Federal Register / Vol. 79, No. 235 / Monday, December 8, 2014 / Notices 72663 

1WAPA–146 was approved by the Deputy 

Secretary of Energy on December 14, 2009 (74 FR 

67191 (Dec 18, 2009)), and confirmed and approved 

by FERC on a final basis on June 18, 2010, in Docket 

No. EF10–1–000. See United States Department of 

Energy, Western Area Power Administration 

(Loveland Area Projects), 131 FERC ¶ 62,247. 

submit via email, postal mail, or hand 

delivery/courier two well-marked 

copies: One copy of the document 

marked ‘‘confidential’’ including all the 

information believed to be confidential, 

and one copy of the document marked 

‘‘non-confidential’’ with the information 

believed to be confidential deleted. 

Submit these documents via email or on 

a CD, if feasible. DOE will make its own 

determination about the confidential 

status of the information and treat it 

according to its determination. Factors 

of interest to DOE when evaluating 

requests to treat submitted information 

as confidential include: (1) A 

description of the items; (2) whether 

and why such items are customarily 

treated as confidential within the 

industry; (3) whether the information is 

generally known by or available from 

other sources; (4) whether the 

information has previously been made 

available to others without obligation 

concerning its confidentiality; (5) an 

explanation of the competitive injury to 

the submitting person which would 

result from public disclosure; (6) when 

such information might lose its 

confidential character due to the 

passage of time; and (7) why disclosure 

of the information would be contrary to 

the public interest. 

Issued in Washington, DC, on December 2, 

2014. 

Peter B. Lyons, 

Assistant Secretary for Nuclear Energy, Office 

of Nuclear Energy. 

[FR Doc. 2014–28695 Filed 12–5–14; 8:45 am] 

BILLING CODE 6450–01–P 

DEPARTMENT OF ENERGY 

Western Area Power Administration 

Loveland Area Projects—Rate Order 

No. WAPA–167 

AGENCY: Western Area Power 

Administration, DOE. 

ACTION: Notice of Order Concerning 

Firm Electric Rates. 

SUMMARY: The Deputy Secretary of 

Energy confirmed and approved Rate 

Order No. WAPA–167 and Rate 

Schedule L–F10, placing firm electric 

service rates for the Western Area Power 

Administration (Western) Loveland 

Area Projects (LAP) into effect on an 

interim basis. 

DATES: Rate Schedule L–F10 will be 

placed into effect on an interim basis on 

the first day of the first full billing 

period beginning on or after January 1, 

2015, and will remain in effect until the 

Federal Energy Regulatory Commission 

(FERC) confirms, approves, and places 

the rate schedule into effect on a final 

basis ending December 31, 2019, or 

until the rate schedule is superseded. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Bradley S. Warren, Regional Manager, 

Rocky Mountain Region, Western Area 

Power Administration, 5555 East 

Crossroads Boulevard, Loveland, CO 

80538–8986, telephone (970) 461–7201, 

or Mrs. Sheila D. Cook, Rates Manager, 

Rocky Mountain Region, Western Area 

Power Administration, 5555 East 

Crossroads Boulevard, Loveland, CO 

80538–8986, telephone (970) 461–7211, 

email scook@wapa.gov. 

SUPPLEMENTARY INFORMATION: The 

existing Rate Schedule L–F9 was 

approved under Rate Order No. WAPA– 

146 for the period beginning January 1, 

2010, and ending December 31, 2014.1

Under the current rate methodology, 

rates for LAP firm electric service are 

designed to recover an annual revenue 

requirement that includes investment 

repayment, interest, purchase power, 

operation and maintenance, and other 

expenses within the allowable period. 

The total annual revenue requirement 

for LAP remains $84.5 million for firm 

electric service. In addition, the overall 

capacity and energy charges are not 

changing, as the existing charges in the 

current rate schedules for firm electric 

service continue to provide sufficient 

revenue to meet LAP’s repayment 

obligations. The Rate Schedule 

continues to be formula based. An 

incremental upward adjustment to the 

Drought Adder greater than the 

equivalent of 2 mills/kWh to the Power 

Repayment Study (PRS) Composite Rate 

will require a public process. The 

Drought Adder may be adjusted 

downward pursuant to the formula 

without a public process. 

Rate Schedule L–F9 is being 

superseded by Rate Schedule L–F10. 

Under Rate Schedule L–F10, the firm 

capacity charge will remain $5.43/

kWmonth and the firm energy charge 

will remain 20.71 mills/kWh. The Base 

and Drought Adder components 

associated with these charges are shown 

in Table 1 below: 

TABLE 1—SUMMARY OF LAP CHARGE COMPONENTS

Existing charges under Rate Schedule L–F9 

effective January 1, 2010 

Provisional charges under Rate Schedule L–F10 

effective January 1, 2015 

Base 

component 

Drought adder 

component Total charge Base component 

Drought adder 

component Total charge 

Firm Capacity ($/kWmonth) ..................... $3.29 $2.14 $5.43 $3.92 $1.51 $5.43 

Firm Energy (mills/kWh) .......................... 12.54 8.17 20.71 14.95 5.76 20.71 

By Delegation Order No. 00–037.00A, 

effective October 25, 2013, the Secretary 

of Energy delegated: (1) The authority to 

develop power and transmission rates to 

Western’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, to 

remand or to disapprove such rates to 

FERC. Existing Department of Energy 

procedures for public participation in 

power rate adjustments (10 CFR part 

903) were published on September 18, 

1985. 

