# Proposed Rates for Pick-Sloan Missouri Basin Program-Eastern Division
**AGENCY:**
Western Area Power Administration, DOE.
**ACTION:**
Notice of proposed rates.
**SUMMARY:**
The Western Area Power Administration (Western) is proposing revised rates for Pick-Sloan Missouri Basin Program-Eastern Division (P-SMBP-ED) firm electric and firm peaking power service. Current rates, under Rate Schedules P-SED-F6 and P-SED-FP6, have been extended through March 31, 2004. The proposed rates will provide sufficient revenue to pay all annual costs, including interest expense, and repayment of required investment within the allowable period. The rate impacts will be detailed in a brochure to be made available to all interested parties. The proposed rates, under Rate Schedules P-SED-F7 and P-SED-FP7, are scheduled to go into effect on January 1, 2004, and will remain in effect through December 31, 2008. Publication of this *Federal Register* notice begins the formal process for the proposed rates.
**DATES:**
The consultation and comment period begins today and will end September 11, 2003. Western will present a detailed explanation of the proposed rates at public information forums. The public information forum dates are:
1. July 14, 2003, 1 p.m. to 4 p.m. MDT, Denver, CO.
2. July 15, 2003, 9 a.m. to 12 noon CDT, Lincoln, NE.
3. July 16, 2003, 9 a.m. to 12 noon CDT, Sioux Falls, SD.
4. July 17, 2003, 9 a.m. to 12 noon CDT, Fargo, ND.
Western will receive oral and written comments at public comment forums. The public comment forums will be held on the following dates:
1. August 6, 2003, 1 p.m. to 4 p.m. MDT, Denver, CO.
2. August 7, 2003, 9 a.m. to 12 noon CDT, Sioux Falls, SD.
Western will receive written comments anytime during the consultation and comment period.
**ADDRESSES:**
Written comments should be sent to Robert J. Harris, Regional Manager, Upper Great Plains Region, Western Area Power Administration, 2900 4th Avenue North, Billings, MT 59101-1266, email: *[email protected].* Information pertaining to the rate process will be posted on our Web site at *http://www.wapa.gov/ugp/rates/2004RateAdj/Default.html.* Official comments received via letter and e-mail, will be posted to our Web site after the close of the comment period. Western must receive written comments by the end of the consultation and comment period to be assured consideration.
The public information forum locations are:
1. Denver—Radisson Stapleton Plaza, 3333 Quebec Street, Denver, CO.
2. Lincoln—Southeast Community College (1st Floor of the Energy Plaza), 11th and O Street, Lincoln, NE.
3. Sioux Falls—Ramkota Hotel and Conference Center, 2400 North Louise Avenue, Sioux Falls, SD.
4. Fargo—Doublewood Inn, 3333 13th Avenue South, Fargo, ND.
The public comment forum locations are:
1. Denver—Radisson Stapleton Plaza, 3333 Quebec Street, Denver, CO.
2. Sioux Falls—Ramkota Hotel and Conference Center, 2400 North Louise Avenue, Sioux Falls, SD.
**FOR FURTHER INFORMATION CONTACT:**
Mr. Robert F. Riehl, Power Marketing Manager, Upper Great Plains Region, Western Area Power Administration, 2900 4th Avenue North, Billings, MT 59101-1266, telephone (406) 247-7394, email: *[email protected].*
**SUPPLEMENTARY INFORMATION:**
The proposed rates for P-SMBP-ED firm electric and firm peaking service are designed to recover an annual revenue requirement that includes investment repayment, interest, purchase power, operation and maintenance expense, and other expenses. The projected annual revenue requirement for firm electric service is allocated equally between capacity and energy.
The Department of Energy (DOE) Deputy Secretary approved Rate Schedules P-SED-F6 and P-SED-FP6 for P-SMBP-ED firm electric and firm peaking service on January 6, 1994 (Rate Order No. WAPA-60, 59 FR 3348, January 21, 1994), and the Federal Energy Regulatory Commission (FERC) confirmed and approved the rate schedules on July 14, 1994, under FERC Docket No. EF94-5031-000 (68 FERC 62,040). Rate Schedules P-SED-F6 and P-FED-FP6 were approved for a 5-year period beginning on February 1, 1994, ending on January 31, 1999. Rate Order No. WAPA-83 extended the rate for 2 years, beginning February 1, 1999, through January 31, 2001. Rate Order No. WAPA-90 extended the rate again beginning February 1, 2001, through September 30, 2003. Rate Order No. WAPA-102 extended the rate a third time beginning October 1, 2003, through March 31, 2004.
