[Federal Register Volume 85, Number 66 (Monday, April 6, 2020)]
[Notices]
[Pages 19144-19146]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-07154]
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DEPARTMENT OF ENERGY
Western Area Power Administration
Boulder Canyon Project
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of proposed fiscal year 2021 Boulder Canyon Project base
charge and rates for electric service.
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SUMMARY: Western Area Power Administration (WAPA) is proposing an
adjustment to the base charge and rates for fiscal year (FY) 2021
Boulder Canyon Project (BCP) electric service under Rate Schedule BCP-
F10. The proposal would reduce the base charge 1.2 percent from $66.4
million in FY 2020 to $65.6 million for FY 2021. The reduction is
primarily the result of an increase in prior year carryover funds and
non-power revenue projections for the Hoover Dam visitor center. The
proposed base charge and rates would go into effect on October 1, 2020,
and remain in effect through September 30, 2021. Publication of this
Federal Register notice will initiate the public process.
DATES: The consultation and comment period begins today and will end
July 6, 2020. WAPA will present a detailed explanation of the proposed
FY 2021 base charge and rates at a public information forum that will
be held on May 6, 2020, from 10:30 a.m. to 12:30 p.m. Mountain Standard
Time. WAPA will also host a public comment forum that will be held on
June 5, 2020, from 10:30 a.m. to 12:30 p.m. Mountain Standard Time.
WAPA will conduct both the public information forum and the public
comment forum via WebEx. Instructions for participating in the forums
via WebEx will be posted on WAPA's website at least 14 days prior to
the public information and comment forums at https://www.wapa.gov/regions/DSW/Rates/Pages/boulder-canyon-rates.aspx. WAPA will accept
written comments any time during the consultation and comment period.
ADDRESSES: Send written comments to Ms. Tracey A. LeBeau, Regional
Manager, Desert Southwest Region, Western Area Power Administration,
P.O. Box 6457, Phoenix, Arizona 85005-6457, or email
dswpwrmrk@wapa.gov. WAPA will post information concerning the rate
process and written comments received on its website at https://www.wapa.gov/regions/DSW/Rates/Pages/boulder-canyon-rates.aspx.
FOR FURTHER INFORMATION CONTACT: Ms. Tina Ramsey, Rates Manager, Desert
Southwest Region, Western Area Power Administration, P.O. Box 6457,
Phoenix, Arizona 85005-6457, (602) 605-2565, or dswpwrmrk@wapa.gov.
SUPPLEMENTARY INFORMATION: Hoover Dam,\1\ authorized by the Boulder
Canyon Project Act of 1928, as amended (43 U.S.C 617 et seq.), sits on
the Colorado River along the Arizona-Nevada border. The Hoover Dam
power plant has 19 generating units (two for plant use) and an
installed capacity of 2,078.8 megawatts (4,800 kilowatts for plant
use). In collaboration with the Bureau of Reclamation (Reclamation),
WAPA markets and delivers
[[Page 19145]]
hydropower from the Hoover Dam power plant through high voltage
transmission lines and substations to Arizona, Southern California, and
Southern Nevada.
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\1\ Hoover Dam was known as Boulder Dam from 1933 to 1947, but
was renamed Hoover Dam by an April 30, 1947 joint resolution of
Congress. See Act of April 30, 1947, H.J. Res. 140, ch. 46, 61 Stat.
56-57.
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The rate-setting methodology for BCP calculates an annual base
charge rather than a unit rate for Hoover Dam hydropower. The base
charge recovers an annual revenue requirement that includes projected
costs of investment repayment, interest, operations, maintenance,
replacements, payments to States, and Hoover Dam visitor services. Non-
power revenue projections such as water sales, Hoover Dam visitor
revenue, ancillary services, and late fees help offset these projected
costs. Hoover power customers are billed a percentage of the base
charge in proportion to their power allocation. A unit rate is
calculated for comparative purposes but is not used to determine the
charge for service.
On June 6, 2018, the Federal Energy Regulatory Commission (FERC)
confirmed and approved Rate Schedule BCP-F10 for a five-year period
ending September 30, 2022.\2\ Rate Schedule BCP-F10 and the BCP
Electric Service Contract require WAPA to determine the annual base
charge and rates for the next fiscal year before October 1 of each
year. The FY 2020 BCP base charge and rates expire on September 30,
2020.
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\2\ Order Confirming and Approving Rate Schedule on a Final
Basis, FERC Docket No. EF18-1-000, 163 FERC ] 62,154 (2018).
