[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