Under Delegation Order Nos. 00– 

037.00A and 00–001.00E and in 

compliance with 10 CFR part 903 and 

18 CFR part 300, I hereby confirm, 

approve, and place Rate Order No. 

WAPA–167, LAP firm electric service 

rates, into effect on an interim basis 

(Provisional Rates). 

The new Rate Schedule L–F10 will be 

promptly submitted to FERC for 

confirmation and approval on a final 

basis. 

Dated: December 2, 2014. 

Elizabeth Sherwood-Randall, 

Deputy Secretary of Energy. 

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72664 Federal Register / Vol. 79, No. 235 / Monday, December 8, 2014 / Notices 

Order Confirming, Approving, and 

Placing the Loveland Area Projects 

Firm Electric Service Rates Into Effect 

on an Interim Basis 

These firm electric service rates for 

the Loveland Area Projects (LAP) were 

established in accordance with section 

302 of the Department of Energy (DOE) 

Organization Act (42 U.S.C. 7152). 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 section 5 of the 

Flood Control Act of 1944 (16 U.S.C. 

825s), and other acts that specifically 

apply to the project involved. 

By Delegation Order No. 00–037.00A, 

effective October 25, 2013, the Secretary 

of Energy delegated: (1) The authority to 

develop power and transmission rates to 

the Administrator of Western Area 

Power Administration (Western); (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, to 

remand, or to disapprove such rates to 

the Federal Energy Regulatory 

Commission (FERC). Existing DOE 

procedures for public participation in 

power rate adjustments (10 CFR part 

903) were published on September 18, 

1985. 

Acronyms and Definitions 

As used in this Rate Order, the 

following acronyms and definitions 

apply: 

Base .................................................................... A fixed revenue requirement that includes operation and maintenance expenses, investments and replacements, interest on investments and replacements, normal timing purchase power (purchases due to operational constraints, not associated with drought), and 

transmission costs. 

Capacity .............................................................. The electric capability of a generator, transformer, transmission circuit, or other equipment. It is expressed in kilowatts. 

Capacity Charge ................................................. The charge under the rate schedule for capacity. It is expressed in dollars per 

kilowattmonth. 

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 kilowatthour and used for comparison purposes. 

CROD .................................................................. Contract Rate of Delivery. The maximum amount of capacity and energy allocated to a 

Preference Customer for a period specified under a contract. 

Deficits ................................................................ Deferred or unrecovered annual and/or interest expenses. 

DOE Order RA 6120.2 ....................................... An order outlining power marketing administration financial reporting and rate-making 

procedures. 

Drought Adder ................................................... A formula-based revenue requirement that includes future purchase power above timing 

purchases, previous purchase power drought deficits, and interest on the purchase 

power drought deficits. 

Energy ................................................................. Measured in terms of the work it is capable of doing over a period of time. Energy is expressed in kilowatthours. 

Energy Charge .................................................... The charge under the rate schedule for energy. It is expressed in mills per kilowatthour 

and applied to each kilowatthour delivered to each customer. 

Firm .................................................................... A type of product and/or service available at the time requested by the customer. 

FY ....................................................................... Fiscal year—October 1 to September 30. 

kW ....................................................................... Kilowatt—the electrical unit of capacity that equals 1,000 watts. 

kWh ..................................................................... Kilowatthour—the electrical unit of energy that equals 1,000 watts in 1 hour. 

kWmonth ............................................................ Kilowattmonth—the electrical unit of the monthly amount of capacity. 

mills/kWh ........................................................... Mills per kilowatthour—the unit of charge for energy (equal to one tenth of a cent or one 

thousandth of a dollar). 

MW ...................................................................... Megawatt—the electrical unit of capacity that equals 1 million watts or 1,000 kilowatts. 

Non-Timing Power Purchases ........................... Power purchases that are not related to operational constraints such as management of endangered species, species habitat, water quality, navigation, control area purposes, etc. 

O&M .................................................................... Operation and Maintenance. 

P–SMBP .............................................................. The Pick-Sloan Missouri Basin Program. 

P–SMBP—ED ...................................................... Pick-Sloan Missouri Basin Program—Eastern Division. 

P–SMBP—WD ..................................................... Pick-Sloan Missouri Basin Program—Western Division. 

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. 

Preference ........................................................... The provisions of Reclamation Law that require Western 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 Rate ................................................. A rate that has been confirmed, approved, and placed into effect on an interim basis by the 

Deputy Secretary of Energy. 

Revenue Requirement ........................................ The revenue required by PRS to recover annual expenses (such as O&M, purchase power, 

transmission service expenses, interest, and deferred expenses) and repay Federal investments and other assigned costs. 

