6450-01-P
DEPARTMENT OF ENERGY
Western Area Power Administration
Pick-Sloan Missouri Basin Program--Eastern Division - Rate Order No. WAPA-213
AGENCY: Western Area Power Administration, Department of Energy (DOE).
ACTION: Notice of proposed firm power service and sale of surplus products formula
rates.
SUMMARY: The Upper Great Plains (UGP) region of the Western Area Power
Administration (WAPA) proposes revised formula rates for the Pick-Sloan Missouri
Basin Program (P-SMBP)--Eastern Division (ED) firm power, firm peaking power
service, and sale of surplus products. The existing formula rates for these services, under
Rate Schedules P-SED-F14 and P-SED-FP14, and sale of surplus products, under
formula rate schedule P-SED-M2, do not expire until December 31, 2027; however, the
existing firm power and firm peaking power service rates no longer provide sufficient
revenue 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-213
(WAPA-213) 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.”

UGP will present a detailed explanation of the proposed P-SMBP--ED formula rates
and other modifications at a public information forum that will be held on August 7,
2024, at 8:30 MDT to no later than 10:30 MDT. UGP will also host a public comment
forum on August 7, 2024, at 11:00 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 UGP’s website at least
14 days prior to the public information and comment forums at: www.wapa.gov/aboutwapa/regions/ugp/ugp-rates/2025-firm-rate-adjustment.
UGP 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 UGP to FERC for approval should be sent to: Lloyd Linke, Regional
Manager, Upper Great Plains Region, Western Area Power Administration, 2900 4th
Avenue North, 6th Floor, Billings, MT 59101-1266, or e-mail: ugpfirmrate@wapa.gov.
UGP will post information about the proposed formula rates and written comments
received to its website at: www.wapa.gov/about-wapa/regions/ugp/ugp-rates/2025-firmrate-adjustment.
FOR FURTHER INFORMATION CONTACT: Linda Cady-Hoffman, Rates
Manager, Upper Great Plains Region, Western Area Power Administration, 2900
4th Avenue North, 6th Floor, Billings, MT 59101-1266, telephone (406) 255-2920, e-mail
cady@wapa.gov or ugpfirmrate@wapa.gov.
SUPPLEMENTARY INFORMATION: On June 29, 2023, FERC confirmed and
approved Rate Schedules P-SED-F14, P-SED-FP14, and P-SED-M2 under Rate Order

No. WAPA-203 (WAPA-203) on a final basis through December 31, 2027.1 These
schedules apply to firm power, firm peaking power service, and the sale of surplus
products. UGP intends for the proposed formula rates under P-SED-F15, P-SED-FP15,
and P-SED-M3 to go into effect January 1, 2025. The proposed formula rates 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 UGP’s website at: www.wapa.gov/about-wapa/regions/ugp/ugprates/2025-firm-rate-adjustment.
Firm Power and Firm Peaking Power Services
The P-SMBP FY 2023 Power Repayment Study (PRS) revenue requirement, changes
to future workplans, and projected water conditions are the determining factors for this
proposed rate adjustment.
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-203
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-203.

Order Confirming and Approving Rate Schedules on a Final Basis, FERC Docket No. EF23-2-000, (2023).

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 P-SMBP--ED revenue requirement. Under Rate Schedules
P-SED-F15 and P-SED-FP15, UGP 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, UGP is proposing estimated revenue
requirements based on the USACE’s 2024 AOP and drought costs projected in the Final
FY 2023 PRS for the first and second steps. UGP 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-213 and become
effective January 1, 2025. UGP will also inform customers of updates by letter and post
updates to UGP’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
Proposed
Under
P-SED-F15
First Step
As of
Jan. 1, 2025
(in million $)

Total Revenue
Requirement1

$268.4

$288.1

7.4%

$306.0

6.2%

Base Component

$235.4

$264.5

12.4%

$292.4

10.5%

Drought Adder
Component2

$33.0

$23.6

-28.5%

$13.6

-42.4%

Firm Power Service

1
Proposed
Under
P-SED-F15
Second Step
As of
Jan. 1, 2026
(in million $)2

Current
Under
P-SED-F14 As
of
Jan. 1, 2023
(in million $)

