CRSP-MC SLIP-F10

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Rate Schedule SLIP-F10

(Supersedes Schedule SLIP-F9)

 

UNITED STATES DEPARTMENT OF ENERGY

WESTERN AREA POWER ADMINISTRATION

 

COLORADO RIVER STORAGE PROJECT MANAGEMENT CENTER

SALT LAKE CITY AREA INTEGRATED PROJECTS

 

SCHEDULE OF RATES FOR FIRM POWER SERVICE

(Approved Under Rate Order No. WAPA-169)

 

Effective:

     Rate Schedule SLIP-F10 will be placed into effect on an interim basis on the first day of the first full-billing period beginning on or after October 1, 2015, and will remain in effect until FERC confirms, approves, and places the rate schedules in effect on a final basis through September 30, 2020, or until the rate schedules are superseded.

Available:

In the area served by the Salt Lake City Area Integrated Projects.

Applicable:

To the wholesale power customer for firm power service supplied through one meter at one point of delivery or as otherwise established by contract.

Character:

Alternating current, 60 hertz, three-phase, delivered and metered at the voltages and points established by contract.

Monthly Rate:

DEMAND CHARGE:  $5.18 per kilowatt of billing demand.

ENERGY CHARGE:  12.19 mills per kilowatthour of use.

 

COST RECOVERY CHARGE:

 

To adequately recover and maintain a sufficient balance in the Basin Fund, Western uses a cost recovery mechanism, called a Cost Recovery Charge (CRC).  The CRC is a charge on all SHP energy.

This charge will be recalculated before May 1 of each year, and Western will provide notification to the customers.  The charge, if needed, will be placed into effect on the first day of the first full-billing period beginning on or after October 1, 2015, through September 30, 2020.  If a Shortage Criteria is necessary, the CRC will be re-calculated at that time.  (See Shortage Criteria Trigger explanation below.)  The CRC will be calculated as follows:

 

WESTERN HAS THE DISCRETION TO IMPLEMENT A CRC BASED ON THE TIERS BELOW. TABLE:  CRC Tiers
Tier	Criteria, If the BFBB is:	Review
i	Greater than $150 million, with an expected decrease to below $75 million	Annually
ii	Less than $150 million but greater than $120 million, with an expected 50-percent decrease in the next FY
iii	Less than $120 million but greater than $90 million, with an expected 40-percent decrease in the next FY
iv	Less than $90 million but greater than $60 million, with an expected 25-percent decrease in the next FY	Semi-Annual (May / November)
v	Less than $60 million but greater than $40 million with an expected decrease to below $40 million in the next FY	Monthly

 

 

 

TABLE:  SAMPLE CRC CALCULATION
		Description			Example	Formula
STEP ONE	Determine the Net Balance available in the Basin Fund.
	BFBB		Basin Fund Beginning Balance ($)		$       85,860,265	Financial forecast
	BFTB		Basin Fund Target Balance ($)		$       64,395,199	BFBB – (Tier % *BFBB), or BFTB for Tier i and Tier v1
	PAR		Projected Annual Revenue ($) w/o CRC		$     232,780,000	Financial forecast
	PAE		Projected Annual Expenses ($)		$     226,649,066	Financial forecast
	NR		Net Revenue ($)		$         6,130,934	PAR – PAE
	NB		Net Balance ($)		$        91,991,199	BFBB + NR
STEP TWO	Determine the Forecasted Energy Purchase Expenses.
	EA		SHP Energy Allocation (GWh)		4,952	Customer contracts
	HE		Forecasted Hydro Energy (GWh)		4,924	Hydrologic & generation forecast
	FE		Forecasted Energy Purchase (GWh)		504	EA – HE or anticipated
	FFC		Forecasted Average Energy Price per MWh ($)		$               34.23	From commercially available price indices
	FX		Forecasted Energy Purchase Expense ($)		$      17,262,512	FE * FFC *1000
STEP THREE	Determine the amount of Funds Available for firming energy purchases, and then determine additional revenue to be recovered.  The following two formulas will be used to determine FA; the lesser of the two will be used.
	FA1		Basin Fund Balance Factor ($)		$      17,262,512	If (NB>BFBB,FX,FX -(BFTB – NB))
	FA2		Revenue Factor ($)		$      17,262,512	If (NR>-(BFBB-BFTB), FX, FX+NR +(BFBB-BFTB))
	FA		Funds Available ($)		$      17,262,512	Lesser of FA1 or FA2 (not less than $0)
	FARR		Additional Revenue to be Recovered ($)		$   0	FX – FA
STEP FOUR	Once the FA for purchases have been determined, the CRC can be calculated, and the WL can be determined.
	WL			Waiver Level (GWh)	5428	If (EA<he,ea,he+(fe*(fa fx))),=”” but=”” not=”” less=”” than=”” he<=”” span=”” style=”box-sizing: border-box;”></he,ea,he+(fe*(fa>
	WLP			Waiver Level Percentage of Full SHP	110%	WL/EA*100
	CRCE			CRC Energy (GWh)	0	EA – WL
	CRCEP			CRC Energy Percentage of Full SHP	0%	CRCE/EA*100
	CRC			Cost Recovery Charge (mills/kWh)	0	FARR/(EA*1,000)

