[Federal Register Volume 64, Number 127 (Friday, July 2, 1999)]
[Notices]
[Pages 36030-36032]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16852]
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DEPARTMENT OF THE INTERIOR
Office of the Assistant Secretary for Water and Science; Notice
of Intent To Contract for Hydroelectric Power Development at the Jordan
Aqueduct, Reach 4, Flow Control Structure (Jordan Aqueduct) and at
Jordanelle Dam, Features of the Central Utah Project (CUP), Utah
AGENCY: Office of the Assistant Secretary for Water and Science,
Department of the Interior.
ACTION: Notice of intent to accept proposals, select one or more
lessees, and contract for hydroelectric power development at Jordanelle
Dam and Jordan Aqueduct.
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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
at Jordanelle Dam and Jordan Aqueduct of the CUP, Utah. 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 is a Federal Bureau of
Reclamation (Reclamation) project. This notice presents background
information, proposal content guidelines, information concerning
selection of one or more non-Federal entities to develop hydroelectric
power at Jordanelle Dam and on the Jordan Aqueduct, and power
purchasing and/or marketing considerations. Interested entities are
invited to submit on one or both of these projects. That is, Interior
will consider proposals by interested entities on only Jordanelle Dam,
on only Jordan Aqueduct, or on both projects.
DATES: A written proposal and seven copies must be submitted on or
before 5:00 p.m. (MST), on January 7, 2000, to: Mr. Ronald Johnston,
Program Director, Central Utah Project Completion Act, Department of
the Interior, 302 East 1860 South, Provo UT 84606-7317, Telephone:
(801) 379-1103.
A proposal will be considered timely only if it is received in the
office of the Program Director by or before 5:00 p.m. on the designated
date. Interested entities are cautioned that delayed delivery to this
office due to failures or misunderstandings of the entity and/or of
mail, overnight, or courier services will not excuse lateness and,
accordingly, are advised to provide sufficient time for delivery. Late
proposals will not be considered.
A copy of the proposal should also be sent at or about the time it
is due at Interior to: Mr. Dave Sabo, CRSP Manager, Western Area Power
Administration, 257 East 200 South, Suite 475, Salt Lake City UT 84111-
0606.
FOR FURTHER INFORMATION: Contact Technical data may be obtained at the
address and telephone number set forth below:
Mr. Ronald Johnston, Program Director, Central Utah Project Completion
Act, Department of the Interior, 302 East 1860 South, Provo UT 84606-
7317, Telephone: (801) 379-1103
Interior will be available to meet with interested entities only
upon written request to the Program Director at the above address.
Interior reserves the right to schedule a single meeting and/or visit
to address at once the questions of all entities that have submitted
questions or requested site visits.
Information related to Western's purchasing and/or marketing the
power may be obtained at the address and telephone number set forth
below:
Mr. Dave Sabo, CRSP Manager, Western Area Power Administration, 257
East 200 South, Suite 475, Salt Lake City UT 84111-0606, Telephone:
(801) 524-6372
Information related to the operation and maintenance of Jordanelle
Dam and Jordan Aqueduct may be obtained at the address and telephone
number set forth below:
Mr. Rich Tullis, Central Utah Water Conservancy District, 355 West
University Parkway, Orem UT 84058-7303, (801) 226-7122
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 (ch. 203, 70 Stat. 105)
(CRSP Act). The United States constructed Jordanelle Dam and Jordan
Aqueduct under the CRSP Act. The Central Utah Project Completion Act
(CUPCA), comprised of Titles II-VI of the Act of October 30, 1992 (106
Stat. 4600, Pub. L. 102-575) authorized the construction of other
features of the Bonneville Unit. 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
Central Utah Water Conservancy District (District), under its contracts
with the United States, has certain operation, maintenance,
replacement, and repayment responsibilities and obligations concerning
the Bonneville Unit, which includes such responsibility for Jordanelle
Dam and Jordan Aqueduct. The District has contracted with the Salt Lake
County Water Conservancy District for the operation and maintenance of
Jordan Aqueduct.
Interior, in consultation with Western, is considering
hydroelectric power development at Jordanelle Dam and the Jordan
Aqueduct through one or more leases of power privilege. A lease of
power privilege is an alternative to Federal hydroelectric power
development. A lease of power privilege grants to a non-Federal entity
the right to utilize, consistent with CUP purposes, water power head or
storage at and/or operationally in conjunction with the CUP, for non-
Federal electric power generation and sale by the entity. Leases of
power privilege have terms not to exceed 40 years. The general
authority for lease of power privilege under Reclamation law includes,
among others, 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.
