[Federal Register Volume 60, Number 88 (Monday, May 8, 1995)]
[Notices]
[Pages 22575-22577]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-11264]



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DEPARTMENT OF ENERGY
Western Area Power Administration


Boulder Canyon Project--Proposed Firm Power Rate Adjustment

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of Proposed Boulder Canyon Project Power Rate 
Adjustment.

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SUMMARY: On October 7, 1994, the Western Area Power Administration 
(Western) published a notice terminating WAPA-58-2, the public process 
for the Boulder Canyon Project (BCP) second annual rate adjustment 
under Rate Order WAPA-58 (see Notice to Terminate, 59 FR 51192). Rate 
Order WAPA-58 was approved by the Federal Energy Regulatory Commission 
(FERC) on November 3, 1993, to be effective from January 1, 1993, 
through September 30, 1997 (65 FERC Sec. 61,186). The methodology 
utilized in the Order requires Western to adjust the BCP power rate on 
an annual basis. On February 4, 1994, the Order was confirmed and Rate 
Schedule BCP-F4/2 was placed into effect by the Administrator of 
Western by Rate Order No. WAPA-58-1 (59 FR 10629, March 7, 1994). Rate 
Schedule BCP-F4/2 established a composite power rate of 12.62 mills per 
kilowatthour (mills/kWh), which is comprised of an energy charge of 
6.31 mills/kWh and a capacity charge of $1.07 per kilowatt per month 
(kW/month).
    Western, BCP Contractors<SUP>1, and the Bureau of Reclamation 
(Reclamation) have successfully concluded negotiations on a BCP 
Implementation Agreement. Based on that Agreement, Western is now 
proposing a revised rate methodology for the BCP which results in a 
rate increase in the composite rate and energy charge, and a rate 
decrease in the capacity charge. The power repayment spreadsheet study 
(PRSS), based on the estimated annual revenue requirement for fiscal 
year (FY) 1996, indicates that the proposed composite rate increases by 
0.04 mills/kWh, the proposed energy charge increases by 0.02 mills/kWh, 
and the proposed capacity charge decreases by $0.03/kW/month since the 
last rate adjustment. The proposed rates for energy and capacity are 
expected to become effective October 1, 1995, and will supersede the 
existing BCP rates. [[Page 22576]] 

    \1\The BCP Contractors include the Arizona Power Authority; 
Colorado River Commission of Nevada; City of Boulder City, Nevada; 
Department of Water and Power of the City of Los Angeles; The 
Metropolitan Water District of Southern California; Southern 
California Edison Company; and the Cities of Anaheim, Azusa, 
Banning, Burbank, Colton, Glendale, Pasadena, Riverside, and Vernon.
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    During the last rate adjustment process (WAPA-58-2), the BCP 
Contractors requested that Western re-evaluate the annual costs in the 
PRSS for the ratesetting period. As a result of this re-evaluation, 
Western terminated the public process for proposed Rate WAPA-58-2 on 
October 7, 1994 (59 FR 51192). Termination was based on the following: 
(1) The BCP currently had a rate in effect that would satisfy FYs 1994 
and 1995 annual costs; and (2) the BCP Implementation Agreement which 
became effective February 17, 1995, was in the final stage of 
negotiations with the BCP Contractors and Reclamation, and those 
negotiations included a revised methodology for establishing BCP power 
rates on an annual basis. The Implementation Agreement addresses eleven 
issues: (1) Replacements; (2) Visitor Facilities; (3) Amendment to 
Regulations; (4) Multi-Project Benefits and Costs; (5) Engineering & 
Operating Committee (E&OC) and Coordinating Committee; (6) Billing and 
Payment; (7) Operating Amount and Working Capital; (8) Audits; (9) 
Principal Payments; (10) Annual Rate Adjustments; and (11) Uprating 
Credits.
    The major differences between the existing rates and methodology, 
compared to the proposed rates and methodology, resulted from several 
activities which involve Western and Reclamation working in partnership 
with the BCP Contractors. First, the BCP Implementation Agreement 
revises the methodology for determination of the power rate to an 
annualized rate, from the higher of either: (1) The 5-year-average for 
the cost evaluation period; or (2) the rate in the first year of the 
cost evaluation period. Second, future revenue requirements were 
reduced by continuing to review Western's and Reclamation's operating 
and maintenance costs, and by reviewing and monitoring the construction 
and replacement program through the E&OC. Third, the BCP Implementation 
Agreement establishes the method by which the dollar imbalance between 
total capacity and total energy revenues is resolved. Fourth, a new 
rate making revenue requirements and billing methodology will be 
implemented. Under the current rate making and billing methodology, 
rates were determined each year based on projected hydrology for the 
project and bills were issued monthly based on actual hydrology and 
resulting energy production. Under the new methodology, revenue 
requirements will be calculated and billed regardless of the projected 
or actual hydrology and resultant energy generation.
    The proposed rates are based on a composite rate of 12.66 mills/
kWh. The composite rate consists of an energy charge of 6.33 mills/kWh 
and a capacity charge of $1.04/kW/month.
    The following table compares the existing BCP rates with the 
proposed rates:

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                                                                  Existing rates                                
                                                                    February 1,                                 
                                                                    1994, thru      Proposed rates     Percent  
                                                                   September 30,    October 1, 1995     change  
                                                                       1995                                     
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Rate Schedule..................................................  BCP-F4/2          BCP-F5                     --
Composite Rate (mills/kWh).....................................  12.62             12.66                  + 0.32
Energy Rate (mills/kWh)........................................  6.31              6.33                   + 0.32
Capacity Rate ($/kW/month).....................................  $1.07             $1.04                  - 2.80
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    Since the proposed rates and revised rate methodology constitute a 
major rate adjustment as defined by the procedures for public 
participation in general rate adjustments, both a public information 
forum and a public comment forum will be held. A revised PRSS, which is 
the basis for the proposed rate adjustment, has been distributed to the 
BCP Contractors and other interested parties prior to publication of 
this notice. After review of public comments, Western will recommend 
the proposed rates for approval on an interim basis by the Deputy 
Secretary of the Department of Energy (Deputy Secretary). Once the 
Deputy Secretary approves the rates as provisional rates, they will be 
submitted to FERC for approval on a final basis.

