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[Federal Register Volume 89, Number 249 (Monday, December 30, 2024)]
[Notices]
[Pages 106476-106479]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-30858]

[[Page 106476]]

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DEPARTMENT OF ENERGY

Western Area Power Administration

Pick-Sloan Missouri Basin Program--Eastern Division--Rate Order 
No. WAPA-218

AGENCY: Western Area Power Administration, DOE.

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

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SUMMARY: The Upper Great Plains (UGP) region of the Western Area Power 
Administration (WAPA) proposes new formula rates for the Pick-Sloan 
Missouri Basin Program--Eastern Division (P-SMBP--ED) transmission and 
ancillary services for UGP's costs to be recovered under the Southwest 
Power Pool's (SPP) Open Access Transmission Tariff (Tariff) should UGP 
decide to expand its participation in SPP in the Western 
Interconnection. These rates will be used by UGP to provide rate data 
to SPP, the Regional Transmission Organization (RTO) of which UGP is a 
member, after SPP's planned expansion of the RTO into the Western 
Interconnection on April 1, 2026. The existing UGP rates for services 
expire on September 30, 2025, but are being extended under a separate 
rate process, Rate Order No, WAPA-217, to continue to provide existing 
rate data to SPP between October 1, 2025, and final implementation date 
of the planned RTO expansion into the Western Interconnection. The 
proposed rates will address UGP operating changes and new provisions 
and settlement requirements under the proposed revisions to SPP's 
Tariff filed with the Federal Energy Regulatory Commission (FERC) to 
accommodate their RTO expansion into the Western Interconnection. The 
proposed formula rates will become effective on the go-live date of the 
expansion of the SPP RTO into the Western Interconnection (scheduled 
for April 1, 2026, as of the date of this notice) and will remain in 
effect for five years from the effective date, which with an effective 
date of April 1, 2026, will be March 31, 2031, or until superseded.

DATES: A consultation and comment period will begin December 30, 2024 
and end March 31, 2025. UGP will present a detailed explanation of the 
proposed formula rates and other modifications at a public information 
forum that will be held on February 19, 2025, at 8 a.m. MST to no later 
than 9 a.m. MST. UGP will also host a public comment forum on February 
19, 2025, at 9:15 a.m. MST to no later than 10 a.m. MST. The public 
information forum and the public comment forum will be conducted 
virtually. Instructions for participating in the forums will be posted 
on UGP's Rates website at least 14 days prior to the public information 
and comment forums at: www.wapa.gov/about-wapa/regions/ugp/ugp-rates 
and other posting locations noted below.
    UGP will accept comments any time during the consultation and 
comment period.

ADDRESSES: Written comments and requests to be informed of FERC actions 
concerning the proposed formula rates submitted by WAPA to FERC for 
approval should be sent to: Lloyd Linke, Regional Manager, Upper Great 
Plains Region, Western Area Power Administration, 2900 4th Ave. North, 
6th Floor, Billings, MT 59101-1266, or email [email protected]. UGP 
will post information about the proposed formula rates and written 
comments received to its Rates website at: www.wapa.gov/about-wapa/regions/ugp/ugp-rates and other posting locations noted below in the 
SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Linda Cady-Hoffman, Rates Manager, 
Upper Great Plains Region, Western Area Power Administration, (406) 
255-2920 or email: [email protected].

