[Federal Register Volume 85, Number 169 (Monday, August 31, 2020)]
[Notices]
[Pages 53809-53811]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-19116]
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
Western Area Power Administration
Boulder Canyon Project
AGENCY: Western Area Power Administration, Energy (DOE).
ACTION: Notice concerning fiscal year 2021 Boulder Canyon Project base
charge and rates for electric service.
-----------------------------------------------------------------------
SUMMARY: The Assistant Secretary for Electricity confirms, approves,
and places into effect on a final basis the Boulder Canyon Project
(BCP) base charge and rates for fiscal year (FY) 2021 under Rate
Schedule BCP-F10. The base charge decreased 1.5 percent from $66.4
million in FY 2020 to $65.4 million in FY 2021. The reduction is
primarily the result of an increase in prior year carryover funds.
DATES: The FY 2021 base charge and rates will be effective October 1,
2020 and will remain in effect through September 30, 2021.
FOR FURTHER INFORMATION CONTACT: Tracey A. LeBeau, Regional Manager,
Desert Southwest Region, Western Area Power Administration, P.O. Box
6457, Phoenix, AZ 85005-6457, (602) 605-2525, or dswpwrmrk@wapa.gov; or
Tina Ramsey, Rates Manager, Desert Southwest Region, Western Area Power
Administration, (602) 605-2565, or ramsey@wapa.gov.
SUPPLEMENTARY INFORMATION: On June 6, 2018, the Federal Energy
Regulatory Commission (FERC) confirmed and approved Rate Schedule BCP-
F10 under Rate Order No. WAPA-178 on a final
[[Page 53810]]
basis through September 30, 2022.\1\ 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 Western Area Power Administration (WAPA) and Bureau of
Reclamation (Reclamation) projected costs of investment repayment,
interest, operations and maintenance (O&M), replacements, payments to
States, and Hoover Dam visitor services. Non-power revenue projections
such as water sales, Hoover Dam visitor center revenue, ancillary
services, and late fees help offset these projected costs. Customers
are billed a percentage of the base charge in proportion to their
Hoover power allocation. Rates are calculated for comparative purposes
but are not used to determine the charges for service.
---------------------------------------------------------------------------
\1\ Order Confirming and Approving Rate Schedule on a Final
Basis, FERC Docket No. EF18-1-000, 163 FERC ] 62,154 (2018).
---------------------------------------------------------------------------
Rate Schedule BCP-F10 and the BCP Electric Service Contract require
WAPA to determine the annual base charge and rates for the next FY
before October 1 of each year. The FY 2020 BCP base charge and rates
expire on September 30, 2020.
Comparison of Base Charge and Rates
----------------------------------------------------------------------------------------------------------------
FY 2020 FY 2021 Amount change Percent change
----------------------------------------------------------------------------------------------------------------
Base Charge ($)................................. $66,419,402 $65,443,462 -$975,940 -1.5
Composite Rate (mills/kWh)...................... 18.08 18.10 0.02 0.1
Energy Rate (mills/kWh)......................... 9.04 9.05 0.01 0.1
Capacity Rate ($/kW-Mo)......................... 1.75 1.69 -0.06 -3.4
----------------------------------------------------------------------------------------------------------------
A $3 million increase in prior year carryover funds significantly
contributed to the FY 2021 base charge reduction of 1.5 percent from
the FY 2020 base charge. In addition, Reclamation's FY 2021 budget
increased by $470,000 to $76.2 million, a 0.6 percent increase from FY
2020. The difference between Reclamation's $3.2 million decrease in O&M
expenses and a $3.4 million increase in replacement costs accounts for
most of the budget increase. WAPA's FY 2021 budget decreased by
$370,000 to $8.4 million, a 4.2 percent decline from FY 2020. A
reduction in O&M expenses and the elimination of WAPA's contingency
funds resulted in the budget decrease.
Although there is a 1.5 percent reduction to the FY 2021 base
charge, the composite and energy rates are both slightly increasing
from FY 2020 due to a forecasted decrease in energy from the long-term
drought in the Lower Colorado River Basin. The capacity rate, which
represents a 3.4 percent reduction from the FY 2020 rate, is decreasing
due to changes in capacity projections and the FY 2021 base charge.
Public Notice and Comment
The notice of the proposed FY 2021 base charge and rates for
electric service was published consistent with procedures set forth in
10 CFR part 903 and 10 CFR part 904. WAPA took the following steps to
involve customers and interested parties in the rate process:
1. On April 6, 2020, a Federal Register notice (85 FR 19144)
announced the proposed base charge and rates and initiated the 90-day
public consultation and comment period.
