E9-4609. Notice of Proposed Program and Request for Public Comments

AGENCY:

Western Area Power Administration, DOE.

ACTION:

Notice of Proposed Program and Request for Public Comments.

SUMMARY:

The Western Area Power Administration (Western) proposes to adopt a Transmission Infrastructure Program. The Program is being proposed to implement section 402 of the American Recovery and Reinvestment Act of 2009 (Recovery Act) for the purpose of constructing, financing, facilitating, planning, operating, maintaining, or studying construction of new or upgraded electric power transmission lines and related facilities with at least one terminus within the area served by Western and for delivering or facilitating the delivery of power generated by renewable energy resources constructed or reasonably expected to be constructed. The proposed Program would use authority granted under this section to borrow funds from the U.S. Treasury to accomplish these purposes. The Recovery Act also calls for Western to use a public process to develop practices and policies that implement the authority granted by this section. To expedite the development process, Western is offering this initial proposal. This Federal Register notice (FRN) seeks public comment on these proposed principles, policies and practices.

DATES:

The consultation and comment period begins today and ends April 3, 2009. Western will present an explanation of the proposed program and accept oral and written comments at a public meeting on March 23, 2009, beginning at 1 p.m. MDT, in Lakewood, Colorado. The meeting will also be Webcast. Western will accept written comments any time during the consultation and comment period. Written comments on the proposed Program should be submitted to Western by April 3, 2009.

ADDRESSES:

The public meeting will be held at Western's Corporate Services Office, 12155 West Alameda Parkway, Lakewood, CO 80228 on the date listed above. Send written comments to: Transmission Infrastructure Program, Western Area Power Administration, P.O. Box 281213, Lakewood, CO 80228-8213, e-mail [e-mail]. Western will post information about the program development on its Web site at http://www.wapa.gov,, including written comments received in response to this notice after the close of the comment period. Western must receive written comments by the end of the consultation and comment period to ensure they are considered in Western's decision process.

As access to Western facilities is controlled, any U.S. citizen wishing to attend any meetings at Western must present a government-issued form of picture identification, such as a U.S. driver's license, U.S. passport, U.S. government ID, or U.S. military ID, at the time of the meeting. Foreign nationals should contact Western at least 15 days in advance of this meeting to obtain the necessary form for admittance to the meeting.

FOR FURTHER INFORMATION CONTACT:

Please contact Transmission Infrastructure Program, Western Area Power Administration, P.O. Box 281213, Lakewood, CO 80228-8213, e-mail [e-mail]. This proposal is also available on Western's Web site at http://www.wapa.gov.

SUPPLEMENTARY INFORMATION:

Background

Western markets and transmits wholesale hydroelectric power, generated at Federal dams across the western United States. This power is sold to customers in accordance with Federal Law. Western's transmission system was developed to deliver the Federal hydropower to those customers. Western owns and operates an integrated 17,000 circuit mile, high-voltage transmission system across 15 western states and a 1.3 million square-mile service area. Western's service area encompasses all of the following states: Arizona, California, Colorado, Nebraska, Nevada, New Mexico, North Dakota, South Dakota, Utah, and Wyoming; as well as parts of Iowa, Kansas, Montana, Minnesota, and Texas. Today, Western makes capacity on its transmission system, excess to that needed to serve its preference customers, available through the policies and procedures outlined in its Open Access Transmission Tariff (OATT). Western offers nondiscriminatory access to its transmission system, including requests to interconnect new generating resources to that transmission system under its Safe Harbor OATT on file with the Federal Energy Regulatory Commission (FERC).

Western is seeking public comment on the proposed principles, policies and practices it will use to implement the authority provided in section 402 of the Recovery Act. A 30-day consultation and comment period starts with the publication of this notice in the Federal Register.

In defining the proposed Program, Western has identified a series of principles that will provide overarching guidance. It has further identified a series of policies and practices it will follow in implementing the proposed Program. These principles, policies and practices are described in this notice.

Proposed Action

The proposed action is to implement the Program authorized in section 402 of the Recovery Act. The Program goal is to identify, prioritize and participate in the study, facilitation, financing, planning, operating, maintaining, and construction of new or upgraded transmission facilities and additions that will help bring renewable energy resources to market across the West. One objective is to encourage non-Federal participation so as to leverage Western's borrowing authority. The Program consists of several major components: (1) Project Funding, (2) Project Evaluation, (3) Project Development, (4) Project Operation and Maintenance, and (5) Project Rates and Repayment.

Principles

In implementing the authority granted to Western in section 402, Western identified the following principles which provide overarching guidance. Western will ensure each project approved for funding using Treasury borrowing authority:

1. Is in the public interest.

2. Will not adversely impact system reliability or operations, or other statutory obligations.

3. Offers a reasonable expectation that the proceeds from such project shall be adequate to meet Western's financial repayment obligations.

4. Uses a public process to set rates for Western-owned transmission capacity resulting from any new facilities developed as a result of Western's participation in such project.

5. Has the necessary capabilities to provide generation-related ancillary services.

6. Uses the proceeds from the sale of the transmission capacity from such project for the repayment of the principal and interest of the loan from the Treasury attributable to that project, after reserving such funds as Western determines are necessary—

 a. to pay for the ancillary services that are provided.

 b. to meet the costs of operating and maintaining the new project.