Notes:              1- Use CRC Tiers Table to calculate applicable value

Narrative CRC Example

STEP ONE:  Determine the net balance available in the Basin Fund.

BFBB – Western will forecast the Basin Fund Beginning Balance for the next FY.

BFBB = $85,860,265

BFTB – The Basin Fund Target Balance is based on the applicable tiered percentage, or minimum value, of the Basin Fund Beginning Balance derived from the CRC Tiers table with a minimum BFTB set at $40 million.

BFTB = BFBB less 25 percent, see Tier iv (BFBB < 90 million, BFBB > 60 million)

                        = $85,860,265 – $21,464,066

                        = $64,395,199

PAR – Projected Annual Revenue is Western’s estimate of revenue for the next FY.

                        PAR    = $232,780,000

PAE – Projected Annual Expenses is Western’s estimate of expenses for the next FY.  The PAE includes all expenses plus non-reimbursable expenses, which are capped at $27 million per year plus an inflation factor.  This limitation is for CRC formula calculation purposes only, and is not a cap on actual non-reimbursable expenses.

                        PAE    = $226,649,066

NR – Net Revenue equals revenues minus expenses.

NR      = PAR-PAE

= $232,780,000 -$226,649,066

                        = $6,130,934

NB – Net Balance is the Basin Fund Beginning Balance plus net revenue.

NB                  = BFBB+NR

                        = $85,860,265 + $6,130,934

                        = $91,991,199

STEP TWO:  Determine the forecasted energy purchases expenses.

EA – The Sustainable Hydro Power Energy Allocation (from Customer contracts).  This does not include Project Use customers.

EA      = 4,952 (GWh)

HE – Western’s forecast of Hydro Energy available during the next FY developed from Reclamation’s April, 24-month study.

                        HE                  = 4,924 (GWh)

FE – Forecasted Energy purchases are the difference between the Sustainable Hydro Power allocation and the forecasted hydro energy available for the next FY or the anticipated firming purchases for the next year.

FE                   = EA-HE or anticipated purchases

                        = 504.33 (GWh, anticipated)

FFC – The forecasted energy price for the next FY per MWh.

FFC    = $34.23 per MWh

FX – Forecasted energy purchase power expenses based on the current year’s, April, 24‑month study, representing an estimate of the total costs of firming purchases for the coming FY.

FX                   = FE*FFC*1000

= 504.33 * $34.23*1000

= $17,263,215.90

STEP THREE:  Determine the amount of Funds Available (FA) to expend on firming energy purchases and then determine additional revenue to be recovered (FARR).  The following two formulas will be used to determine FA; the lesser of the two will be used.  Funds available shall not be less than zero.

1. Basin Fund Balance Factor (FA1)

If the Net Balance is greater than the Basin Fund Target Balance, use the value for forecasted energy purchase power expenses (FX).  If the net balance is less than the Basin Fund Target Balance, reduce the value of the Forecasted Energy Purchase Power Expenses by the difference between the Basin Fund Target Balance and the Net Balance.

FA1     = If (NB > BFTB, FX, FX – (BFTB – NB))

                        = $91,991,199 (NB) is greater than $64,395,199 (BFTB) then:

                        = $17,263,215.90 (FX)

If the Net Balance is greater than the Basin Fund Target Balance, then FA1=FX.

If the Net Balance is less than the Basin Fund Target Balance, then FA1=FX-(BFTB-NB).