2. On May 6, 2020, WAPA held a public information forum by web
conference. WAPA and Reclamation representatives explained the proposed
base charge and rates, answered questions, and posted the presentation
materials to WAPA's website.
3. On June 5, 2020, WAPA held a public comment forum by web
conference to provide customers and interested parties an opportunity
to comment for the record. WAPA received no comments during this forum.
4. On July 6, 2020, the public consultation and comment period
ended with WAPA receiving two comment letters. The comments appear
below, paraphrased where appropriate without compromising their
meaning.
Comment: Both commenters thanked WAPA and Reclamation for their
efforts to decrease the BCP base charge and electric service rates for
FY 2021 amid the COVID-19 pandemic. They applauded efforts by
Reclamation to mitigate revenue losses due to the pandemic's effects on
tourism.
Response: WAPA and Reclamation acknowledge the comments. Non-power
revenue projections decreased by $4 million since publication of the
proposed base charge and rates due to the closing of the Hoover Dam
visitor center as a result of the pandemic. Reclamation reduced FY 2021
O&M and replacement costs by $4 million to maintain the proposed
decrease to the FY 2021 base charge.
Comment: A commenter had concerns about future costs for the
landfill mitigation, post-retirement benefit costs, and the potential
for a continued decrease in Hoover Dam visitor center tourism revenue.
Response: WAPA and Reclamation will continue to work with the BCP
contractors on moderating future costs.
Comment: A commenter requested that future maintenance schedules be
adjusted to minimize capacity downtime in the summer.
Response: Reclamation plans to continue to limit routine
maintenance from May through October to provide maximum available
capacity to the BCP contractors.
Certification of Rates
WAPA's Administrator certified that the FY 2021 base charge and
rates under Rate Schedule BCP-F10 are the lowest possible rates
consistent with sound business principles. The base charge and rates
were developed following administrative policies and applicable laws.
Availability of Information
Information about the rate process to establish the FY 2021 base
charge and rates was made available on WAPA's website at https://www.wapa.gov/regions/DSW/Rates/Pages/boulder-canyon-rates.aspx.
Legal Authority
10 CFR 904.7(e) requires annual review of the BCP base charge and
an adjustment, either upward or downward, when necessary and
administratively feasible to assure sufficient revenues to effect
payment of all costs and financial obligations associated with the
project. WAPA's Administrator provided all BCP contractors an
opportunity to comment
[[Page 53811]]
on the proposed base charge adjustment consistent with the procedures
for public participation in rate adjustments as required under 10 CFR
904.7(e) and the BCP Electric Service Contract. The BCP Electric
Service Contract goes on to state that in years other than the first
and fifth years of a rate schedule approved by the Deputy Secretary on
a provisional basis and by FERC on a final basis, adjustments to the
base charge ``shall be effective upon approval by the Deputy Secretary
of Energy.'' Under the Department of Energy Organization Act, the
Secretary of Energy holds plenary authority over Department of Energy
affairs with respect to the Power Marketing Administrations, and the
Secretary of Energy may therefore exercise the Deputy Secretary's
contractual authority in this context. 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. By Redelegation Order No. 00-002.10-5, effective July 8, 2020,
the Assistant Secretary for Electricity delegated to WAPA's
Administrator the same authority with respect to WAPA. However, based
upon the governing terms of existing BCP Electric Service Contract, the
Assistant Secretary for Electricity is approving the FY 2021 base
charge and rates for BCP electric service. This rate action is issued
under the Redelegation Orders and Department of Energy (DOE) procedures
for public participation in rate adjustments set forth at 10 CFR part
903 and 10 CFR part 904.\3\
---------------------------------------------------------------------------
\3\ 50 FR 37835 (Sept. 18, 1985); 85 FR 19144 (Apr. 6, 2020).
---------------------------------------------------------------------------
Following DOE's review of WAPA's proposal, and as authorized by
applicable provisions of the BCP Electric Service Contract, I hereby
confirm, approve, and place the FY 2021 base charge and rates for BCP
electric service, under Rate Schedule BCP-F10, into effect on a final
basis through September 30, 2021.
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), WAPA
has determined that this action is categorically excluded from
preparing an environmental assessment or an environmental impact
statement.
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 August 24,
2020, by Bruce J. Walker, Assistant Secretary, Office of Electricity,
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 August 26, 2020.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2020-19116 Filed 8-28-20; 8:45 am]
BILLING CODE 6450-01-P