Under Rate Schedule P-SED-F6 , the second step of the composite rate effective on October 1, 1994, is 14.23 mills per kilowatthour (mills/kWh), the energy rate is 8.32 mills/kWh and the capacity rate is $3.20 per kilowattmonth (kW month). Under Rate Schedule P-SED-F7, the proposed rates for P-SMBP-ED firm electric service will result in an overall composite rate increase of approximately 15.4 percent and the firm peaking rate will increase approximately 15.6 percent effective on January 1, 2004. The proposed rates for P-SMBP-ED firm electric and firm peaking service are listed in Table 1.
| Firm electric service | Existing rates | Proposed rates | Percent change |
| --- | --- | --- | --- |
| P-SMBP-ED Revenue Requirement | $135.2 million | $159.2 million | 17.8 |
| P-SMBP-ED Composite Rate | 14.23 mills/kWh | 16.42 mills/kWh | 15.4 |
| Firm Capacity | $3.20/kW month | $3.70/kW month | 15.6 |
| Firm Energy | 8.32 mills/kWh | 9.57 mills/kWh | 15.0 |
| Tiered > 60 Percent Load Factor | 3.38 mills/kWh | 7.23 mills/kWh | 113.9 |
| Firm Peaking Capacity | $3.20/kW month | $3.70/kW month | 15.6 |
| Firm Peaking Energy | 8.32 mills/kWh | 9.57 mills/kWh | 15.0 |
Although a one-step rate adjustment is the option being proposed, Western is interested in receiving comments on a two-step rate adjustment option. Under a two-step adjustment, the rates for P-SMBP-ED firm electric service will result in an overall composite rate increase of approximately 12.3 percent effective on January 1, 2004, and another 3.3 percent effective on October 1, 2004, for a total increase of approximately 15.6 percent. The rates under this option for P-SMBP-ED firm electric service are listed in Table 2.
| Firm electric service | Existing rates | First step rates | Percent change | Second step rates | Percent change |
| --- | --- | --- | --- | --- | --- |
| P-SMBP-ED Revenue Requirement | $135.2 million | $154.9 million | 14.6 | $159.5 million | 3.4 |
| P-SMBP-ED Composite Rate | 14.23 mills/kWh | 15.98 mills/kWh | 12.3 | 16.45 mills/kWh | 3.3 |
| Firm Capacity | $3.20/kW month | $3.60/kW month | 12.5 | $3.71/kW month | 3.4 |
| Firm Energy | 8.32 mills/kWh | 9.31 mills/kWh | 11.9 | 9.58 mills/kWh | 3.3 |
| Tiered > 60 Percent Load Factor | 3.38 mills/kWh | 7.23 mills/kWh | 113.9 | 7.23 mills/kWh | 0.0 |
| Firm Peaking Capacity | $3.20/kW month | $3.60/kW month | 12.5 | $3.71/kW monrh | 3.4 |
| Firm Peaking Energy | 8.32 mills/kWh | 9.31 mills/kWh | 11.9 | 9.58 mills/kWh | 3.3 |
Since the proposed rates constitute a major adjustment as defined by the procedures for public participation in general rate adjustments, as cited below, 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 proposed rates for approval on an interim basis by the DOE Deputy Secretary.
These firm electric service rates for P-SMBP-ED are being established pursuant to the Department of Energy 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 projects involved.
By Delegation Order No. 00-037.00, approved December 6, 2001, the DOE Secretary of Energy delegated: (1) The authority to develop power and transmission rates on a nonexclusive basis 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) became effective on September 18, 1985 (50 FR 37835).
**Availability of Information**
All brochures, studies, comments, letters, memorandums, or other documents made or kept by Western in developing the proposed rates are available for inspection and copying at the Upper Great Plains Regional Office, located at 2900 4th Avenue North, Billings, Montana. Many of these documents and supporting information are also available on our Web site under the “2004 Rate Adjustment” section located at *http://www.wapa.gov/ugp/rates/2004RateAdj/Default.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 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 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; so 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: May 30, 2003.
Michael S. Hacskaylo,
Administrator.