DATES: The consultation and comment period will begin on May 8, 1995 
and will end no later than August 7, 1995. The public information forum 
will be held at Western's Phoenix Area Office, 615 South 43rd Avenue, 
Phoenix, Arizona, beginning at 10 a.m. on June 15, 1995. The public 
comment forum at which Western will receive oral and written comments 
will be held at the same location beginning at 10 a.m. on July 13, 
1995.
    Written comments should be received by the end of the consultation 
and comment period to assure consideration and should be sent to the 
address below.

[[Page 22577]] FOR FURTHER INFORMATION CONTACT: Mr. J. Tyler Carlson, 
Area Manager, Western Area Power Administration, Phoenix Area Office, 
P.O. Box 6457, Phoenix, AZ 85005-6457, (602) 352-2453.

SUPPLEMENTARY INFORMATION: The power rates for the BCP are established 
pursuant to the Department of Energy Organization Act (42 U.S.C. 7101 
et seq.), the Reclamation Act of 1902 (43 U.S.C. 391 et seq.), as 
amended and supplemented by subsequent enactments, particularly section 
9(c) of the Reclamation Project Act of 1939 (43 U.S.C. 485h(c)), the 
Colorado River Basin Project Act of 1968 (43 U.S.C. 1501 et seq.), the 
Colorado River Storage Project Act (43 U.S.C. 620 et seq.), the Boulder 
Canyon Project Act (43 U.S.C. 617 et seq.), the Boulder Canyon Project 
Adjustment Act (43 U.S.C. 618 et seq.), the Hoover Power Plant Act of 
1984 (43 U.S.C. 619 et seq.), the General Regulations for Power 
Generation, Operation, Maintenance, and Replacement at the Boulder 
Canyon Project, Arizona/Nevada (43 CFR Part 431) published in the 
Federal Register at 51 FR 23960 on July 1, 1986, and the General 
Regulations for the Charges for the Sale of Power From the Boulder 
Canyon Project, Final Rule (10 CFR Part 904) published in the Federal 
Register at 51 FR 43124 on November 28, 1986, the Procedures for Public 
Participation in Power and Transmission Rate Adjustments and Extensions 
(10 CFR Part 903) published in the Federal Register at 50 FR 37837 on 
September 18, 1985, and the DOE financial reporting policies, 
procedures, and methodology (DOE Order No. RA 6120.2 dated September 
20, 1979).
    By Amendment No. 3 to Delegation Order No. 0204-108, published 
November 10, 1993 (58 FR 59716), the Secretary of Energy delegated: (1) 
The authority to develop long-term power and transmission rates on a 
nonexclusive basis to the Administrator of Western; (2) The authority 
to confirm, approve, and place power rates into effect on an interim 
basis to the Deputy Secretary; and (3) the authority to confirm, 
approve, and place into effect on a final basis, to remand, or to 
disapprove power rates to FERC.
    The existing BCP rate methodology in WAPA-58 was approved by the 
Assistant Secretary for Conservation and Renewable Energy on an interim 
basis, effective January 1, 1993 (57 FR 61074). On November 3, 1993, 
FERC approved the BCP rate methodology as a final rate effective from 
January 1, 1993, through September 30, 1997 (65 FERC Sec. 61,186). The 
Administrator of Western confirmed and approved the rate methodology in 
Rate Order WAPA-58-1 (59 FR 10629, March 7, 1994). The methodology 
utilized in Rate Order WAPA-58 requires that Western adjust the BCP 
rates, either an increase or decrease, on an annual basis. The existing 
BCP composite power rate set forth in Rate Schedule BCP-F4/2 is 12.62 
mills/kWh comprised of an energy charge of 6.31 mills/kWh and a 
capacity charge of $1.07/kW/month. See Notice of Rate Order WAPA-58-1, 
59 FR 10629.

Availability of Information

    All brochures, studies, comments, letters, memorandums, and other 
documents made or kept by Western for the purpose of developing the 
proposed rates for energy and capacity are and will be made available 
for inspection and copying at the Phoenix Area Office, 615 South 43rd 
Avenue, Phoenix, Arizona 85005.

Determination Under Executive Order 12866

    DOE has determined that this is not a significant regulatory action 
because it does not meet the criteria of Executive Order 12866, 58 FR 
51735. Western 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.

Environmental Evaluation

    In compliance with the National Environmental Policy Act of 1969 
(NEPA), 42 U.S.C. 4321 et seq.; Council on Environmental Quality 
Regulations (40 CFR Parts 1500-1508); and DOE NEPA Regulations (10 CFR 
Part 1021), Western has determined that this action is categorically 
excluded from the preparation of an environmental assessment or an 
environmental impact statement.

    Issued in Golden, CO May 1, 1995.
J.M. Shafer,
Administrator.
[FR Doc. 95-11264 Filed 5-5-95; 8:45 am]
BILLING CODE 6450-01-P