[Federal Register Volume 75, Number 26 (Tuesday, February 9, 2010)]
[Notices]
[Pages 6380-6383]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-2838]
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DEPARTMENT OF ENERGY
Western Area Power Administration
Provo River Project Rate Order No. WAPA-149
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of Rate Order Concerning a Power Rate Formula.
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SUMMARY: The Deputy Secretary of Energy confirmed and approved Rate
Order No. WAPA-149 placing a power rate formula for the Provo River
Project (PRP) of Western Area Power Administration (Western) into
effect on an interim basis. The provisional power rate formula will
remain in effect on an interim basis until the Federal Energy
Regulatory Commission (FERC) confirms, approves, and places it into
effect on a final basis, or until the power rate formula is replaced by
another power rate formula.
DATES: The provisional power rate formula will be placed into effect on
an interim basis on April 1, 2010, and will be in effect until FERC
confirms, approves, and places the provisional power rate formula in
effect on a final basis for 5 years ending March 31, 2015, or until
superseded.
FOR FURTHER INFORMATION CONTACT: Ms. LaVerne Kyriss, Acting CRSP
Manager, Colorado River Storage Project Management Center, Western Area
Power Administration, 150 East Social Hall Avenue, Suite 300, Salt Lake
City, UT 84111-1580, (801) 524-5493, e-mail kyriss@wapa.gov, or Mr.
Rodney Bailey, Rates Manager, Colorado River Storage Project Management
Center, Western Area Power Administration, 150 East Social Hall Avenue,
Suite 300, Salt Lake City, UT 84111-1580, (801) 524-4007, e-mail
rbailey@wapa.gov.
SUPPLEMENTARY INFORMATION: The PRP, which includes Deer Creek Dam on
the Provo River in Utah, was authorized in 1935. Construction of the
dam began in 1938 and was completed in 1951. The Deer Creek Powerplant
was authorized on August 20, 1951, construction began in 1956, and was
completed in 1958; generation began that same year. Its maximum
operating capacity is 5,300 kilowatts.
The PRP power is marketed according to a marketing plan that was
approved and published in the Federal Register on November 21, 1994.
This marketing plan allows Western to market the output of the PRP to
customers of Utah Municipal Power Agency, Utah Associated Municipal
Power Systems, and Heber Light and Power (Customers) in the Provo River
drainage area.
Contract Nos. 94-SLC-0253, 94-SLC-0254, and 07-SLC-0601 between the
United States and Customers require that the amount of each annual
installment be established in advance by Western and submitted to the
Customers on or before August 31 of the year preceding the appropriate
fiscal year. Each fiscal year, Western will estimate the Deer Creek
Powerplant (DCP) expenses by preparing a power repayment study, which
will include estimates of operation, maintenance, and replacement costs
for the DCP.
Each annual installment pays the annual amortized portion of the
United States' investment in the Deer Creek Dam and Reservoir
hydroelectric facilities with interest and the associated operation,
maintenance, and replacement (OM&R) costs. Since the repayment schedule
does not depend upon the power and energy made available for sale or
the rate of generation each year, the Customers pay all OM&R expenses
of the PRP and, in return, receive all of the energy produced by the
PRP. Western will continue to provide the Customers a revised annual
installment by August 31 of each year using the same methodology.
By Delegation Order No. 00-037.00, effective December 6, 2001, the
Secretary of Energy delegated: (1) The authority to develop power and
[[Page 6381]]
transmission rates to Western'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 FERC. Existing DOE procedures for public
participation in power rate adjustments (10 CFR 903) were published on
September 18, 1985.
Under Delegation Order Nos. 00-037.00 and 00-001.00C, 10 CFR 903,
and 18 CFR 300, I hereby confirm, approve, and place Rate Order No.
WAPA-149 into effect on an interim basis. The renewal of the power rate
formula will be promptly submitted to FERC for confirmation and
approval on a final basis.
Dated: February 1, 2010.
Daniel B. Poneman,
Deputy Secretary.
Order Confirming, Approving, and Placing the Power Rate Formula for the
Provo River Project Into Effect on an Interim Basis
This rate was established in accordance with section 302 of the
Department of Energy (DOE) Organization Act (42 U.S.C. 7152). 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 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 other acts that specifically apply to the Provo
River Project (PRP).
By Delegation Order No. 00-037.00, effective December 6, 2001, the
Secretary of Energy delegated: (1) The authority to develop power and
transmission rates to Western's Administrator, (2) the authority to
confirm, approve, and place such 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 such
rates to FERC. Existing DOE procedures for public participation in
power rate adjustments (10 CFR part 903) were published on September
18, 1985.
