[Federal Register Volume 59, Number 242 (Monday, December 19, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-31057]
[[Page Unknown]]
[Federal Register: December 19, 1994]
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DEPARTMENT OF THE INTERIOR
Central Utah Project Completion Act; Notice of Intent To Contract
for Hydroelectric Power Development in the Diamond Fork Area of the
Central Utah Project (CUP) and the Strawberry Valley Project (SVP), UT
AGENCY: Office of the Assistant Secretary for Water and Science,
Department of the Interior.
ACTION: Notice of intent to accept proposals, select a lessee, and
contract for hydroelectric power development in the Diamond Fork area.
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SUMMARY: Current Federal policy encourages non-Federal development of
electrical power resource potential on Federal water resource projects.
The Department of the Interior (Interior), in consultation with the
Department of Energy, Western Area Power Administration (Western), will
consider proposals for non-Federal development of hydroelectric power
in the Diamond Fork area of the CUP and the SVP, Utah, consisting of
the area from the outlet of the Syar Tunnel to the confluence of
Diamond Fork Creek and the Spanish Fork River. Interior is considering
such hydroelectric power development under a lease of power privilege.
No Federal funds will be available for such hydroelectric power
development. Western would have the first opportunity to purchase and/
or market the power that would be generated by such development under a
lease of power privilege. The CUP and the SVP are Federal Bureau of
Reclamation (Reclamation) projects. This notice presents background
information, proposal content guidelines, information concerning
selection of a non-Federal entity(s) to develop hydroelectric power in
the Diamond Fork area of the CUP and the SVP, and power purchasing and/
or marketing considerations. Interested parties are invited to submit
proposals.
DATES: A written proposal and seven copies must be submitted on or
before May 1, 1995, to: Mr. Ronald Johnston, Program Director, CUP
Completion Act Office, Department of the Interior, 302 East 1860 South,
Provo, UT 84606-6154.
A copy of the proposal should also be sent to: Mr. Kenneth G.
Maxey, Area Manager, Western Area Power Administration, P.O. Box 11606,
Salt Lake City, UT 84147-0606.
FOR FURTHER INFORMATION: Additional information on matters related to
this Federal Register notice can be obtained at the address and
telephone number set forth below: Mr. Ronald Johnston, Program
Director, CUP Completion Act Office, Department of the Interior, 302
East 1860 South, Provo, UT 84606-6154, Telephone: (801) 379-1103.
Information related to Western's purchasing and/or marketing the
power may be obtained at the address and telephone number set forth
below: Mr. Kenneth G. Maxey, Area Manager, Western Area Power
Administration, P.O. Box 11606, Salt Lake City, UT 84147-0606,
Telephone: (801) 524-6372.
Technical data may be obtained at the address and telephone number
set forth below: Mr. Reed Murray, Program Coordinator, CUP Completion
Act Office, Department of the Interior, 302 East 1860 South, Provo, UT
84606-6154, Telephone: (801) 379-1237.
Background Information
The CUP, Bonneville Unit, located in northern Utah, was authorized
for construction, including hydroelectric power, by the Colorado River
Storage Project (CRSP) Act of April 11, 1956, (70 Stat. 105) (CRSP Act)
as a participating project, and the Central Utah Project Completion Act
(Titles II through VI of Public Law 102-575, 106 Stat. 4605) (CUPCA).
The United States has constructed a portion of the Bonneville Unit of
the CUP (initial phase), including, among other features, Upper
Stillwater Dam, Bottle Hollow Dam, Starvation Dam, Currant Creek Dam,
Jordanelle Dam, Soldier Creek Dam for the enlarged Strawberry
Reservoir, the Syar Tunnel, and the Sixth Water Aqueduct and Tunnel.
The Central Utah Water Conservancy District (District) is constructing
other features of the Bonneville Unit pursuant to CUPCA. Section 208 of
the CUPCA provides that power generation facilities associated with the
CUP be developed and operated in accordance with the CRSP Act, which
explicitly embodies all Reclamation law except as otherwise provided in
the CRSP Act. The District, under its contracts with the United States,
has certain operation, maintenance, replacement, and repayment
responsibilities and obligations concerning the Bonneville Unit.
