89 FR 224 pgs. 91723-91731 - Loveland Area Projects—Rate Order No. WAPA-212
Type: NOTICEVolume: 89Number: 224Pages: 91723 - 91731
Pages: 91723, 91724, 91725, 91726, 91727, 91728, 91729, 91730, 91731FR document: [FR Doc. 2024-26932 Filed 11-19-24; 8:45 am]
Agency: Energy Department
Sub Agency: Western Area Power Administration
Official PDF Version: PDF Version
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DEPARTMENT OF ENERGY
Western Area Power Administration
Loveland Area Projects-Rate Order No. WAPA-212
AGENCY:
Western Area Power Administration, DOE.
ACTION:
Notice of rate.
SUMMARY:
The formula rates for the Rocky Mountain (RM) region's Loveland Area Projects (LAP) firm electric service and sale of surplus products have been confirmed, approved, and placed into effect on an interim basis (Provisional Formula Rates). LAP consists of the Fryingpan-Arkansas Project (Fry-Ark) and the Pick-Sloan Missouri Basin Program (P-SMBP)-Western Division, which were integrated for marketing and ratemaking purposes in 1989. These new formula rates replace the existing formula rates for these services under Rate Schedules L-F12, Firm Electric Service; and L-M3, Sale of Surplus Products, which expire on December 31, 2027. The LAP firm electric service composite rate is increasing over a 2-year period with an 8.8 percent increase on January 1, 2025, and an additional 8.2 percent increase on January 1, 2026. There are no changes to the formula rate for sale of surplus products.
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DATES:
The Provisional Formula Rates under Rate Schedules L-F13, Firm Electric Service; and L-M4, Sale of Surplus Products, are effective on the first day of the first full billing period beginning on or after January 1, 2025, and will remain in effect through December 31, 2029, pending confirmation and approval by the Federal Energy Regulatory Commission (FERC) on a final basis or until superseded.
FOR FURTHER INFORMATION CONTACT:
Barton V. Barnhart, Regional Manager, Rocky Mountain Region, Western Area Power Administration, 5555 East Crossroads Boulevard, Loveland, CO 80538-8986, or email: lapfirmadj@wapa.gov, or Sheila D. Cook, Rates Manager, Rocky Mountain Region, Western Area Power Administration, (970) 685-9562, or email: scook@wapa.gov.
SUPPLEMENTARY INFORMATION:
On September 12, 2023, FERC confirmed and approved Rate Schedules L-F12 and L-M3 under Rate Order No. WAPA-202 on a final basis through December 31, 2027. 1 Western Area Power Administration (WAPA) published a Federal Register notice (Proposed FRN) on June 28, 2024 (89 FR 53992), proposing adjustments to increase the base component and decrease the drought adder component of the LAP firm electric service rate using a two-step rate adjustment where roughly 50 percent of the total increase is being applied in step 1 (January 2025) and the remaining 50 percent is being applied in step 2 (January 2026), and to put new 5-year rate schedules in place. The Proposed FRN also initiated a 60-day public consultation and comment period and set forth the dates and locations of the virtual public information and public comment forums.
Footnotes:
1 ? Order Confirming and Approving Rate Schedules on a Final Basis, FERC Docket No. EF23-1-000 (2023).
Legal Authority
By Delegation Order No. S1-DEL-RATES-2016, effective November 19, 2016, the Secretary of Energy delegated: (1) the authority to develop power and transmission rates to the WAPA 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, or to remand or disapprove such rates, to FERC. By Delegation Order No. S1-DEL-S3-2024, effective August 30, 2024, the Secretary of Energy also delegated the authority to confirm, approve, and place such rates into effect on an interim basis to the Under Secretary for Infrastructure. By Redelegation Order No. S3-DEL-WAPA1-2023, effective April 10, 2023, the Under Secretary for Infrastructure further redelegated the authority to confirm, approve, and place such rates into effect on an interim basis to WAPA's Administrator. This rate action is issued under Redelegation Order No. S3-DEL-WAPA1-2023 and Department of Energy procedures for public participation in rate adjustments set forth in 10 CFR part 903. 2
Footnotes:
2 ?50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
Following review of RM's proposal, Rate Order No. WAPA-212, which provides the formula rates for LAP firm electric service and sale of surplus products, is hereby confirmed, approved, and placed into effect on an interim basis. WAPA will submit Rate Order No. WAPA-212 to FERC for confirmation and approval on a final basis.