1. Basin Fund Revenue Factor (FA2)

The second factor ensures that Western collects sufficient funds to meet the Basin Fund Target Balance so long as the amount needed does not exceed the forecasted purchase expense (FX):

In the situation when there is no projected revenue:

FA2     = If (NR>-(BFBB-BFTB), FX, FX+NR+(BFBB-BFTB))

= $6,130,934(NR) is greater than ($21,464,066) then:

                        = $17,263,215.90 (FX)

If the Net Revenue (loss) value does not result in a loss that exceeds the allowable decrease value of the Basin Fund Beginning Balance (-(BFBB-BFTB) ), then FA2=FX.

If the Net Revenue (loss) results in a loss that exceeds the allowable decrease value of the Basin Fund Beginning Balance (-(BFBB-BFTB)), then FX + NR + (BFBB-BFTB).

FA – Determine the funds available for purchasing firming energy by using the lesser of FA1 and FA2.

FA1 and FA2 are equal, so:

FA       = $17,263,215.90 (FX)

     FARR – Calculate the additional revenue to be recovered by subtracting the Funds Available from the forecasted energy purchase power expenses.

FARR             = FX-FA

                        = $17,263,215.90 (FX) – $17,263,215.90 (FA)

                        = $ 0.00                      

            STEP FOUR:  Once the funds available for purchases have been determined, the CRC can be calculated and the Waiver Level (WL) can be determined.

3. Cost Recovery Charge:  The CRC will be a charge to recover the additional revenue required as calculated in Step 3.  The CRC will apply to all customers who choose not to request a waiver of the CRC, as discussed below.  The CRC equals the additional revenue to be recovered divided by the total energy allocation to all customers for the FY.

CRC   = FARR / (EA*1,000)

                        = $ 0.00 charge

1. Waiver Level (WL):  Western will establish an energy WL that provides Western the ability to reduce purchase power expenses by scheduling less energy than what is contractually required.  Therefore, for those customers who voluntarily schedule no more energy than their proportionate share of the WL, Western will waive the CRC for that year.

After the Funds Available has been determined, the WL will be set at the sum of the energy that can be provided through hydro generation and purchased with Funds Available.  The WL will not be less than the forecasted Hydro Energy.

WL     = If (EA< HE, EA, HE + (FE * (FA / FX))

= 4,952 (EA) is not less than 4,924 (HE) then:

= 4,924 (HE) + (504.33 (FE) * ($17,263,215.90 (FA) / $17,263,215.90 (FX))

                        = 5,428 (GWh) is the Waiver Level

If SHP Energy Allocation is less than forecasted Hydro Energy available, then WL=EA

If SHP Energy Allocation is greater than the forecasted Hydro Energy available, then WL=HE+(FE *(FA/FX))

 

PRIOR YEAR ADJUSTMENT:

The CRC PYA for subsequent years will be determined by comparing the prior year’s estimated firming-energy cost to the prior year’s actual firming-energy cost for the energy provided above the WL.  The PYA will result in an increase or decrease to a customer’s firm energy costs over the course of the following year.  The table below is the calculation of a PYA.

PYA CALCULATION
		Description	Formula
STEP ONE	Determine actual expenses and purchases for previous year’s firming.  This data will be obtained from Western’s financial statements at the end of the FY.
	PFX	Prior Year Actual Firming Expenses ($)	Financial Statements
	PFE	Prior Year Actual Firming Energy (GWh)	Financial Statements
STEP TWO	Determine the actual firming cost for the CRC portion.
	EAC	Sum of the energy allocations of customers subject to the PYA (GWh)
	FFC	Forecasted Firming Energy Cost – ($/MWh)	From CRC Calculation
	AFC	Actual Firming Energy Cost – ($/MWh)	PFX/PFE
	CRCEP	CRC Energy Percentage	From CRC Calculation
	CRCE	Purchased Energy for the CRC (GWh)	EAC*CRCEP
STEP THREE	Determine Revenue Adjustment (RA) and PYA.
	RA	Revenue Adjustment ($)	(AFC-FFC)*CRCE*1,000
	PYA	Prior Year Adjustment (mills/kWh)	(RA/EAC)/1,000

 

Narrative PYA Calculation

STEP ONE:  Determine actual expenses and purchases for previous year’s firming.  This data will be obtained from Western’s financial statements at end of FY.

PFX – Prior year actual firming expense

PFE – Prior year actual firming energy

STEP TWO:  Determine the actual firming cost for the CRC portion.

