# Boulder Canyon ProjectProposed Firm Power Rate Adjustment > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A95-11264 ## Record - **Collection:** Federal Register - **Document type:** Notice - **Published:** May 8, 1995 - **Citation:** 60 FR 22575 ## Text DEPARTMENT OF ENERGY Western Area Power Administration Boulder Canyon Project--Proposed Firm Power Rate Adjustment AGENCY: Western Area Power Administration, DOE. ACTION: Notice of Proposed Boulder Canyon Project Power Rate Adjustment. ----------------------------------------------------------------------- SUMMARY: On October 7, 1994, the Western Area Power Administration (Western) published a notice terminating WAPA-58-2, the public process for the Boulder Canyon Project (BCP) second annual rate adjustment under Rate Order WAPA-58 (see Notice to Terminate, 59 FR 51192). Rate Order WAPA-58 was approved by the Federal Energy Regulatory Commission (FERC) on November 3, 1993, to be effective from January 1, 1993, through September 30, 1997 (65 FERC Sec. 61,186). The methodology utilized in the Order requires Western to adjust the BCP power rate on an annual basis. On February 4, 1994, the Order was confirmed and Rate Schedule BCP-F4/2 was placed into effect by the Administrator of Western by Rate Order No. WAPA-58-1 (59 FR 10629, March 7, 1994). Rate Schedule BCP-F4/2 established a composite power rate of 12.62 mills per kilowatthour (mills/kWh), which is comprised of an energy charge of 6.31 mills/kWh and a capacity charge of $1.07 per kilowatt per month (kW/month). Western, BCP Contractors1, and the Bureau of Reclamation (Reclamation) have successfully concluded negotiations on a BCP Implementation Agreement. Based on that Agreement, Western is now proposing a revised rate methodology for the BCP which results in a rate increase in the composite rate and energy charge, and a rate decrease in the capacity charge. The power repayment spreadsheet study (PRSS), based on the estimated annual revenue requirement for fiscal year (FY) 1996, indicates that the proposed composite rate increases by 0.04 mills/kWh, the proposed energy charge increases by 0.02 mills/kWh, and the proposed capacity charge decreases by $0.03/kW/month since the last rate adjustment. The proposed rates for energy and capacity are expected to become effective October 1, 1995, and will supersede the existing BCP rates. [[Page 22576]] \1\The BCP Contractors include the Arizona Power Authority; Colorado River Commission of Nevada; City of Boulder City, Nevada; Department of Water and Power of the City of Los Angeles; The Metropolitan Water District of Southern California; Southern California Edison Company; and the Cities of Anaheim, Azusa, Banning, Burbank, Colton, Glendale, Pasadena, Riverside, and Vernon. --------------------------------------------------------------------------- During the last rate adjustment process (WAPA-58-2), the BCP Contractors requested that Western re-evaluate the annual costs in the PRSS for the ratesetting period. As a result of this re-evaluation, Western terminated the public process for proposed Rate WAPA-58-2 on October 7, 1994 (59 FR 51192). Termination was based on the following: (1) The BCP currently had a rate in effect that would satisfy FYs 1994 and 1995 annual costs; and (2) the BCP Implementation Agreement which became effective February 17, 1995, was in the final stage of negotiations with the BCP Contractors and Reclamation, and those negotiations included a revised methodology for establishing BCP power rates on an annual basis. The Implementation Agreement addresses eleven issues: (1) Replacements; (2) Visitor Facilities; (3) Amendment to Regulations; (4) Multi-Project Benefits and Costs; (5) Engineering & Operating Committee (E&OC) and Coordinating Committee; (6) Billing and Payment; (7) Operating Amount and Working Capital; (8) Audits; (9) Principal Payments; (10) Annual Rate Adjustments; and (11) Uprating Credits. The major differences between the existing rates and methodology, compared to the proposed rates and methodology, resulted from several activities which involve Western and Reclamation working in partnership with the BCP Contractors. First, the BCP Implementation Agreement revises the methodology for determination of the power rate to an annualized rate, from the higher of either: (1) The 5-year-average for the cost evaluation period; or (2) the rate in the first year of the cost evaluation period. Second, future revenue requirements were reduced by continuing to review Western's and Reclamation's operating and maintenance costs, and by reviewing and monitoring the construction and replacement program through the E&OC. Third, the BCP Implementation Agreement establishes the method by which the dollar imbalance between total capacity and total energy revenues is resolved. Fourth, a new rate making revenue requirements and billing methodology will be implemented. Under the current rate making and billing methodology, rates were determined each year based on projected hydrology for the project and bills were issued monthly based on actual hydrology and resulting energy production. Under the new methodology, revenue requirements will be calculated and billed regardless of the projected or actual hydrology and resultant energy generation. The proposed rates are based on a composite rate of 12.66 mills/ kWh. The composite rate consists of an energy charge of 6.33 mills/kWh and a capacity charge of $1.04/kW/month. The following table compares the existing BCP rates with the proposed rates: ---------------------------------------------------------------------------------------------------------------- Existing rates February 1, 1994, thru Proposed rates Percent September 30, October 1, 1995 change 1995 ---------------------------------------------------------------------------------------------------------------- Rate Schedule.................................................. BCP-F4/2 BCP-F5 -- Composite Rate (mills/kWh)..................................... 