Comparison of Base Charge and Rates
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FY 2020 FY 2021 Amount change Percent change
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Base Charge ($)................................. $66,419,402 $65,606,080 - $813,322 - 1.2
Composite Rate (mills/kWh)...................... 18.08 18.83 0.75 4.1
Energy Rate (mills/kWh)......................... 9.04 9.42 0.38 4.2
Capacity Rate ($/kW-Mo)......................... $1.75 $1.73 - $0.02 - 1.1
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Reclamation's FY 2021 budget is increasing $4.5 million to $80.2
million, a 5.9 percent increase from FY 2020. Higher operations and
maintenance expenses ($2.6 million) and replacement costs ($1.7
million) account for most of this increase. The rate impact of these
increases to Reclamation's budget are more than offset, however, by an
increase in prior year carryover ($2.8 million) and non-power revenue
projections ($2 million) following completion of the Hoover Dam visitor
center renovations.
WAPA's FY 2021 budget is decreasing $400,000 to $8.4 million, a 4.2
percent reduction from FY 2020. Lower operations and maintenance
expenses ($300,000) and the elimination of WAPA's contingency fund
($100,000) account for this decrease.
While there is a 1.2 percent reduction to the FY 2021 base charge,
the composite and energy rates are increasing 4.1 and 4.2 percent
respectively from FY 2020. The composite and energy rates use a
forecasted energy value, which decreased due to the long-term drought
in the Lower Colorado River Basin. The capacity rate is a 1.1 percent
reduction from FY 2020 due to the decrease in the base charge.
Forecasted energy and capacity values may be updated when determining
the final base charge due to changing hydrological conditions.
This proposal, to be effective October 1, 2020, is preliminary and
subject to change based on modifications to forecasts before
publication of the final base charge and rates. In particular, the
forecast of non-power revenue projections associated with the Hoover
Dam visitor center may require modification due to social distancing
requirements resulting from COVID-19.
Legal Authority
This action constitutes a major rate adjustment as defined by 10
CFR 903.2(e). Pursuant to 10 CFR 903.15 and 10 CFR 903.16, WAPA will
hold public information and public comment forums for this rate
adjustment. WAPA will review and consider all timely public comments
and adjust the proposal, as appropriate, at the conclusion of the
consultation and comment period.
WAPA is establishing rates for BCP electric service in accordance
with section 302 of the Department of Energy (DOE) Organization Act (42
U.S.C. 7152). This provision transferred to, and vested in, the
Secretary of Energy certain functions of the Secretary of the Interior,
along with the power marketing functions of Reclamation. Those
functions include actions that specifically apply to the BCP.
The BCP Electric Service Contract states that in years other than
the first and fifth years of a rate schedule approved by the FERC on a
final basis, adjustments to the base charge shall be effective upon
approval by the Deputy Secretary of Energy. Under the DOE Organization
Act, the Secretary of Energy holds plenary authority over DOE affairs
with respect to the Power Marketing Administrations. By Delegation
Order No. 00-002.00S, effective January 15, 2020, the Secretary of
Energy delegated to the Under Secretary of Energy the authority vested
in the Secretary with respect to WAPA. By Redelegation Order No. 00-
002.10E, effective February 14, 2020, the Under Secretary of Energy
delegated to the Assistant Secretary for Electricity the same authority
with respect to WAPA.\3\ This rate action is issued under the
Redelegation Order and DOE's procedures for public participation in
rate adjustments set forth at 10 CFR parts 903 and 904.\4\
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\3\ Delegation Orders No. 00-002-00S and 00-002.10E both clarify
that this delegation of authority is ``in addition'' to the
authority to approve and place into effect on an interim basis
WAPA's power and transmission rates.
\4\ 50 FR 37,835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21,
2019).
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Availability of Information
All studies, comments, letters, memoranda, and other documents WAPA
initiates or uses to develop the proposed base charge and rates are
available for inspection and copying at the Desert Southwest Customer
Service Regional Office, Western Area Power Administration located at
615 South 43rd Avenue, Phoenix, Arizona 85009. Many of these documents
and supporting information are also available on WAPA's website at
https://www.wapa.gov/regions/DSW/Rates/Pages/boulder-canyon-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
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action can be categorically excluded from those requirements.\5\
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\5\ In compliance with the National Environmental Policy Act of
1969 (NEPA), 42 U.S.C. 4321 et seq., 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.
Dated: March 25, 2020.
Mark A. Gabriel,
Administrator.
[FR Doc. 2020-07154 Filed 4-3-20; 8:45 am]
BILLING CODE 6450-01-P