[Senate Report 108-231]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 441
108th Congress                                                   Report
                                 SENATE
 2d Session                                                     108-231

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             WATER STORAGE IN THE KENDRICK PROJECT, WYOMING

                                _______
                                

                 March 9, 2004.--Ordered to be printed

                                _______
                                

   Mr. Domenici, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 943]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 943) to authorize the Secretary of the 
Interior to enter into 1 or more contracts with the city of 
Cheyenne, Wyoming, for the storage of water in the Kendrick 
Project, Wyoming, having considered the same, reports favorably 
thereon with an amendment and an amendment to the title and 
recommends that the bill, as amended, do pass.
    The amendments are as follows:
    1. Strike out all after the enacting clause and insert in 
lieu thereof the following:

SECTION 1. WATER STORAGE CONTRACTS.

  (a) Definitions.--In this Act:
          (1) City.--The term ``city'' means--
                  (A) the city of Cheyenne, Wyoming;
                  (B) the Board of Public Utilities of the city; and
                  (C) any agency, public utility, or enterprise of the 
                city.
          (2) Kendrick project.--The term ``Kendrick Project'' means 
        the Bureau of Reclamation project on the North Platte River 
        that was authorized by a finding of feasibility approved by the 
        President on August 30, 1935, and constructed for irrigation 
        and electric power generation, the major features of which 
        include--
                  (A) Seminoe Dam, Reservoir, and Powerplant; and
                  (B) Alcova Dam and Powerplant.
          (3) Secretary.--The term ``Secretary'' means the Secretary of 
        the Interior, acting through the Commissioner of Reclamation.
          (4) State.--The term ``State'' means the State of Wyoming.
  (b) Contracts.--
          (1) In general.--The Secretary may enter into 1 or more 
        contracts with the city for annual storage of the city's water 
        for municipal and industrial use in Seminoe Dam and Reservoir 
        of the Kendrick Project.
          (2) Conditions.--
                  (A) Term; renewal.--A contract under paragraph (1) 
                shall--
                          (i) have a term of not more than 40 years; 
                        and
                          (ii) may be renewed on terms agreeable to the 
                        Secretary and the city, for successive terms of 
                        not more than 40 years per term.
                  (B) Revenues.--Notwithstanding the Act of May 9, 1938 
                (52 Stat. 322, chapter 187; 43 U.S.C. 392a)--
                          (i) any operation and maintenance charges 
                        received under a contract executed under 
                        paragraph (1) shall be credited against 
                        applicable operation and maintenance costs of 
                        the Kendrick Project; and
                          (ii) any other revenues received under a 
                        contract executed under paragraph (1) shall be 
                        credited to the Reclamation Fund as a credit to 
                        the construction costs of the Kendrick Project.
                  (C) Effect on existing contractors.--A contract under 
                paragraph (1) shall not adversely affect the Kendrick 
                Project, any existing Kendrick Project contractor, or 
                any existing Reclamation contractor on the North Platte 
                River System.

    2. Amend the title so as to read: ``A bill to authorize the 
Secretary of the Interior to contract with the city of 
Cheyenne, Wyoming, for the storage of the city's water in the 
Kendrick Project, Wyoming.''.

                         PURPOSE OF THE MEASURE

    The purpose of S. 943 is to authorize the Secretary of the 
Interior to enter into one or more contracts with the city of 
Cheyenne, Wyoming, for the storage of the city's water in the 
Kendrick Project, Wyoming.

                          BACKGROUND AND NEED

    The Kendrick Project (formerly Casper-Alcova), located in 
Carbon and Natrona Counties in Central Wyoming, provides water 
from the North Platte River for irrigation and electrical power 
generation. Major features of the project include: Seminoe Dam, 
Reservoir, and Powerplant; and Alcova Dam, Reservoir, and 
Powerplant. The city of Cheyenne, Wyoming, through its Board of 
Public Utilities, has developed a water supply system, a 
component of which involves storage at Seminoe Reservoir.
    In 1983, the Bureau of Reclamation and the city of Cheyenne 
entered into an Interim Water Storage Contract which provided 
the city with 10,000 acre feet of storage space at Seminoe 
Reservoir. This agreement allowed the city to store water for 
use in the spring and summer months to compensate for water 
that the city released during winter months to fulfill minimum 
flow requirements for fish habitat. The original agreement was 
for a term of fifteen years, with the option for a five-year 
renewal. The agreement also provided that the city, like other 
Kendrick Project users, would pay a reasonable sum for storage 
rights. The original agreement and the five-year extension have 
now expired. Since the original agreement, the Bureau has only 
given the city one-year storage contracts. This legislation 
clarifies the authority of the Bureau of Reclamation to enter 
into long-term contracts with the city of Cheyenne for the 
storage of the city's water for municipal and industrial use in 
Seminoe Reservoir.

