-212 are established 
following section 302 of the Department of Energy (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.
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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 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\
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    \2\ 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
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Acronyms, Terms, and Definitions

    As used in this Rate Order, the following acronyms, terms, and 
definitions apply:
    Base: A component of the firm electric service 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).
    Capacity Rate: The rate which sets forth the charges for capacity. 
It is expressed in dollars per kilowatt-month and applied to each 
kilowatt of the Contract Rate of Delivery or CROD.
    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 Loveland Area 
Projects (LAP) firm electric 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.

[[Page 91725]]

    Deficit(s): Deferred or unrecovered annual and/or interest 
expenses.
    Drought Adder: A component of the firm electric service 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 
expenses, interest, and deferred expenses) and repay Federal 
investments and replacements and other assigned costs.

Effective Date

    The Provisional Formula Rate Schedules L-F13, Firm Electric 
Service; and L-M4, 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

    RM followed the Procedures for Public Participation in Power and 
Transmission Rate Adjustments and Extensions, 10 CFR part 903, in 
developing these formula rates. RM took the following steps to involve 
interested parties in the rate process:
    1. On June 28, 2024, a Federal Register notice (89 FR 53992) 
(Proposed FRN) announced the proposed formula rates and initiated a 60-
day public consultation and comment period.
    2. On July 1, 2024, RM notified Preference Customers and interested 
parties of the proposed rates and provided a copy of the published 
Proposed FRN.
    3. On August 7, 2024, RM held a public information forum via 
Microsoft Teams. RM'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, RM held a public comment forum via Microsoft 
Teams to provide an opportunity for Customers and other interested 
parties to comment for the record.
    5. RM established a public website to post information about the 
rate process. The website is located at: www.wapa.gov/about-wapa/regions/rm/rm-rates/2025-rate-adjustment-firm-electric-service.
    6. During the 60-day consultation and comment period, which ended 
on August 27, 2024, RM received three oral comment submissions and one 
written comment letter. The comments and RM'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 organization:

Mid-West Electric Consumers Association, Colorado (customer 
association)

Power Repayment Study--Firm Electric Service Rate Discussion

    PRSs are 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) and the Fryingpan-
Arkansas Project (Fry-Ark). 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, RM 
developed a rate adjustment to demonstrate that sufficient revenues 
will be collected under the Provisional

[[Page 91726]]

Formula Rate to meet future obligations. The Revenue Requirement of the 
Fry-Ark PRS is combined with the P-SMBP--Western Division (WD) Revenue 
Requirement, derived from the P-SMBP PRS, to develop one rate for LAP 
firm electric service. The Revenue Requirement and composite rate for 
LAP firm electric service are 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
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                                                    Provisional                     Provisional
                                  Existing under    under L-F13                     under L-F13
    LAP firm electric service       L-F12 as of    first step as    First step    second step as    Second step
                                   Jan. 1, 2023     of Jan. 1,    percent change    of Jan. 1,    percent change
                                                       2025                            2026
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Total Revenue Requirement \1\              $74.6           $81.3             9.0           $87.9             8.1
 (in million $).................
Pick-Sloan--WD \1\ \2\..........           $58.5           $62.6             7.0           $66.3             5.9
Fry-Ark.........................           $16.1           $18.7            16.1           $21.6            15.5
(in million $)..................
LAP Composite Rate \1\ (mills/             36.61           39.84             8.8           43.10             8.2
 kWh)...........................
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\1\ Provisional values are estimates only based on using set/final Base and estimated Drought Adder components.
\2\ Additional information on the overall P-SMBP PRS and charge components can be found in Rate Order No. WAPA-
  213 and on the UGP's website at: www.wapa.gov/about-wapa/regions/ugp/ugp-rates/2025-firm-rate-adjustment.

Firm Electric Service--Existing and Provisional Formula Rates

    Under the existing and provisional rate methodology, rates for LAP 
firm electric service 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 capacity and energy.

Base and Drought Adder Components

    As a part of the existing and provisional rate schedule, RM 
provides for a formula-based adjustment of the Drought Adder component, 
with an annual increase of up to 2mills/kWh each year. 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 electric service Revenue Requirement using Base and 
Drought Adder components will assist the Regions in presenting the 
future impacts of droughts, demonstrate repayment of drought-related 
costs in the PRSs, and allow the Regions to be more responsive to 
changes caused by drought-related expenses. RM 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.
    Under Rate Schedule L-F13, RM will continue to identify its LAP 
firm electric service Revenue Requirement using Base and Drought Adder 
components. The Base component is a fixed Revenue Requirement from each 
PRS that includes annual O&M, investment and replacement repayment, and 
associated interest, Normal Timing Power Purchases, and transmission 
costs. RM cannot adjust the Base component without a public process. 
The Drought Adder component is a formula-based Revenue Requirement from 
each PRS 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 electric 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 
FY2024 would be repaid by FY2034.
    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

