FR 2024-30361

Overview of the Document

The document, issued by the Western Area Power Administration (WAPA) within the U.S. Department of Energy, notices the extension of existing transmission and ancillary services rates for the Pick-Sloan Missouri Basin Program—Eastern Division. This decision extends the current formula rates, originally set to expire on September 30, 2025, until September 30, 2030. The extension covers various services, including scheduling, system control, energy imbalance, and reserve services. These rates will continue in effect on an interim basis starting October 1, 2025, pending final approval from the Federal Energy Regulatory Commission (FERC).

Significant Issues and Concerns

The document presents several notable challenges and concerns. Firstly, it employs complex legal and technical language, which may be inaccessible to the general public or those without specialized knowledge, complicating public understanding and engagement. This complexity could hinder meaningful participation in any consultations or commentary processes related to these rates.

Moreover, the document does not provide clear reasons for why the current rates are deemed adequate or justify the decision not to adjust them. This lack of transparency might concern stakeholders who wish to understand the basis for these decisions. Additionally, there is scant information on the financial implications of the extended rates or the potential impacts on customers, making it difficult to assess how this decision affects stakeholders financially.

The document also indicates that no public forums or consultations were held prior to or during the decision-making process. This absence of stakeholder engagement could raise questions about the thoroughness and inclusivity of the decision-making process.

Impact on the Public and Stakeholders

Broadly, the public might be affected by the potential lack of opportunity to engage with or influence the rate-setting process. For consumers and businesses that rely on services from the Upper Great Plains region, these unchanged rates might offer stability in terms of cost expectations. However, there remains a risk of financial strain should the unchanged rates become misaligned with economic conditions or operational needs over time.

Specific stakeholders, such as utility companies and large energy consumers within the region, may experience both positive and negative impacts. On one hand, the extension provides certainty and consistency, allowing for longer-term financial and operational planning. On the other hand, if the cost structures or economic conditions change over the next several years, these stakeholders could find themselves facing unforeseen challenges without a mechanism for updating or adjusting the rates.

In conclusion, while the document extends existing rate schedules, facilitating continuity and stability, it also raises transparency and stakeholder engagement issues, potentially affecting consumer trust and the perceived fairness of the rate-setting process.

The document in question pertains to the extension of formula rates related to the Pick-Sloan Missouri Basin Program—Eastern Division, which are detailed under various rate schedules. These formula rates are essential in calculating the financial requirements associated with transmission services and other ancillary services provided by the Western Area Power Administration (WAPA) in the Upper Great Plains region. The rates are originally set to expire on September 30, 2025, but have been extended through September 30, 2030, without any modifications.

Financial References and Allocations

Throughout the document, the financial allocations are articulated in terms of formulaic expressions, which provide a basis for calculating service rates. The formulas frequently reference components such as Operation & Maintenance costs, Depreciation, Interest Expenses, and Revenue Credits. These components, denoted symbolically (e.g., A, B, C, etc.), are pivotal in determining the Annual Transmission Revenue Requirement (ATRR) and other service costs.

For example, the ATRR formula is given by: - ATRR = A + B + C - D - E + F, where: - A stands for Operation & Maintenance allocated to transmission. - B reflects Depreciation allocated to transmission. - C represents Interest Expense allocated to transmission. - D accounts for Revenue Credits. - E signifies Scheduling, System Control, and Dispatch costs. - F pertains to Prior Period True-up.

These formulas serve as a mechanism to ensure that adequate revenue is generated to cover annual expenses, including interest and capital repayment.

Relation to Identified Issues

The manner in which financial allocations are expressed may lead to several concerns raised in the document's analysis. The primary issue is the lack of detailed explanation or justification for maintaining the existing rates unchanged through 2030. While the formulas clearly specify the financial components involved, there is no discussion regarding the criteria or metrics used to ascertain the sufficiency of these unchanged rates. This leaves stakeholders without a clear understanding of why these rates are deemed adequate.

Another concern is the potential long-term financial impact of maintaining unaltered rates. Without adjustments, there might be unforeseen budgetary issues that could arise if the current formulas fail to accurately predict future financial needs. The absence of a thorough exploration into these implications could hinder effective financial planning and stakeholder assessment.

Moreover, transparency and public engagement are critical in such rate determinations. The document notes that no public forums or detailed public consultation processes were conducted before deciding on this extension. This lack of engagement could inhibit the public's ability to understand and challenge the financial assumptions underpinning these rates.

In conclusion, while the document provides explicitly detailed financial formulas, the absence of contextual explanation and stakeholder engagement could pose challenges for accountability and financial foresight. Addressing these issues might involve more explicit disclosures and opportunities for public involvement, which could lead to a more transparent and inclusive rate-setting process.