[Federal Register Volume 86, Number 121 (Monday, June 28, 2021)]
[Notices]
[Pages 34002-34005]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-13645]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Proposed Salt Lake City Area Integrated Projects Firm Power Rate 
and Colorado River Storage Project Transmission and Ancillary Services 
Rates--Rate Order No. WAPA--199

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of proposed firm power fixed rate and transmission and 
ancillary services formula rates.

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SUMMARY: The Colorado River Storage Project Management Center (CRSP MC) 
of the Western Area Power Administration (WAPA) proposes a new Salt 
Lake City Area Integrated Projects (SLCA/IP) fixed firm power rates for 
use December 1, 2021, through December 31, 2023. The existing rates for 
these services are not set to expire until September 30, 2025; however, 
CRSP MC is initiating this rate action in response to a 35-percent 
projected increase to the firm power composite rate caused by a large 
increase in purchased power costs due to on-going drought conditions 
and a small increase to Operation, Maintenance, and Replacement (OM&R) 
expenses. Based on the FY 2021 toll on the Upper Colorado River Basin 
Fund (Basin Fund) and the drought-induced purchased power projections 
from the Reclamation May 24-Month Study, existing rates will not 
sustain a balance in the Basin Fund capable of supporting operations. 
CRSP MC proposes modifying how purchased power is calculated, and 
purchased power costs would be assessed on a pass-through-cost basis 
charged to each customer. CRSP MC proposes modifying language to 
implement the Cost Recovery Charge (CRC) throughout the year, if 
warranted, and would be able to implement a CRC if water levels drop 
below the intake structures at Glen Canyon Dam. Additionally, updated 
Colorado River Storage Project (CRSP) transmission and ancillary 
services rate schedules are proposed for use December 1, 2021, through 
December 31, 2023, with no material change proposed other than updating 
effective dates.

DATES: A consultation and comment period will begin June 28, 2021 and 
end August 31, 2021. This provides approximately 65 days for public 
comment, in accordance with WAPA's authority under 10 CFR 903.14 to 
shorten the otherwise 90-day comment period for good cause. Concluding 
the comment period by August 31, 2021, will enable CRSP MC to implement 
the rates by the effective date of December 1, 2021. Further delaying 
implementation to January 1, 2022, given projected costs of purchased 
power, would reduce the Basin Fund by a further $10 million due to the 
deficiency of current rates in light of escalating purchased power 
costs. CRSP MC will present a detailed explanation of the proposed 
rates and other modifications at a public information forum on July 7, 
2021, 12 p.m. to 2 p.m. Mountain Daylight Time (MDT). CRSP MC will 
present a purchased-power-specific public information forum on July 28, 
2021, 12 p.m. to 2 p.m. MDT. CRSP MC will present a CRC-specific public 
information forum on July 29, 2021, 12 p.m. to 2 p.m. MDT. CRSP MC will 
accept oral and written comments at a public comment forum on August 
11, 2021, 12 p.m. to no later than 2 p.m. MDT. CRSP MC will accept 
written comments any time during the consultation and comment period. 
CRSP MC will provide a 14-day consultation and comment period 
specifically for purchased power after the CRSP MC posts the final 
purchased power amounts to its website at: https://www.wapa.gov/regions/CRSP/rates/Pages/rates.aspx.

ADDRESSES: Written comments and requests for information about Federal 
Energy Regulatory Commission (FERC) actions concerning the proposed 
rates submitted by WAPA to FERC for approval should be sent to: Mr. 
Rodney Bailey, Acting CRSP Manager, Colorado River Storage Project 
Management Center, Western Area Power Administration, 1800 South Rio 
Grande Avenue, Montrose, CO 81401, or email: <a href="/cdn-cgi/l/email-protection#43001110130e006e312237266e2227296e03342233226d242c35"><span class="__cf_email__" data-cfemail="63203130332e204e110217064e0207094e23140213024d040c15">[email protected]</span></a>. 
CRSP MC will post information about the proposed rates and written 
comments received to its website at: https://www.wapa.gov/regions/CRSP/rates/Pages/rates.aspx.
    The public information and comment forums will be conducted online. 
CRSP MC will post webinar and call-in information a week before each 
respective forum to its website at: https://www.wapa.gov/regions/CRSP/rates/Pages/rates.aspx.

