[Federal Register Volume 63, Number 230 (Tuesday, December 1, 1998)]
[Notices]
[Pages 66166-66167]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-32009]
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DEPARTMENT OF ENERGY
Western Area Power Administration
Power Allocation Issues
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of Inquiry on the Impact of Electric Utility Industry
Restructuring.
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SUMMARY: The Western Area Power Administration (Western) is initiating
an inquiry to explore the impact of electric utility industry
restructuring on Western's power allocation policies.
DATES: The consultation and comment period will begin on the date of
publication of this Federal Register notice and will end January 15,
1999. A public comment forum at which Western will receive oral and
written comments will be held on Wednesday, January 6, 1999, beginning
at 1 p.m., Mountain Standard Time, at the Four Points Denver Central
Hotel, 3535 Quebec Street, Denver, Colorado. To be assured of
consideration, written comments must be received by the end of the
consultation and comment period.
ADDRESSES: Written comments may be hand-delivered, mailed, emailed, or
faxed to Robert C. Fullerton, Project Manager, Corporate Services
Office, Western Area Power Administration, 1627 Cole Boulevard, P.O.
Box 3402, Golden, CO 80401-0098, telephone (303) 275-2700, fax (303)
275-1290, email: fullerto@wapa.gov. All documentation developed or
retained by Western during the course of this public process will be
available for inspection and copying at this address.
FOR FURTHER INFORMATION CONTACT:
Robert C. Fullerton, Project Manager, Corporate Services Office,
Western Area Power Administration, 1627 Cole Boulevard, P. O. Box 3402,
Golden, CO 80401-0098, telephone (303) 275-2700, email:
fullerto@wapa.gov.
Joel K. Bladow, Regional Manager, Rocky Mountain Region, Western Area
Power Administration, P.O. Box 3700, Loveland, CO 80539-3003, telephone
(970) 490-7201, email: bladow@wapa.gov.
J. Tyler Carlson, Regional Manager, Desert Southwest Region, Western
Area Power Administration, P.O. Box 6457, Phoenix, AZ 85005-6457,
telephone (602) 352-2453, email: carlson@wapa.gov.
David Sabo, Customer Service Center Manager, Colorado River Storage
Project, Western Area Power Administration, P.O. Box 11606, Salt Lake
City, UT 84147-0606, telephone (801) 524-6372, email: sabo@wapa.gov.
Jerry W. Toenyes, Regional Manager, Sierra Nevada Region, Western Area
Power Administration, 114 Parkshore Drive, Folsom, CA 95630-4710,
telephone (916) 353-4418, email: toenyes@wapa.gov.
Gerald C. Wegner, Regional Manager, Upper Great Plains Region, Western
Area Power Administration, P.O. Box 35800, Billings, MT 59107-5800,
telephone (406) 247-7405, email: wegner@wapa.gov.
SUPPLEMENTARY INFORMATION:
Authorities
This public process is being conducted pursuant to the Department
of Energy Organization Act (42 U.S.C. 7101, et seq.); the Reclamation
Act of 1902 (43 U.S.C. 371, et seq.), as amended and supplemented by
subsequent enactments, particularly section 9(c) of the Reclamation
Project Act of 1939 (43 U.S.C. 485h(c)); and other acts specifically
applicable to the projects involved.
Background
Western is a Federal power marketing administration, charged with
the responsibility of marketing electricity generated by power plants
operated by the Bureau of Reclamation, the Corps of Engineers, and the
International Boundary and Water Commission. Created in 1977, Western
markets on a wholesale basis and transmits Federal hydroelectric power
throughout 1.3 million square miles to more than 600 customers,
including rural electric cooperatives, municipal utilities, public
utility districts, Federal and State agencies, and irrigation
districts. Western's power customers, in turn, provide service to
millions of consumers in 15 western States.
Western markets power on a project-specific basis. A marketing plan
for each project is developed through a public process, with
opportunity for comment on a marketing proposal before publication of
the final marketing plan in the Federal Register. Reclamation law
governs how Western markets electricity, including the requirement that
Western offer power first to non-profit entities such as rural electric
cooperatives and municipalities.
In the first decade of Western's existence, marketing plans were
relatively inflexible. Unless new generation was available, the amount
of power made available for potential new customers was relatively
small. Contracts with terms up to 30 years were negotiated and signed.
No capability existed under contracts to adjust Western's marketable
resources in the event that power plant operational changes were
necessary due to environmental considerations.