SUPPLEMENTARY INFORMATION: On September 28, 2020, FERC approved and 
confirmed Rate Schedules WAUGP-ATRR, WAUGP-AS1, WAUW-AS3, WAUW-AS4, 
WAUW-AS5, WAUW-AS6, and WAUW-AS7 under Rate Order No. WAPA-188 on a 
final basis through September 30, 2025.\1\ These existing formula-based 
rate schedules are for transmission and ancillary services for the 
transmission facilities in the P-SMBP--ED that UGP transferred to the 
functional control of SPP for its existing membership. The existing 
formula rates are viewable online at the following locations: (1) UGP's 
Open Access Same-time Information System (OASIS) at: https://www.oasis.oati.com/wapa/index.html; (2) UGP's Rates website at: 
www.wapa.gov/about-wapa/regions/ugp/ugp-rates; and (3) the ``Western 
Area Power Administration UGP Information'' link on SPP's Member 
Related Postings website at: opsportal.spp.org/OASIS/Directory/Member%20Related%20Postings.
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    \1\ Order Confirming and Approving Rate Schedules on a Final 
Basis, FERC Docket Nos. EF20-3-000 and EF20-3-001.
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    On April 28, 2023, WAPA published a Federal Register notice titled 
``Recommendation for the Western Area Power Administration's Rocky 
Mountain Region and Colorado River Storage Project Management Center to 
Pursue Final Negotiations Regarding Membership in the Southwest Power 
Pool Regional Transmission Organization, and for the Upper Great Plains 
Region to Expand its Participation'' (88 FR 26298). On June 4, 2024, 
SPP submitted revisions to its Tariff, Bylaws, and Membership Agreement 
to expand the SPP RTO into the Western Interconnection to FERC.\2\ If 
SPP succeeds in obtaining FERC's approval of its Tariff, Bylaws, and 
Membership Agreement revisions, and upon further approval by the 
Administrator, UGP plans to expand its participation in SPP in the 
Western Interconnection.
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    \2\ Southwest Power Pool, Inc., Submission of Revisions to 
Tariff, Bylaws, and Membership Agreement to Expand the Regional 
Transmission Organization into the Western Interconnections (Part 1 
of 2) and (Part 2 of 2), Docket Nos. ER24-2184, ER24-2185 (June 4, 
2024).
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    As of the date of this notice, SPP's anticipated deadline for 
filing certain SPP Tariff documents for UGP (including annual revenue 
requirements (ARR), formula rate templates, and formula rate 
implementation protocols proposed in this rate filing, as well as other 
pertinent documents not included in this rate filing) with FERC is 
October 2025. UGP is publishing this notice of proposed formula rates 
and initiating the rate consultation and comment period at this time in 
order for UGP to obtain FERC-approved formula rates prior to this SPP 
deadline.
    If UGP does not expand its participation in SPP in the Western 
Interconnection, further actions under this notice of proposed rates 
will be canceled, and existing formula rates will remain in effect. If 
canceled, UGP will inform customers by letter and by posting notice of 
such on UGP's OASIS website (www.oasis.oati.com/wapa/index.html), on 
UGP's Rates website (www.wapa.gov/about-wapa/regions/ugp/ugp-rates), 
and on the ``Western Area Power Administration UGP Information'' link 
on SPP's Member Related Postings website (opsportal.spp.org/OASIS/Directory/Member%20Related%20Postings) and will withdraw the formula 
rates proposed in this notice.
    UGP needs to adopt new formula rates for transmission and ancillary 
services so that UGP's costs can continue to be recovered under the SPP 
Tariff with the SPP expansion of its RTO and Integrated Marketplace 
into the Western Interconnection, and to address the new and revised 
SPP settlements proposed in SPP's FERC filing for the RTO

[[Page 106477]]