The United States constructed the SVP, comprising the Strawberry
Dam and Reservoir, the Strawberry Tunnel, the Upper Spanish Fork
Powerplant and transmission lines, the High Line Canal, the Mapleton
and Springville Lateral and related collection, diversion, conveyance,
and distribution works, all of which were substantially completed in
approximately the year 1915. The Strawberry Water Users Association
(Association), under its contracts with the United States, has the
right to lease power privileges (subject to approval by Interior) and
has operation, maintenance, replacement, and repayment responsibilities
and obligations concerning the SVP.
Interior, in consultation with Western, is considering only a
consolidated system for hydroelectric power development in the Diamond
Fork area (Project), involving both the CUP and the SVP, through a
lease of power privilege. The general authority for lease of power
privilege under Reclamation law includes the Town Sites and Power
Development Act of 1906 (43 U.S.C. Sec. 522) and the Reclamation
Project Act of 1939 (43 U.S.C. Sec. 485h(c)) (1939 Act).
A lease of power privilege is an alternative to Federal
hydroelectric power development. The lease of power privilege would
grant to a non-Federal entity(s) the right to utilize, consistent with
CUP and SVP purposes, water power head or storage at and/or
operationally in conjunction with the CUP and the SVP, for non-Federal
electric power generation and sale by the lessee(s). Any lease of power
privilege in the Diamond Fork area of the CUP and SVP must accommodate
pre-existing legal rights of the District and the Association.
Interior would be the lead Federal agency for compliance with the
National Environmental Policy Act (NEPA) for any lease of power
privilege to develop the Project. Issuance of a lease(s) of power
privilege for hydroelectric power development in the Diamond Fork area
will require compliance with Federal fish, wildlife, recreation, and
environmental laws, as determined by Interior.
Western would have the first opportunity to purchase and/or market
the power that would be generated by the Project under a lease(s) of
power privilege. Under this process, Western would either purchase and
market the power as Salt Lake City Area--Integrated Projects (SLCA-IP)
power or market the power independently by first offering it to
preference entities and secondly to non-preference entities.
All Project study and development costs, including compliance with
Federal fish, wildlife, recreation and environmental laws, would be the
expense of the lessee(s). Lease payments to the United States will be
deposited in the Upper Colorado River Basin Fund.
Proposal Content Guidelines
Interested parties should submit proposals explaining in as precise
detail as is practicable how the Project would be developed. Factors
which a proposal(s) should consider and address include, but are not
limited to, the following:
A. Provide qualifications of the proposing entity(s). Include
information on preference status, type of organization, length of time
in business, experience in funding and design and construction of
similar projects, industry rating(s) that indicate financial soundness
of the potential lessee(s), experience of key management personnel,
history of any reorganizations or mergers with other companies, and any
other information that demonstrates the adequacy of the proposal and
financial ability to fund all studies, designs, and construction. The
term ``preference,'' as applied to a lease of power privilege, means an
entity qualifying for preference to develop non-Federal hydroelectric
power, under Section 9(c) of the 1939 Act, as a municipality, public
corporation or agency, or cooperative or other nonprofit organization
financed in whole or in part by loans made pursuant to the Rural
Electrification Act of 1936.
B. Provide geographical locations and describe principal structures
and other important features of the Project including roads and
transmission lines. Estimate and describe installed capacity and the
capacity of the power facilities under dry, average, and wet
hydrological conditions. Also describe seasonal or annual generation
patterns. Include estimates of the amount of electrical energy that
would be produced from each facility for each month of average, dry,
and wet water years. If capacity and energy can be delivered to another
location, either by the proposing entity or by potential wheeling
agents, specify where capacity and energy can be delivered. Include
concepts for power sales and contractual arrangements, involved parties
and the proposed approach to wheeling if required.
C. Indicate title arrangements and the ability for acquiring title
to or the right to occupy and use lands necessary for the Project,
including such additional lands as may be required during construction.
D. Identify water rights applicable to the proper operation of the
Project, the holder of such rights, and how these rights would be
acquired or perfected.
E. Explain studies necessary to adequately define impacts on the
CUP and the SVP and the environment in order to facilitate the decision
making process. Explain any proposed use of the Project for
conservation and utilization of the available water resources in the
public interest. Describe any significant environmental issues and the
approach for gathering data and handling the environmental issues to
protect and enhance the quality of the environment.
F. Describe anticipated contractual arrangements with the District
and the Association and define how the Project would operate in harmony
with the CUP and the SVP.
G. Provide a management plan to accomplish such activities as
planning, NEPA compliance, design, construction, operation, and
maintenance. Prepare schedules of these activities as is applicable.
