[Federal Register Volume 76, Number 184 (Thursday, September 22, 2011)]
[Notices]
[Pages 58837-58839]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-24335]
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DEPARTMENT OF THE INTERIOR
Bureau of Reclamation
Notice of Intent to Accept Proposals, Select Lessee, and Contract
for Hydroelectric Power Development at Caballo Dam, Rio Grande Project,
New Mexico
AGENCY: Bureau of Reclamation, 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 Bureau of Reclamation (Reclamation), in
consultation with the Department of Energy, Western Area Power
Administration (Western), will consider proposals for non-Federal
development of hydroelectric power at Caballo Dam, a feature of the Rio
Grande Project. Reclamation 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 Rio
Grande Project is a Federal Reclamation project. This notice presents
background information, proposal content guidelines, and information
concerning selection of a non-Federal entity to develop hydroelectric
power at Caballo Dam.
DATES: A written proposal and seven copies must be submitted on or
before 5 p.m. (MST) on January 20, 2012. A proposal will be considered
timely only if it is received in the office of the Area Manager 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 proposal and seven copies to Mr. Mike Hamman,
Area Manager, Albuquerque Area Office, Bureau of Reclamation, 555
Broadway Avenue, NE., Suite 100, Albuquerque, New Mexico 87102,
telephone (505) 462-3540.
A copy of the proposal should also be sent at or about the time it
is due at Reclamation to: CRSP Manager, Western Area Power
Administration, 150 Social Hall Avenue, Suite 300, Salt Lake City, Utah
84111-1534. Western is available to meet with Reclamation and
interested entities to discuss Western's potential marketing of
hydropower.
FOR FURTHER INFORMATION CONTACT: Technical data may be obtained by
contacting Ms. Kathleen Dickinson, Albuquerque Area Office, Bureau of
Reclamation, 555 Broadway Avenue, NE., Suite 100, Albuquerque, New
Mexico 87102, e-mail: [email protected]. Reclamation will be
available to meet with interested entities only upon written request to
Ms. Kathleen Dickinson at the above cited address. Reclamation will
provide an opportunity for a site visit. In addition, Reclamation
reserves the right to schedule a single meeting and/or visit to address
the questions of all entities that have submitted questions or
requested site visits.
Information related to Western's purchasing and/or marketing of the
power may be obtained by contacting Ms. LaVerne Kyriss, CRSP Manager,
Western Area Power Administration, 150 Social Hall Avenue, Suite 300,
Salt Lake City, Utah 84111-1534, telephone (801) 524-6372.
SUPPLEMENTARY INFORMATION: Construction of the Rio Grande Project was
authorized by the Secretary of the Interior (Secretary) on December 2,
1905, under provisions of the Reclamation Act of 1902 (Act of June 17,
1902, 32 Stat. 388). The Reclamation Act was extended to the entire
state of Texas on June 12, 1906 (34 Stat. 259), following a partial
extension for Engle (Elephant Butte) Dam in 1905 (33 Stat. 814).
Caballo Dam was included as a flood control unit in the Rio Grande
Canalization Project (Act of June 4, 1936, 49 Stat. 1463). Construction
of Caballo Dam took place from 1936 to 1938. Flood control operations
of the dam are governed by the agreement of October 9, 1935, between
the Departments of State and Interior. Caballo Reservoir has a surface
area of about 11,500 acres and is located approximately 17 miles south
of Truth or Consequences, New Mexico. Caballo
[[Page 58838]]
Reservoir also provides replacement for storage lost at Elephant Butte
Reservoir due to silt deposition and enables more efficient power
generation at Elephant Butte Dam. Additional information about the Rio
Grande Project can be found at: http://www.usbr.gov/projects/Project.jsp?proj_Name=Rio+Grande+Project. Additional information about
Caballo Reservoir operations can be found at: http://www.usbr.gov/uc/crsp/GetSiteInfo.
Reclamation, in consultation with Western, is considering
hydroelectric power development at Caballo Dam under 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, 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). Reclamation will be
the lead Federal agency for ensuring compliance with the National
Environmental Policy Act (NEPA) and all other relevant Federal
environmental compliance laws such as the Endangered Species Act,
National Historic Preservation Act, and Clean Water Act for any lease
of power privilege considered in response to this notice. Leases of
power privilege may be issued only when Reclamation, upon completion of
the NEPA process, determines that the proposed hydropower development
is environmentally acceptable. Any lease of power privilege at Caballo
Dam must accommodate existing contractual and environmental commitments
related to operation and maintenance of existing Rio Grande Project
facilities, including water delivery contracts, flood control
operations, and compliance with the Rio Grande Compact (Act of May 31,
1939, 53 Stat 785) and the convention between the United States and
Mexico concluded on May 21, 1906. Caballo Reservoir storage levels must
comply with the Court Order CIV-90-95 HB/WWD, dated October 17, 1996.