Effective Date 

The Provisional Rates will take effect 

on the first day of the first full billing 

period beginning on or after January 1, 

2015, and will remain in effect until 

December 31, 2019, pending approval 

by FERC on a final basis. 

Public Notice and Comment 

Western followed the Procedures for 

Public Participation in Power and 

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Federal Register / Vol. 79, No. 235 / Monday, December 8, 2014 / Notices 72665 

Transmission Rate Adjustments and 

Extensions, 10 CFR part 903, in 

developing these rates. The steps 

Western took to involve interested 

parties in the minor rate process were: 

1. On April 17, 2014, Western mailed 

a notice announcing an informal public 

meeting would be held via webinar on 

May 2, 2014, to discuss the rate process 

for the expiring firm electric service 

rates for LAP. The focus of the webinar 

was to provide an update on the FY 

2013 PRS, discuss the Base and Drought 

Adder component true-up, and plan for 

the upcoming rate adjustment process. 

2. A Federal Register notice (FRN), 

published on August 8, 2014 (79 FR 

46430), announced the proposed rates 

for LAP and began the 30-day public 

consultation and comment period. 

3. On August 11, 2014, Western 

mailed letters to all LAP Preference 

Customers and interested parties 

transmitting the FRN published on 

August 8, 2014. 

4. Western provided a Web page that 

contains all dates, customer letters, 

presentations, the FRN, and all other 

information about this rate process. The 

Web page is located at https://

www.wapa.gov/rm/ratesRM/2015/

default.htm. 

5. During the consultation and 

comment period, which ended 

September 8, 2014, Western received 

one comment letter. The formally 

submitted comment has been 

considered in the preparation of this 

Rate Order. 

Comment 

Written Comment Received by the 

Following Organization 

Mid-West Electric Consumers 

Association 

Project Description 

Loveland Area Projects 

The Post-1989 General Power 

Marketing and Allocation Criteria, 

published in the Federal Register on 

January 31, 1986 (51 FR 4012), 

integrated the resources of the P– 

SMBP—WD and Fryingpan-Arkansas 

Project (Fry-Ark). This operational and 

contractual integration, known as LAP, 

allowed an increase in marketable 

resource, simplified contract 

administration, and established a 

blended rate for LAP power sales. The 

Rocky Mountain Region markets LAP 

power in northeastern Colorado, east of 

the Continental Divide in Wyoming, 

west of the 101st meridian in Nebraska, 

and most of Kansas. 

The P–SMBP—WD and Fry-Ark retain 

separate financial status. For this 

reason, separate PRSs are prepared 

annually for each project. These PRSs 

are used to determine the sufficiency of 

the firm electric service rate to generate 

adequate revenue to repay project 

investment and costs during each 

project’s prescribed repayment period. 

The revenue requirement of the Fry-Ark 

PRS is combined with the P–SMBP— 

WD revenue requirement, derived from 

the P–SMBP PRS, to develop one rate 

for LAP firm electric sales. 

Pick-Sloan Missouri Basin Program 

The P–SMBP was authorized by 

Congress in Section 9 of the Flood 

Control Act of December 22, 1944, 

commonly referred to as the Flood 

Control Act of 1944. This multipurpose 

program provides flood control, 

irrigation, navigation, recreation, 

preservation and enhancement of fish 

and wildlife, and power generation. 

Multipurpose projects have been 

developed on the Missouri River and its 

tributaries in Colorado, Montana, 

Nebraska, North Dakota, South Dakota, 

and Wyoming. 

In addition to the multipurpose water 

projects authorized by Section 9 of the 

Flood Control Act of 1944, certain other 

existing projects have been integrated 

with the P–SMBP for power marketing, 

operation, and repayment purposes. The 

Colorado-Big Thompson, Kendrick, and 

Shoshone Projects were combined with 

the P–SMBP in 1954, followed by the 

North Platte Project in 1959. These 

projects are referred to as the 

‘‘Integrated Projects’’ of the P–SMBP. 

The Flood Control Act of 1944 also 

authorized the inclusion of the Fort 

Peck Project with the P–SMBP for 

operation and repayment purposes. The 

Riverton Extension Unit of the Flood 

Control Act of 1944 Project was 

reauthorized to include the original 

Riverton Project in 1970. 

The P–SMBP is marketed by two 

regions. The Rocky Mountain Region, 

with a regional office in Loveland, 

Colorado, markets the Western Division 

power of P–SMBP through LAP. 

Western Division power is marketed in 

Colorado, Kansas, Nebraska, and 

Wyoming. The Upper Great Plains 

Region, with a regional office in 

Billings, Montana, markets power from 

the Eastern Division of P–SMBP. 

P–SMBP power is marketed to 

approximately 53 firm power customers 

by the Rocky Mountain Region and 

approximately 360 firm power 

customers by the Upper Great Plains 

Region. 

Fryingpan-Arkansas Project 

Fry-Ark is a trans-mountain diversion 

development in southeastern Colorado 

authorized by the Act of Congress on 

August 16, 1962 (Pub. L. 87–590, 76 

Stat. 389, as amended by Title XI of the 

Act of Congress on October 27, 1974 

(Pub. L. 93–493, 88 Stat. 1486, 1497)). 