Department of Energy
Administrator, Western Area Power Administration
In the Matter of: Western Area Power Administration, Rocky Mountain Region, Rate Adjustment for the Loveland Area Projects, Firm Electric Service and Sale of Surplus Products, Formula Rates, Rate Order No. WAPA-212
Order Confirming, Approving, and Placing the Formula Rates for the Loveland Area Projects Into Effect on an Interim Basis
The formula rates in Rate Order No. WAPA-212 are established following section 302 of the Department of Energy (DOE) Organization Act (42 U.S.C. 7152). 1
Footnotes:
1 ?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 (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 projects involved.
By Delegation Order No. S1-DEL-RATES-2016, effective November 19, 2016, the Secretary of Energy delegated: (1) the authority to develop power and transmission rates to the Western Area Power Administration (WAPA) 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, or to remand or disapprove such rates, to the Federal Energy Regulatory Commission (FERC). By Delegation Order No. S1-DEL-S3-2024, effective August 30, 2024, the Secretary of Energy also delegated the authority to confirm, approve, and place such rates into effect on an interim basis to the Under Secretary for Infrastructure. By Redelegation Order No. S3-DEL-WAPA1-2023, effective April 10, 2023, the Under Secretary for Infrastructure further redelegated the authority to confirm, approve, and place such rates into effect on an interim basis to WAPA's Administrator. This rate action is issued under Redelegation Order No. S3-DEL-WAPA1-2023 and DOE procedures for public participation in rate adjustments set forth at 10 CFR part 903. 2
Footnotes:
2 ?50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
Acronyms, Terms, and Definitions
As used in this Rate Order, the following acronyms, terms, and definitions apply:
Base: A component of the firm electric service rate design that is a fixed revenue requirement that includes operation and maintenance expenses (O&M), investments and replacements, interest on investments and replacements, normal timing power purchases, and transmission costs.
Capacity: The electric capability of a generator, transformer, transmission circuit, or other equipment. It is expressed in kilowatts (kW) or megawatts (MW).
Capacity Rate: The rate which sets forth the charges for capacity. It is expressed in dollars per kilowatt-month and applied to each kilowatt of the Contract Rate of Delivery or CROD.
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 kilowatt-hour (mills/kWh) and used only for comparison purposes.
Corps of Engineers Annual Operating Plan (AOP): The United States Army Corps of Engineers (USACE) water management guidelines designed to meet the reservoir regulation objectives.
Customer: An entity with a contract that is receiving Loveland Area Projects (LAP) firm electric service from WAPA.
[top] Customer Rate Brochure: A document prepared for public distribution explaining the rationale and background for the information contained in the Proposed FRN and in this rate order.
Deficit(s): Deferred or unrecovered annual and/or interest expenses.
Drought Adder: A component of the firm electric service rate design that is a formula-based revenue requirement that includes future power purchases above normal timing power purchases, previous purchase power drought-related Deficits, and interest on the purchase power drought-related Deficits.
Energy: Measured in terms of the work it is capable of doing over a period of time. Electric energy is expressed in kilowatt-hours (kWh) or megawatt-hours (MWh).
Energy Charge: The charge under the rate schedule for energy. It is expressed in mills per kilowatt-hour and applied to each kilowatt-hour delivered to each Customer.
Firm: Power intended to be available at all times during the period covered by a guaranteed commitment to deliver, even under adverse conditions.
FRN: Federal Register Notice-a document published in the Federal Register in order for WAPA to provide information of public interest.
FY: WAPA's fiscal year; October 1 to September 30.
kW: Kilowatt-the electrical unit of capacity that equals 1,000 watts.
kWh: Kilowatt-hour-the electrical unit of energy that equals 1,000 watts in 1 hour.
kW-month: Kilowatt-month-the electrical unit of the monthly amount of capacity.
mills/kWh: Mills per kilowatt-hour-the unit of charge for energy (equal to one tenth of a cent or one thousandth of a dollar).
Microsoft Teams: Microsoft Teams is an online secure invite-only meeting platform used by WAPA. The general website is www.microsoft.com/en-us/microsoft-teams/group-chat-software.
NEPA: National Environmental Policy Act of 1969, as amended.
Non-timing Power Purchases: Power purchases related to drought conditions, not related to operational constraints.
