02-4617. Boulder Canyon Project

AGENCY:

Western Area Power Administration, DOE.

ACTION:

Notice of proposed base charge and rates adjustment.

SUMMARY:

The Western Area Power Administration (Western) is proposing an adjustment to the Boulder Canyon Project (BCP) firm power base charge and rates. The current base charge and rates expire September 30, 2002. The current base charge is not sufficient to pay all annual costs including operation, maintenance, replacement, and interest expenses, and to repay investment obligations within the required period. The proposed base charge will provide sufficient revenue to pay all annual costs, including operation, maintenance, replacement, and interest expenses, and to repay investment obligations within the allowable period. A detailed rate package that identifies the reasons for the base charge and rates adjustment will be available in March 2002. The proposed base charge and rates are scheduled to become effective on October 1, 2002, the beginning of Federal fiscal year (FY) 2003, and will remain in effect through September 30, 2003. This Federal Register notice initiates the formal process for the proposed base charge and rates.

DATES:

The consultation and comment period will begin today and will end May 28, 2002. Western representatives will explain the proposed base charge and rates at a public information forum on April 4, 2002, beginning at 10 a.m. MST, Phoenix, AZ. Interested parties can provide oral and written comments at a public comment forum on April 25, 2002, beginning at 10 a.m. MST, at the same location.

ADDRESSES:

The meetings will be held at the Desert Southwest Customer Service Regional Office 615 South 43rd Avenue, Phoenix, Arizona. If you are interested in sending comments, address them to: Mr. 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]. Comments must be received by Western by the end of the consultation and comment period to be assured consideration.

FOR FURTHER INFORMATION CONTACT:

Mr. Maher A. Nasir, 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:

Proposed Base Charge and Rates for BCP Firm Power

The proposed base charge and rates for BCP firm power service are designed to recover an annual revenue requirement that includes the investment repayment, interest, operation and maintenance, replacements, payment to states, visitor services, and uprating payments. These annual costs are reduced by the projected revenue from water sales, visitor services, water pump energy sales, facility use charges, regulation services, miscellaneous leases, late fees, and the prior year carryover to determine the annual revenue requirement. The projected annual revenue requirement is the base charge for firm power service and is divided equally between capacity dollars and energy dollars. 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 the Department of Energy (DOE) approved the existing rate formula for calculating the base charge and rates in Rate Schedule BCP-F6 for BCP firm power service on August 29, 2001, (Rate Order No. WAPA-94, October 13, 2000). The Federal Energy Regulatory Commission (FERC) confirmed and approved the rate formula on a final basis in Docket No. EF00-5092-000 issued July 31, 2001. Rate Schedule BCP-F6 became effective on October 1, 2000, for the period ending September 30, 2005. Under Rate Schedule BCP-F6, for FY 2002, the base charge is $48,039,988, the forecasted energy rate is 5.33 mills per kilowatthour (mills/kWh) and the forecasted capacity rate is $0.99 per kilowattmonth (kWmonth). The composite rate is 10.32 mills/kWh.

The FY 2003 proposed base charge is $58,993,730, the forecasted energy rate is 6.22 mills/kWh, and the forecasted capacity rate is $1.26/kWmonth. The proposed composite rate is 12.44 mills/kWh. This is approximately a 21 percent increase from the current composite rate. The proposed base charge and rates are based on the FY 2003 operating plan for Western and the Bureau of Reclamation (Reclamation), and also account for the restrictions in operations at the Hoover Dam following the September 11, 2001 terrorist attack in the United States. The following table compares the current and proposed base charge and rates.

Comparison of Current and Proposed Base Charge and Rates

Current Oct. 1, 2001 through Sept. 30, 2002	Proposed Oct. 1, 2002 through Sept. 30, 2003	Percent change increase
Total Composite (mills/kWh)	10.32	12.44	21
Base Charge ($)	48,039,988	58,993,730	23
Energy Rate (mills/kWh)	5.33	6.22	17
Capacity Rate ($/kWmonth)	0.99	1.26	27

The increase in the base charge and rates results from higher annual costs and lower non-power revenues. The significant increase in annual costs is due to increased security staff at Hoover Dam, and limitations on public tours at the Hoover visitor center. Another contributing factor is an increase in the replacement costs.

Procedural Requirements

Although the proposed base charge and rates do not constitute a major rate adjustment as defined by the procedures for public participation in general rate adjustments, Western will hold both a public information forum and a public comment forum. After considering comments, Western will recommend the proposed base charge and rates for final approval by the DOE Deputy Secretary.

The proposed firm power service base charge and rates for BCP are being established pursuant to the 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, particularly section 9(c) of the Reclamation Project Act of 1939, 43 U.S.C. 485h(c); and other acts specifically applicable to the project involved.

Availability of Information

Interested parties may review and copy all brochures, studies, comments, letters, memorandums, or other documents made or kept by Western for developing the proposed base charge and rates. These documents are at the Desert Southwest Customer Service Regional Office, located at 615 South 43rd Avenue, Phoenix, Arizona.

Regulatory Procedural 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 that applies to rates or services for 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 that 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; therefore, this notice requires no clearance by the Office of Management and Budget.

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 8, 2002.

Michael S. Hacskaylo,

Administrator.