The Fry-Ark diverts water from the 

Fryingpan River and other tributaries of 

the Roaring Fork River in the Colorado 

River Basin on the West Slope of the 

Rocky Mountains to the Arkansas River 

on the East Slope. The water diverted 

from the West Slope, together with 

regulated Arkansas River water, 

provides supplemental irrigation and 

M&I water supplies, and produces 

hydroelectric power. Flood control, fish 

and wildlife enhancement, and 

recreation are other important purposes 

of Fry-Ark. The only generating facility 

in Fry-Ark is the Mt. Elbert PumpedStorage powerplant on the East Slope. 

Power Repayment Study—Firm Electric 

Service Rate 

Western prepares a PRS each FY to 

determine if revenues will be sufficient 

to repay, within the required time, all 

costs assigned to LAP. Repayment 

criteria are based on Western’s 

applicable laws and legislation, as well 

as policies including DOE Order RA 

6120.2. To meet Cost Recovery Criteria 

outlined in DOE Order RA 6120.2, 

revised studies and rate adjustments 

have been developed to demonstrate 

that sufficient revenues will be collected 

under Provisional Rates to meet future 

obligations. The PRS revenue 

requirement and Composite Rate remain 

unchanged, as indicated in Table 1. 

TABLE 1—COMPARISON OF LAP REVENUE REQUIREMENT AND COMPOSITE RATE

Existing requirements 

(January 1, 2010) 

Provisional requirements 

(January 1, 2015) Percent change 

LAP Revenue Requirement (millions $) ...................................... $84.5 $84.5 0 

LAP Composite (mills/kWh) ......................................................... 41.42 41.42 0 

mstockstill on DSK4VPTVN1PROD with NOTICES

72666 Federal Register / Vol. 79, No. 235 / Monday, December 8, 2014 / Notices 

Existing and Provisional Rates 

Under Rate Schedule L–F10, the firm 

capacity charge remains $5.43/

kWmonth, and the firm energy charge 

remains 20.71 mills/kWh. This Rate 

Schedule is formula-based to provide 

for an annual adjustment to the Drought 

Adder component. An incremental 

upward adjustment to the Drought 

Adder greater than the equivalent of 2 

mills/kWh to the PRS Composite Rate 

will require a public process. The 

Drought Adder may be adjusted 

downward pursuant to the formula 

without a public process. The overall 

capacity and energy charges are not 

changing, as indicated in the following 

Table 2: 

TABLE 2—COMPARISON OF EXISTING AND PROVISIONAL LAP FIRM ELECTRIC SERVICE RATES

Firm electric service 

Existing charges under Rate Shedule 

L–F9 

effective 

January 1, 2010 

Provisional charges under Rate 

Schedule 

L–F10 effective 

January 1, 2015 

Percent change 

Firm Capacity ($/kWmonth) ........................... $5.43 $5.43 0 

Firm Energy (mills/kWh) ................................ 20.71 20.71 0 

Under the current rate methodology, 

rates for LAP firm electric service are 

designed to recover an annual revenue 

requirement that includes investment 

repayment, interest, purchase power, 

O&M, and other expenses within the 

allowable period. 

Western is truing up the Base and 

Drought Adder components included in 

the rate schedule and placing a new rate 

schedule into effect for the 5-year 

period, beginning January 1, 2015, 

through December 31, 2019. The true-up 

updates the Base components to 

represent present costs and lowers the 

Drought Adder components to represent 

present drought costs. Over the past 5- 

year rate period, the P–SMBP costs 

included in the LAP Drought Adder 

have decreased as the actual deficits 

were less than the projected deficits. 

Additionally, P–SMBP drought costs 

were repaid ahead of schedule, which 

decreased the drought deficit interest 

expense. The portion of the LAP 

Drought Adder component coming from 

Fry-Ark ($200,000) is now going to $0, 

as Fry-Ark did not actually incur any 

deficits and Fry-Ark is not projecting 

any future Non-timing Power Purchases 

at this time. All historical droughtrelated costs for Fry-Ark have been 

repaid. In addition, Base costs increased 

during that same period due to a new 5- 

year cost evaluation period, new 

investments and replacements, and 

inflationary costs. 

Certification of Rates 

Western’s Administrator certified that 

the firm electric service rates under Rate 

Schedule L–F10 are the lowest possible 

rates consistent with sound business 

principles. The rates were developed 

following administrative policies and 

applicable laws. 

LAP Firm Electric Service Rate 

Discussion 

Western must establish power rates 

sufficient to recover O&M, purchased 

power and interest expenses, and repay 

power investment and irrigation aid. 