expansion. UGP's revenue requirements are added to the annual revenue 
requirements of other transmission owners in the multi-owner SPP 
pricing Zone 19, also identified as the Upper Missouri Zone (UMZ) for 
transmission service billed by SPP within the UMZ. UGP's revenue 
requirements under these proposed rates also impact other costs for 
transmission service within the broader SPP footprint.
    The proposed rates continue the formula-based methodology that 
includes an annual update on January 1 of every year, to the financial 
data in the rate formulas, and include Rate Formula Implementation 
Protocols to clarify UGP's rate implementation and annual update 
procedures with changes related to the planned RTO expansion in the 
Western Interconnection to: (1) Terminate the Balancing Authority Area 
(BAA)-related ancillary services (and associated worksheets in the Rate 
Formula Templates) for Regulation and Frequency Response Service, 
Operating Reserves--Spinning Reserve Service and Supplemental Reserve 
Service, Energy Imbalance Service (EI), and Generator Imbalance Service 
(GI); (2) Incorporate changes in the Rate Formula Templates to 
calculate the Annual Transmission Revenue Requirement (ATRR) for the 
Miles City Direct Current (DC) Tie for SPP's settlements purposes 
related to SPP's proposed DC Tie Access Charge; \3\ (3) Incorporate 
changes in the Rate Formula Templates to calculate the subtotals of the 
ATRR for the SPP West and East BAAs separately for SPP's settlements 
purposes; (4) Incorporate a new worksheet in the Rate Formula Templates 
to calculate the Incremental Market Efficiency Use \4\ (Incremental 
MEU) share for the Miles City DC Tie; (5) Incorporate changes in the 
Rate Formula Templates to calculate the ATRRs for SPP Base Plan 
Upgrades separately for SPP's settlements purposes in each of the SPP 
West and East BAAs; and (6) Update, as needed, the existing Rate 
Formula Templates to smooth the true-up process impacts, increase 
transparency, and incorporate the changes noted above. The proposed 
formula rates will remain in effect for five years from the effective 
date, which with an effective date of April 1, 2026, will be March 31, 
2031, or until WAPA changes the formula rates through another public 
rate process pursuant to 10 CFR part 903, whichever occurs first.
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    \3\ ``DC Tie Access Charge: A charge on a transmission 
reservation utilizing a West DC Tie that sinks outside of the Zone 
where the West DC Tie is located. The Transmission Customer shall be 
responsible for DC Tie Access Charge determined in accordance with 
Schedule 14.'' (SPP Proposed Tariff at Part I, Section 1, D 
Definitions.)
    \4\ ``Incremental Market Efficiency Use (Incremental MEU) 
Charge: A market recovery mechanism to compensate West DC Tie 
Transmission Owners for the expected loss of life of certain West DC 
Tie facilities due to increased utilization of the West DC Ties by 
the Integrated Marketplace.'' (SPP Proposed Tariff at Part I, 
Section 1, I Definitions.)
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    UGP is a Transmission Owner member of SPP pursuant to negotiated 
provisions in its SPP Membership Agreement, Bylaws, and SPP Tariff. 
Transmission and ancillary services are provided by SPP under the SPP 
Tariff for UGP's facilities transferred to the functional control of 
SPP. UGP has transmission facilities in both the Eastern and Western 
Interconnections separated by the Miles City DC Tie and the Fort Peck 
Power Plant substation. UGP currently operates its Western Area Power 
Administration, Upper Great Plains West (WAUW) BAA in the Western 
Interconnection as the Balancing Authority (BA) and has not previously 
placed the portion of its transmission system located in the Western 
Interconnection into SPP's Integrated Marketplace. However, with the 
planned SPP expansion of its RTO into the Western Interconnection, UGP 
will merge its WAUW BAA into the SPP West BAA and discontinue its 
current role as a BA. UGP will also place its remaining transmission 
system and other generation and load located in the Western 
Interconnection (in the existing WAUW BAA footprint) into SPP's 
Integrated Marketplace on the effective date of UGP's expanded 
participation in SPP in the Western Interconnection.
    The proposed formula rates will provide sufficient revenue to 
recover annual operation, maintenance, replacement, and interest 
expense while ensuring repayment of the project within the cost 
recovery criteria set forth in Department of Energy (DOE) Order RA 
6120.2. For more information on the proposed rates, please see the 
customer rate brochure located on UGP's OASIS website, on UGP's Rates 
website, and on SPP's Member Related Postings website (see web 
addresses listed previously).

Proposed Transmission Formula Rates

    UGP proposes changes to its current formula rate calculation 
methodology for its ATRR, currently provided under Rate Schedule WAUGP-
ATRR. These changes will more clearly, transparently, and separately 
document UGP's facilities in the Western Interconnection, the Eastern 
Interconnection, and at the Miles City DC Tie and associated subtotals 
of the overall ATRR for each of these sub-sets of facilities. SPP will 
utilize these ATRR subtotals, along with zonal and regional load and 
other applicable information, to calculate the applicable charges and 
revenue distribution for SPP transmission service under the SPP Tariff.
    Consistent with UGP's current formula rates, UGP proposes to 
continue recovering transmission-related expenses and investments on a 
forward-looking basis by using projections to estimate transmission 
costs for the upcoming year, with a true-up of incurred costs in a 
subsequent year. Transmission-related annual costs include operation 
and maintenance, administrative and general costs, interest, and 
depreciation. The annual costs will be reduced by applicable revenue 
credits received by UGP under the SPP Tariff.
    Revenue requirement data will be submitted to SPP in standard 
formula rate templates with costs classified as either ``Zonal'' or 
``Regional,'' applying the definitions in the SPP Tariff. ``Zonal'' 
costs are those that meet certain criteria and are recovered within the 
local pricing zone, while ``Regional'' costs are those meeting certain 
criteria eligible to be recovered across SPP's applicable West or East 
BAA, dependent upon where the transmission upgrade is located in the 
Western or Eastern Interconnection for SPP's settlement purposes under 
the SPP Tariff. The Formula Rate Template for UGP ATRR and related 
information will be posted on UGP's OASIS website, on UGP's Rates 
website, and on SPP's Member Related Postings website (see web 
addresses listed previously).