Normal Timing Power Purchases: Power purchases related to operational constraints ( e.g., management of endangered species habitat, water quality, navigation, balancing authority purposes, market events, etc.), not associated with drought conditions.
O&M: Operation and maintenance expenses.
Order RA 6120.2: DOE Order outlining Power Marketing Administration financial reporting and rate-making procedures.
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.
Power Repayment Study (PRS): Defined in Order RA 6120.2 as a study portraying the annual repayment of power production and transmission costs of a power system through the application of revenues over the repayment period of the power system. The study shows, among other items, estimated revenues and expenses, year by year, over the remainder of the power system's repayment period (based upon conditions prevailing over the cost evaluation period), the estimated amount of Federal investment amortized during each year, and the total estimated amount of Federal investment remaining to be amortized.
Preference: The provisions of Reclamation Law that require WAPA 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 Formula Rates: Formula rates confirmed, approved, and placed into effect on an interim basis by the Secretary of Energy or his/her designee.
Rate-setting PRS: The PRS used for the rate adjustment.
Regions: WAPA's Rocky Mountain (RM) region, WAPA's Upper Great Plains (UGP) region.
Revenue Requirement: The revenue required by the PRS to recover annual expenses (such as O&M, purchase power, transmission service expenses, interest, and deferred expenses) and repay Federal investments and replacements and other assigned costs.
Effective Date
The Provisional Formula Rate Schedules L-F13, Firm Electric Service; and L-M4, Sale of Surplus Products, will take effect on the first day of the first full billing period beginning on or after January 1, 2025, and will remain in effect through December 31, 2029, pending approval by FERC on a final basis or until superseded.
Public Notice and Comment
RM followed the Procedures for Public Participation in Power and Transmission Rate Adjustments and Extensions, 10 CFR part 903, in developing these formula rates. RM took the following steps to involve interested parties in the rate process:
1. On June 28, 2024, a Federal Register notice (89 FR 53992) (Proposed FRN) announced the proposed formula rates and initiated a 60-day public consultation and comment period.
2. On July 1, 2024, RM notified Preference Customers and interested parties of the proposed rates and provided a copy of the published Proposed FRN.
3. On August 7, 2024, RM held a public information forum via Microsoft Teams. RM's representatives explained the proposed formula rates, answered questions, and gave notice that more information was available in the Customer Rate Brochure.
4. On August 7, 2024, RM held a public comment forum via Microsoft Teams to provide an opportunity for Customers and other interested parties to comment for the record.
5. RM established a public website to post information about the rate process. The website is located at: www.wapa.gov/about-wapa/regions/rm/rm-rates/2025-rate-adjustment-firm-electric-service.
6. During the 60-day consultation and comment period, which ended on August 27, 2024, RM received three oral comment submissions and one written comment letter. The comments and RM's responses are addressed in the "Comments" section. All comments have been considered in the preparation of this Rate Order.
Oral comments were received from the following organizations:
City of Orange City, Iowa (member utility)
Mid-West Electric Consumers Association, Colorado (customer association)
Missouri River Energy Services, South Dakota (action agency)
Written comments were received from the following organization:
Mid-West Electric Consumers Association, Colorado (customer association)
Power Repayment Study-Firm Electric Service Rate Discussion
[top] PRSs are prepared each FY to determine if revenues will be sufficient to repay, within the required time, all costs assigned to the Pick-Sloan Missouri Basin Program (P-SMBP) and the Fryingpan-Arkansas Project (Fry-Ark). Repayment criteria are based on applicable laws and legislation, as well as policies including Order RA 6120.2. To meet the Cost Recovery Criteria outlined in Order RA 6120.2, RM developed a rate adjustment to demonstrate that sufficient revenues will be collected under the Provisional
| LAP firm electric service | Existing under L-F12 as of Jan. 1, 2023 | Provisional under L-F13 first step as of Jan. 1, 2025 | First step percent change | Provisional under L-F13 second step as of Jan. 1, 2026 | Second step percent change |
|---|---|---|---|---|---|
| Total Revenue Requirement? 1 (in million $) | $74.6 | $81.3 | 9.0 | $87.9 | 8.1 |
| Pick-Sloan-WD? 1 ? 2 Fry-Ark (in million $). | $58.5 $16.1 | $62.6 $18.7 | 7.0 16.1 | $66.3 $21.6 | 5.9 15.5 |
| LAP Composite Rate? 1 (mills/kWh) | 36.61 | 39.84 | 8.8 | 43.10 | 8.2 |
| 1 ?Provisional values are estimates only based on using set/final Base and estimated Drought Adder components. | |||||
| 2 ?Additional information on the overall P-SMBP PRS and charge components can be found in Rate Order No. WAPA-213 and on the UGP's website at: www.wapa.gov/about-wapa/regions/ugp/ugp-rates/2025-firm-rate-adjustment. | |||||
Firm Electric Service-Existing and Provisional Formula Rates
Under the existing and provisional rate methodology, rates for LAP firm electric service are designed to recover an annual Revenue Requirement that includes investment and replacement repayment (including aid to irrigation), interest, purchase power, O&M, and other expenses within the allowable period. The annual Revenue Requirement continues to be allocated equally between capacity and energy.
