05-3146. Boulder Canyon Project-Rate Order No. WAPA-120

AGENCY:

Western Area Power Administration, DOE.

ACTION:

Notice of Proposed Rate Adjustment and Extension of Rate-Setting Formula.

SUMMARY:

The Western Area Power Administration (Western) is initiating a rate adjustment process for Boulder Canyon Project (BCP) electric service. Western proposes to extend the existing rate-setting formula, and approve the proposed base charge and rates for FY 2006. Publication of this Federal Register notice begins the formal process to extend the existing rate-setting formula and the proposed base charge and rates. The proposed base charge and rates will provide sufficient revenue to pay all annual costs, including interest expense, and repayment of required investment within the allowable period.

DATES:

The consultation and comment period begins today and will end May 19, 2005. Western will present a detailed explanation of the proposed base charge and rates at a public information forum on April 6, 2005, 10:30 a.m. MST, Phoenix, AZ. Western will accept oral and written comments at a public comment forum on May 4, 2005, 10:30 a.m. MST, Phoenix, AZ.

Western 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 the Desert Southwest Regional Customer Service Office, 615 South 43rd Avenue, Phoenix, AZ. Send written comments to J. Tyler Carlson, Regional Manager, Desert Southwest Customer Service Region, Western Area Power Administration, P.O. Box 6457, Phoenix, AZ 85005-6457, e-mail [e-mail]. Western will post information about the rate process on its Web site at http://www.wapa.gov/​dsw/​pwrmkt/​BCP/​RateAdjust.htm. Western will post official comments received via letter and e-mail to its Web site after the close of the comment period. Western must receive written comments by the end of the consultation and comment period to ensure they are considered in Western's decision process.

FOR FURTHER INFORMATION CONTACT:

Mr. Jack Murray, Rates Team Lead, Desert Southwest Customer Service Region, Western Area Power Administration, P.O. Box 6457, Phoenix, AZ 85005-6457, telephone [phone], e-mail [e-mail].

SUPPLEMENTARY INFORMATION:

Annual base charge and rates adjustments are required by the existing rate-setting formula methodology approved by the Federal Energy Regulatory Commission (Commission) on April 19, 1996. Rate Schedule BCP-F5 was placed into effect on November 1, 1995, and expires on September 30, 2005. Western proposes to extend the existing rate-setting formula through September 30, 2010, and approve the proposed base charge and rates for FY 2006. The proposed base charge and rates for BCP electric service are designed under the existing rate-setting formula to recover an annual revenue requirement that includes investment repayment, interest, operation and maintenance, replacements, payment to states, visitor services, and uprating program payments. These annual costs are reduced by the projected revenue from water sales, visitor services, water pump energy sales, facility use charges, miscellaneous leases, and late fees. The annual revenue requirement is the annual base charge. The annual base charge for electric service is divided equally between capacity and energy. Annual energy dollars are divided by annual energy sales, and annual capacity dollars are divided by annual capacity sales to determine the proposed energy rate and the proposed capacity rate.

The Deputy Secretary of Energy (DOE) approved the extension of the existing rate-setting formula and Rate Schedule BCP-F6 for BCP firm power service on September 18, 2000 (Rate Order No. WAPA-94, October 13, 2000), and the Commission confirmed and approved the schedule on July 31, 2001, under FERC Docket No. EF00-5092-000. Approval for the rate-setting formula and Rate Schedule BCP-F6 covered 5 years beginning on October 1, 2000, ending on September 30, 2005.

Under Rate Schedule BCP-F6, the composite rate is 14.82 mills/kWh and the base charge is $57,654,683 for FY 2005. The forecasted energy rate is 7.41 mills per kilowatt-hour (mills/kWh) and the forecasted capacity rate is $1.39 per kilowatt month (kWmonth). Under Rate Schedule BCP-F7, the proposed base charge for FY 2006 will result in an overall composite rate increase of about 10 percent. The proposed base charge will increase about 7 percent, the proposed forecasted energy rate will increase about 10 percent, and the proposed forecasted capacity rate will increase about 7 percent. The proposed base charge and rates for BCP electric service are listed in the following table.

Table 1.—Proposed Electric Service Base Charge and Rates

	Existing base charge and rates	Proposed base charge and rates October 1, 2005	Percent change
Total Composite (mills/kWh)	14.82	16.43	10
Base Charge ($)	$57,654,683	$61,694,940	7
Energy Rate (mills/kWh)	7.41	8.21	10
Capacity Rate ($/kWmonth)	$1.39	$1.49	7

Legal Authority

Since the rate-setting formula and proposed base charge and rates constitute a major rate adjustment as defined by 10 CFR part 903, Western will hold both a public information forum and a public comment forum. After review of public comments, and possible amendments or adjustments, Western will recommend the Deputy Secretary of Energy extend the rate-setting formula and approve the proposed base charge and rates for FY 2006 on an interim basis.

Western is establishing the electric service base charge and rates for BCP under the Department of Energy Organization Act (42 U.S.C. 7152); 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 projects involved.

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 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 Commission. Existing Department of Energy (DOE) procedures for public participation in power rate adjustments (10 CFR part 903) were published on September 18, 1985 (50 FR 37835).

Availability of Information

All brochures, studies, comments, letters, memorandums, or other documents that Western initiates or uses to develop the proposed base charge and rates are 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. Many of these documents and supporting information are also available on Western's Web site at: http://www.wapa.gov/​dsw/​pwrmkt/​BCP/​RateAdjust.htm.

Regulatory Procedure Requirements

Regulatory Flexibility Analysis

The Regulatory Flexibility Act of 1980 (5 U.S.C. 601, et seq.) requires Federal agencies to perform a regulatory flexibility analysis if a final rule is likely to have a significant economic impact on a substantial number of small entities and there is a legal requirement to issue a general notice of proposed rulemaking. This action does not require a regulatory flexibility analysis since it is a rulemaking of particular applicability involving rates or services applicable to public property.

Environmental Compliance

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 this action is categorically excluded from preparing 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.

Small Business Regulatory Enforcement Fairness Act

Western has determined that this rule is exempt from congressional notification requirements under 5 U.S.C. 801 because the action is a rulemaking of particular applicability relating to rates or services and involves matters of procedure.

Dated: February 7, 2005.

Michael S. Hacskaylo,

Administrator.