EAC – Sum of the energy allocations of customers subject to the PYA

CRCE – The amount of CRC Energy needed

AFC – The Actual Firming Energy Cost are the PFX divided by the PFE

AFC = (PFX/PFE)/1,000

STEP THREE:  Determine Revenue Adjustment (RA) and Prior Year Adjustment (PYA).

RA – The Revenue Adjustment is AFC less FFC times CRCE

RA = (AFC-FFC)*CRCE)*1,000

PYA = The PYA is the RA divided by the EAC for the CRC customers only.

PYA = (RA/EAC)/1,000

The customer’s PYA will be based on its prior year’s energy multiplied by the resulting mills/kWh to determine the dollar amount that will be assessed.  The customers will be charged or credited for this dollar amount equally in the remaining months of the next year’s billing cycle.  Western will attempt to complete this calculation by December of each year.  Therefore, if the PYA is calculated in December, the charge/credit will be spread over the remaining 9 months of the FY (January through September).

Shortage Criteria Trigger:

In the event that Reclamation’s 24-month study projects that Glen Canyon Dam water releases will drop below 8.23 MAF in a water year (October through September), Western will recalculate the CRC to include those lower estimates of hydropower generation and the estimated costs for the additional purchase power necessary.  Western, as in the yearly projection for the CRC, will give the customers a 45‑day notice to request a waiver of the CRC, if they do not want to have the CRC charge added to their energy bill.  This recalculation will remain in effect for the remainder of the current FY.

In the event that hydropower generation returns to an 8.23 MAF or higher during the trigger implementation, a new CRC will be calculated for the next month, and the customers will be notified.

 

CRC Schedule for customers

Consistent with the procedures at 10 CFR 903, Western will provide its customers with information concerning the anticipated CRC for the upcoming FY in May.  The established CRC will be in effect for the entire FY.  The table below displays the time frame for determining the amount of purchases needed, developing customers’ load schedules, and making purchases.

CRC Schedule

	Respective Dates Under Table CRC Tiers1
Task	i, ii, and iii	iv2	v3
24-Month Study (Forecast to Model Projections)	April 1	April 1 October 1	Monthly Study
CRC Notice to Customers	May 1	May 1 November 1	Monthly
Waiver Request Submitted by Customers	June 15	Within 45 days	Within 30 days
CRC Effective	October 1	August 1 February 1	Updated Monthly
Notes: 1 This schedule does not apply if the CRC is triggered by the Glen Canyon Dam annual releases dropping below 8.23 MAF.   2 If it is determined during the additional reviews, under tier iv, that a CRC is necessary, customers will be notified that a CRC will be implemented in 90 days.  Western will provide its customers with information concerning the anticipated CRC and give them 45 days to request a waiver or accept the CRC.  The established CRC will be in effect for 12 months from the date implemented unless superseded by another CRC.   3 If it is determined during the additional reviews, under tier v, that a CRC is necessary, customers will be notified that a CRC will be implemented in 60 days.  Western will provide its customers with information concerning the anticipated CRC and give them 30 days to request a waiver or accept the CRC.  The established CRC will be in effect for 12 months from the date implemented unless superseded by another CRC.

 

Billing Demand:

The billing demand will be the greater of:

1.    The highest 30-minute integrated demand measured during the month up to, but not more than, the delivery obligation under the power sales contract, or
2. The Contract Rate of Delivery.

Billing Energy:

The billing energy will be the energy measured during the month up to, but not more than, the delivery obligation under the power sales contract.

Adjustment for Waiver:

Customers can choose not to take the full SHP energy supplied as determined in the attached formulas for CRC and will be billed the Energy and Capacity rates listed above, but not the CRC.

Adjustment for Transformer Losses:

If delivery is made at transmission voltage but metered on the low-voltage side of the substation, the meter readings will be increased to compensate for transformer losses as provided in the contract.

Adjustment for Power Factor:

The customer will be required to maintain a power factor at all points of measurement between 95 percent lagging and 95 percent leading.

Adjustment for Western Replacement Power:

Pursuant to the contractor’s Firm Electric Service Contract, as amended, Western will bill the contractor for its proportionate share of the costs of Western Replacement Power (WRP) within a given time period.  Western will include in the contractor’s monthly power bill the cost of the WRP and the incremental administrative costs associated with WRP.

Adjustment for Customer Displacement Power Administrative Charges:

Western will include in the contractor’s regular monthly power bill the incremental administrative costs associated with Customer Displacement Power.