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DEPARTMENT OF ENERGY

Western Area Power Administration

NOTICE: NOTICES

DOCUMENT ACTION: Notice of Proposed Base Charge and Rates Adjustment.

SUBJECT CATEGORY: Boulder Canyon Project

DATES: The consultation and comment period will begin today and will end May 1, 2008. Western will present a detailed explanation of the proposed base charge and rates at a public information forum on April 2, 2008, beginning at 10:30 a.m. MST, in Phoenix, AZ. Western will accept oral and written comments at a public comment forum on April 23, 2008, beginning at 10:30 a.m. MST at the same location. Western will accept written comments any time during the consultation and comment period.

DOCUMENT SUMMARY: The Western Area Power Administration (Western) is proposing an adjustment to the Boulder Canyon Project (BCP) electric service base charge and rates. The current base charge and rates expire September 30, 2008, under Rate Schedule BCPF7. The current base charge is not sufficient to cover all annual costs including operation, maintenance, replacements, and interest expense, and to repay investment obligations within the required period. The proposed base charge will provide sufficient revenue to cover all annual costs 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 2008. The proposed base charge and rates are scheduled to become effective on October 1, 2008, and will remain in effect through September 30, 2009. This Federal Register notice initiates the formal process for the proposed base charge and rates.

SUMMARY: Boulder Canyon Project; Proposed Base Charge and Rates Adjustment,

SUPPLEMENTAL INFORMATION

The proposed base charge and rates for BCP electric 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. The total costs are offset by the projected revenue from water sales, visitor services, water pumping energy sales, facilities use charges, regulation and spinning reserve services, miscellaneous leases, and late fees. The projected annual revenue requirement is the base charge for electric 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 Energy approved the existing rate formula for calculating the base charge and rates in Rate Schedule BCPF7 for BCP electric service on August 11, 2005, (Rate Order No. WAPA120, 70 FR 50316, August 26, 2005). The Federal Energy Regulatory Commission (Commission) confirmed and approved the rate formula on a final basis in Docket No. EF055091000 issued June 22, 2006 (115 FERC ] 61,362). Rate Schedule BCPF7 became effective on October 1, 2005, for the period ending September 30, 2010. The base charge for FY 2009 is $71,211,438, the forecasted energy rate is 8.74 mills per kilowatthour (mills/kWh), the forecasted capacity rate is $1.77 per kilowattmonth (kWmonth), and the composite rate is 17.49 mills/kWh.

Under Rate Schedule BCPF7, the proposed rates for BCP electric service will result in an overall composite rate decrease of about one percent. The following table compares the current and proposed base charge and rates.
Comparison of Current and Proposed Base Charge and Rates Current October 1, Proposed October 1, 2007 through 2008 through % Change September 30, 2008 September 30, 2009 Composite Rate (mills/kWh)....................... 17.64 17.49 1 Base Charge ($).................................. 66,975,283 71,211,438 6 Energy Rate (mills/kWh).......................... 8.82 8.74 1 Capacity Rate ($/kWmonth)........................ 1.63 1.77 9

The increase in the electric service base charge and capacity rate is primarily the result of projecting no yearend carryover from FY 2008 into FY 2009. Initial analysis of the projected financial data for FY 2009 reflects a
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slight decrease in overall annual costs and a slight increase in other revenues when compared to FY 2008. However, since there is no projected yearend carryover into FY 2009 the result is an overall increase in the base charge for FY 2009. Another factor contributing to the increase in the capacity rate is the decrease in capacity sales associated with lower Lake Mead water elevations. The decrease in the composite and energy rates is due to a slight increase in the FY 2009 energy sales from FY 2008.

Legal Authority

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 approve the proposed base charge and rates on a final basis.

Western is establishing an 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 project involved.

By Delegation Order No. 00037.00, 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.

Availability of Information

All brochures, studies, comments, letters, memorandums or other documents that Western initiates or uses to develop the proposed 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, AZ. 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. Ratemaking Procedure Requirements

Environmental Compliance

In compliance with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321, et seq.), the Council On Environmental Quality Regulations for implementing NEPA (40 CFR parts 15001508), and DOE NEPA Implementing Procedures and Guidelines (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.

Dated: January 10, 2008.
Timothy J. Meeks,
Administrator.
[FR Doc. E81872 Filed 13108; 8:45 am]
BILLING CODE 645001P

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 850056457, (602) 6052442, email jmurray@wapa.gov.