E8-24430. Post-2010 Resource Pool, Pick-Sloan Missouri Basin Program-Eastern Division

AGENCY:

Western Area Power Administration, DOE.

ACTION:

Notice of proposed procedures and call for applications.

SUMMARY:

Western Area Power Administration (Western), Upper Great Plains Region, a Federal power marketing agency of the Department of Energy (DOE), is seeking comments on proposed procedures and is calling for applications from preference entities interested in an allocation of Federal power. The Energy Planning and Management Program (Program) provides for establishing project-specific resource pools and allocating power from these pools to new preference customers and other appropriate purposes as determined by Western. Western, in accordance with the Program, proposes procedures for comment and consideration, and also calls for applications from entities interested in a Federal power resource pool allocation. This resource pool is comprised of up to 1 percent (approximately 20 megawatts) of the long-term marketable resource of the Pick-Sloan Missouri Basin Program—Eastern Division (P-SMBP—ED) that may become available January 1, 2011 (Post-2010 Resource Pool). Preference entities that wish to apply for an allocation of power from Western's Upper Great Plains Region must submit formal applications as outlined below.

DATES:

An entity interested in commenting on proposed procedures must submit written comments to Western's Upper Great Plains Regional Office at the address below. An entity applying for an allocation of power must submit a formal application to the Upper Great Plains Regional Office at the address below. Western must receive written and/or electronic comments and/or applications by 4 p.m., MST, on January 13, 2009. Western reserves the right to not consider any comments and/or applications received after the prescribed date and time.

Western will hold a public information forum and a public comment forum (immediately following the public information forum) on the proposed procedures and applications. The public information and public comment forums will be held on November 20, 2008, at 9 a.m. CST.

ADDRESSES:

Submit applications for an allocation of Western power and/or written comments regarding these proposed procedures to Robert J. Harris, Regional Manager, Upper Great Plains Region, Western Area Power Administration, 2900 4th Avenue North, Billings, MT 59101-1266. Applications for an allocation of Western power and comments on the proposed procedures may also be faxed to [phone] or e-mailed with an electronic signature to [e-mail]. If submitting the application electronically and an electronic signature is not available, please either fax or mail the application signature page with the signature to the fax number/address provided above. Application forms are available upon request or may be accessed at http://www.wapa.gov/​ugp/​post2010/​APD.htm. Applicants are encouraged to use the application form provided at the website.

The public information and comment forums will be held at the Holiday Inn, 100 West 8th Street, Sioux Falls, South Dakota.

FOR FURTHER INFORMATION CONTACT:

John A. Pankratz, Public Utilities Specialist, Upper Great Plains Region, Western Area Power Administration, 2900 4th Avenue North, Billings, MT 59101-1266, telephone [phone], or e-mail [e-mail].

SUPPLEMENTARY INFORMATION:

On October 20, 1995, Western published the Final Rule for the Program (Final Rule) 60 FR 54151. The Final Rule became effective on November 20, 1995. Subpart C—Power Marketing Initiative of the Program, Final Rule, 10 CFR part 905, provides for project-specific resource pools and allocations of power from these pools to eligible new preference customers and/or for other appropriate purposes as determined by Western. The additional resource pool increments shall be established by pro rata withdrawals, on 2 years' notice, from existing customers. Specifically, 10 CFR 905.32(b) provides:

At two 5-year intervals after the effective date of the extension to existing customers, Western shall create a project-specific resource pool increment of up to an additional 1 percent of the long-term marketable resource under contract at the time. The size of the additional resource pool increment shall be determined by Western based on consideration of the actual fair-share needs of eligible new customers and other appropriate purposes.

On June 25, 2007, Western published a Notice of Request for Letters of Interest in the Federal Register (72 FR 34680) in which Western requested and received letters of interest regarding a resource pool of up to 1 percent (approximately 20 megawatts) of the marketable resource that may become available January 1, 2011, for new customers and/or other appropriate purposes pursuant to the Program. Traditionally, Western has marketed allocations of firm power to be apportioned to eligible new preference entities in such a manner as to encourage the most widespread use thereof, in accordance with Federal Reclamation Law.