FOR FURTHER INFORMATION CONTACT: Mr. Thomas Hackett, Rates Manager, 
Colorado River Storage Project Management Center, Western Area Power 
Administration, (801) 524-5503, or email: <a href="/cdn-cgi/l/email-protection#4b0819181b060866392a3f2e662a2f210b3c2a3b2a652c243d"><span class="__cf_email__" data-cfemail="5516070605181678273421307834313f15223425347b323a23">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: On August 17, 2020, under Rate Order No. 
WAPA-190, WAPA's Administrator placed the following rate schedules into 
effect on an interim basis, effective October 1, 2020, and through 
September 30, 2025, pending confirmation and final approval by FERC:\1\ 
SLIP-F11 for SLCA/IP Firm Power, SP-NW5 for Network Integration 
Transmission Service, SP-PTP9 for Firm Point-to-Point Transmission 
Service, SP-NFT8 for Non-Firm Point-to-Point Transmission Service, SP-
UU2 for Unreserved Use Penalties, SP-EI5 for Energy and Generator 
Imbalance Service, SP-SSR5 for Operating Reserves--Spinning and 
Supplemental Reserve Services, and SP-SS1 for Sale of Surplus Products. 
On December 17, 2020, FERC approved and

[[Page 34003]]

confirmed the rate schedules on a final basis through September 30, 
2025.\2\
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    \1\ 85 FR 52115 (Aug. 24, 2020).
    \2\ Order Confirming and Approving Rate Schedules on a Final 
Basis, FERC Docket No. EF20-7-000, 173 FERC ] 61,230 (2020).
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    WAPA is proposing a 2-year rate to address worsening drought 
conditions in the southwestern United States and volatile purchased 
power costs. The proposed firm power rate is a fixed rate; the proposed 
transmission and ancillary services rates continue to use the formula-
based methodology that includes an annual update to the financial and 
load data in the rate formulas. The proposed rates would go into effect 
December 1, 2021, and remain in effect until December 31, 2023, or 
until WAPA supersedes or changes the rates through another public rate 
process pursuant to 10 CFR part 903, whichever occurs first.
    The proposed base rates would provide sufficient revenue to recover 
annual OM&R expenses, interest expense, irrigation assistance, and 
capital repayment requirements within the cost recovery criteria set 
forth in Department of Energy (DOE) Order No. RA 6120.2.
    WAPA proposes that purchased power required to supplement 
hydropower deliveries up to contractual levels would be passed through 
to firm power customers under a separate charge, which would be in 
addition to the base rate for hydropower deliveries. Any customer not 
wanting to receive its share of the purchased power costs would not be 
charged the purchased power charge and would receive a proportionate 
amount of capacity and energy from WAPA each month, charged at the base 
rate, reflecting actual hydropower generation levels. If WAPA 
identifies a viable proposal to reduce the total purchased power 
expenses in the power rate and provide additional flexibility to the 
customers, it will be set forth during a public information forum. WAPA 
will develop a rate schedule to pass through the purchased power costs. 
A draft of the new rate schedule will be included in the brochure.

SLCA/IP Firm Power Rate

    Under the current Rate Schedule SLIP-11, the energy rate is 11.43 
mills per kilowatthour (mills/kWh), and the capacity rate is $4.85 per 
kilowattmonth ($/kWmonth). The composite rate of all charges, used for 
reference only as a comparison against other wholesale power rates, is 
27.45 mills/kWh.
    The revenue requirement for the proposed rate is based upon the 
most current data available, specifically the fiscal year (FY) 2020 
historical financial data and the FY 2023 work plans for WAPA and the 
Bureau of Reclamation (Reclamation), and the May 24-Month Study. Table 
1 shows a comparison of costs of the existing rate structures, without 
the additional purchased power expenses.

