6450-01-P
DEPARTMENT OF ENERGY
Western Area Power Administration
Loveland Area Projects - Rate Order No. WAPA-212
AGENCY: Western Area Power Administration, Department of Energy (DOE).
ACTION: Notice of proposed firm electric service and sale of surplus products formula
rates.
SUMMARY: The Rocky Mountain (RM) region of the Western Area Power
Administration (WAPA) proposes revised formula rates for the Loveland Area Projects
(LAP) firm electric service (FES) and sale of surplus products. LAP consists of the
Fryingpan-Arkansas Project (Fry-Ark) and the Pick-Sloan Missouri Basin Program
(P-SMBP)--Western Division (WD), which were integrated for marketing and ratemaking purposes in 1989. The existing formula rates for these services, under Rate
Schedules L-F12 and L-M3, do not expire until December 31, 2027; however, the
existing FES rate no longer provides sufficient revenues to recover interest expense and
repay investments. The formula rate for sale of surplus products is not changing but is
being included in Rate Order No. WAPA-212 (WAPA-212) in order to make these rate
schedules effective for the same time frame.
DATES: A consultation and comment period will begin [INSERT DATE OF
PUBLICATION IN THE FEDERAL REGISTER] and end [INSERT DATE
60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER].
Due to not receiving final Fiscal Year (FY) 2023 financial data until late January, holding
subsequent rate impact discussions with customers between February and April, and the
subsequent time frame required for completion of the Federal Register notice workflow
process, the publication of this proposal was not possible prior to the June 2024 time
frame. As such, and in order to continue with the existing January 2025 implementation

date, the time frame of the consultation and comment period has been shortened from the
standard 90 days to 60 days. This shortened time frame is allowed under 10 CFR
903.14(a), which states that, “...periods may be shortened for good cause shown.”
RM will present a detailed explanation of the proposed LAP formula rates and other
modifications at a public information forum that will be held on August 7, 2024, at
8:30 a.m. MDT to no later than 10:30 a.m. MDT. RM will also host a public comment
forum on August 7, 2024, at 11:00 a.m. MDT to no later than noon MDT. The public
information forum and the public comment forum will only be conducted virtually.
Instructions for participating in the forums will be posted on RM’s website at least
14 days prior to the public information and comment forums at: www.wapa.gov/aboutwapa/regions/rm/rm-rates/2025-rate-adjustment-firm-electric-service.
RM will accept comments any time during the consultation and comment period.
ADDRESSES: Written comments and requests to be informed of Federal Energy
Regulatory Commission (FERC) actions concerning the proposed formula rates
submitted by RM to FERC for approval should be sent to: Barton V. Barnhart, Regional
Manager, Rocky Mountain Region, Western Area Power Administration, 5555 East
Crossroads Boulevard, Loveland, CO 80538-8986, or e-mail lapfirmadj@wapa.gov. RM
will post information about the proposed formula rates and written comments received to
its website at: www.wapa.gov/about-wapa/regions/rm/rm-rates/2025-rate-adjustmentfirm-electric-service.
FOR FURTHER INFORMATION CONTACT: Sheila D. Cook, Rates Manager,
Rocky Mountain Region, Western Area Power Administration, 5555 East Crossroads
Boulevard, Loveland, CO 80538-8986, (970) 685-9562, or e-mail scook@wapa.gov or
lapfirmadj@wapa.gov.
SUPPLEMENTARY INFORMATION: On September 12, 2023, FERC confirmed and
approved Rate Schedule L-F12 and Rate Schedule L-M3 under Rate Order

No. WAPA-202 (WAPA-202) on a final basis through December 31, 2027.1 These
schedules apply to FES and the sale of surplus products. RM intends the proposed
formula rates under Rate Schedule L-F13 and Rate Schedule L-M4 to go into effect
January 1, 2025. The proposed formula rate schedules would remain in effect until
December 31, 2029, or until WAPA supersedes or changes the formula rates through
another public rate process pursuant to 10 CFR part 903, whichever occurs first.
The proposed formula rates would provide sufficient revenue to recover annual
operation, maintenance, and replacement (OM&R) expenses, interest expense, irrigation
assistance, and capital repayment requirements while ensuring repayment of the project
within the cost recovery criteria set forth in Department of Energy (DOE) Order
RA 6120.2. For more information on the proposed rates, please see the customer
brochure located on RM’s website at: www.wapa.gov/about-wapa/regions/rm/rmrates/2025-rate-adjustment-firm-electric-service.
Firm Electric Service
The Fry-Ark and the P-SMBP FY 2023 Power Repayment Studies’ (PRSs) revenue
requirements, changes to future workplans, and projected water conditions are the
determining factors for this proposed rate adjustment.
The base component costs for the Fry-Ark have increased primarily due to increased
annual expenses, mainly transmission purchases and OM&R from both WAPA and the
Bureau of Reclamation (Reclamation).
The base component costs for the P-SMBP have increased primarily due to increased
OM&R from WAPA and the generating agencies.
The driver behind the P-SMBP drought adder component decrease is the United States
Army Corps of Engineers (USACE) 2024 Annual Operating Plan (AOP) projecting less
than average generation, though it is better than generation projected in the WAPA-202

Order Confirming and Approving Rate Schedules on a Final Basis, FERC Docket No. EF23-1-000 (2023).