Base and Drought Adder Components
As a part of the existing and provisional rate schedule, RM provides for a formula-based adjustment of the Drought Adder component, with an annual increase of up to 2mills/kWh each year. The 2 mills/kWh cap places a limit on the amount the Drought Adder component can be adjusted upward relative to associated drought costs included in the Drought Adder formula rate for any 1-year cycle. The Drought Adder component may be adjusted downward by any amount. Continuing to identify the firm electric service Revenue Requirement using Base and Drought Adder components will assist the Regions in presenting the future impacts of droughts, demonstrate repayment of drought-related costs in the PRSs, and allow the Regions to be more responsive to changes caused by drought-related expenses. RM will continue to charge and bill its customers firm electric service rates for energy and capacity, which are the sum of the Base and Drought Adder components.
Under Rate Schedule L-F13, RM will continue to identify its LAP firm electric service Revenue Requirement using Base and Drought Adder components. The Base component is a fixed Revenue Requirement from each PRS that includes annual O&M, investment and replacement repayment, and associated interest, Normal Timing Power Purchases, and transmission costs. RM cannot adjust the Base component without a public process. The Drought Adder component is a formula-based Revenue Requirement from each PRS that includes costs attributable to drought conditions in the Regions. The Drought Adder component includes costs associated with future Non-timing Power Purchases to meet firm electric service 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-related Deficits. The Drought Adder component is designed to repay drought-related Deficits within 10 years from the time the Deficit was incurred, using balloon-payment methodology. For example, a drought-related Deficit incurred in FY2024 would be repaid by FY2034.
The annual Revenue Requirement calculation will continue to be summarized by the following formula: Annual Revenue Requirement = Base Revenue Requirement + Drought Adder Revenue Requirement.
Annual Drought Adder Adjustment Process
RM reviews the inputs for the P-SMBP and Fry-Ark PRS Base and Drought Adder components after the annual PRSs are complete, generally in the first quarter of the calendar year. If an adjustment to the LAP Base component is necessary, or if an incremental upward adjustment to the LAP Drought Adder component greater than the equivalent of 2 mills/kWh to the LAP Rate is necessary, RM will initiate a public process pursuant to 10 CFR part 903 prior to making an adjustment.
In accordance with the approved annual Drought Adder adjustment process, the PRS Drought Adder components are reviewed annually in early summer to determine if drought costs differ from those projected in the PRSs. In October, RM will determine if a change to the LAP Drought Adder component is necessary, either incremental or decremental. Any incremental adjustment to the Drought Adder component, up to 2mills/kWh, or any decremental adjustment will be implemented in the following 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. Implementing the Drought Adder component adjustment on January 1 of each year will help keep the drought-related Deficits from escalating as quickly, will lower the interest expense due to drought-related Deficits, will demonstrate responsible Deficit management, and will provide prompt drought-related Deficit repayments.
Revenue Requirement Changes
[top] The Base component costs for the P-SMBP PRS have increased primarily due to increased O&M from WAPA and the generating agencies. The Base component costs for the Fry-Ark PRS have increased primarily due to
The driver behind the P-SMBP Drought Adder component decrease is the USACE's 2024 AOP projecting less than average generation, despite the improvement to generation as projected in the WAPA-202 January 2023 rate. Planned repayment of both the Base and Drought Adder Deficits are in the same time frame (2027) as they were projected to be repaid under WAPA-202. Uncertainties with water inflows, hydro generation, and replacement energy prices continue to pose potential risks regarding the ability to satisfy firm power contractual commitments.