Availability of Information

Documents developed or retained by Western in developing this Post-2010 Resource Pool will be available for inspection and copying at the Upper Great Plains Regional Office in Billings, Montana. Public comments received on these proposed procedures will be available for viewing at http://www.wapa.gov/​ugp/​Post2010/​default.htm after the close of the comment period.

Letters of Interest

As a result of the June 25, 2007, Notice of Request for Letters of Interest, Western received 32 responses, including 19 letters of interest and 13 comment letters. The responses were evaluated and categorized into three main areas. Some letters addressed more than one category. Eighteen entities expressed an interest in becoming a new customer. Three letters of interest were from entities seeking an allocation for other appropriate purposes, including supporting renewable energy programs and increasing a current customer allocation. Thirteen entities submitted comments advocating that Western apply the same policies and procedures that were applied to prior marketing initiatives, act within existing laws and regulations, not use other appropriate purposes to expand eligibility requirements, make allocations in such amounts as to be meaningful, and apply identical contract terms and conditions as were utilized for existing customers. One letter also commented that, under the Post-2010 Resource Pool, Western should not provide allocations to preference entities which previously held an allocation of Federal power and relinquished that allocation.

Response to Letters of Interest

Western has historically marketed power from resource pools to new preference customers through marketing plans and initiatives. Western recognizes the interest expressed from potential new customers in an allocation from the P-SMBP-ED. Western encourages the new customer interest that lends support to Western's mission of allocating low-cost hydropower in such a way as to promote the most widespread use thereof.

Western received 3 letters of interest regarding other appropriate purposes. One letter was received from a customer interested in an increase to its current allocation. Historically, Western has not increased allocations within the P-SMBP-ED that were established in marketing initiatives under the Program. Western recognizes that customer loads continue to grow and change and increases in individual allocations would be beneficial. However, if Western were to entertain requests for increases or adjustments to allocations, all customers would need to be afforded the opportunity to submit new applications. If this were to occur, it is expected that Western would receive significant modification requests, which would likely not be supportable with the power available from the Post-2010 Resource Pool. Any significant modifications could result in a new marketing plan, which is not the intent of the Program. Therefore, Western is not proposing to increase current customer allocations.

Western also received letters of interest supporting renewable resources as another appropriate purpose for the Post-2010 Resource Pool. Western believes the best manner to support renewable resources with this power is to allow existing customers to retain the power that may be available, after allocating to new customers. This will allow preference entities across the marketing area to leverage this power and use existing allocations to support renewable resources if they so choose. Western recognizes that many customers are already demonstrating support of renewable resources through their investments in various renewable projects across the P-SMBP-ED marketing area. Renewable projects are being developed and implemented by Western's customers regardless of any potential new allocation from the Post-2010 Resource Pool.

Western received comments stating that any commitment of the Post-2010 Resource Pool should be in amounts sufficient to be meaningful, subject to existing laws, regulations, and guidelines, as well as contract terms and conditions, set forth in previous marketing initiatives under the Program. Western agrees that any allocation made from the Post-2010 Resource Pool must comply with existing laws, regulations, and guidelines, as well as contract terms and conditions applied to allocations made in previous marketing initiatives under the Program.

Western also received a comment that allocations made under the Post-2010 Resource Pool should be limited to new preference entities that have not had a previous allocation of Federal power and relinquished it. The Program limits allocations to new preference entities, therefore Western agrees that preference entities that had a prior allocation of Federal power are not eligible to receive a new allocation in the Post-2010 Resource Pool.