January 2023 rate. Planned repayment of both the base and drought deficits are in the
same time frame (2027) as they were projected to be repaid under WAPA-202.
Uncertainties with water inflows, hydro generation, and replacement energy prices
continue to pose potential risks for meeting firm power contractual commitments.
The net effect of these adjustments to the base and drought adder components results
in an overall increase to the LAP revenue requirement. Under Rate Schedule L-F13, RM
is proposing a two-step rate adjustment. For the base component, the revenue
requirements and associated charges for each step would be set values. For the drought
adder component, RM is proposing estimated revenue requirements based on the
USACE’s 2024 AOP and drought costs projected in the Final FY 2023 PRSs for the first
and second steps. RM will follow the previously established “annual drought adder
adjustment process” to determine if these estimated values for the January 2025 and 2026
rate years require adjustment. If a drought adder component change is required for
January 2025, a modified drought adder revenue requirement and the associated charges
for January 2025, and possibly new estimates for January 2026, will be included in the
publication of the notice of rate order WAPA-212 and become effective January 1, 2025.
RM will also inform customers of updates by letter and post updates to RM’s external
website.
A comparison of the current and proposed revenue requirements is shown in Table 1:
Table 1 - Summary of Current and Two-Step Proposal Revenue Requirements

LAP
Firm Electric Service

Total Revenue Requirement1
Pick-Sloan--WD2
Fry-Ark

Current
Under L-F12
As of
Jan. 1, 2023
(in million $)

Proposed
Under L-F13
First Step
As of
Jan. 1, 2025
(in million $)

First
Step
Percent
Change

Proposed
Under L-F13
Second Step
As of
Jan. 1, 2026
(in million $)

Second
Step
Percent
Change

$74.6

$81.3

9.0%

$87.9

8.1%

$58.5
$16.1

$62.6
$18.7

7.0%
16.1%

$66.3
$21.6

5.9%
15.5%

Base Component
Pick-Sloan--WD2
Fry-Ark
Drought Adder Component3
Pick-Sloan--WD2
Fry-Ark

$67.8

$76.4

12.7%

$85.1

11.4%

$51.7
$16.1

$57.7
$18.7

11.6%
16.1%

$63.5
$21.6

10.1%
15.5%

$6.8

$4.9

-27.9%

$2.8

-42.9%

$6.8
$0.0

$4.9
$0.0

-27.9%
0.0%

$2.8
$0.0

-42.9%
0.0%

Proposed values are estimates only based on using final base and estimated drought adder components.
Additional information on the overall P-SMBP PRS and charge components can be found in the proposal under Rate Order
No. WAPA-213 and on the Upper Great Plains region’s website at: www.wapa.gov/about-wapa/regions/ugp/ugp-rates/2025-firm-rateadjustment.
3 Proposed values are estimates that may change during the existing annual drought adder adjustment process.
Under the current rate methodology, rates for LAP FES are designed to recover an
annual revenue requirement that includes investment repayment, interest, purchase
power, OM&R, and other expenses within the allowable period. The annual revenue
requirement continues to be allocated equally between capacity and energy.
A comparison of the current and proposed rates is shown in Table 2:
Table 2 - Summary of Current and Two-Step Proposal Rates

Firm Electric
Service

Current
Under L-F12
As of
Jan. 1, 2023

Proposed
Under L-F13
First Step
As of
Jan. 1, 20251

First
Step
Percent
Change

Proposed
Under L-F13
Second Step
As of
Jan. 1, 20261

Second
Step
Percent
Change

LAP Composite
Rate
(mills/kilowatt-hour)

36.61

39.84

8.8%

43.10

8.2%

Firm Capacity Rate
($/kilowatt-month)

$4.80

$5.22

8.8%

$5.65

8.2%

Firm Energy Rate
(mills/kilowatt-hour)

18.31

19.92

8.8%

21.55

8.2%

Proposed values are estimates only based on using final base and estimated drought adder components.

