Amendment

Section 9 of the Act entitled An Act authorizing construction of water conservation and utilization projects in the Great Plains and arid semiarid areas of the United States, approved August 11, 1939 (16 U.S.C. 590z–7; commonly known as the Water Conservation and Utilization Act), is amended— (1) by striking In connection with and inserting (a) In connection with; and (2) by adding at the end the following:

(b) Notwithstanding subsection (a), the Secretary is authorized to enter into leases of power privileges for electric power generation in connection with any project constructed under this Act, and shall have authority in addition to and alternative to any authority in existing laws relating to particular projects, including small conduit hydropower development. (c) When entering into leases of power privileges under subsection (b), the Secretary shall use the processes applicable to such leases under section 9(c) of the Reclamation Project Act of 1939 (43 U.S.C. 485h(c)). (d) Lease of power privilege contracts shall be at such rates as, in the Secretary’s judgment, will produce revenues at least sufficient to cover the appropriate share of the annual operation and maintenance cost of the project and such fixed charges, including interest, as the Secretary deems proper. Lease of power privilege contracts shall be for periods not to exceed 40 years. (e) No findings under section 3 shall be required for a lease under subsection (b). (f) All right, title, and interest to installed power facilities constructed by non-Federal entities pursuant to a lease of power privilege, and direct revenues derived therefrom, shall remain with the lessee unless otherwise required under subsection (g). (g) Notwithstanding section 8, lease revenues and fixed charges, if any, shall be covered into the Reclamation Fund to be credited to the project from which those revenues or charges were derived. (h) When carrying out this section, the Secretary shall first offer the lease of power privilege to an irrigation district or water users’ association operating the applicable transferred conduit, or to the irrigation district or water users’ association receiving water from the applicable reserved conduit. The Secretary shall determine a reasonable timeframe for the irrigation district or water users’ association to accept or reject a lease of power privilege offer. If the irrigation district or water users’ association elects not to accept a lease of power privilege offer under subsection (b), the Secretary shall offer the lease of power privilege to other parties using the processes applicable to such leases under section 9(c) of the Reclamation Project Act of 1939 (43 U.S.C. 485h(c)). (i) The Bureau of Reclamation shall apply its categorical exclusion process under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) to small conduit hydropower development under this section, excluding siting of associated transmission facilities on Federal lands. (j) Nothing in this section shall obligate the Western Area Power Administration or the Bonneville Power Administration to purchase or market any of the power produced by the facilities covered under this section and none of the costs associated with production or delivery of such power shall be assigned to project purposes for inclusion in project rates. (k) Nothing in this section shall alter or impede the delivery and management of water by Bureau of Reclamation facilities, as water used for conduit hydropower generation shall be deemed incidental to use of water for the original project purposes. Lease of power privilege shall be made only when, in the judgment of the Secretary, the exercise of the lease will not be incompatible with the purposes of the project or division involved and shall not create any unmitigated financial or physical impacts to the project or division involved. The Secretary shall notify and consult with the irrigation district or legally organized water users’ association operating the transferred conduit in advance of offering the lease of power privilege and shall prescribe such terms and conditions necessary to adequately protect the planning, design, construction, operation, maintenance, and other interests of the United States and the project or division involved. (l) Nothing in this section shall alter or affect any agreements in effect on the date of the enactment of the Bureau of Reclamation Conduit Hydropower Development Equity and Jobs Act for the development of conduit hydropower projects or disposition of revenues. (m) In this section: (1) The term conduit means any Bureau of Reclamation tunnel, canal, pipeline, aqueduct, flume, ditch, or similar manmade water conveyance that is operated for the distribution of water for agricultural, municipal, or industrial consumption and not primarily for the generation of electricity. (2) The term irrigation district means any irrigation, water conservation or conservancy, multi-county water conservation or conservancy district, or any separate public entity composed of two or more such districts and jointly exercising powers of its member districts. (3) The term reserved conduit means any conduit that is included in project works the care, operation, and maintenance of which has been reserved by the Secretary, through the Commissioner of the Bureau of Reclamation. (4) The term transferred conduit means any conduit that is included in project works the care, operation, and maintenance of which has been transferred to a legally organized water users’ association or irrigation district. (5) The term small conduit hydropower means a facility capable of producing 5 megawatts or less of electric capacity.