                          LEGISLATIVE HISTORY

    S. 943 was introduced by Senator Enzi on April 29, 2003. 
The Water and Power Subcommittee held a hearing on S. 943 on 
October 15, 2003. S. Hrg. 108-271. At the business meeting on 
February 11, 2004, the Committee on Energy and Natural 
Resources ordered S. 943, favorably reported with an amendment 
in the nature of a substitute.

           COMMITTEE RECOMMENDATIONS AND TABULATIONS OF VOTES

    The Committee on Energy and Natural Resources, in open 
business session on February 11, 2004, by a unanimous vote of a 
quorum present, recommends that the Senate pass S. 943, if 
amended as described herein.
    The rollcall vote on reporting the measure was 23 yeas, 0 
nays, as follows:
        YEAS                          NAYS
Mr. Domenici
Mr. Nickles
Mr. Craig
Mr. Campbell *
Mr. Thomas
Mr. Alexander
Ms. Murkowski
Mr. Talent
Mr. Burns
Mr. Smith *
Mr. Bunning
Mr. Kyl *
Mr. Bingaman
Mr. Akaka
Mr. Dorgan *
Mr. Graham *
Mr. Wyden *
Mr. Johnson *
Ms. Landrieu *
Mr. Bayh *
Mrs. Feinstein *
Mr. Schumer *
Ms. Cantwell

    * Indicates voted by proxy.

                          COMMITTEE AMENDMENTS

    During the consideration of S. 943, the Committee adopted 
an amendment in the nature of a substitute to address the 
concerns raised by the administration during the October 15, 
2003 Water and Power Subcommittee hearing. The amendment 
clarifies that it is the city of Cheyenne's water that will be 
stored under the contract, addresses the disposition of 
revenues received, and makes other technical changes. The 
amendment is further described in the section-by-section.

                      SECTION-BY-SECTION ANALYSIS

    Section 1(a) defines key terms used in the Act.
    Subsection (b)(1) allows the Secretary to enter into 
contracts with the city of Cheyenne, Wyoming for annual storage 
of the city's water for municipal and industrial use in Seminoe 
Dam and Reservoir.
    Subsection (b)(2) limits the contract term to no more than 
40 years and sets parameters for contract renewal.
    Subsection (b)(2)(B) provides for the disposition of 
revenues received under the contract. Specifically, operation 
and maintenance charges received under a contract executed 
under paragraph (1) are to be credited against applicable 
operation and maintenance costs of the Kendrick Project. Any 
other revenues received under such a contract shall be credited 
to the Reclamation Fund as a credit to the construction costs 
of the Kendrick Project.
    Subsection (b)(2)(C) of the bill states that the contract 
shall not adversely affect the Kendrick Project, any existing 
contractor, or any existing Reclamation contractor on the North 
Platt River System.

                   COST AND BUDGETARY CONSIDERATIONS

    The following estimate of costs of this measure has been 
provided by the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, March 8, 2004.
Hon. Pete V. Domenici,
Chairman, Committee on Energy and Natural Resources, United States 
        Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 943, a bill to 
authorize the Secretary of the Interior to contract with the 
city of Cheyenne, Wyoming, for the storage of the city's water 
in the Kendrick Project, Wyoming.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Julie 
Middleton.
            Sincerely,
                                      Elizabeth M. Robinson
                               (For Douglas Holtz-Eakin, Director).
    Enclosure.

S. 943--A bill to authorize the Secretary of the Interior to contract 
        with the city of Cheyenne, Wyoming, for the storage of the 
        city's water in the Kendrick Project, Wyoming

    S. 943 would authorize the Secretary of the Interior, 
through the Bureau of Reclamation, to renew a water storage 
contract with the city of Cheyenne, Wyoming, for the storage of 
the city's municipal and industrial water. The term of this and 
subsequent contracts would be limited to 40 years.
    CBO estimates that implementing S. 943 would have no 
significant impact on the federal budget. Currently, the bureau 
provides water storage services under a temporary one-year 
water storage contract to the city of Cheyenne through the 
Kendrick Project on the North Platte River. The temporary 
contract has the same terms as the expired contract. Under the 
temporary contract, the city makes an annual payment of $70,000 
to the federal government. Under S. 943, the city would 
negotiate a contract with the federal government for water 
storage services. Under that contract, the bureau expects that 
the city would make an annual payment of about $53,000 to the 
federal government. CBO estimates that enacting S. 943 would 
decrease offsetting receipts (a form of direct spending), but 
the loss of receipts would be less than $500,000 over the 2005-
2014 period.
    S. 943 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact for this estimate is Julie Middleton. 
This estimate was approved by Peter H. Fontaine, Deputy 
Assistant Director for Budget Analysis.