The net effect of these changes to the PRS Base and Drought Adder components results in an overall increase to the LAP rate. To implement the required rate increase over a two-year period/in two steps, the Base component Revenue Requirements and associated charges for each step are set values. For the Drought Adder component, RM is using estimated Revenue Requirements and associated charges for each step based on the USACE's 2024 AOP and drought costs projected in the Rate-Setting PRSs. In accordance with the approved annual Drought Adder adjustment process, these Drought Adder estimates are subject to change based upon updated AOPs/generation models and revised drought costs. A comparison of the existing and provisional charge component Revenue Requirements for firm electric service are shown in Table 2:
| LAP firm electric service | Existing under L-F12 as of Jan.1, 2023 (in million $) | Provisional under L-F13 first step as of Jan. 1, 2025 (in million $) | First step percent change | Provisional under L-F13 second step as of Jan. 1, 2026 (in million $) | Second step percent change |
|---|---|---|---|---|---|
| Base Component | $67.8 | $76.4 | 12.7 | $85.1 | 11.4 |
| Pick-Sloan-WD? 1 Fry-Ark | 51.7 16.1 | 57.7 18.7 | 11.6 16.1 | 63.5 21.6 | 10.1 15.5 |
| Drought Adder Component? 2 | 6.8 | 4.9 | -27.9 | 2.8 | -42.9 |
| Pick-Sloan-WD? 1 ? 2 Fry-Ark? 2 | 6.8 0.0 | 4.9 0.0 | -27.9 0.0 | 2.8 0.0 | -42.9 0.0 |
| 1 ?Additional information on the overall P-SMBP PRS and charge components can be found in Rate Order No.WAPA-213 and on UGP's website at: www.wapa.gov/about-wapa/regions/ugp/ugp-rates/2025-firm-rate-adjustment. | |||||
| 2 ?Provisional values are estimates that may change during the existing annual Drought Adder adjustment process. | |||||
A summary of the provisional charge components is shown in Table 3:
| Provisional charges under rate schedule L-F13 first step as of Jan. 1, 2025 | Base component | Drought adder component? 1 | Total charge? 2 | Provisional charges under rate schedule L-F13 second step as of Jan. 1, 2026 | Base component | Drought adder component? 1 | Total charge? 2 | |
|---|---|---|---|---|---|---|---|---|
| Firm Capacity ($/kilowatt-month) | $4.91 | $0.31 | $5.22 | $5.47 | $0.18 | $5.65 | ||
| Firm Energy (mills/kWh) | 18.72 | 1.20 | 19.92 | 20.86 | 0.69 | 21.55 | ||
| 1 ?Provisional values are estimates that may change during the existing annual Drought Adder adjustment process. | ||||||||
| 2 ?Provisional values are estimates only based on using final Base and estimated Drought Adder components. | ||||||||
Statement of Revenue and Related Expenses
The following Table 4 provides a summary of projected revenue and expense data for the Fry-Ark firm power service Revenue Requirement through the 5-year provisional rate approval periods:
BILLING CODE 6450-01-P
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[Federal Register graphic "EN20NO24.073" is not available. Please view the graphic in the PDF version of this document.]
BILLING CODE 6450-01-C
The summary of the P-SMBP projected revenue and expenses for the 5-year rate-setting periods is included in the P-SMBP Statement of Revenue and Related Expenses that is part of Rate Order No. WAPA-213.
Sale of Surplus Products Rate Discussion
The sale of surplus products rate schedule is formula-based, providing for LAP Marketing Office to sell LAP surplus energy and capacity products. If LAP surplus products are available, as specified in the rate schedule, the charge will be based on market rates plus administrative costs. The customer will be responsible for acquiring transmission service necessary to deliver the product(s) for which a separate charge may be incurred. Rate Schedule L-M3 is being superseded by the Provisional Rate Schedule L-M4 and continues to allow for the sale of energy, frequency response, regulation, and reserves.
Comments
RM received four separate oral and/or written comments during the public consultation and comment period. The comments expressed have been paraphrased and/or combined, where appropriate, without compromising the meaning of the comments.
A. Comment: The customer association, member utility, and action agency commented that they understand a rate increase is necessary due to inflation on O&M and labor costs, along with increased debt principal costs and they support and appreciate the increase being implemented in two steps rather than one large increase.