First
Step
Percent
Change

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

Second
Step
Percent
Change

Under the current rate methodology, rates for P-SMBP--ED firm power and firm
peaking power service 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 demand 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

P-SMBP--ED
Firm Power
Service

Current
Under
P-SED-F14/
P-SED-FP14
As of
Jan. 1, 2023

Proposed
Under
P-SED-F15/
P-SED-FP15
As of
Jan. 1, 20251

First
Step
Percent
Change

Proposed
Under
P-SED-F15/
P-SED-FP15
As of
Jan. 1, 20261

P-SMBP--ED
Composite
Rate
(mills/kilowatthour)

27.91

30.00

7.5%

31.87

6.2%

Firm Demand
($/kilowattmonth)

$6.20

$6.60

6.5%

$7.00

6.1%

Firm Energy
(mills/kilowatthour)

15.27

16.55

8.4%

17.60

6.3%

Firm Peaking
Demand
($/kilowattmonth)

$5.70

$6.05

6.1%

$6.40

5.8%

Firm Peaking
Energy2
(mills/kilowatthour)

15.27

16.55

8.4%

17.60

6.3%

Second
Step
Percent
Change

1 Proposed

values are estimates only based on using final base and estimated drought adder components.
Firm Peaking Energy is normally returned. This charge will be assessed in the event Firm Peaking Energy is not
returned.
As a part of the current and proposed rate schedules, UGP provides for a formulabased adjustment of the drought adder component, with an annual increase of up to

2 mills per kilowatt-hour (kWh). 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 firm power service revenue requirement using base and drought adder components
will assist UGP in the presentation of future impacts of droughts, demonstrate repayment
of drought-related costs in the PRS, and allow UGP to be more responsive to changes
caused by drought-related expenses. UGP will continue to charge and bill its customers
firm power and firm peaking power service rates for energy and demand, 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 P-SMBP--ED Two-Step Proposal Charge Components
Proposed Charges Under
Proposed Charges Under
Rate Schedules
Rate Schedules
P-SED-F15 and P-SED-FP15
P-SED-F15 and P-SED-FP15
First Step
Second Step
As of January 1, 2025
As of January 1, 2026
Base
Drought
Total
Base
Drought
Total
2
Component
Adder
Charge
Component
Adder
Charge2
1
1
Component
Component
Firm Demand
($/kilowatt$6.05
$0.55
$6.60
$6.70
$0.30
$7.00
month)
Firm Energy
15.21
1.34
16.55
16.80
0.80
17.60
(mills/kWh)
Firm Peaking
Demand
$5.55
$0.50
$6.05
$6.10
$0.30
$6.40
($/kilowattmonth)
Firm Peaking
Energy3
15.21
1.34
16.55
16.80
0.80
17.60
(mills/kWh)
1Proposed

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.
3 Firm peaking energy is normally returned. This charge will be assessed in the event firm peaking energy is not returned.
Sale of Surplus Products
The Sale of Surplus Products rate schedule is formula-based, providing for P-SMBP-ED Marketing to sell P-SMBP--ED surplus energy and demand products. If P-SMBP--

ED 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 P-SED-M3 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), UGP will hold
public information and public comment forums for this rate adjustment. UGP 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 P-SMPB--ED 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

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 the 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.
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
UGP initiates or uses to develop the proposed formula rates are available for inspection
and copying at the Upper Great Plains Regional Office, located at 2900 4th Avenue
North, 6th Floor, Billings, Montana. Many of these documents and supporting
information are also available on UGP’s website at: www.wapa.gov/aboutwapa/regions/ugp/ugp-rates/2025-firm-rate-adjustment.
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

4 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).

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.
Treena V. Garrett,
Federal Register Liaison Officer,
U.S. Department of Energy.
[FR Doc. 2024-14275 Filed: 6/27/2024 8:45 am; Publication Date: 6/28/2024]