Acronyms and Definitions
As used in this rate order, the following acronyms and
definitions apply:
Administrator: The Administrator of the Western Area Power
Administration.
CRSP: Colorado River Storage Project.
Contracts: Contract No. 94-SLC-0254 with Utah Municipal Power Agency
effective December 22, 1994, Contract No. 94-SLC-0253 with Utah
Associated Municipal Power System effective January 19, 1995, and
Contract No. 07-SLC-0601 with Heber Light and Power effective April
1, 2007. The Contracts are effective through September 30, 2024.
Customers: Utah Associated Municipal Power Systems, Utah Municipal
Power Agency, and Heber Light and Power.
DCP: Deer Creek Powerplant.
DOE: Department of Energy.
DOE Order RA 6120.2: A Department of Energy order dealing with power
marketing administration financial reporting and ratemaking
procedures.
FERC: Federal Energy Regulatory Commission.
FY: Fiscal year; October 1 to September 30.
Heber: Heber Light & Power.
Interior: United States Department of the Interior.
kW: Kilowatt--the electrical unit of capacity that equals 1,000
watts.
MW: Megawatt--the electrical unit of capacity that equals 1 million
watts or 1,000 kilowatts.
NEPA: National Environmental Policy Act of 1969. (42 U.S.C. 4321, et
seq.)
OM&R: Operation, Maintenance, and Replacement.
PRP: Provo River Project.
PRS: Power Repayment Study.
PRWUA: Provo River Water Users Association.
Reclamation: United States Department of the Interior, Bureau of
Reclamation.
UAMPS: Utah Associated Municipal Power Systems.
UMPA: Utah Municipal Power Agency.
Western: United States Department of Energy, Western Area Power
Administration.
Effective Date
This power rate formula takes effect on an interim basis beginning
April 1, 2010, and will remain in effect pending FERC's approval of
this or a substitute power rate formula on a final basis for a 5-year
period ending March 31, 2015, or until superseded.\1\
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\1\ FERC confirmed and approved the present Provo River Project
rate on April 25, 2005, for a period through March 31, 2010 (111
FERC ] 62089).
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Public Notice and Comment
Paragraph 903.23(a) of 10 CFR 903 for rate extensions does not
require either a consultation and comment period, or public
information, or comment forums. Western considers this rate order a
rate extension since the power rate formula is not changing; rather it
is going through the course of a 5-year renewal. This request is for
approval of the power rate formula renewal using the present
methodology for calculating the annual installment. On April 20, 2009,
Western met with the Customers and notified them of Western's intent to
renew the present power rate formula. Western also discussed the FY
2010 budget and capital expenditures. The Customers expressed their
desire to continue using the power rate formula methodology through
letter notifications.
Project Description
Construction of the PRP began in May 1938, and the powerplant was
completed in 1958. Presently, it has a generating capacity of 5,300 kW
of power. Energy excess to the PRP purposes is marketed under a
marketing plan published in the Federal Register on November 21, 1994.
This marketing plan allows Western to market the output of the PRP to
customers of UAMPS, UMPA, and Heber in the Provo River drainage area.
Power Repayment Studies
Each FY, Western will estimate DCP expenses by preparing a PRS that
will include estimates of OM&R costs for the DCP for the next FY. The
PRS determines if power revenues will be sufficient to pay, within the
prescribed time periods, all costs assigned to the PRP power function.
Repayment criteria are based on law, policies (including DOE Order RA
6120.2), and authorizing legislation.
Western calculates the annual installment based on 2 years of data.
The calculation includes the projected costs of the rate installment
year (future FY) and an adjustment from the last historic FY. The
adjustment is the surplus or deficit that occurs in the last historic
year when actual costs and repayment obligations are compared with
actual revenues. This surplus or deficit is combined with the costs for
the projected rate installment year to arrive at the annual rate
installment. Each annual installment pays the annual amortized portion
of the United States' investment in the Deer Creek Dam and Reservoir
hydroelectric facilities with interest and the associated OM&R. This
repayment schedule does not depend upon the power and energy made
available for sale or the rate of generation each year.
Certification of Rates
Western's Administrator certified that the methodology for the
provisional power rate formula renewal for the Provo River Project to
calculate the annual installment is consistent with sound business
principles. The methodology for the provisional power rate formula
renewal was developed following administrative policies and applicable
laws.
[[Page 6382]]
Statement of Revenue and Related Expenses
The revenue requirements for the PRP are based on PRS calculations
for future requirements, which will be adjusted when FY actuals are
known. The following table summarizes revenues and expenses for the
current 6-year power rate formula and the actual revenues and expenses
for the same period.