12.62 12.66 + 0.32 Energy Rate (mills/kWh)........................................ 6.31 6.33 + 0.32 Capacity Rate ($/kW/month)..................................... $1.07 $1.04 - 2.80 ---------------------------------------------------------------------------------------------------------------- Since the proposed rates and revised rate methodology constitute a major rate adjustment as defined by the procedures for public participation in general rate adjustments, both a public information forum and a public comment forum will be held. A revised PRSS, which is the basis for the proposed rate adjustment, has been distributed to the BCP Contractors and other interested parties prior to publication of this notice. After review of public comments, Western will recommend the proposed rates for approval on an interim basis by the Deputy Secretary of the Department of Energy (Deputy Secretary). Once the Deputy Secretary approves the rates as provisional rates, they will be submitted to FERC for approval on a final basis. DATES: The consultation and comment period will begin on May 8, 1995 and will end no later than August 7, 1995. The public information forum will be held at Western's Phoenix Area Office, 615 South 43rd Avenue, Phoenix, Arizona, beginning at 10 a.m. on June 15, 1995. The public comment forum at which Western will receive oral and written comments will be held at the same location beginning at 10 a.m. on July 13, 1995. Written comments should be received by the end of the consultation and comment period to assure consideration and should be sent to the address below. [[Page 22577]] FOR FURTHER INFORMATION CONTACT: Mr. J. Tyler Carlson, Area Manager, Western Area Power Administration, Phoenix Area Office, P.O. Box 6457, Phoenix, AZ 85005-6457, (602) 352-2453. SUPPLEMENTARY INFORMATION: The power rates for the BCP are established pursuant to the Department of Energy Organization Act (42 U.S.C. 7101 et seq.), the Reclamation Act of 1902 (43 U.S.C. 391 et seq.), as amended and supplemented by subsequent enactments, particularly section 9(c) of the Reclamation Project Act of 1939 (43 U.S.C. 485h(c)), the Colorado River Basin Project Act of 1968 (43 U.S.C. 1501 et seq.), the Colorado River Storage Project Act (43 U.S.C. 620 et seq.), the Boulder Canyon Project Act (43 U.S.C. 617 et seq.), the Boulder Canyon Project Adjustment Act (43 U.S.C. 618 et seq.), the Hoover Power Plant Act of 1984 (43 U.S.C. 619 et seq.), the General Regulations for Power Generation, Operation, Maintenance, and Replacement at the Boulder Canyon Project, Arizona/Nevada (43 CFR Part 431) published in the Federal Register at 51 FR 23960 on July 1, 1986, and the General Regulations for the Charges for the Sale of Power From the Boulder Canyon Project, Final Rule (10 CFR Part 904) published in the Federal Register at 51 FR 43124 on November 28, 1986, the Procedures for Public Participation in Power and Transmission Rate Adjustments and Extensions (10 CFR Part 903) published in the Federal Register at 50 FR 37837 on September 18, 1985, and the DOE financial reporting policies, procedures, and methodology (DOE Order No. RA 6120.2 dated September 20, 1979). By Amendment No. 3 to Delegation Order No. 0204-108, published November 10, 1993 (58 FR 59716), the Secretary of Energy delegated: (1) The authority to develop long-term power and transmission rates on a nonexclusive basis to the Administrator of Western; (2) The authority to confirm, approve, and place power rates into effect on an interim basis to the Deputy Secretary; and (3) the authority to confirm, approve, and place into effect on a final basis, to remand, or to disapprove power rates to FERC. The existing BCP rate methodology in WAPA-58 was approved by the Assistant Secretary for Conservation and Renewable Energy on an interim basis, effective January 1, 1993 (57 FR 61074). On November 3, 1993, FERC approved the BCP rate methodology as a final rate effective from January 1, 1993, through September 30, 1997 (65 FERC Sec. 61,186). The Administrator of Western confirmed and approved the rate methodology in Rate Order WAPA-58-1 (59 FR 10629, March 7, 1994). The methodology utilized in Rate Order WAPA-58 requires that Western adjust the BCP rates, either an increase or decrease, on an annual basis. The existing BCP composite power rate set forth in Rate Schedule BCP-F4/2 is 12.62 mills/kWh comprised of an energy charge of 6.31 mills/kWh and a capacity charge of $1.07/kW/month. See Notice of Rate Order WAPA-58-1, 59 FR 10629. Availability of Information All brochures, studies, comments, letters, memorandums, and other documents made or kept by Western for the purpose of developing the proposed rates for energy and capacity are and will be made available for inspection and copying at the Phoenix Area Office, 615 South 43rd Avenue, Phoenix, Arizona 85005. Determination Under Executive Order 12866 DOE has determined that this is not a significant regulatory action because it does not meet the criteria of Executive Order 12866, 58 FR 51735. 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. Environmental Evaluation In compliance with the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321 et seq.; Council on Environmental Quality Regulations (40 CFR Parts 1500-1508); and DOE NEPA Regulations (10 CFR Part 1021), Western has determined that this action is categorically excluded from the preparation of an environmental assessment or an environmental impact statement. Issued in Golden, CO May 1, 1995. J.M. Shafer, Administrator. [FR Doc. 95-11264 Filed 5-5-95; 8:45 am] BILLING CODE 6450-01-P --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A95-11264. Public record. Not legal advice.