Use of the Post-2010 Resource Pool

Based on examination of the letters of interest and comments, Western has determined the Post-2010 Resource Pool should be made available to new preference entities and is not proposing to use a share of the Post-2010 Resource Pool for other appropriate purposes. Allocations to new preference customers shall be made in accordance with the P-SMBP-ED Final Post-1985 Marketing Plan (45 FR 71860) (Post-1985 Marketing Plan) and the Program. Western intends to carry forward the key principles and criteria that were established in the Post-2000 and Post-2005 Resource Pools, except as modified herein.

The Proposed Post-2010 Resource Pool Allocation Procedures

These proposed procedures for the P-SMBP-ED address: (1) Eligibility criteria, (2) how Western plans to allocate the Post-2010 Resource Pool in accordance with the Program to eligible applicants as new preference customers and not for other appropriate purposes, and (3) the terms and conditions under which Western will sell the power allocated.

I. Amount of Pool Resources

Western proposes to allocate up to 1 percent (approximately 20 megawatts) of the P-SMBP-ED long-term firm hydroelectric resource available, as firm power to eligible new preference customers. Firm power means capacity and associated energy allocated by Western and subject to the terms and conditions specified in the Western firm electric service contract.

II. General Eligibility Criteria

Western proposes to apply the following General Eligibility Criteria to applicants seeking an allocation of firm power under the proposed Post-2010 Resource Pool Allocation Procedures.

A. Qualified applicants must be preference entities as defined by section 9(c) of the Reclamation Project Act of 1939, 43 U.S.C. 485h(c), as amended and supplemented.

B. Qualified applicants must be located within the currently established P-SMBP—ED marketing area.

C. Qualified applicants must not be currently receiving benefits, directly or indirectly, from a current P-SMBP—ED firm power allocation or other firm Federal power commitment. Qualified Native American applicants who did not receive an allocation from the Post-2000 or Post-2005 Resource Pools are not subject to this requirement.

D. Qualified utility and non-utility applicants must be able to use the firm power directly or be able to sell it directly to retail customers.

E. Qualified utility applicants that desire to purchase power from Western for resale to consumers, including cooperatives, municipalities, public utility districts, and public power districts must have met utility status by January 1, 2008. Utility status means the entity has responsibility to meet load growth, has a distribution system, and is ready, willing, and able to purchase Federal power from Western on a wholesale basis.

F. Qualified Native American applicants must be an Indian tribe as defined in the Indian Self Determination Act of 1975, 25 U.S.C. 450b, as amended.

III. General Allocation Criteria

Western proposes to apply the following General Allocation Criteria to applicants seeking an allocation of firm power under the proposed Post-2010 Resource Pool Allocation Procedures.

A. Allocations of firm power will be made in amounts as determined solely by Western in exercise of its discretion under Federal Reclamation Law.

B. An allottee will have the right to purchase such firm power only upon executing an electric service contract between Western and the allottee, and satisfying all conditions in that contract.

C. Firm power allocated under these procedures will be available only to new preference customers in the existing P-SMBP—ED marketing area. The marketing area of the P-SMBP—ED is Montana (east of the Continental Divide), all of North Dakota and South Dakota, Nebraska east of the 101° meridian, Iowa west of the 941/2° meridian, and Minnesota west of a line on the 941/2° meridian from the southern boundary of the state to the 46° parallel and then northwesterly to the northern boundary of the state at the 961/2° meridian.

D. Allocations made to Native American tribes will be based on the actual load experienced in calendar year 2007. Western has the right to use estimated load values for calendar year 2007 should actual load data not be available. Western will adjust inconsistent estimates during the allocation process.

E. Allocations made to qualified utility and non-utility applicants will be based on the actual loads experienced in calendar year 2007. Western will apply the Post-1985 Marketing Plan and the Program criteria to these loads. Western will carry forward key principles and criteria established in the Post-2000 and Post-2005 Resource Pools, except as modified herein.

F. Energy provided with firm power will be based upon the customer's monthly system load pattern.

G. Any electric service contract offered to a new customer shall be executed by the customer within 6 months of a contract offer by Western, unless otherwise agreed to in writing by Western.

