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[Federal Register Volume 89, Number 248 (Friday, December 27, 2024)]
[Notices]
[Pages 105564-105567]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-30862]

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DEPARTMENT OF ENERGY

Western Area Power Administration

Loveland Area Projects--Rate Order No. WAPA-219

AGENCY: Western Area Power Administration, DOE.

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

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SUMMARY: The Rocky Mountain (RM) region of the Western Area Power 
Administration (WAPA) proposes new formula rates for the Loveland Area 
Projects (LAP) transmission and ancillary services for RM's costs to be 
recovered under the Southwest Power Pool's (SPP) Open Access 
Transmission Tariff (Tariff) should RM decide to become a member of 
SPP. The proposed formula rates will become effective on the latter of 
RM's membership date or the go-live date of the expansion of the SPP 
Regional Transmission Organization (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2031, or until superseded.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 27, 2024 
and end March 27, 2025. RM 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 11 a.m. MST to no 
later than 12 noon MST. RM will also host a public comment forum on 
February 19, 2025, at 12:15 p.m. MST to no later than 1 p.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 RM's Rates website at least 14 days prior to the public information 
and comment forums at:www.wapa.gov/about-wapa/regions/rm/rm-rates/2026-rate-adjustment-rto-trans-and-anc-svcs.
    RM will accept comments any time during the consultation and 
comment period.

ADDRESSES: Written comments and requests to be informed of Federal 
Energy Regulatory Commission (FERC) actions concerning the proposed 
formula rates submitted by WAPA to FERC for approval should be sent to: 
Barton V. Barnhart, Regional Manager, Rocky Mountain Region, Western 
Area Power Administration, 5555 East Crossroads Boulevard, Loveland, CO 
80538-8986, or email [email protected]. RM will post information 
about the proposed formula rates and

[[Page 105565]]

written comments received to its Rates website at: www.wapa.gov/about-wapa/regions/rm/rm-rates/2026-rate-adjustment-rto-trans-and-anc-svcs

FOR FURTHER INFORMATION CONTACT: Sheila D. Cook, Rates Manager, Rocky 
Mountain Region, Western Area Power Administration, (970) 685-9562 or 
email: [email protected].

SUPPLEMENTARY INFORMATION: 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.\1\ If SPP succeeds in 
obtaining FERC's approval of its Tariff, Bylaws, and Membership 
Agreement revisions, and upon further approval by the Administrator, RM 
plans to become a member of SPP.\2\
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    \1\ 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).
    \2\ WAPA's Colorado River Storage Project Management Center also 
plans to become a member of the SPP RTO, and WAPA's Upper Great 
Plains region plans to expand membership participation in the SPP 
RTO. These regions are proposing new formula rate designs/rate 
schedules under separate Rate Order Nos. WAPA-220 and WAPA-218, 
respectively.
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    RM's membership will include RM becoming a Transmission Owner 
member of SPP and SPP assuming the balancing authority (BA) 
responsibilities for RM's Western Area Colorado Missouri (WACM) BA 
area. WAPA will transfer functional control of eligible LAP 
transmission facilities to SPP. At such time, LAP transmission and 
ancillary services and WACM BA ancillary services will no longer be 
available under WAPA's Tariff, and RM's BA contracts and the existing 
transmission and ancillary services rate schedules, specifically L-NT1, 
L-FPT1, L-NFPT1, L-UU1, L-AS1, L-AS2, L-AS3, L-AS4, L-AS5, L-AS6, L-
AS7, and L-AS9, will no longer be applicable.
    LAP transmission service will be provided under the SPP Tariff by 
SPP as the transmission service provider. Accordingly, RM will need to 
have new rate designs/rate schedules and rate implementation protocols 
in place for specific costs to be recovered under the SPP Tariff.
    As of the date of this notice, SPP's anticipated deadline for 
filing certain SPP Tariff documents for RM (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. RM is publishing this notice of proposed formula rates 
and initiating the rate consultation and comment period at this time in 
order for RM to obtain FERC-approved formula rates prior to this SPP 
deadline.
    If RM does not become a member of SPP, further actions under this 
notice of proposed rates will be canceled, and existing formula rates 
will remain in effect. If canceled, RM will inform customers by letter 
and by posting notice of such on RM's Rates website (www.wapa.gov/about-wapa/regions/rm/rm-rates/2026-rate-adjustment-rto-trans-and-anc-svcs) and will withdraw the formula rates proposed in this notice.
    RM is proposing a new formula rate to calculate the ARRs for its 
LAP transmission facilities located in both the Eastern and Western 
Interconnections and for its Virginia Smith Converter Station (Sidney 
DC Tie) that will be transferred to the functional control of SPP under 
the SPP Tariff. RM is also proposing a new formula rate to calculate 
the Sidney DC Tie Incremental Market Efficiency Use \3\ (Incremental 
MEU) share. RM is proposing a new formula rate to calculate the ARR for 
Scheduling, System Control, and Dispatch Service (SSCD Service) under 
the SPP Tariff. RM's revenue requirements will be added to the annual 
revenue requirements of other transmission owners in the SPP pricing 
Zone 104, also identified as the Loveland Area Projects Zone (LAPZ), 
for transmission service billed by SPP within the LAPZ. RM's revenue 
requirements under these proposed rates will also impact other costs 
for transmission service within the broader SPP footprint. For 
transmission and ancillary services provided under the SPP Tariff, RM 
also proposes to provide information related to RM's rate 
implementation and annual updates in ``Formula Rate Implementation 
Protocols'' (Protocols). Each of these topics is described in more 
detail below.
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    \3\ ``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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    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 
RA6120.2. For more specific information on the proposed formula rates, 
please see the customer rate brochure located on RM's Rates website at: 
www.wapa.gov/about-wapa/regions/rm/rm-rates/2026-rate-adjustment-rto-trans-and-anc-svcs.