                          Table 1--Comparison Of Existing And Proposed Firm Power Rates
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                                                             Existing rate       Proposed rate
                                                              under rate          under rate
                      Rate schedule                        schedule SLIP-F11   schedule SLIP-F12    Change (%)
                                                           effective October  effective December
                                                                1, 2020             1, 2021
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Base Rate:
Firm Energy: (mills/kWh)................................               11.43               12.70          +11.11
Firm Capacity: ($kW/month)..............................                4.85                5.40          +11.25
Composite Rate: (mills/kWh).............................               27.45               30.44          +10.89
Purchased Power Rate: Average Monthly Purchase Energy                    N/A        Market Price
 (mills/kWh)............................................
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    Currently, WAPA uses Reclamation's most-probable monthly water 
releases and end-of-month elevations as reported in Reclamation's 
August 24-Month Study (24-month Study), provided by Reclamation--Upper 
Colorado Basin, to determine the first year of firming-energy-purchase 
projections. For energy-purchase projections in subsequent years, WAPA 
uses a subset of Reclamation's annual August Colorado River Simulation 
System (CRSS) model traces to estimate energy purchase projections, 
using a rolling average value to minimize fluctuations. WAPA continues 
to evaluate methodologies used to forecast purchased power. Under rate 
schedule SLIP-F12, WAPA will use the August 24-Month Study to determine 
generation and projected sales for the two rate years. WAPA will 
propose actions to be implemented when Lake Powell's water level drops 
below the level at which its turbines cannot generate power. These 
actions will be included in the new rate schedule. Any additional 
changes to methodologies will be posted in the rate brochure and 
presented at the public information forum for purchased power. WAPA 
will update the rate brochure throughout the rate process as data and 
processes are updated or added.

Cost Recovery Charge

    WAPA will continue to use a Cost Recovery Charge (CRC), if 
necessary, as a mechanism to adequately recover and maintain a 
sufficient balance in the Basin Fund in the event projected expenses 
significantly exceed projected revenue estimates. The Basin Fund is a 
revolving fund and operates without annual appropriations. The CRC is 
an additional surcharge on all Sustainable Hydro Power (SHP) energy 
deliveries, which are long-term energy sales provided under WAPA's 
SLCA/IP firm electric service contracts. The CRC may be implemented 
when, among other things, the Basin Fund's cash balance is at risk due 
to low hydropower generation, high prices for firming power, or 
emergency capitalized investment funding. The CRC is based only on 
Basin Fund cash analysis and is independent of the SLCA/IP Power 
Repayment Study calculations.
    WAPA proposes to reserve the right to implement a CRC throughout 
the year using guidance from the existing implementation tiers and the 
latest 24-month Study from Reclamation. An established CRC would be in 
effect for 12 months from the date implemented. If circumstances 
dictate the need to reassess an established CRC, the updated CRC would 
supersede the previous CRC and remain in effect for 12 months. The CRC 
is implemented at WAPA's discretion based on the balance of the Basin 
Fund and WAPA's ability to meet contractual requirements.
    The minimum Basin Fund carryover balance is $40 million.

[[Page 34004]]



                                        Table 3--CRC Implementation Tiers
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                                 Criteria, if the Basin Fund
             Tier                   beginning balance is:                         Notification
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i.............................  Greater than $150 million      Annually.
                                 with an expected decrease to
                                 below $75 million.
ii............................  Less than $150 million but
                                 greater than $120 million
                                 with an expected 50-percent
                                 decrease in the next CY.
iii...........................  Less than $120 million but
                                 greater than $90 million
                                 with an expected 40-percent
                                 decrease in the next CY.
iv............................  Less than $90 million but      Semi-Annual (May/November).
                                 greater than $60 million
                                 with an expected 25-percent
                                 decrease in the next CY.
v.............................  Less than $60 million but      Monthly.
                                 greater than $40 million
                                 with an expected decrease to
                                 below $40 million in the
                                 next CY.
----------------------------------------------------------------------------------------------------------------

    Under this proposal, WAPA reserves the right to implement a CRC 
throughout the year using the criteria in Table 3 if annual water 
releases from Glen Canyon Dam fall below 8.23 million acre-feet 
regardless of the Basin Fund balance.
    WAPA would establish an energy waiver level (WL) using the CRC 
formula. Customers could accept either the CRC or WL. The WL provides 
WAPA the ability to reduce purchase power expenses by delivering less 
energy than its contractual obligations. For those customers who agree 
to schedule no more energy than their proportionate share of the WL, 
WAPA would waive the CRC for that year.
    WAPA continues to refine the CRC process and the details of the CRC 
calculations. Any recommended changes will be provided in the customer 
rate brochure and set forth at the public information forum for the 
CRC.