Proposed Miles City DC Tie Incremental Market Efficiency Use Share 
Formula Rate

    In its FERC filing for the proposed expansion of the RTO into the 
Western Interconnection, SPP proposes to expand its Integrated 
Marketplace across the seam between the Eastern and Western 
Interconnections by including the West DC Ties \5\ into the Integrated 
Marketplace 5-minute market dispatch. To enable this market dispatch 
between the Eastern and Western Interconnections, SPP included a new 
Section 8.11 to Attachment AE of the SPP Tariff for the calculation of 
the Incremental MEU amounts. The

[[Page 106478]]

Incremental MEU compensates each West DC Tie Transmission Owner for the 
expected loss of life of that owner's West DC Tie facilities due to 
increased utilization of the West DC Ties by the Integrated 
Marketplace.
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    \5\ ``West DC Ties: A direct current interconnection between the 
Eastern Interconnection and Western Interconnection for which the DC 
Tie Access Charge and the Incremental Market Efficiency Use Charge 
may be applicable. In the Integrated Marketplace, the West DC Ties 
will be Non-Biddable Locations that will be used in the settlements 
in the TCR [Transmission Congestion Rights] Markets. The West DC 
Ties are Miles City, Stegall, or Sidney.'' (SPP Proposed Tariff at 
Part I, Section W Definitions.).
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    For SPP to compensate UGP as a West DC Tie Transmission Owner of 
the Miles City DC Tie for Incremental MEU under SPP's Tariff, UGP 
proposes to provide its Miles City DC Tie Incremental MEU share under 
Rate Schedule UGP-DCTIE-IMEU. SPP will utilize this Miles City DC Tie 
Incremental MEU share along with other applicable information to 
calculate the amount to be paid to UGP for the expected loss of life of 
certain Miles City DC Tie facilities due to increased utilization of 
those West DC Tie facilities by SPP in the Integrated Marketplace.
    To simplify the calculation of the Incremental MEU and provide a 
consistent forward-looking known amount to be included in the market 
uplift, a loss-of-life will be estimated for each of the eligible 
groups of West DC Tie equipment due to expected market operation 
impacts, and a levelized annual estimate will be provided to SPP. The 
loss-of-life calculations will be based upon pre-defined impact metrics 
directly related to the increased market use for each of the West DC 
Tie equipment groups eligible for cost recovery. Revenue received from 
SPP for UGP's Miles City DC Tie Incremental MEU share will be credited 
against the Miles City DC Tie portion of the UGP ATRR described above.
    The Miles City DC Tie Incremental MEU share data will be submitted 
to SPP in a standard formula rate template in accordance with the new 
SPP Tariff Attachment AE, Addendum 3A. The Formula Rate Template for 
the Miles City DC Tie Incremental MEU share will be posted on UGP's 
OASIS website, on UGP's Rates website, and on SPP's Member Related 
Postings website (see web addresses listed previously).

Proposed Formula Rate for Scheduling, System Control, and Dispatch 
Service

    UGP proposes to continue to use its current formula rate 
calculation methodology for Scheduling, System Control, and Dispatch 
Service (SSCD), currently provided under Rate Schedule WAUGP-AS1. This 
rate schedule will continue to include transmission facilities in the 
Western Interconnection. The Formula Rate Template for SSCD and related 
information will be posted on UGP's OASIS website, on UGP's Rates 
website, and on SPP's Member Related Postings website (see web 
addresses listed previously).

Formula Rate Implementation Protocols

    For transmission service provided by SPP under SPP's Tariff, UGP 
will continue to provide information relating to UGP's rate 
implementation and annual update procedures and timelines in ``Formula 
Rate Implementation Protocols'' (Protocols). The Protocols, together 
with the above-mentioned formula rate templates, comprise the Formula 
Rates that will be submitted to SPP to be incorporated into the SPP 
Tariff. All relevant information pertaining to UGP's annual updates, 
customer notifications and review periods, and meetings will be 
contained in the Protocols. The Protocols will be posted on UGP's OASIS 
website, on UGP's Rates website, and on SPP's Member Related Postings 
website (see web addresses listed previously).