The Criteria, published in the Federal 

Register on January 31, 1986 (51 FR 

4012), operationally and contractually 

integrated the resources of the P– 

SMBP—WD and Fry-Ark (thereafter 

referred to as LAP). A blended rate was 

established for the sale of LAP firm 

electric service. The P–SMBP—WD 

portion of the revenue requirement for 

LAP firm electric service rates was 

developed from the revenue 

requirement calculated in the P–SMBP 

Ratesetting PRS. The P–SMBP—WD 

revenue requirement remains the same 

from the previous rate process revenue 

requirement. The revenue requirements 

for P–SMBP—WD are as follows: 

TABLE 3—SUMMARY OF P–SMBP— 

WD REVENUE REQUIREMENTS

[$000] 

Current Revenue Requirement 

(Jan 2010): 

(34.80 mills/kWh × 

1,988,000,000 kWh) .......... $69,182 

Provisional Change (Jan 2015): 

Base: 4.84 mills/kWh × 

1,988,000,000 kWh ........... 9,622 

Drought Adder: ¥4.84 mills/

kWh × 1,988,000,000 kWh ¥9,622 

0 

Provisional Revenue Requirement: 

TABLE 3—SUMMARY OF P–SMBP— 

WD REVENUE REQUIREMENTS— 

Continued 

[$000] 

(34.80+0.00 = 34.80 mills/

kWh × 1,988,000,000 kWh) 69,182 

The adjustment to the P–SMBP—ED 

revenue requirement is a separate 

formal rate process, which is 

documented in Rate Order No. WAPA– 

166. Rate Order No. WAPA–166 is also 

scheduled to go into effect on the first 

day of the first full billing period on or 

after January 1, 2015. 

Fry-Ark 

The Fry-Ark portion of the revenue 

requirement for LAP firm electric 

service rates was developed from the 

revenue requirement calculated in the 

Fry-Ark Ratesetting PRS. The Fry-Ark 

revenue requirement remains the same 

as the previous rate process revenue 

requirement. The revenue requirements 

for Fry-Ark are as follows: 

TABLE 4—SUMMARY OF FRY-ARK

REVENUE REQUIREMENTS

[$000] 

Current Revenue Requirement 

(Jan 2010) ............................... $15,328 

Provisional Change (Jan 2015): 

Base .................................... 200,000 

Drought Adder ..................... ¥200,000 

0 

Provisional Revenue Requirement ........................................ 15,328 

The following table compares LAP 

existing revenue requirements to the 

proposed revenue requirements: 

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Federal Register / Vol. 79, No. 235 / Monday, December 8, 2014 / Notices 72667 

TABLE 5—SUMMARY OF LAP REVENUE REQUIREMENTS

[$000] 

Existing 

(January 2010) 

Provisional 

(January 2015) 

P–SMBP—WD ................................................................................................................................................. $69,182 $69,182 

Fry-Ark ............................................................................................................................................................. 15,328 15,328 

Total LAP .................................................................................................................................................. 84,510 84,510 

Under Rate Schedule L–F10, Western 

will continue to identify its firm electric 

service revenue requirement using Base 

and Drought Adder components. The 

Base component is a fixed revenue 

requirement for each project that 

includes annual O&M expenses, 

investment repayment and associated 

interest, normal timing power 

purchases, and transmission costs. 

Western’s normal timing power 

purchases are purchases due to 

operational constraints (e.g., 

management of endangered species 

habitat, water quality, navigation, 

control area purposes, etc.) and are not 

associated with drought conditions in 

the Regions. The Base component 

cannot be adjusted by Western without 

a public process. The Drought Adder 

component is a formula-based revenue 

requirement that includes costs 

attributable to drought conditions 

within LAP. The Drought Adder 

component includes costs associated 

with future Non-timing Power 

Purchases to meet firm power 

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 

debt. The Drought Adder component is 

designed to repay Western’s drought 

debt within 10 years from the time the 

debt was incurred, using balloonpayment methodology. For example, the 

drought debt incurred by Western in FY 

2009 will be repaid by FY 2019. 

The annual revenue requirement 

calculation will continue to be 

summarized by the following formula: 

Annual Revenue Requirement = Base 

Revenue Requirement + Drought Adder 

Revenue Requirement. Under this 

Provisional Rate, the LAP annual 

revenue requirement equals $84.5 

million and is comprised of a Base 

revenue requirement of $69.2 million 

plus a Drought Adder revenue 

requirement of $15.3 million. 

A comparison of the existing and 

provisional charge components is listed 

in Table 6. 

TABLE 6—SUMMARY OF LAP CHARGE COMPONENTS

Firm electric service 

Existing charges under Rate Schedule 

L–F9 effective 

(January 1, 2010) 

Provisional charges under Rate Schedule L–F10 

effective 

(January 1, 2015) 

Base 

component 

Drought Adder 

component Total charge Base component 

Drought Adder 

component Total charge 

Firm Capacity ($/kWmonth) ..................... $3.29 $2.14 $5.43 $3.92 $1.51 $5.43 

Firm Energy (mills/kWh) .......................... 12.54 8.17 20.71 14.95 5.76 20.71 

Continuing to identify the firm 

electric service revenue requirement 

using Base and Drought Adder 

components will assist Western in 

presenting the effects of the drought 

within LAP, demonstrating repayment 

of the drought-related costs, and allow 

Western to be more responsive to 

changes in drought-related expenses. 