Transmission Services

Annual Transmission Revenue Requirement (ATRR)

    WAPA does not propose any changes to the existing formula rate for 
calculating ATRR, applicable to both Network Integration and Point-to-
Point transmission service rates. The ATRR is the annual cost of the 
CRSP Transmission System adjusted for Non-Firm Point-to-Point revenue 
credits, other miscellaneous charges or credits, and the prior year 
true-up.

Unreserved Use Penalties

    WAPA proposes no changes to the Unreserved Use penalty rate.

Ancillary Services

Energy Imbalance and Generator Imbalance Services

    WAPA proposes no changes to the Energy Imbalance and Generator 
Imbalance Rate Schedule. These services are provided to CRSP, as a 
Transmission Service Provider, by the Western Area Colorado Missouri 
Balancing Authority under Rate Schedule L-AS9.

Spinning and Supplemental Reserves

    WAPA proposes no changes to the Operating Reserves--Spinning and 
Supplemental Reserves Services formula rate.

Sale of Surplus Products

    WAPA proposes no changes to the rate schedule for the sale of the 
following surplus energy and capacity products: Energy, regulation, 
reserves, and frequency response.

Joint Dispatch Transmission Service

    Joint Dispatch Transmission Service is currently being added, in a 
separate parallel process, to WAPA's rates under Rate Order No. WAPA-
195 \3\ and is proposed to be effective October 1, 2021. This Rate 
Order would supersede WAPA-195 for the purpose of aligning expiration 
dates. No other changes are proposed.
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    \3\ 86 FR 21726 (Apr 23, 2021).
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Legal Authority

    Existing DOE procedures for public participation in power and 
transmission rate adjustments (10 CFR part 903) were published on 
September 18, 1985, and February 21, 2019.\4\ The proposed action is a 
major rate adjustment, as defined by 10 CFR 903.2(e). In accordance 
with 10 CFR 903.15(a) and 10 CFR 903.16(a), CRSP MC will hold public 
information and public comment forums for this rate adjustment. CRSP MC 
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.
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    \4\ 50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
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    CRSP MC is proposing the SLCA/IP firm power rate and revised CRSP 
transmission and ancillary services formula rates in accordance with 
section 302 of the DOE Organization Act (42 U.S.C. 7152).\5\
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    \5\ 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 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 other acts 
that specifically apply to the projects involved.
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    By Delegation Order No. 00-037.00B, effective November 19, 2016, 
the Secretary of Energy delegated: (1) The authority to develop power 
and transmission rates to WAPA's 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-S4-2021, 
effective February 25, 2021, the Acting 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 Science (and 
Energy). By Redelegation Order No. S4-DEL-OE1-2021, effective March 25, 
2021, the Acting Under Secretary for Science (and Energy) redelegated 
the authority to confirm, approve, and place such rates into effect on 
an interim basis to the Assistant Secretary for Electricity. By 
Redelegation Order No. 00-002.10-05, effective July 8, 2020, the 
Assistant Secretary for Electricity further redelegated the authority 
to confirm, approve, and place such rates into effect on an interim 
basis to WAPA's Administrator. This redelegation order, despite 
predating the February 2021 and March 2021 delegations, remains valid.

Availability of Information

    All brochures, studies, comments, letters, memoranda, or other 
documents that the CRSP MC initiates or uses to develop the proposed 
rates are available for inspection and copying at the Colorado River 
Storage Project Management Center, 1800 South Rio Grande Avenue, 
Montrose, Colorado.

[[Page 34005]]

Many of these documents and supporting information are also available 
on WAPA's website at: https://www.wapa.gov/regions/CRSP/rates/Pages/rates.aspx.

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.\6\
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    \6\ In compliance with the National Environmental Policy Act 
(NEPA) of 1969 (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 June 21, 
2021, by Tracey A. LeBeau, Interim 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 June 22, 2021.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2021-13645 Filed 6-25-21; 8:45 am]
BILLING CODE 6450-01-P


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