Proposed Termination of Regulation and Frequency Response Service 
Formula Rate

    UGP proposes to terminate its current formula rate calculation 
methodology for Regulation and Frequency Response Service (Regulation), 
currently provided under Rate Schedule WAUW-AS3. This rate schedule 
addresses Regulation associated with UGP's WAUW BAA in the Western 
Interconnection. Given the SPP Integrated Marketplace will extend into 
the Western Interconnection, and UGP will merge its WAUW BAA into the 
SPP West BAA, UGP will no longer provide Regulation in the WAUW BAA as 
the BA.

Proposed Termination of Operating Reserves Service-Spinning and 
Supplemental Formula Rates

    UGP proposes to terminate its current formula rate calculation 
methodology for Operating Reserve-Spinning Reserve Service and for 
Operating Reserve-Supplemental Reserve Service (collectively, Operating 
Reserves), currently provided under Rate Schedules WAUW-AS5 and WAUW-
AS6, respectively. These rate schedules address Operating Reserves 
associated with UGP's WAUW BAA in the Western Interconnection. Given 
the SPP Integrated Marketplace will extend into the Western 
Interconnection, and UGP will merge its WAUW BAA into the SPP West BAA, 
UGP will no longer provide Operating Reserves in the WAUW BAA as the 
BA.

Proposed Termination of Energy Imbalance and Generator Imbalance 
Service Formula Rates

    UGP proposes to terminate its current formula rate calculation 
methodologies for EI, currently provided under Rate Schedule WAUW-AS4, 
and GI, currently provided under Rate Schedule WAUW-AS7. These rate 
schedules address Energy Imbalance and Generator Imbalance associated 
with UGP's WAUW BAA in the Western Interconnection. Given that the SPP 
Integrated Marketplace will extend into the Western Interconnection, 
and UGP will merge its WAUW BAA into the SPP West BAA, UGP will no 
longer provide Energy Imbalance and Generator Imbalance in the WAUW BAA 
as the BA.

Legal Authority

    DOE procedures for public participation in power and transmission 
rate adjustments are located at 10 CFR part 903. The proposed action is 
a major rate adjustment, as defined by 10 CFR 903.2(d). In accordance 
with 10CFR 903.15(a) and 10CFR 903.16(a), UGP will hold public 
information and public comment forums for this rate adjustment. UGP 
will review and consider all timely public comments at the conclusion 
of the consultation and comment period and adjust the proposal as 
appropriate. The rates will then be approved on an interim basis.
    WAPA is establishing the formula rates for UGP in accordance with 
section 302 of the DOE Organization Act (42 U.S.C. 7152).\6\
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    \6\ 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 November19, 
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

[[Page 106479]]

Under Secretary for Infrastructure. By Redelegation Order No.S3-DEL-
WAPA1-2023, effective April 10, 2023, the Under Secretary for 
Infrastructure further redelegated the authority to confirm, approve, 
and place such rates into effect on an interim basis to WAPA's 
Administrator.

Availability of Information

    All brochures, studies, comments, letters, memorandums, or other 
documents that UGP initiates or uses to develop the proposed formula 
rates are available for inspection and copying at the Upper Great 
Plains Regional office located at 2900 4th Ave. North, 6th Floor, 
Billings, Montana. Many of these documents and supporting information 
are also available on UGP's Rates website at: www.wapa.gov/about-wapa/regions/ugp/ugp-rates and other posting locations noted.

Ratemaking Procedure Requirements

Environmental Compliance

    WAPA is in the process of determining whether an environmental 
assessment or an environmental impact statement should be prepared or 
if this action can be categorically excluded from those 
requirements.\7\
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    \7\ In compliance with the National Environmental Policy Act 
(NEPA) of 1969, as amended, 42 U.S.C. 4321-4347; the Council on 
Environmental Quality Regulations for implementing NEPA (40 CFR 
parts 1500-1508); and DOE NEPA Implementing Procedures and 
Guidelines (10 CFR part 1021).
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Determination Under Executive Order 12866

    WAPA has an exemption from centralized regulatory review under 
Executive Order 12866; accordingly, no clearance of this notice by the 
Office of Management and Budget is required.

Signing Authority

    This document of the Department of Energy was signed on December 
19, 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 December 19, 2024.
Jennifer Hartzell,
Alternate Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2024-30858 Filed 12-27-24; 8:45 am]
BILLING CODE 6450-01-P
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