H. The resource pool will be dissolved subsequent to the closing date of the last qualified applicant to execute their respective firm electric service contract. Firm power not under contract will be used in accordance with the Program.

I. The minimum allocation shall be 100 kilowatts (kW).

J. The maximum allocation for qualified utility and non-utility applicants shall be 5,000 kW.

K. Contract rates of delivery shall be subject to adjustment in the future as provided for in the Program.

L. If unanticipated obstacles to the delivery of hydropower benefits to Native American tribes arise, Western retains the right to provide the economic benefits of its resources directly to these tribes.

IV. General Contract Principles

Western proposes to apply the following General Contract Principles to all applicants receiving an allocation of firm power under these proposed Post-2010 Resource Pool Allocation Procedures.

A. Western shall reserve the right to reduce a customer's summer season contract rate of delivery by up to 5 percent for new project pumping requirements, by giving a minimum of 5 years' written notice in advance of such action.

B. Western, at its discretion and sole determination, reserves the right to adjust the contract rate of delivery on 5 years' written notice in response to changes in hydrology and river operations. Any such adjustments shall only take place after a public process by Western.

C. Each allottee is ultimately responsible for obtaining its own third-party delivery arrangements, if necessary. Western may assist the allottee in obtaining third-party transmission arrangements for the delivery of firm power allocated under these procedures to new customers.

D. Contracts entered into under the Post-2010 Resource Pool Allocation Procedures shall provide for Western to furnish firm electric service effective from January 1, 2011, through December 31, 2020.

E. Contracts entered into as a result of these procedures shall incorporate Western's standard provisions for power sales contracts, integrated resource planning, and the General Power Contract Provisions.

V. Applications for Firm Power

This notice formally requests applications from qualified entities wishing to purchase power from the Upper Great Plains Region. Applicant Profile Data (APD) is requested so Western will have a uniform basis upon which to evaluate the applications. To be considered, applicants must submit an application to the Upper Great Plains Region. To ensure that full consideration is given to all applicants, Western will not consider applications submitted before publication of this notice or after the deadlines specified in the Dates Section. Applications are available at http://www.wapa.gov/​ugp/​Post2010/​APD/​default.htm, or hard copies of the application are available upon request. Applicants are encouraged to use the application form provided at the above Web site.

A. Applicant Profile Data Application

The content and format of the APD are outlined below. Applicants must provide all requested information or the most reasonable available estimate. The applicant should note any requested information that is not applicable. Western is not responsible for errors in data or missing pages. All items of information in the APD should be answered as if prepared by the entity/organization seeking the allocation of Federal power. The APD shall consist of the following:

1. Applicant Information:

a. Applicant's (entity/organization requesting an allocation) name and address.

b. Person(s) representing applicant: Contact person name, title, address, telephone and fax number, and email address.

c. Type of entity/organization: Federal agency, state agency, irrigation district, municipal, rural, or industrial user, municipality, Native American tribe, public utility district, rural electric cooperative, or other, please specify.

d. Parent entity/organization of applicant, if any.

e. Name of the applicant's member organizations, if any.

f. Applicable law under which the applicant was established.

g. Applicant's geographic service area: If available, please submit a map of the service area, and indicate the date prepared.

h. Describe whether the applicant owns and operates its own electric utility system.

i. Provide the date the applicant attained utility status, if applicable. 10 CFR 905.35 defines utility status to mean “that the entity has responsibility to meet load growth, has a distribution system, and is ready, willing, and able to purchase power from Western on a wholesale basis for resale to retail customers.”

j. Describe the entity/organization that will interact with Western on contract and billing matters.

2. Applicant's Loads:

a. Utility and non-utility applicants:

(i) If applicable, provide the number and type of customers served (e.g., residential, commercial, industrial, military base, agricultural).

(ii) Provide the actual monthly maximum demand (kilowatts) and energy use (kilowatt-hours) experienced in calendar year 2007.

b. Native American Tribe applicants only:

(i) Indicate the utility or utilities currently serving your loads.