                      REGULATORY IMPACT EVALUATION

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S. 943.
    The bill is not a regulatory measure in the sense of 
imposing Government-established standards or significant 
economic responsibilities on private individuals and 
businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of S. 943, as ordered reported.

                        EXECUTIVE COMMUNICATIONS

    The testimony provided by the Department of the Interior at 
the Subcommittee hearing follows:

  Statement of John W. Keys III, Commissioner, Bureau of Reclamation, 
                       Department of the Interior

    My name is John Keys and I am the Commissioner of the 
Bureau of Reclamation. I appreciate the opportunity to provide 
the Administration's views on S. 943, legislation to authorize 
the Secretary of the Interior to enter into one or more 
contracts with the City of Cheyenne, Wyoming, for the storage 
of water in the Kendrick Project in the State of Wyoming.
    Madam Chairman, the Department could support S. 943 subject 
to modifications recommended in this statement.
    The Bureau of Reclamation has several dams and reservoirs 
located on the North Platte River in Wyoming. The North Platte 
River System is operated to optimize irrigation and power 
benefits. To accomplish these activities, vacant space becomes 
available in Seminoe Reservoir as water is released to other 
downstream Reclamation reservoirs.
    By enacting S. 943, the Secretary of the Interior would be 
authorized to enter into long-term contracts with the City of 
Cheyenne to store water in Seminoe Reservoir for municipal and 
industrial use.
    The Department does not support S. 943 as drafted because 
it is vague regarding whose water is to be stored in Seminoe 
Reservoir and the disposition of revenues received. To provide 
clarity, the Department recommends the amendment attached to my 
statement be adopted by the Committee.
    Thank you for the opportunity to appear before you today. 
To assist the Subcommittee in understanding the modifications 
offered here today, I am including a copy of the entire bill 
with the additions and deletions. Again, Madam Chairman, with 
the above modifications, the Department could support this 
legislation.


                     ATTACHMENT: PROPOSED REVISIONS


    1. Modify the Introduction to read: ``To authorize the 
Secretary of the Interior to contract with the city of 
Cheyenne, Wyoming, for the storage of the City's water in the 
Kendrick Project, Wyoming.''
    2. Modify Section 1(a)(2) to read:
          ``(2) Kendrick project.--The term `Kendrick Project' 
        shall mean the Bureau of Reclamation project on the 
        North Platte River, authorized by a finding of 
        feasibility approved by the President on August 30, 
        1935, constructed for irrigation and electric power 
        generation whose major features include Seminoe Dam, 
        Reservoir, and Powerplant; and Alcova Dam, and 
        Powerplant.''
    3. Modify Section 1(b) and (c) to read:
    ``(b) Contracts.--The Secretary is authorized to enter into 
one or more contracts with the City for annual storage of the 
City's water for municipal and industrial use in Seminoe Dam 
and Reservoir of the Kendrick Project.
    ``(c) Conditions.--
          ``(1) Term; renewal.--Any contract under subsection 
        (b) shall--
                  ``(A) have a term of not to exceed 40 years; 
                and
                  ``(B) may be renewed upon terms mutually 
                agreeable to the Secretary and the City, for 
                successive periods not to exceed 40 years each.
          ``(2) Revenues.--Without regard to the Act of May 9, 
        1938, (52 Stat. 322; U.S.C. Sec. 393a), the revenues 
        received under any contract executed pursuant to this 
        section shall be credited as follows: All operation and 
        maintenance charges shall be credited against 
        applicable operation and maintenance costs of the 
        Kendrick Project; all remaining revenues shall be 
        credited to the Reclamation Fund as a credit to the 
        construction costs of the Kendrick Project.
          ``(3) Impacts to existing contractors.--Contracts 
        under subsection (c) shall not negatively impact the 
        Kendrick Project, any existing Kendrick Project 
        contractor, or any existing Reclamation contractor on 
        the North Platte River System.''

                        CHANGES IN EXISTING LAW

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee notes that no 
changes in existing law are made by the bill S. 943, as ordered 
reported.

                                
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