In recent years, Western added more flexibility to its marketing
policies and power sales contracts. On October 20, 1995, Western
adopted a final rule for the Energy Planning and Management Program
(Program) (60 FR 54151), which established a framework for the project-
specific allocation of hydropower. Pursuant to the Program, Western
signed resource extension contracts with existing customers for the
sale of power from the Pick-Sloan Missouri Basin Program-Eastern
Division and the Loveland Area Projects. These 20-year contracts
contain withdrawal opportunities at 5 and 10 years to meet the needs of
potential new customers and other purposes as determined by Western.
Western also reserved the contractual ability to adjust power
commitments in response to changes in operations and hydrology. In
addition, Western has full flexibility to adjust its power rates under
the terms of the contracts. Resource pools of up to 6 percent of the
marketable resource were set aside to meet the needs of new customers,
including Indian tribes.
While the Program did not immediately impact the marketing of power
from the Central Valley Project (CVP), Washoe Project, and Salt Lake
City Area Integrated Projects (SLCA/IP), Western anticipated that
Program
[[Page 66167]]
application would be evaluated for these projects in the future. Much
work has already been done to advance the completion of the marketing
plans for the CVP, Washoe Project, and SLCA/IP, pursuant to the
Program's framework.
There is now a further need to consider the impact of electric
utility industry restructuring on the way that we allocate power.
Western seeks public input on six questions to help in this
consideration.
Upon completion of this public process, Western will consult with
the Department of Energy (DOE) prior to taking further action to
complete pending power marketing plans.
While this public process was triggered by marketing proposals for
CVP, Washoe Project, and SLCA/IP firm power, Western regards the issues
addressed in this public process as relevant to all of our power
allocation efforts. However, the conclusions we reach will be applied
prospectively, and will not impact existing marketing plans and
contracts.
As electric utility industry restructuring progresses over time,
Western likely will evaluate the impact of industry change on a
periodic basis to assure that our power marketing policy continues to
be responsive to public needs.
Regulatory Procedure Requirements
Review Under Executive Order 12866
Western 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.
Regulatory Flexibility Analysis
The Regulatory Flexibility Act of 1980 (5 U.S.C. 601, et seq.)
requires Federal agencies to perform a regulatory flexibility analysis
if a final rule is likely to have a significant economic impact on a
substantial number of small entities and there is a legal requirement
to issue a general notice of proposed rulemaking. Western has
determined that this action does not require a regulatory flexibility
analysis since it is a rulemaking of particular applicability involving
rates or services applicable to public property.
Environmental Compliance
DOE National Environmental Policy Act (NEPA) regulations
categorically exclude marketing plans from NEPA documentation unless
they involve new generation, new transmission, or a change in
operations. Therefore, Western will not conduct further evaluation
under NEPA. Considerable environmental evaluation has already occurred
under the Energy Planning and Management Program and during project-
specific marketing plan development.
Scope of Issues
Public comment is requested on the following questions:
1. Should Western's power allocations system, including the term of
firm power contract renewals, be modified to take into account changes
in electricity markets that have occurred, and are expected to occur in
the future, due to the enactment of California Assembly Bill 1890 and
other State retail competition statutes? If so, please explain what
modifications would be desirable. If not, please explain why the
present system should be preserved.
2. To the extent a utility with an allocation of preference power
loses load due to retail competition, should it receive the same
allocation as it received previously or should its allocation be
reduced proportionately?
3. Should Western allocate power directly to electricity end-users
that are preference entities such as publicly-owned schools in States
or localities that permit retail access? If so, how much power should
be allocated for this purpose? Alternatively, should Western continue
to allocate power primarily to its traditional customers such as
municipal and cooperative utilities and Federal and State agencies?
4. In a retail choice environment, what additional steps, if any,
should Western take to ensure that the full economic benefits of
preference power are passed through to end-users served by the
distribution utility that receives a power allocation from Western?
5. Should a distribution utility be permitted to transmit the
economic benefits of preference power exclusively to industrial and/or
commercial end users? Conversely, should a distribution utility be
required to pass on the benefits of preference power exclusively to a
certain class of customers such as residential or small business?
6. Should a distribution utility be required to offer retail access
to its distribution customers as a condition of receiving a preference
power allocation in the future?
Dated: November 20, 1998.
Michael S. Hacskaylo,
Administrator.
[FR Doc. 98-32009 Filed 11-30-98; 8:45 am]
BILLING CODE 6450-01-P