Provo River--Comparison of 6-Year Total Revenues and Revenue Distribution FY 2004-2009
[$1,000]
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Item Projected \1\ Actual \2\ Change
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Total Revenues............................................ 1,857 1,532 (325)
Revenues Distribution:
O&M................................................... 1,217 1,510 293
Transmission.......................................... 179 108 (71)
Interest.............................................. 165 23 (142)
Investment Repayment.................................. 264 316 52
Surplus Revenues...................................... 32 (425) (457)
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Total Revenues Distribution....................... 1,857 1,532 (325)
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\1\ Taken from FY 2003 Final PRS.
\2\ Although the rate process seeks approval for a 5-year period, 6 years of data are shown in the above table
because FY 2009 is an estimate and is used for the current 2009 rate installment. Actual data is taken from
the FY 2008 Final PRS.
The following table provides a summary of the projected revenues
and expenses during the provisional power rate formula period.
Provo River Project 6-Year Projections Total Revenues and Revenue
Distribution FY 2010-2015
[$1,000]
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FY 2010-2015 projections
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Total Revenues \1\........................ $1,799
Revenue Distribution:
O&M................................... 1,799
Interest \2\.......................... 0
Investment Repayment \2\.............. 0
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Total Revenue Distribution........ 1,799
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\1\ Although the rate process seeks approval for a 5-year period (FY
2010-2015), 6 years of data are shown in the above table because FY
2010 is an estimate and is used for the current 2010 rate installment.
\2\ All capitalized investments are repaid and none are planned through
2015; therefore, no interest or principal payments are projected.
Basis for Rate Development
Each Customer is billed for electric service calculated every FY,
payable in 12 equal monthly payments. Every FY, Western will estimate
the PRP expenses by preparing a PRS which will include estimates of
OM&R costs for the DCP. The amount of each monthly payment will be
established in advance by Western and submitted to the Customers on or
before August 31 of the year preceding the appropriate FY.
The calculation of the annual installment and the monthly payments
will include adjustments to the revenue requirements estimates. These
adjustments deal with the difference between estimated and actual
revenue requirements. If the revenue requirements are underestimated,
an amount equal to the difference must be added to the next annual
installment. Conversely, if revenue requirements are overestimated, the
amount would be deducted from the next installment.
In accordance with the Contracts, minor replacements and additions
are included in the revenue requirements of the DCP. If major
replacements and additions exceeding $5,000 but not greater than
$25,000 are needed, the Customers will be given the option of financing
their share of the cost or having the cost capitalized and amortized
over the life of the replacement or addition. If the Customers select
the latter, the costs will be capitalized at the current interest rate
prescribed by DOE, under RA 6120.2, Paragraph 11B, ``Basic Policy for
Rate Adjustment; Interest Rate Formula,'' in the fiscal year in which
the replacement or addition is made. Such costs will be based on
prudent and businesslike management practices and following established
electric industry operation and maintenance practices. If extraordinary
replacements exceeding $25,000 are needed, the Customers will consult
with Reclamation, PRWUA, and Western about financing the replacement.
The rate does not depend upon the power and energy made available
for sale; instead, the Customers will pay the total PRP's annual
powerplant revenue requirements in return for the total marketable PRP
production. Each Customer will pay its proportional share of the
revenue requirements identified in the PRS in 12 monthly installments.
Availability of Information
Information about this power rate formula renewal is available for
public review at the Colorado River Storage Project Management Center,
Western Area Power Administration, 150 East Social Hall Avenue, Suite
300, Salt Lake City, Utah or at http://www.wapa.gov/crsp/ratescrsp/adjustments.htm under CRSP rate adjustment documents for the Provo
River Project's section.
[[Page 6383]]
Ratemaking Procedure Requirements
Environmental Compliance
In compliance with the National Environmental Policy Act (NEPA) of
1969 (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.
Determination Under Executive Order 12866
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.
Submission to Federal Energy Regulatory Commission
The interim power rate formula renewal 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 as the
Deputy Secretary of Energy, I confirm and approve on an interim basis,
effective April 1, 2010, a renewal of the rate formula for the Provo
River Project of the Western Area Power Administration. The power rate
formula shall remain in effect on an interim basis, pending FERC's
confirmation and approval of it or a substitute rate on a final basis,
through March 31, 2015.
Dated: February 1, 2010.
Daniel B. Poneman,
Deputy Secretary.
[FR Doc. 2010-2838 Filed 2-8-10; 8:45 am]
BILLING CODE 6450-01-P