Western will continue to charge and bill 

customers firm electric service charges 

for energy and capacity, which are the 

sum of the Base and Drought Adder 

components. 

Western reviews its firm electric 

service rates annually. Western will 

review the Base component after the 

annual PRS is completed, generally in 

the first quarter of the calendar year. If 

an adjustment to the Base component is 

necessary, Western will initiate a public 

process pursuant to 10 CFR part 903 

prior to making an adjustment. 

In accordance with the original 

implementation of the Drought Adder 

component, Western will review the 

Drought Adder component each 

September to determine if drought costs 

differ from those projected in the PRSs. 

If drought costs differ, Western will 

determine if an adjustment to the 

Drought Adder component is necessary. 

Western will notify customers by letter 

each October of the planned 

incremental or decremental adjustment 

and implement the adjustment in the 

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. To give customers advance 

notice, Western will conduct a 

preliminary review of the Drought 

Adder component in early summer and 

notify customers by letter of the 

estimated change to the Drought Adder 

component for the following January. 

Western will verify the final Drought 

Adder component adjustment and 

notify customers by letter each October 

of any planned increase or decrease in 

this component. Implementing the 

Drought Adder component adjustment 

on January 1 of each year will help keep 

the drought deficits from escalating, will 

lower the interest expense due to 

drought deficits, will demonstrate 

responsible deficit management, and 

will provide prompt drought deficit 

repayments. 

Western’s current and provisional rate 

schedule is formula-based to provide for 

an annual adjustment to the Drought 

Adder component. An incremental 

upward adjustment to the Drought 

Adder greater than the equivalent of 2 

mills/kWh to the PRS Composite Rate 

will require a public process. The 

Drought Adder may be adjusted 

downward pursuant to the formula 

without a public process. 

mstockstill on DSK4VPTVN1PROD with NOTICES

72668 Federal Register / Vol. 79, No. 235 / Monday, December 8, 2014 / Notices 

Statement of Revenue and Related 

Expenses 

The following Table 7 provides a 

summary of projected revenue and 

expense data for the Fry-Ark firm 

electric service revenue requirement 

through the 5-year rate approval period. 

TABLE 7—FRY-ARK COMPARISON OF 5-YEAR RATE PERIOD (FY 2015–2019) 

[Total revenues and expenses] 

Existing rate 

($000) 

Provisional 

rate 

($000) 

Difference 

($000) 

Total Revenues .......................................................................................................................... $84,897 $89,012 $4,115 

Revenue Distribution 

Expenses: 

O&M 1 ................................................................................................................................. 25,307 32,322 7,015 

Purchased Power ............................................................................................................... 1,077 691 (386 ) 

Interest 2 .............................................................................................................................. 20,243 16,080 (4,163 ) 

Transmission 3 .................................................................................................................... 20,671 12,663 (8,008 ) 

Total Expenses ............................................................................................................ 67,298 61,756 (5,542 ) 

Principal Payments: 

Capitalized Expenses (Deficits) .......................................................................................... 0 0 0 

Original Project and Additions 4 .......................................................................................... 14,214 21,757 7,543 

Replacements 4 ................................................................................................................... 3,385 5,499 2,114 

Total Principal Payments ............................................................................................ 17,599 27,256 9,657 

Total Revenue Distribution .......................................................................................... 84,897 89,012 4,115 

1The increase in O&M expense is due to changes reflected in both Western’s and Reclamation’s FY15 work plans. 

2The decrease in interest expense is primarily due to increased repayment over the 5-year period. 

3The decrease in Transmission Expenses is due to the negotiation of a new contract. 

4The difference in principal payments is due to increased revenue being available for repayment during the 5-year period. 

The summary of P–SMBP—WD 

revenues and expenses for the 5-year 

Provisional Rate approval period is 

included in the P–SMBP Statement of 

Revenue and Related Expenses that is 

part of Rate Order No. WAPA–166. 

Basis for Rate Development 

The existing charges for firm electric 

service in Rate Schedule L–F9, which 

expires December 31, 2014, continue to 

provide sufficient revenue to meet the 

LAP repayment obligations. The total 

annual revenue requirement for LAP 

remains $84.5 million for firm electric 

service, and the overall capacity and 

energy charges are not changing. The 

Provisional Rates, under Rate Schedule 

L–F10, will take effect on the first full 

billing period on or after January 1, 

2015, and will remain in effect on an 

interim basis, pending FERC’s 

confirmation and approval of the rate 

schedule or substitute rates on a final 

basis, through December 31, 2019. 

Comment 

Western received one comment letter 

during the public consultation and 

comment period. The comment 

expressed in this letter has been 

paraphrased, where appropriate, 

without compromising the meaning of 

the comments. 

Comment: One customer 

representative supported the rate 

modifications as proposed, and 

emphasized the need for continued cost 

control regarding the Base component. 

They stated the Base costs cannot grow 

unabated and replace the shrinking 

Drought Adder. The customer stressed 

that cost control is of paramount 

importance. 

Response: Western agrees with the 

above comment. Western is committed 

to keeping the power rates at the lowest 

possible rates while maintaining sound 

business principles. All budgeted O&M 

and capital improvements are vetted 

annually through customer work plan 

meetings to assess the impacts to the 

rates. 