485h(c)) (1939 Act). Interior will be the lead Federal agency for
ensuring compliance with the
[[Page 36031]]
National Environmental Policy Act (NEPA) of any lease of power
privilege considered in response to this notice. Leases of power
privilege may be issued only when Interior, upon completion of the NEPA
process, determines that the affected hydroelectric power sites are
environmentally acceptable. Any lease of power privilege at either
Jordanelle Dam or Jordan Aqueduct must accommodate existing contractual
commitments related to operation and maintenance of such existing
facilities. The lessee (i.e., successful proposing entity) would be
required to enter into a contract with the District to coordinate
operation and maintenance of any proposed hydropower developments with
existing Federal features.
Western would have the first opportunity to purchase and/or market
the power that would be generated under any lease 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 costs incurred by the United States related to development and
operation and maintenance under a lease of power privilege, including
NEPA compliance and development of the lease of power privilege, would
be the expense of the lessee. In addition, the lessee would be required
to make annual payments to the United States for the use of a
Government facility. This amount will be at least 1 mill per kilowatt-
hour but not more than 3 mills per kilowatt-hour of generation,
depending on the economic capability of the proposed hydropower
development. Such annual payments to the United States would be
deposited as a credit to the Upper Colorado River Basin Fund.
Proposal Content Guidelines
Interested parties should submit one or more proposals explaining
in as precise detail as is practicable how the hydropower potential at
each site would be developed. As noted, proposals may be submitted for
one or both sites (i.e., Jordan Aqueduct or Jordanelle Dam or both). If
proposals are submitted for both sites, they must be submitted as
independent proposals. Factors which a proposal should consider and
address include, but are not limited to, the following:
A. Provide all information relevant to the qualifications of the
proposing entity to plan and implement such a project, including, but
not limited to, information about preference status, type of
organization, length of time in business, experience in funding, design
and construction of similar projects, industry rating(s) that indicate
financial soundness and/or technical and managerial capability,
experience of key management personnel, history of any reorganizations
or mergers with other companies, and any other information that
demonstrates the interested entity's organizational, technical and
financial ability to perform all aspects of the work. Include a
discussion of past experience in operating and maintaining similar
facilities and provide references as appropriate. The term ``preference
entity,'' as applied to a lease of power privilege, means an entity
qualifying for preference under Section 9c 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, as amended.
B. Provide geographical locations and describe principal structures
and other important features of the proposed development 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 proposed
development(s), including such additional lands as may be required
during construction.
D. Identify water rights applicable to the operation of the
proposed development(s), the holder of such rights, and how these
rights would be acquired or perfected.
E. Discuss any studies necessary to adequately define impacts on
the CUP and the environment of the development. Describe any
significant environmental issues associated with the development and
the proposing entity's approach for gathering relevant data and
resolving such issues to protect and enhance the quality of the
environment. Explain any proposed use of the hydropower development for
conservation and utilization of the available water resources in the
public interest.
F. Describe anticipated contractual arrangements with the entity or
entities having operation and maintenance responsibility for the CUP
feature(s) that are proposed for utilization in the hydropower
development under consideration. Define how the hydropower development
would operate in harmony with the CUP and existing applicable contracts
related to operation and maintenance of CUP feature(s) being considered
for modification.
G. Identify the organizational structure planned for the long-term
operation and maintenance of any proposed hydropower development.
H. Provide a management plan to accomplish such activities as
planning, NEPA compliance, lease of power privilege development,
design, construction, facility testing, and start of hydropower
production. 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.
I. Estimate 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 hydropower development;
lease payments to the United States; and expenses that may be
associated with the CUP. If there are additional transmission or
wheeling expenses associated with the development of the hydropower
development, these should be included. Identify proposed methods of
financing the hydropower development. An economic analysis should be
presented that compares the present worth of all benefits and costs of
the hydropower development.
Selection of Lessee
Interior, in consultation with Western, will evaluate proposals
received in response to this published notice.
Interior will give more favorable consideration to proposals that
(1) are well-adapted to developing, conserving, and utilizing the water
and natural resources, (2) clearly demonstrate that the offeror is
qualified to develop the hydropower facility and provide for long-term
operation and maintenance, and (3) develop the hydropower potential
economically. A proposal will be deemed unacceptable if it is
inconsistent with CUP purposes, as
[[Page 36032]]
determined by Interior. Interior will give preference to those entities
that qualify as preference entities (as defined under PROPOSAL CONTENT
GUIDELINES, item A.) provided that their proposal is at least as well-
adapted to developing, conserving, and utilizing the water and natural
resources as other submitted proposals and that the preference entity
is well qualified. Preference entities would be allowed 90 days to
improve their proposals, if necessary, to be made at least equal to a
proposal(s) that may have been submitted by a non-preference entity.
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 may market the power available from the project as part of
its Salt Lake City Area Integrated Projects (SLCA/IP) or 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 hydropower development 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, item A.
Notice and Time Period To Enter Into Lease of Power Privilege
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. Such lease(s) of power
privilege will state whether and 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: June 28, 1999.
Ronald Johnston,
CUPCA Program Director, Department of the Interior.
[FR Doc. 99-16852 Filed 7-1-99; 8:45 am]
BILLING CODE 4310-RK-P
