[Federal Register Volume 76, Number 91 (Wednesday, May 11, 2011)]
[Notices]
[Pages 27342-27344]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-11525]
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DEPARTMENT OF THE INTERIOR
Central Utah Project Completion Act; Notice of Intent To Accept
Proposals, Select a Potential Lessee, and Contract for Hydroelectric
Power Development at the Spanish Fork Flow Control Structure
AGENCY: Office of the Assistant Secretary--Water and Science,
Department of the Interior.
ACTION: Notice.
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SUMMARY: Current Federal policy encourages non-Federal development of
environmentally sustainable hydropower 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 the Spanish Fork Flow Control
Structures of the Central Utah Project (CUP). 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 under the administration of the Assistant
Secretary for Water and Science. This notice presents background
information, proposal content guidelines, and information concerning
selection of a non-Federal entity to develop hydroelectric power at the
Spanish Fork Flow Control Structure, and power purchasing and/or
marketing considerations. Interested entities are invited to submit a
proposal for hydroelectric power development at the Spanish Fork Flow
Control Structure site for consideration by Interior.
DATES: A written proposal and seven copies must be submitted on or
before 5 p.m. (MST), on October 14, 2011. A proposal will be considered
timely only if it is received in the office of the Program Director by
or before 5 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.
ADDRESSES: Send written proposals and seven copies to Mr. Reed R.
Murray, Program Director, Central Utah Project Completion Act,
Department of the Interior, 302 East 1860 South, Provo, UT 84606-7317.
Requests for technical data should also be sent to Mr. Murray. Any
release of such data will be subject to applicable Homeland Security
laws and policy.
A copy of the proposal should also be sent to Ms. LaVerne Kyriss,
CRSP Manager, Western Area Power Administration, 150 Social Hall
Avenue, Suite 300, Salt Lake City, UT 84111-1580. Information related
to Western's purchasing and/or marketing the power may also be obtained
from Ms. Kyriss at the address above, or by calling (801) 524-6372.
Information related to the operation and maintenance of the Spanish
Fork Flow Control Structure may be obtained from Mr. Rich Tullis,
Central Utah Water Conservancy District, 355 West University Parkway,
Orem, UT 84058-7303; or by calling (801) 226-7122.
FOR FURTHER INFORMATION CONTACT: Mr. Lynn Hansen, (801) 379-1238.
SUPPLEMENTARY INFORMATION:
Background Information: The CUP, Bonneville Unit, located in
northern Utah, was originally 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 Spanish Fork
Flow Control Structure was constructed under 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). CUPCA also authorized the
construction of other features of the Bonneville Unit. Section 208 of
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. Section 208 also specifies that water diverted for power
purposes shall only be incidental
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to the delivery of water for other authorized project purposes. The
Central Utah Water Conservancy District (District), under its contracts
with the United States and under CUPCA has certain responsibilities and
obligations for the CUP and specifically for the Spanish Fork Flow
Control Structure including operation, maintenance, replacement, and
repayment.
Interior, in consultation with Western, is considering
hydroelectric power development at the Spanish Fork Flow Control
Structure through a lease of power privilege. A lease of power
privilege is an alternative to Federal hydroelectric power development.
A lease of power privilege is a contractual right given to a non-
Federal entity to use a Reclamation facility for electric power
generation consistent with Reclamation project purposes. 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, Section 5 of the Town Sites and Power Development Act of
1906 (43 U.S.C. 522) and Section 9(c) of 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 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 the Spanish Fork Flow Control Structure
must accommodate existing contractual commitments related to operation
and maintenance of such existing facilities. The potential lessee
(i.e., successful proposing entity) would be required to coordinate
with the District in the operation and maintenance of any proposed
hydropower developments with existing project 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. Western would have 60 days from
the date of notification of selection of a potential lessee in which to
decide whether to purchase and/or market the power.
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. Depending on the economic capability of the
proposed hydroelectric development, this amount will not be less than 3
mills per kilowatt-hour of generation. If conditions provide
opportunity for substantial benefit to accrue to the lessee, then the
United States will benefit proportionally. Also, under the lease of
power privilege, provisions will be included for inflation of the
annual payment with time. Such annual payments to the United States
would be deposited as a credit to the Upper Colorado River Basin Fund.
Interested Parties: 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. Western will
also be available to meet with Interior and interested entities to
discuss Western's potential marketing of hydropower.
Proposal Content Guidelines: Interested parties should submit a
proposal explaining in as precise detail as is practicable how the
hydropower potential at the site would be developed. 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 9(c) of the Reclamation Project
Act of 1939, 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 the 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. To determine the
marketability of the generated hydropower, Western requires the
following information: cost of delivered generation in $/megawatt-hour,
including any variations in cost (on-peak, off-peak, seasonal),
including escalation factors and any other charges; delivery point and
voltage of generation plus any arrangements the lessee has to wheel
power to an alternate location(s); the daily, weekly, monthly, and
annual pattern of expected generation under average, wet, and dry
hydrological conditions; ability of generation to provide ancillary
services such as regulation, spinning reserves, and volt-ampere
reactive support; and information on the reliability of the generation,
potential maintenance outage schedule, and duration.
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. 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.
E. Describe any contractual arrangements with the entity having
operation and maintenance responsibility for the CUP feature(s) that
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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.
F. Identify plans for assuming liability for damage to the
operational and structural integrity of the CUP caused by construction,
operation, and/or maintenance of the hydropower development.
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; and the anticipated return on investment. 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 the Potential Lessee: Interior, in consultation with
Western, will evaluate proposals received in response to this published
notice. Interior may request additional information from individual
proposing entities and/or all proposing entities after proposals are
submitted, but prior to making a selection of a potential lessee.
Interior will give more favorable consideration to proposals that
(1) utilize water and natural resources in an environmentally and
economically sound manner: (2) improve ecosystem function; (3) clearly
demonstrate that the offeror is qualified to develop the hydropower
facility and provide for long-term operation and maintenance, and (4)
best share the economic benefits of the hydropower development among
parties (including the United States) to the lease of power privilege.
A proposal will be deemed unacceptable if it is inconsistent with CUP
purposes, as 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. Through written notice, all
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 within 60 days of notification of selection of a potential lessee,
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. This period may only be extended
by the United States in writing.
Dated: May 4, 2011.
Reed R. Murray,
Program Director, Department of the Interior.
[FR Doc. 2011-11525 Filed 5-10-11; 8:45 am]
BILLING CODE 4310-MN-P