[Senate Report 109-27]
[From the U.S. Government Publishing Office]



                                                        Calendar No. 40
109th Congress                                                   Report
                                 SENATE
 1st Session                                                     109-27

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                       KENDRICK PROJECT, WYOMING

                                _______
                                

                 March 10, 2005.--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. 99]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 99) 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, having considered the same, reports favorably thereon 
without amendment and recommends that the bill do pass.

                         PURPOSE OF THE MEASURE

    The purpose of S. 99 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: the Seminoe 
Dam, Reservoir, and Powerplant; and the 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. 99 was introduced by Senator Enzi on January 24, 2005. 
S. 99 is identical to S. 943 as passed by the Senate in the 
108th Congress. 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. S. 943 was passed by 
the Senate, as amended, by unanimous consent on May 19, 2004. 
At a business meeting on February 16, 2005, the Committee on 
Energy and Natural Resources ordered S. 99 favorably reported.

                        COMMITTEE RECOMMENDATION

    The Committee on Energy and Natural Resources, in an open 
business session on February 16, 2005, by unanimous vote of a 
quorum present, recommends that the Senate pass S. 99.

                      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 
Kendrick Project 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.

                                                 February 22, 2005.
Hon. Pete V. Domenici,
Chairman, Committee on Energy and Natural Resources,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 99, 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. This estimate was approved by Peter H. Fontaine, 
Director for Budget Analysis.
            Sincerely,
                                               Douglas Holtz-Eakin.
    Enclosure.

S. 99--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. 99 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 50 years.
    CBO estimates that implementing S. 99 would have no 
significant impact on the federal budget. Currently, the bureau 
provides water storage services under a temporary one-year 
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. 99, 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. 99 would decrease offsetting 
receipts (a form of direct spending), but the loss of such 
receipts would be less than $500,000 over the 2006-2015 period.
    S. 99 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, 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. 99.
    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. 99, as ordered reported.

                        EXECUTIVE COMMUNICATIONS

    The testimony provided by the Department of the Interior at 
the Subcommittee hearing on S. 943, as introduced in the 108th 
Congress, 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. 392a), 
                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. 99, as ordered 
reported.

                                  
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