Describe what studies are necessary to accomplish the hydroelectric
power development and how the studies would be implemented.
H. Estimate Project development cost. This cost should include all
investment costs such as the cost of studies to determine feasibility,
NEPA compliance, design, construction, and financing as well as the
amortized annual cost of the investment; also, the annual operation,
maintenance, and replacement expense for the Project and other expenses
associated with the CUP and the SVP. If there are additional
transmission or wheeling expenses associated with the development of
the Project, these should be included. Identify proposed methods of
financing the Project. An economic analysis should be presented that
compares the present worth of all benefits and costs of the Project.
Additionally, a financial analysis should be presented that compares
monies available to the United States for use of Federal facilities and
costs to the CUP and the SVP.
Selection of Lessee
Interior, in consultation with Western, will evaluate proposals
received in response to this published notice. A proposal will be ruled
unacceptable if it is not complete, is not consistent with both CUP and
SVP purposes, and does not accommodate pre-existing legal rights of the
District and the Association, as determined by Interior.
Selection of a lessee will be based on the following
considerations:
A. First consideration will be given to preference entities.
Interior will give added consideration to proposals that (1) are
especially well-adapted to developing, conserving, and utilizing the
water and natural resources; (2) are harmonious with CUP and SVP
purposes; and (3) would provide significant economic benefits to the
CUP, the SVP, and the United States.
B. Second consideration will be given to non-preference entities.
Interior will give added consideration to proposals that (1) are
especially well-adapted to developing, conserving, and utilizing the
water and natural resources; (2) are harmonious with CUP and SVP
purposes; and (3) would provide significant economic benefits to the
CUP, the SVP, and the United States.
Power Purchasing and/or Marketing Considerations
Western would have the first opportunity to purchase and/or market
the power that would be generated by the Project under a lease(s) of
power privilege. Western will consult with Interior on such power
purchasing and/or marketing considerations.
Western would determine its interest in purchasing the electric
power from the lessee(s) as a replacement resource for its Salt Lake
City Area Integrated Projects (SLCA/IP) under principles and processes
being considered as part of Western's Replacement Power Process under
the Grand Canyon Protection Act. Western would also apply Integrated
Resource Planning principles in comparing this resource with all other
potential resource purchases available to Western.
Alternatively, Western may market the power available from the
Project on a stand-alone basis, first to preference entities qualified
under criteria established by Western and second to non-preference
entities, by developing an individual marketing plan for this power.
This marketing plan would be developed through a separate subsequent
public process beginning with a notice in the Federal Register of
Western's intent to market the power. The marketing plan would include
all aspects of marketing the power, including assignment of power to
qualified preference and/or non-preference entities, pricing,
transmission, and delivery of power. Western would recover the costs it
would incur in purchasing and/or marketing the power through the rates
charged for the power. Firm power rates would be established through a
public process, initiated by a notice in the Federal Register, separate
from the marketing plan.
In the event Western elects to not purchase and/or market the power
generated by the Project or such a decision cannot be made prior to
execution of the lease of power privilege, the lessee(s) would be
responsible for marketing the power generated by the Project with
priority given to preference entities as heretofore defined in PROPOSAL
CONTENT GUIDELINES, paragraph A.
Notification of Selection of Lessee and Negotiations for a Lease of
Power Privilege
After Interior selects a lessee, Interior will notify, in writing,
all entities submitting proposals of Interior's decision regarding
selection of the potential lessee(s). The selected potential lessee(s)
will have five years from the date of such notification to enter into a
lease(s) of power privilege for the site or sites identified in the
proposal. Lease of power privilege negotiation sessions will be public.
If Western elects to purchase and/or market the power, such lease(s) of
power privilege will state how Western will be involved in purchasing
and/or marketing the power.
Any excessive delay resulting from compliance with the provisions
of Federal environmental laws or administrative review by a Federal
agency, pertaining to the Project, may extend the five year time period
for a period equal to that of the delay. In the event of litigation
related to the proposed Project, the five year time period will be
extended for a period equal to that of the delay, provided such
litigation was initiated by parties other than the selected potential
lessee(s) or its employees, officers, agents, assigns, shareholders,
customers or persons or groups served by or in privity with the
potential lessee(s).
Dated: December 13, 1994.
Ronald Johnston,
CUP Program Director, Department of the Interior.
[FR Doc. 94-31057 Filed 12-16-94; 8:45 am]
BILLING CODE 4310-RK-P