As a part of the current and proposed rate schedules, RM provides for a formula-based
adjustment of the drought adder component, with an annual increase of up to 2 mills per
kilowatt-hour (kWh) each year. The 2 mills/kWh cap places a limit on the amount the
drought adder component can be adjusted upward relative to associated drought costs
included in the drought adder formula rate for any one-year cycle. Continuing to identify

the FES revenue requirement using base and drought adder components will assist RM in
the presentation of future impacts of droughts, demonstrate repayment of drought-related
costs in the PRSs, and allow RM to be more responsive to changes caused by
drought-related expenses. RM will continue to charge and bill its customers FES rates
for energy and capacity, which are the sum of the base and drought adder components.
A summary of the proposed charge components is shown in Table 3:
Table 3 – Summary of Two-Step Proposal Charge Components
Proposed Charges
Under
Rate Schedule L-F13
First Step
As of Jan. 1, 2025

Firm Capacity
($/kilowatt-month)
Firm Energy
(mills/kWh)

Proposed Charges
Under
Rate Schedule L-F13
Second Step
As of Jan. 1, 2026

Base
Component

Drought
Adder
Component1

Total
Charge2

Base
Component

Drought
Adder
Component1

Total
Charge2

$4.91

$0.31

$5.22

$5.47

$0.18

$5.65

18.72

1.20

19.92

20.86

0.69

21.55

1 Proposed
values are estimates that may change during the existing annual drought adder adjustment process.
Proposed values are estimates only based on using final base and estimated drought adder components.

Sale of Surplus Products
The Sale of Surplus Products rate schedule is formula-based, providing for LAP
Marketing to sell LAP surplus energy and capacity products. If LAP surplus products are
available, as specified in the rate schedule, the charge will be based on market rates plus
administrative costs. The customer will be responsible for acquiring transmission service
necessary to deliver the product(s) for which a separate charge may be incurred. The
proposed Rate Schedule, L-M4, continues to allow for the sale of energy, frequency
response, regulation, and reserves.
Legal Authority
Existing DOE procedures for public participation in power and transmission rate
adjustments (10 CFR part 903) were published on September 18, 1985, and February 21,

2019.2 The proposed action is a major rate adjustment, as defined by 10 CFR 903.2(d).
In accordance with 10 CFR 903.15(a) and 10 CFR 903.16(a), RM will hold public
information and public comment forums for this rate adjustment. RM will review and
consider all timely public comments at the conclusion of the consultation and comment
period and adjust the proposal as appropriate. The rates will then be approved on an
interim basis.
WAPA is establishing the formula rates for LAP in accordance with section 302 of the
DOE Organization Act (42 U.S.C. 7152).3
By Delegation Order No. S1-DEL-RATES-2016, effective November 19, 2016, the
Secretary of Energy delegated: (1) the authority to develop power and transmission rates
to the WAPA 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, or to remand or disapprove such
rates to FERC. By Delegation Order No. S1-DEL-S3-2023, effective April 10, 2023, the
Secretary of Energy also delegated the authority to confirm, approve, and place such rates
into effect on an interim basis to the Under Secretary for Infrastructure. By Redelegation
Order No. S3-DEL-WAPA1-2023, effective April 10, 2023, the Under Secretary for
Infrastructure redelegated the authority to confirm, approve, and place such rates into
effect on an interim basis to WAPA’s Administrator.
Availability of Information
All brochures, studies, comments, letters, memorandums, or other documents that RM
initiates or uses to develop the proposed formula rates are available for inspection and

50 FR 37835 (Sept. 18, 1985) and 84 FR 5347 (Feb. 21, 2019).
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 Bureau of Reclamation (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 section 5 of the Flood Control Act of 1944 (16 U.S.C. 825s); and other acts that
specifically apply to the projects involved.
copying at the Rocky Mountain Regional Office located at 5555 East Crossroads
Boulevard, Loveland, Colorado. Many of these documents and supporting information
are also available on RM’s website at: www.wapa.gov/about-wapa/regions/rm/rmrates/2025-rate-adjustment-firm-electric-service.
Ratemaking Procedure Requirements:
Environmental Compliance
WAPA is in the process of determining whether an environmental assessment or an
environmental impact statement should be prepared or if this action can be categorically
excluded from those requirements.4
Determination Under Executive Order 12866
WAPA 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.
Signing Authority
This document of the Department of Energy was signed on June 24, 2024, by
Tracey A. LeBeau, Administrator, Western Area Power Administration, pursuant to
delegated authority from the Secretary of Energy. That document, with the original
signature and date, is maintained by DOE. For administrative purposes only, and in
compliance with requirements of the Office of the Federal Register, the undersigned
DOE Federal Register Liaison Officer has been authorized to sign and submit the
document in electronic format for publication, as an official document of the Department
of Energy. This administrative process in no way alters the legal effect of this document
upon publication in the Federal Register.
Signed in Washington, DC on June 25, 2024.
In compliance with the National Environmental Policy Act (NEPA) of 1969, as amended, 42 U.S.C. 4321-4347; the
Council on Environmental Quality Regulations for implementing NEPA (40 CFR parts 1500-1508); and DOE NEPA
Implementing Procedures and Guidelines (10 CFR part 1021).

Treena V. Garrett,
Federal Register Liaison Officer,
U.S. Department of Energy.
[FR Doc. 2024-14274 Filed: 6/27/2024 8:45 am; Publication Date: 6/28/2024]