Western will ensure the Program:

1. Provides an opportunity for participation of other entities in constructing, financing, owning, facilitating, planning, operating, maintaining, or studying construction of new or upgraded electric power transmission lines under this authority by seeking requests from entities interested in identifying potential projects through one or more notices published in the Federal Register.

2. Uses revenues from projects developed under this authority as the only source of revenue for—

 a. Repayment of the associated loan for the project and

 b. Payment of expenses for ancillary services, and operation and maintenance.

 c. Payments for ancillary services that will be credited to the existing power system providing these services, when the existing Federal power system is the source of the ancillary services.

3. Maintains appropriate controls to ensure, for accounting and repayment purposes, each transmission line and related facility project in which Western participates under this authority is treated as separate and distinct from—

 a. each other such project and

 b. all other Western power and transmission facilities.

Proposed Program

I. Table of Contents

II. Definitions

III. Project Funding

A. Applicability

B. Criteria

C. Policies and Practices

IV. Project Evaluation

A. Applicability

B. Criteria

C. Policies and Practices

V. Project Development and Operations and Maintenance

A. Applicability

B. Policies and Practices

VI. Project Rates and Repayment

A. Applicability

B. Criteria

C. Policies and Practices

VII. Effective Date

II. Definitions

A. The term “Administrator” means the Administrator of Western.

B. The term “entity” means the firm or business concern that seeks to participate with Western under this authority.

III. Project Funding

A. Applicability: All Projects selected for funding under this authority are proposed to be governed by the principles, policies, and practices outlined in this notice.

B. Criteria: All projects selected for funding under this authority would be evaluated based on the reasonable likelihood that the project will generate enough transmission service revenue to repay the principal investment, all operating costs and the accrued interest.

C. Policies and Practices:

1. Western will use generally accepted accounting principles and practices in recording and tracking all expenses and revenue transactions for each Project selected.

2. Western will isolate these financial accounting transactions in its existing financial management system.

IV. Project Evaluation

A. Applicability: All Projects to be considered for funding under this authority would be evaluated against the criteria outlined below.

B. Criteria: Project evaluation includes feasibility of developing a project that meets the following minimum criteria:

1. Facilitates the delivery of energy from renewable resources to market,

2. Is in the public interest,

3. Will not adversely impact system reliability or operations, or other statutory obligations,

4. Is reasonable to expect that the proceeds from such project shall be adequate to meet Western's financial repayment obligations, and

5. At least one terminus must be located within Western's service territory.

C. Policies and Practices:

1. Western will establish additional evaluation factors to evaluate proposed Projects as necessary.

2. Western may, at its discretion, use outside expertise to assist in evaluating proposed Projects seeking funding under this authority.

3. Western will treat data submitted by Project participants related to this authority, including project descriptions, participation and financing arrangements by other parties, as available to the public through the FOIA. However, participants may request confidential treatment of all or part of a submitted document under FOIA's exemption for “Confidential Business Information.” Materials so designated and which meet the criteria stipulated in the FOIA will be treated as exempt from FOIA inquiries.

V. Project Development and Operations and Maintenance

A. Applicability: All Projects to be considered for funding under this authority.

B. Policies and Practices:

1. For study, facility development, construction and any other related purposes, where applicable, Western will consider projects that may be constructed pursuant to its authority under section 402 of the Recovery Act separately from procedures and requirements for arranging for transmission service or interconnection under its OATT, or related interconnection agreements. To the extent projects considered under this authority might satisfy OATT or related requests, Western will attempt to develop the project to satisfy those requests, however project development under section 402 of the Recovery Act will take priority. Western will use the appropriate project management methods to initiate, plan, execute, monitor, control and close all transmission projects approved for funding under this authority.

2. Available transfer capability surplus to Western's need will be made available in a nondiscriminatory manner consistent with FERC open access transmission rules, Federal statute, and Western policies.

3. Western will comply with all other applicable Federal laws, regulations and policies.

VI. Project Rates and Repayment

A. Applicability: All Projects funded under this authority.

B. Criteria: The repayment requirements and applicable transmission rates will be designed so that proceeds from the project can reasonably be expected to be adequate to meet the repayment obligation.

C. Policies and Practices:

1. Before project development, Western will confirm the reasonable likelihood that the project will generate enough transmission service revenue to meet Western's financial repayment obligations including principal investment, operating costs, accrued interest, and other appropriate costs.

2. Transmission rates for transmission capacity Western owns or controls will be developed in a public process following the applicable requirements outlined in 10 CFR 903 and set by the Administrator as specified in relevant DOE orders.

Environmental Compliance

In compliance with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321, et seq.), the Council on Environmental Quality Regulations for implementing NEPA (40 CFR parts 1500-1508) and the DOE NEPA Implementing Procedures and Guidelines (10 CFR part 1021), Western has determined that this action is categorically excluded from further NEPA analysis. Future actions under this authority will undergo appropriate NEPA analysis.

Dated: February 20, 2009.

Timothy J. Meeks,

Administrator.