(ii) If applicable, provide the number and type of customers served (e.g., residential, commercial, industrial, military base, agricultural).

(iii) Provide the actual monthly maximum demand (kilowatts) and energy use (kilowatt-hours) experienced in calendar year 2007. If the actual demand and energy data are not available or are difficult to obtain provide the estimated monthly demand.

(iv) If the demand and energy data in 2.b(iii) above is estimated, provide a description of the method and basis for this estimation.

3. Applicant's Resources:

a. A list of current power supplies if applicable, including the applicant's own generation as well as purchases from others. For each supply, provide the resource name, capacity supplied, and the resource's location.

b. For each power supplier, provide a description and status of the power supply contract (including the termination date).

c. For each power supplier, provide the type of power: Power supply is on a firm basis or power supply is not on a firm basis, please explain.

4. Transmission:

a. Points of delivery: Provide the requested point(s) of delivery on Western's transmission system (or a third-party's transmission system) the voltage of service required, and the capacity desired, if applicable.

b. Transmission arrangements: Describe the transmission arrangements necessary to deliver firm power to the requested points of delivery. Include a brief description of the applicant's transmission and distribution system including major interconnections. Provide a single-line drawing of applicant's system, if one is available.

c. Provide a brief explanation of the applicant's ability to receive and use, or receive and distribute Federal power as of January 1, 2008.

5. Other Information: The applicant may provide any other information pertinent to receiving an allocation.

6. Signature: Western requires the signature and title of an appropriate official who is able to attest to the validity of the APD and who is authorized to submit the request for an allocation.

The signature block must contain a certification stating: “By signing below, I certify the information which I have provided is true and correct to the best of my information, knowledge and belief.” Electronically submitted applications must contain an electronic signature, or in the alternative, the signature page with a signature should be faxed or mailed as provided for in the Addresses Section above.

Recordkeeping Requirements: If Western accepts your application and you receive an allocation of Federal power you must keep all records associated with your APD for a period of 3 years after you sign your contract for Federal power. If you do not receive an allocation of Federal power, there is no recordkeeping requirement.

Western has obtained an Office of Management and Budget (OMB) Control Number 1910-5136 for the collection of the above information.

B. Western's Consideration of Applications

1. When Western receives the APD, Western will verify that the applicant meets the General Eligibility Criteria set forth in Section II, and that the application contains all items requested in the APD.

a. Western will request in writing additional information from any applicant whose APD is determined to be deficient. The applicant shall have 15 days from the date on Western's letter of request to provide the information.

b. If Western determines the applicant does not meet the General Eligibility Criteria, Western will send a letter explaining why the applicant did not qualify.

c. If the applicant has met the General Eligibility Criteria, Western will determine the amount of firm power, if any, to allocate pursuant to the General Allocation Criteria set forth in Section III. Western will send a draft contract to the applicant for review which identifies the terms and conditions of the offer and the amount of firm power allocated to the applicant.

2. All firm power shall be allocated according to the procedures in the General Allocation Criteria set forth in Section III.

3. Western reserves the right to determine the amount of firm power to allocate to an applicant, as justified by the applicant in its APD.

Resource Pool Procedure Requirements

Environmental Compliance

Western completed an Environmental Impact Statement on the Program (DOE/EIS-0812), pursuant to the National Environmental Policy Act of 1969, 42 U.S.C. 4321-4370(b), as amended and supplemented, (NEPA). The Record of Decision was published in the Federal Register on October 12, 1995, (60 FR 53181). Western's NEPA review assured all environmental effects related to these actions have been analyzed.

Paperwork Reduction Act

Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the Paperwork Reduction Act, unless that collection displays a currently valid OMB control number. The use of the referred to APD application form has been approved by OMB under the Control Number 1910-5136, expiration date September 30, 2011.

Dated: October 1, 2008.

Timothy J. Meeks,

Administrator.