    RM reviews the inputs for the P-SMBP and Fry-Ark PRS Base and 
Drought Adder components after the annual PRSs are complete, generally 
in the first quarter of the calendar year. If an adjustment to the LAP 
Base component is necessary, or if an incremental upward adjustment to 
the LAP Drought Adder component greater than the equivalent of 2 mills/
kWh to the LAP Rate is necessary, RM 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 components are reviewed annually in 
early summer to determine if drought costs differ from those projected 
in the PRSs. In October, RM will determine if a change to the LAP 
Drought Adder component is necessary, either incremental or 
decremental. Any incremental adjustment to the Drought Adder component, 
up to 2mills/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 Base component costs for the Fry-Ark PRS have increased primarily 
due to

[[Page 91727]]

increased annual expenses, mainly attributed to transmission purchases 
and O&M from both WAPA and the Bureau of Reclamation and increases in 
capital investment projections for the Mount Elbert Power Plant 
repairs/refurbishment.
    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-202 January 2023 
rate. 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-202. 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 LAP 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, RM 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 PRSs. 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 
Requirements for firm electric 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 L-F13                     under L-F13
                                    L-F12 as of    first step as    First step    second step as    Second step
    LAP firm electric service       Jan.1, 2023     of Jan. 1,    percent change    of Jan. 1,    percent change
                                  (in million $)     2025 (in                        2026 (in
                                                    million $)                      million $)
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Base Component..................           $67.8           $76.4            12.7           $85.1            11.4
Pick-Sloan--WD \1\..............            51.7            57.7            11.6            63.5            10.1
Fry--Ark........................            16.1            18.7            16.1            21.6            15.5
Drought Adder Component \2\.....             6.8             4.9           -27.9             2.8           -42.9
Pick-Sloan--WD \1\ \2\..........             6.8             4.9           -27.9             2.8           -42.9
Fry--Ark \2\....................             0.0             0.0             0.0             0.0             0.0
----------------------------------------------------------------------------------------------------------------
\1\ Additional information on the overall P-SMBP PRS and charge components can be found in Rate Order No.WAPA-
  213 and on UGP's website at: www.wapa.gov/about-wapa/regions/ugp/ugp-rates/2025-firm-rate-adjustment.
\2\ Provisional values are estimates that may change during the existing annual Drought Adder adjustment
  process.

    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
                                     schedule L-F13 first step as of Jan.  schedule L-F13 second step as of Jan.
                                                   1, 2025                                1, 2026
                                   -----------------------------------------------------------------------------
                                                   Drought                                Drought
                                        Base        adder        Total         Base        adder        Total
                                     component    component    charge \2\   component    component    charge \2\
                                                     \1\                                    \1\
----------------------------------------------------------------------------------------------------------------
Firm Capacity ($/kilowatt-month)..        $4.91        $0.31        $5.22        $5.47        $0.18        $5.65
Firm Energy (mills/kWh)...........        18.72         1.20        19.92        20.86         0.69        21.55
----------------------------------------------------------------------------------------------------------------
\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.

Statement of Revenue and Related Expenses

    The following Table 4 provides a summary of projected revenue and 
expense data for the Fry-Ark firm power service Revenue Requirement 
through the 5-year provisional rate approval periods:
BILLING CODE 6450-01-P

[[Page 91728]]

[GRAPHIC] [TIFF OMITTED] TN20NO24.073

BILLING CODE 6450-01-C
    The summary of the P-SMBP projected revenue and expenses for the 5-
year rate-setting periods is included in the P-SMBP Statement of 
Revenue and Related Expenses that is part of Rate Order No. WAPA-213.

Sale of Surplus Products Rate Discussion

    The sale of surplus products rate schedule is formula-based, 
providing for LAP Marketing Office 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. Rate Schedule L-M3 is being superseded 
by the Provisional Rate Schedule L-M4 and continues to allow for the 
sale of energy, frequency response, regulation, and reserves.

Comments

    RM received four 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 customer association, member utility, 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 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.
    B. Comment: The customer association 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.
    C. 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

[[Page 91729]]

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.
    D. 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.
    E. 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 issues concerning the firm power 
rate.

Certification of Rates

    I have certified that the Provisional Formula Rates for LAP firm 
electric service under Rate Schedule L-F13 and LAP sale of surplus 
products under Rate Schedule L-M4 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 RM to develop the Provisional Formula Rates is 
available for inspection and copying at the Rocky Mountain Regional 
Office, 5555 East Crossroads Boulevard, Loveland, Colorado. Many of 
these documents are also available on RM's Rates website at: 
www.wapa.gov/about-wapa/regions/rm/rm-rates/2025-rate-adjustment-firm-electric-service.