The lessee (i.e., successful proposing entity) would be required to
coordinate operation and maintenance of any proposed hydropower
development with existing Federal features. The lessee will be required
to meet all Bulk Electric System (BES) electrical reliability standards
that apply to the proposed hydro-generation facilities.
Western would have the first opportunity to purchase and/or market
the power that would be generated under any lease of power privilege.
Western would have 60 days from the date of notification of selection
of a 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
environmental compliance, engineering reviews, and development of the
lease of power privilege, would be at 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 Federal Government facility. Depending
on the economic viability of the proposed hydropower development, this
amount will be not less than 3 mills per kilowatt-hour of generation.
If conditions provide opportunity for substantial benefits 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 Reclamation Fund.
Proposal Content Guidelines
Interested parties should submit proposals explaining in as precise
detail as is practicable how the hydropower potential 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 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 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
and BES electrical reliability compliance 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 used, acquired, or perfected. No new net depletions
will be permitted since the Rio Grande is already fully appropriated.
(e) Discuss any studies necessary to adequately define impacts on
the Rio Grande Project 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 Reclamation,
which has operation and maintenance responsibility, for any Rio Grande
Project feature(s) that are proposed for utilization in the hydropower
development under consideration. Define how the hydropower development
would operate in harmony with the multiple purposes of the Rio Grande
Project, existing applicable water delivery contracts, flood control
operations, compliance with court-
[[Page 58839]]
ordered reservoir storage levels, the Rio Grande Compact (Act of May
31, 1939, 53 Stat 785), the convention between the United States and
Mexico concluded on May 21, 1906, and the treaty between the United
States and Mexico dated February 1, 1933.
(g) Describe plans for continuing downstream flows during
construction that are required to meet irrigation demands, flood
control operations, and Rio Grande Compact and international treaty
requirements.
(h) Describe plans for assuming liability for damage to the
operational and structural integrity of the Rio Grande Project caused
by construction, operation, and/or maintenance of the hydropower
development.
(i) Identify the organizational structure planned for the long-term
operation and maintenance of any proposed hydropower development.
(j) Provide a management plan to accomplish such activities as
planning, environmental and electrical reliability 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.
(k) Estimate development cost. This cost should include all
investment costs such as the cost of studies to determine feasibility,
environmental and electrical reliability 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; annual payments to the United
States; expenses that may be associated with the Rio Grande Project;
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 Lessee
Reclamation, in consultation with Western, will evaluate proposals
received in response to this published notice. Reclamation 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 lessee.
Reclamation will give more favorable consideration to proposals
that (1) are well adapted to developing, conserving, improving, and
utilizing the water and natural resources in an environmentally and
economically sound manner; (2) clearly demonstrate that the offeror is
qualified to develop the hydropower facility and provide for long-term
operation and maintenance; and (3) 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 Rio Grande Project purposes, as determined
by Reclamation. Reclamation 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
submitting proposals 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 of power
privilege. Western will consult with Reclamation on such power
purchasing and/or marketing considerations.
Western may market the power available from the project as part of,
and under the existing marketing plan of, its Salt Lake City Area
Integrated Projects. Western may also market the power 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 lessee, the
lessee 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). In addition, if
Western elects to not purchase and or market the power generated by the
hydropower development, the Lessee will be responsible to coordinate
the appropriate transmission service that may be required.
Notice and Time Period To Enter Into Lease of Power Privilege
Reclamation will notify, in writing, all entities submitting
proposals of Reclamation's decision regarding selection of the
potential lessee. The selected potential lessee will have two years
from the date of such notification to accomplish NEPA compliance and
enter into a lease of power privilege for the proposed development of
hydropower at Caballo Dam. 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 two-year time period for a period equal to that of the
delay. In the event of litigation related to the proposed project, the
two-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 or its employees, officers, agents, assigns,
shareholders, customers, or persons or groups served by or in privity
with the potential lessee. The lessee will then have up to two years
from the date of execution of the lease to complete the designs and
specifications and an additional year to begin construction.
Dated: August 8, 2011.
Larry Walkoviak,
Regional Director, Upper Colorado Region.
[FR Doc. 2011-24335 Filed 9-21-11; 8:45 am]
BILLING CODE 4310-MN-P