Proposed Transmission Formula Rate

    For transmission service provided by SPP under SPP's Tariff, under 
Rate Schedule LAPT-ATRR, RM proposes to provide its overall LAP annual 
transmission revenue requirement (ATRR) as separate subtotals to 
distinguish LAP transmission facilities separately between Western 
Interconnection, Eastern Interconnection, Sidney DC Tie (for use by SPP 
in assessing the DC Tie Access Charge \4\ to transmission service 
customers proposed in the SPP filing to FERC for the RTO expansion), 
and other SPP zones. SPP will utilize these LAP 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.
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    \4\ ``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.)
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    Consistent with RM's current transmission formula rates, RM 
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 RM 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

[[Page 105566]]

the local pricing zone, while ``Regional'' costs are those meeting 
certain criteria eligible to be recovered across SPP's applicable West 
or East BA area, dependent upon where the transmission upgrade is 
located. The Formula Rate Template for the LAP ATRR and related 
information will be posted on RM's LAPT Open Access Same-Time 
Information System (OASIS) website (www.oasis.oati.com/LAPT/index.html), on RM's Rates website (www.wapa.gov/about-wapa/regions/rm/rm-rates/2026-rate-adjustment-rto-trans-and-anc-svcs), and on SPP's 
Member Related Postings website(opsportal.spp.org/OASIS/Directory/Member%20Related%20Postings).

Proposed Sidney DC Tie Incremental Market Efficiency Use 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 Incremental MEU compensates each West 
DC Tie Transmission Owner for the expected loss of life of that owner's 
West DC Tie facility 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 RM as a West DC Tie Transmission Owner of the 
Sidney DC Tie for Incremental MEU under SPP's Tariff, RM proposes to 
provide its Sidney DC Tie Incremental MEU share under Rate Schedule 
LAPT-DCTIE-IMEU. SPP will utilize this Sidney DC Tie Incremental MEU 
share along with other applicable information to calculate the amount 
to be paid to RM for the expected loss of life of certain Sidney 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 eligible group 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 RM's Sidney DC Tie Incremental MEU share will be credited against 
the Sidney DC Tie portion of the LAP ATRR described above.
    The Sidney DC Tie Incremental MEU share data will be submitted to 
SPP in a standard formula rate template in accordance with the SPP 
Tariff Attachment AE. The Formula Rate Template for the Sidney DC Tie 
Incremental MEU share will be posted on RM's LAPT OASIS website, on 
RM'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

    SSCD Service is required to operate a Transmission Owner's SPP 
Tariff facilities and schedule movement of power through, out of, 
within, or into one or both of the SPP BA areas and certain parts of 
the transmission system not located within a SPP BA area. Under this 
proposal, RM's ARR for SSCD Service, under Rate Schedule LAPT-AS1, will 
be submitted to SPP in a standard formula rate template for inclusion 
in the SPP Tariff Schedule 1. The SSCD Service ARR will be used by SPP 
to determine the regional SPP Schedule 1 rate and revenue distribution 
for SPP through-and-out transactions and to determine the zonal SPP 
Schedule 1 rate and revenue distribution for the LAPZ under the SPP 
Tariff.
    For consistency with the LAP ATRR proposal, RM proposes a formula-
based rate methodology to calculate its SSCD Service ARR on a forward-
looking basis by using projections to estimate costs associated with 
SSCD Service for the upcoming year, with a true-up of incurred costs in 
a subsequent year. RM's SSCD Service ARR will be derived by calculating 
RM's applicable annual costs associated with the provision of SSCD 
Service, including operation and maintenance, administrative and 
general, interest, and depreciation. The annual costs will be reduced 
by any applicable revenue received by RM under the SPP Tariff. The 
Formula Rate Template for the SSCD Service and related information will 
be posted on RM's LAPT OASIS website, on RM'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, RM 
proposes to provide information relating to RM'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 in the SPP Tariff. All 
relevant information pertaining to RM's annual updates, customer 
notifications and review periods, and meetings will be contained in the 
Protocols. The Protocols will be posted on RM's LAPT OASIS website, on 
RM's Rates website, and on SPP's Member Related Postings website (see 
web addresses listed previously).

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 10 CFR 903.15(a) and 10 CFR 903.16(a), RM will hold public 
information and public comment forums for this rate adjustment. RM 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 LAP 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 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

[[Page 105567]]

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.

Availability of Information

    All brochures, studies, comments, letters, memorandums, or other 
documents that RM initiates or uses to develop the proposed formula 
rates are available for inspection and copying at the Rocky Mountain 
Regional office located at 5555 East Crossroads Boulevard, Loveland, 
Colorado. Many of these documents and supporting information are also 
available on RM's Rates website at: www.wapa.gov/about-wapa/regions/rm/rm-rates/2026-rate-adjustment-rto-trans-and-anc-svcs.

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. 2024-30862 Filed 12-26-24; 8:45 am]
BILLING CODE 6450-01-P
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