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Notice

Boulder Canyon Project-Rate Order No. WAPA-178

This document has a comment period that ends in 30 days. (09/18/2017) Submit a formal comment

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Information about this document as published in the Federal Register.

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AGENCY:

Western Area Power Administration, DOE.

ACTION:

Notice of proposed rate-setting formulas for electric service and adjustment of fiscal year 2018 base charge and rates.

SUMMARY:

Western Area Power Administration (WAPA) is proposing to update the rate-setting formulas for electric service for the Boulder Canyon Project (BCP) under proposed Rate Schedule BCP-F10, and adjust the annual calculation for the fiscal year (FY) 2018 base charge and rates. The expiration of the current base charge and rates on September 30, 2017, and beginning of the new 50-year marketing period on October 1, 2018, require these actions.

The current base charge under Rate Schedule BCP-F9 is not sufficient to cover all annual costs including operation and maintenance, replacements, and interest expense; and repay investment obligations within the allowable period. After collaborating with the BCP contractors, WAPA proposes an FY 2018 base charge that includes a one-time $15 million working capital fund primarily for the Bureau of Reclamation (Reclamation) for the new marketing period. The FY 2019 base charge is expected to decrease by $15 million after the collection of working capital in FY 2018. The proposed base charge will provide sufficient revenue to cover all annual costs and repay investment obligations within the allowable period. WAPA will post proposed Rate Schedule BCP-F10 and a detailed rate package that identifies the reasons for the base charge and rates adjustment on its Web site during the consultation and comment period. The proposed base charge and rates are scheduled to become effective on October 1, 2017, and will remain in effect through September 30, 2018. Publication of this Federal Register notice initiates the formal public process to implement the proposed rate-setting formulas and the FY 2018 base charge and rates.

DATES:

The consultation and comment period begins today and will end September 18, 2017. WAPA will present a detailed explanation of the proposed rate-setting formulas and the FY 2018 base charge and rates at a public information forum that will be held on July 19, 2017, at 10:00 a.m. Mountain Standard Time (MST) in Phoenix, Arizona. WAPA will accept oral and written comments at a public comment forum that will be held on August 18, 2017, at 10:00 a.m. MST in Phoenix, Arizona. WAPA will accept written comments any time during the consultation and comment period.

ADDRESSES:

The public information forum and public comment forum will be held at WAPA's Desert Southwest Customer Service Regional Office located at 615 South 43rd Avenue, Phoenix, Arizona 85009. Send written comments to Mr. Ronald E. Moulton, Regional Manager, Desert Southwest Customer Service Region, Western Area Power Administration, P.O. Box 6457, Phoenix, Arizona 85005-6457, email moulton@wapa.gov. WAPA will post information about the rate process, as well as comments received via letter and email on its Web site at: http://www.wapa.gov/​regions/​DSW/​Rates/​Pages/​boulder-canyon-rates.aspx. Written comments must be received by the end of the consultation and comment period to be considered by WAPA in its decision process.

United States (U.S.) citizens who want to attend a forum must present an official form of picture identification (ID) such as a U.S. driver's license, U.S. passport, U.S. government ID, or U.S. military ID. Foreign nationals who want to attend a forum must contact Mr. Scott Lund, Rates Manager, at (602) 605-2442 or email slund@wapa.gov 30 days in advance of a forum to obtain the necessary clearance.

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FOR FURTHER INFORMATION CONTACT:

Mr. Scott Lund, Rates Manager, Desert Southwest Customer Service Region, Western Area Power Administration, P.O. Box 6457, Phoenix, Arizona 85005-6457, (602) 605-2442, or email slund@wapa.gov.

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SUPPLEMENTARY INFORMATION:

BCP's base charge and rates for electric service are calculated annually based on formulas that are set for a five-year period. Since BCP begins a new 50-year marketing period in FY 2018, WAPA is proposing to update the rate-setting formulas effective October 1, 2017 through September 30, 2022. Proposed Rate Schedule BCP-F10 will update the existing forecast capacity rate formula to reflect BCP's current generating capacity of 2,074 megawatts. No other changes to the existing rate-setting formulas are proposed.

The proposed FY 2018 base charge and rates for BCP electric service are designed to recover an annual revenue requirement that includes operation and maintenance and replacements costs, interest expense, investment repayments, payments to states, and visitor services expenses. The total costs are offset by the projected revenue from water sales, visitor services, ancillary services, and late fees. The annual revenue requirement is the base charge for electric service divided equally between capacity and energy. The annual composite rate is the base charge divided by annual energy sales.

The proposed Rate Schedule BCP-F10 requires updated financial and hydrology data to calculate the annual base charge and rates. The proposed base charge for FY 2018 is $85,094,786 and the proposed composite rate is 24.39 mills/kilowatt-hour. The following table compares the existing and proposed base charge and composite rate:Start Printed Page 27814

Comparison of Existing and Proposed Base Charge and Composite Rate

Existing October 1, 2016 through September 30, 2017Proposed October 1, 2017 through September 30, 2018Percent change
Base Charge ($)69,662,28985,094,78622
Composite Rate (mills/kWh)19.6324.3924

The proposed FY 2018 base charge includes a one-time $15 million working capital fund primarily for Reclamation, which is an increase of approximately 22 percent compared to the FY 2017 base charge. Under the BCP Electric Service Contracts and Amended and Restated Implementation Agreements, Reclamation worked collaboratively with BCP contractors to establish the $15 million working capital fund for the new marketing period, to be collected in the FY 2018 base charge. The FY 2019 base charge is expected to decrease by $15 million after the collection of working capital in FY 2018 (subject to Reclamation's annual working capital evaluation). The working capital fund accounts for nearly all of the increase to the base charge. Increases in annual operation and maintenance and replacement costs, and decreases in debt service, uprating credits, non-power revenue, and carryover revenue account for the remaining increase to the base charge.

The proposed FY 2018 composite rate represents an increase of approximately 24 percent compared to the FY 2017 composite rate. The increase in the proposed base charge accounts for the composite rate increase.

This proposal, to be effective October 1, 2017, is preliminary and is subject to change upon publication of the final base charge and rates.

Legal Authority

In establishing rate-setting formulas for electric service and the base charge and rates for BCP, WAPA will follow the formal public process set forth in 10 CFR parts 903 and 904, and review all comments it receives on the proposed base charge and rates before taking action.

WAPA is proposing this action under the Department of Energy (DOE) Organization Act (42 U.S.C. 7101-7352); the Reclamation Act of 1902 (ch. 1093, 32 Stat. 388), as amended and supplemented by subsequent enactments; and other acts that specifically apply to the project involved.

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, to remand, or to disapprove such rates to the Federal Energy Regulatory Commission.

Availability of Information

All brochures, studies, comments, letters, memorandums, or other documents WAPA initiates or uses to develop the proposed rate-setting formulas and the base charge and rates will be 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 available on WAPA's Web site at: http://www.wapa.gov/​regions/​DSW/​Rates/​Pages/​boulder-canyon-rates.aspx.

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 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.

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.

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Dated: May 4, 2017.

Mark A. Gabriel,

Administrator.

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[FR Doc. 2017-12700 Filed 6-16-17; 8:45 am]

BILLING CODE 6450-01-P