Response: WAPA appreciates the recognition of the impacts many entities are facing due to increasing inflation and labor costs, the specific costs of the power repayment study, and the two-step implementation for the rate adjustment.
B. Comment: The customer association and the action agency commented that they have a concern with the addition of new Full-Time Employees (FTE) when many positions within WAPA remain unfilled. The customers encourage WAPA to evaluate its internal processes for cost control, seeking efficiencies in workflow and staffing.
Response: WAPA understands the concern raised with the addition of new FTEs and the impacts of the FTEs to the rate. WAPA is committed to finding ways to limit cost increases impacting its customers while still ensuring it has the positions needed to fulfill its mission.
C. Comment: The action agency commented that they lack an understanding of any compromises made within the budgeting process to meet the WAPA Administrator's guidance stating tradeoffs need to be made. The action agency also stated they believe that this guidance could have been followed as an element of cost control.
[top] Response: WAPA appreciates the comment regarding the need for better cost control and that compromises in the budgeting process may be necessary
D. Comment: The action agency and the customer association commented that they have concerns about the long-term viability of the P-SMBP going forward as it faces significant financial and operational issues in the future including: (1) USACE's plan of rehabilitation of the Missouri River; (2) dam safety repairs; (3) Aid to Irrigation payments coming due; and (4) environmental impact issues from non-supporting stakeholders. They also expressed their concern that these issues could result in significant future rate impacts to the firm power customers and that WAPA needs to focus on cost control in the future.
Response: WAPA appreciates the concerns regarding the long-term stability and affordability of the P-SMBP beyond the 5-year rate window. WAPA is committed to continuing to focus on the impact of rising costs and to mitigate those costs when possible.
E. Comment: The customer organization commented that they appreciate WAPA engaging with the customers early in the ratemaking process, responding to Customer concerns and questions. The customer organization also commented that they encourage WAPA leadership to support their rates and finance teams who have long-standing working relationships with the customers.
Response: WAPA appreciates the comment regarding WAPA's commitment to engaging with the Customers on issues concerning the firm power rate.
Certification of Rates
I have certified that the Provisional Formula Rates for LAP firm electric service under Rate Schedule L-F13 and LAP sale of surplus products under Rate Schedule L-M4 are the lowest possible rates, consistent with sound business principles. The Provisional Formula Rates were developed following administrative policies and applicable laws.
Availability of Information
Information used by RM to develop the Provisional Formula Rates is available for inspection and copying at the Rocky Mountain Regional Office, 5555 East Crossroads Boulevard, Loveland, Colorado. Many of these documents are also available on RM's Rates website at: www.wapa.gov/about-wapa/regions/rm/rm-rates/2025-rate-adjustment-firm-electric-service.
Ratemaking Procedure Requirements
Environmental Compliance
WAPA has determined that this action fits within the following categorical exclusion listed in appendix B to subpart D of 10 CFR part 1021: B4.3 (Electric power marketing rate changes). 3 Categorically excluded projects and activities do not require preparation of either an environmental impact statement or an environmental assessment. A copy of the categorical exclusion determination is available on WAPA's Rates website at: www.wapa.gov/wp-content/uploads/2024/10/2025-001-Proposed-Loveland-area-FY25-Rate-adjustment-CX.pdf.
Footnotes:
3 ?The determination was done in compliance with NEPA (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).
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.
Submission to the Federal Energy Regulatory Commission
The Provisional Formula 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 above and under the authority delegated to me, I hereby confirm, approve, and place into effect, on an interim basis, Rate Order No. WAPA-212. The rates will remain in effect on an interim basis until: (1) FERC confirms and approves them on a final basis; (2) subsequent rates are confirmed and approved; or (3) such rates are superseded.
Signing Authority
This document of the Department of Energy was signed on November 12, 2024, by Tracey A. LeBeau, Administrator, Western Area Power Administration, 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 November 14, 2024.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
Rate Schedule L-F13
(Supersedes Rate Schedule L-F12 Effective January 1, 2023)
United States Department of Energy
Western Area Power Administration
Rocky Mountain Region
Loveland Area Projects
Firm Electric Service
(Approved Under Rate Order No. WAPA-212)
Effective
First Step: Beginning on the first day of the first full billing period beginning on or after January 1, 2025, through December 31, 2025.