Availability of Information 

All documents related to this action 

are available for inspection and copying 

at the Rocky Mountain Regional Office, 

located at 5555 East Crossroads 

Boulevard, Loveland, Colorado. These 

documents are also available on 

Western’s Web page located at http://

www.wapa.gov/rm/ratesRM/2015/

2015RateAdjustment.htm. 

Ratemaking Procedure Requirements 

Environmental Compliance 

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), Western 

has determined this action is 

categorically excluded from preparing 

an environmental assessment or an 

environmental impact statement. 

Determination Under Executive Order 

12866 

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. 

Submission to the Federal Energy 

Regulatory Commission 

The Provisional 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 foregoing and under the 

authority delegated to me, I confirm and 

approve on an interim basis, effective on 

the first full billing period on or after 

January 1, 2015, Rate Schedule L–F10 

for the Loveland Area Projects of the 

Western Area Power Administration. 

This rate schedule shall remain in effect 

on an interim basis, pending the Federal 

Energy Regulatory Commission’s 

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Federal Register / Vol. 79, No. 235 / Monday, December 8, 2014 / Notices 72669 

confirmation and approval of the rate 

schedule or substitute rates on a final 

basis through December 31, 2019. 

Dated: December 2, 2014. 

Elizabeth Sherwood-Randall, 

Deputy Secretary of Energy. 

Rate Schedule L–F10 

(Supersedes Rate Schedule L–F9) 

Effective January 1, 2015 

United States Department of Energy 

Western Area Power Administration 

Loveland Area Projects Colorado, 

Kansas, Nebraska, Wyoming 

SCHEDULE OF RATE FOR FIRM 

ELECTRIC SERVICE 

(Approved Under Rate Order No. 

WAPA–167) 

Effective: 

The first day of the first full billing 

period beginning on or after January 1, 

2015, through December 31, 2019, or 

until superseded by another rate 

schedule. 

Available: 

Within the marketing area served by 

the Loveland Area Projects. 

Applicable: 

To the wholesale power customers for 

firm electric service supplied through 

one meter at one point of delivery, or as 

otherwise 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: 

Rate = Base component + Drought 

Adder component 

Monthly Charge as of January 1, 2015, 

Under the Rate: 

CAPACITY CHARGE: $5.43 per 

kilowatt of billing capacity. 

ENERGY CHARGE: 20.71 mills per 

kilowatthour (kWh) of monthly 

entitlement. 

BILLING CAPACITY: Unless 

otherwise specified by contract, the 

billing capacity will be the seasonal 

contract rate of delivery. 

Base: A fixed revenue requirement 

that includes operation and 

maintenance expense, investment 

repayment and associated interest, 

normal timing power purchases 

(purchases due to operational 

constraints, not associated with 

drought), and transmission costs. The 

Base revenue requirement is $69.2 

million. 

Process: 

Any proposed change to the Base 

component will require a public 

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 LAP 

Composite Rate. Any planned 

incremental adjustment to the Drought 

Adder component greater than the 

equivalent of 2 mills/kWh to the LAP 

Composite Rate will require a public 

process. The Drought Adder may be 

adjusted downward pursuant to the 

formulas without a public process. A 

revised Drought Adder charge may go 

into effect January 1 of each year based 

on the formula above. Western will 

notify the customer annually in October 

of the revised monthly charges. Any 

change to the Drought Adder 

component will be identified in a 

revision to charges under this rate 

schedule. 

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. The customer 

will be required to maintain a power 

factor at all points of measurement 


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72670 Federal Register / Vol. 79, No. 235 / Monday, December 8, 2014 / Notices 

1WAPA–147 was approved by the Deputy 

Secretary of Energy on December 14, 2009 (74 FR 

67197 (Dec 18, 2009)), and confirmed and approved 

by FERC on a final basis on September 10, 2010, 

in Docket No. EF10–2–000. See United States 

Department of Energy, Western Area Power 

Administration (Pick-Sloan Missouri Basin 

Program—Eastern Division), 132 FERC ¶ 62,159. 

between 95-percent lagging and 95- 

percent leading. 

[FR Doc. 2014–28715 Filed 12–5–14; 8:45 am] 

BILLING CODE 6450–01–P 

DEPARTMENT OF ENERGY 

Western Area Power Administration 

Pick-Sloan Missouri Basin Program— 

Eastern Division-Rate Order No. 

WAPA–166 

AGENCY: Western Area Power 

Administration, DOE. 

ACTION: Notice of Order Concerning 

Firm Power Rates. 

SUMMARY: The Deputy Secretary of 

Energy confirmed and approved Rate 

Order No. WAPA–166 and Rate 

Schedules P–SED–F12 and P–SED– 

FP12, placing firm power and firm 

peaking power rates for the Western 

Area Power Administration (Western) 

Pick-Sloan Missouri Basin Program— 

Eastern Division (P–SMBP—ED) into 

effect on an interim basis. 