Ratemaking Procedure Requirements

Environmental Compliance

    WAPA has determined that this action fits within the following 
categorical exclusion 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/2024/10/2025-001-Proposed-Loveland-area-FY25-Rate-adjustment-CX.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-212. The rates will remain in effect on an interim 
basis until: (1) FERC 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 L-F13

(Supersedes Rate Schedule L-F12 Effective January 1, 2023)

United States Department of Energy

Western Area Power Administration

Rocky Mountain Region

Loveland Area Projects

Firm Electric Service

(Approved Under Rate Order No. WAPA-212)

Effective

    First Step: Beginning on 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, and extending through 
December 31, 2029, or until superseded by another rate schedule, 
whichever occurs earlier.

Available

    Within the marketing area served by the Loveland Area Projects 
(LAP) (consisting of the Fryingpan-Arkansas Project and the Pick-Sloan 
Missouri Basin Program--Western Division, which were integrated for 
marketing and rate-making purposes in 1989), parts of Colorado, Kansas, 
Nebraska, and Wyoming.

Applicable

    To the LAP firm electric service delivered at specific point(s) of 
delivery, as established by contract.

Character

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

Formula Rate and Charge Components

LAP Firm Electric Service Rate (Rate) = Base component + Drought Adder 
component:

[[Page 91730]]

----------------------------------------------------------------------------------------------------------------
                                      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\
----------------------------------------------------------------------------------------------------------------
Capacity Charge ($/kilowatt-month         $4.91        $0.31        $5.22        $5.47        $0.18        $5.65
 of billing capacity \3\).........
Energy Charge (mills/kWh of               18.72         1.20        19.92        20.86         0.69        21.55
 monthly entitlement).............
----------------------------------------------------------------------------------------------------------------
\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.
\3\ Unless otherwise specified by contract, the billing capacity will be the seasonal contract rate of delivery.

Charge Components
    Base Component: A fixed revenue requirement that includes operation 
and maintenance expense, investments and replacements, interest on 
investments and replacements, normal timing power purchases (purchases 
due to operational constraints, not associated with drought), and 
transmission costs. Any proposed change to the Base component will 
require a public process. The Base component revenue requirement for 
the first step is $76,396,300 and for the second step is $85,126,600.
[GRAPHIC] [TIFF OMITTED] TN20NO24.074

    Drought Adder Component: 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. The Drought Adder component 
revenue requirement for the first step is $4,890,480 and for the second 
step is estimated to be $2,803,080. The second step revenue requirement 
is subject to change during the annual Drought Adder adjustment 
processes starting in January 2026.
[GRAPHIC] [TIFF OMITTED] TN20NO24.075

Annual Drought Adder Adjustment Process
    The Drought Adder component 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 Rate. Any planned 
incremental upward adjustment to the Drought Adder component greater 
than the equivalent of 2 mills/kWh to the Rate will require a public 
process.
    The annual review process is initiated in early summer when the 
Rocky Mountain (RM) region reviews the Drought Adder component and 
provides notice of any estimated change to the Drought Adder component 
charge under the formula. In October, RM 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. RM will 
inform customers of updates by letter and post updates to RM's external 
website.

Adjustments

    For Transformer Losses: If delivery is made at transmission voltage 
but metered on the low-voltage side of the substation, the meter 
readings will be increased to compensate for transformer losses as 
provided for in the contract.
    For Power Factor: None. Customers will be required to maintain a 
power factor within the range of 95-percent leading to 95-percent 
lagging, measured at the point of interconnection.

[[Page 91731]]

Rate Schedule L-M4

(Supersedes Rate Schedule L-M3 Effective January 1, 2023)

United States Department of Energy

Western Area Power Administration

Rocky Mountain Region

Loveland Area Projects

Sale of Surplus Products

(Approved Under Rate Order No. WAPA-212)

Effective

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

Applicable

    This rate schedule applies to Loveland Area Projects (LAP) 
marketing and is applicable to the sale of the following LAP surplus 
energy and capacity products: energy, frequency response, regulation, 
and reserves. If any of the above LAP surplus products are available, 
LAP can make the product(s) available for sale, providing entities 
enter into separate agreement(s) with LAP Marketing Office which will 
specify the terms of sale(s).

Formula Rate

    The charge for each product will be determined at the time of the 
sale 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.

[FR Doc. 2024-26932 Filed 11-19-24; 8:45 am]
BILLING CODE 6450-01-P
```