Second Step: Beginning on January 1, 2026, and extending through December 31, 2029, or until superseded by another rate schedule, whichever occurs earlier.
Available
Within the marketing area served by the Loveland Area Projects (LAP) (consisting of the Fryingpan-Arkansas Project and the Pick-Sloan Missouri Basin Program-Western Division, which were integrated for marketing and rate-making purposes in 1989), parts of Colorado, Kansas, Nebraska, and Wyoming.
Applicable
To the LAP firm electric service delivered at specific point(s) of delivery, as 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
[top] LAP Firm Electric Service Rate (Rate) = Base component + Drought Adder component:
| First step January 1, 2025 monthly charges | Base component | Drought adder component | Total charge | Second step January 1, 2026 monthly charges | Base component | Drought adder component? 1 | Total charge? 2 | |
|---|---|---|---|---|---|---|---|---|
| Capacity Charge ($/kilowatt-month of billing capacity? 3 ) | $4.91 | $0.31 | $5.22 | $5.47 | $0.18 | $5.65 | ||
| Energy Charge (mills/kWh of monthly entitlement) | 18.72 | 1.20 | 19.92 | 20.86 | 0.69 | 21.55 | ||
| 1 ?Values are estimates that are subject to change during the annual Drought Adder adjustment process. | ||||||||
| 2 ?Values are estimates only based on final Base and estimated Drought Adder components. | ||||||||
| 3 ?Unless otherwise specified by contract, the billing capacity will be the seasonal contract rate of delivery. | ||||||||
Charge Components
Base Component: A fixed revenue requirement that includes operation and maintenance expense, investments and replacements, interest on investments and replacements, normal timing power purchases (purchases due to operational constraints, not associated with drought), and transmission costs. Any proposed change to the Base component will require a public process. The Base component revenue requirement for the first step is $76,396,300 and for the second step is $85,126,600.
[Federal Register graphic "EN20NO24.074" is not available. Please view the graphic in the PDF version of this document.]
Drought Adder Component: A formula-based revenue requirement that includes future power purchases above normal timing power purchases, previous purchase power drought-related deficits, and interest on the purchase power drought-related deficits. The Drought Adder component revenue requirement for the first step is $4,890,480 and for the second step is estimated to be $2,803,080. The second step revenue requirement is subject to change during the annual Drought Adder adjustment processes starting in January 2026.
[Federal Register graphic "EN20NO24.075" is not available. Please view the graphic in the PDF version of this document.]
Annual Drought Adder Adjustment 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 Rate. Any planned incremental upward adjustment to the Drought Adder component greater than the equivalent of 2 mills/kWh to the Rate will require a public process.
The annual review process is initiated in early summer when the Rocky Mountain (RM) region reviews the Drought Adder component and provides notice of any estimated change to the Drought Adder component charge under the formula. In October, RM will make a final determination of any change to the Drought Adder component charge, either incremental or decremental. If a Drought Adder component change is required, a modified Drought Adder revenue requirement and the associated charges will become effective the following January 1 and will be identified in a Drought Adder modification update. RM will inform customers of updates by letter and post updates to RM's external website.
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.
[top] For Power Factor: None. Customers will be required to maintain a power factor within the range of 95-percent leading to 95-percent lagging, measured at the point of interconnection.
Rate Schedule L-M4
(Supersedes Rate Schedule L-M3 Effective January 1, 2023)
United States Department of Energy
Western Area Power Administration
Rocky Mountain Region
Loveland Area Projects
Sale of Surplus Products
(Approved Under Rate Order No. WAPA-212)
Effective
The first day of the first full billing period beginning on or after January 1, 2025, and extending through December 31, 2029, or until superseded by another rate schedule, whichever occurs earlier.
Applicable
This rate schedule applies to Loveland Area Projects (LAP) marketing and is applicable to the sale of the following LAP surplus energy and capacity products: energy, frequency response, regulation, and reserves. If any of the above LAP surplus products are available, LAP can make the product(s) available for sale, providing entities enter into separate agreement(s) with LAP Marketing Office which will specify the terms of sale(s).
Formula Rate
The charge for each product will be determined at the time of the sale based on market rates, plus administrative costs. The customer will be responsible for acquiring transmission service necessary to deliver the product(s), for which a separate charge may be incurred.
[FR Doc. 2024-26932 Filed 11-19-24; 8:45 am]
BILLING CODE 6450-01-P