DATES: Rate Schedules P–SED–F12 and 

P–SED–FP12 will be placed into effect 

on an interim basis on the first day of 

the first full billing period beginning on 

or after January 1, 2015, and will remain 

in effect until the Federal Energy 

Regulatory Commission (FERC) 

confirms, approves, and places the rate 

schedules or substitute rates in effect on 

a final basis through December 31, 2019, 

or until the rate schedules are 

superseded. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Robert J. Harris, Regional Manager, 

Upper Great Plains Region, Western 

Area Power Administration, 2900 4th 

Avenue North, Billings, MT 59101– 

1266, telephone (406) 255–2800, email 

rharris@wapa.gov, or Ms. Linda CadyHoffman, Rates Manager, Upper Great 

Plains Region, Western Area Power 

Administration, 2900 4th Avenue North, 

Billings, MT 59101–1266, telephone 

(406) 255–2920, email cady@wapa.gov. 

SUPPLEMENTARY INFORMATION: Rate 

Schedules P–SED–F11 and P–SED–FP11 

were approved under Rate Order No. 

WAPA–147 for the period beginning 

January 1, 2010, and ending December 

31, 2014.1 Under the current rate 

methodology, rates for P–SMBP—ED 

firm power and firm peaking power 

service are designed to recover an 

annual revenue requirement that 

includes investment repayment, 

interest, purchase power, operation and 

maintenance, and other expenses within 

the allowable period. The total annual 

revenue requirement for P–SMBP—ED 

remains $320.2 million for firm power 

and firm peaking power service. In 

addition, the overall capacity and 

energy charges are not changing, as the 

existing charges in the current rate 

schedules for firm power and firm 

peaking power continue to provide 

sufficient revenue to meet the P– 

SMBP—ED repayment obligations. The 

Rate Schedules continue to be formula 

based. An incremental upward 

adjustment to the Drought Adder greater 

than the equivalent of 2 mills/kWh to 

the Power Repayment Study (PRS) 

composite rate will require a public 

process. The Drought Adder may be 

adjusted downward pursuant to the 

formula without a public process. 

Rate Schedules P–SED–F11 and P– 

SED–FP11 are being superseded by Rate 

Schedules P–SED–F12 and P–SED– 

FP12, respectively. Under Rate 

Schedule P–SED–F12, the firm capacity 

charge will remain $7.65/kilowattmonth 

(kWmonth), and the firm energy charge 

will remain 19.05 mills/kilowatthour 

(kWh). Under Rate Schedule P–SED– 

FP12, the firm peaking power services 

capacity charge will remain $6.90/

kWmonth, and the energy charge will 

remain 19.05 mills/kWh as of January 1, 

2015. Firm Peaking Energy is normally 

returned. A Firm Peaking Energy charge 

of 19.05 mills/kWh will be assessed in 

the event energy is not returned. The 

Base and Drought Adder components 

associated with these charges are shown 

in Table 1 below: 

TABLE 1—SUMMARY OF P–SMBP—ED CHARGE COMPONENTS

Existing charges under Rate Schedules effective 

(January 1, 2010) P–SED–F11/P–SED–FP11 

Provisional charges under Rate Schedules effective 

(January 1, 2015) P–SED–F12/P–SED–FP12 

Base 

component 

Drought Adder 

component Total charge Base component 

Drought Adder 

component Total charge 

Firm Capacity ($/kWmonth) ............... $3.80 $3.85 $7.65 $4.90 $2.75 $7.65 

Firm Energy (mills/kWh) .................... 9.53 9.52 19.05 12.33 6.72 19.05 

Firm Peaking Capacity ($/kWmonth) $3.45 $3.45 $6.90 $4.45 $2.45 $6.90 

Firm Peaking Energy (mills/kWh) 1 .... 9.53 9.52 19.05 12.26 6.79 19.05 

1Firm Peaking Energy is normally returned. This charge will be assessed in the event firm peaking energy is not returned. 

By Delegation Order No. 00–037.00A, 

effective October 25, 2013, the Secretary 

of Energy delegated: (1) The authority to 

develop power and transmission rates to 

Western’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, to 

remand or to disapprove such rates to 

FERC. Existing DOE procedures for 

public participation in power rate 

adjustments (10 CFR part 903) were 

published on September 18, 1985. 

Under Delegation Order Nos. 00– 

037.00A and 00–001.00E and in 

compliance with 10 CFR part 903 and 

18 CFR part 300, I hereby confirm, 

approve, and place Rate Order No. 

WAPA–166, P–SMBP—ED firm power 

and firm peaking power rates, into effect 

on an interim basis 

(Provisional Rates). The new Rate 

Schedules P–SED–F12 and P–SED–FP12 

will be promptly submitted to FERC for 

confirmation and approval on a final 

basis. 

Dated: December 2, 2014. 

Elizabeth Sherwood-Randall, 

Deputy Secretary of Energy. 

DEPARTMENT OF ENERGY 

DEPUTY SECRETARY 

In the matter of: 

Western Area Power Administration 

Rate Adjustment for the Pick-Sloan 

Missouri Basin Program—Eastern 

Division 

Rate Order No. WAPA–166 

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