[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] ======================================================================= ----------------------------------------------------------------------- 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. ----------------------------------------------------------------------- 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