[House Report 117-644]
[From the U.S. Government Publishing Office]
117th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 117-644
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PACIFIC NORTHWEST PUMPED STORAGE HYDROPOWER DEVELOPMENT ACT OF 2021
_______
December 15, 2022.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Grijalva, from the Committee on Natural Resources, submitted the
following
R E P O R T
[To accompany H.R. 2641]
[Including cost estimate of the Congressional Budget Office]
The Committee on Natural Resources, to whom was referred
the bill (H.R. 2641) to amend the Reclamation Project Act of
1939 to authorize pumped storage hydropower development
utilizing multiple Bureau of Reclamation reservoirs, having
considered the same, reports favorably thereon without
amendment and recommends that the bill do pass.
Purpose of the Bill
The purpose of H.R. 2641 is to amend the Reclamation
Project Act of 1939 to authorize pumped storage hydropower
development utilizing multiple Bureau of Reclamation
reservoirs.
Background and Need for Legislation
Pumped storage hydropower projects move water between two
reservoirs located at different elevations in order to generate
electricity and store energy. Power is generated when water
stored in an upper reservoir is released to the lower reservoir
through hydroelectric turbines. When electricity demand is low,
water is pumped from the lower to the upper reservoir to store
that water--and its energy potential--at the higher reservoir
for later use.
Both the U.S. Bureau of Reclamation (Reclamation) and the
Federal Energy Regulatory Commission (FERC) are authorized to
permit the use of Reclamation facilities to non-federal
entities for the purposes of hydropower development, including
pumped storage hydropower. Whether a hydropower project is
subject to Reclamation or FERC jurisdiction depends on whether
a Reclamation facility was originally authorized for hydropower
development. For Reclamation projects with hydropower as an
authorized project purpose, Reclamation is responsible for
permitting through its Lease of Power Privilege process. All
other hydropower projects using Reclamation facilities are
subject to FERC jurisdiction pursuant to the Federal Power
Act.\1\ For pumped storage hydropower projects, which require
the use of multiple reservoirs, a situation can arise in which
a single project is subject to both Reclamation and FERC's
permitting processes.
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\1\Act of June 10, 1920, ch. 285, Sec. 4, 41 Stat. 1063, 1065,
http://uscode.house.gov/statviewer.htm?volume=41&page=1065 (codified as
amended at 16 U.S.C. Sec. 797, http://uscode.house.gov/table3/
1920_285.htm) (statutory compilation as amended through P.L. 117-58 at
https://www.govinfo.gov/content/pkg/COMPS-834/pdf/COMPS-834.pdf).
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H.R. 2641 amends the Reclamation Project Act of 1939\2\ to
specify that pumped storage hydropower projects that use
multiple Reclamation reservoirs shall be subject to a single
Reclamation permitting process. Reclamation's permitting
process requires pumped storage projects to comply with the
National Environmental Policy Act (NEPA), the Endangered
Species Act, the National Historic Preservation Act, and other
statutory requirements.
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\2\Act of Aug. 4, 1939, ch. 418, 53 Stat. 1187, http://
uscode.house.gov/statviewer.htm?volume=53&page=1187 (codified as
amended at various, see http://uscode.house.gov/table3/1939_418.htm)
(statutory compilation as amended through P.L. 117-58 at https://
www.govinfo.gov/content/pkg/COMPS-10509/pdf/COMPS-10509.pdf).
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The proposed Banks Lake pumped storage project in
Washington State is one project that prior to this bill was
subject to both Reclamation and FERC's permitting processes.
The project proposes to pump water between Roosevelt Lake
(subject to Reclamation jurisdiction) and Banks Lake (subject
to FERC jurisdiction). Section 3 of H.R. 2641 incorporates
feedback from the Confederated Tribes of the Colville
Reservation and the Spokane Tribe of Indians of the Spokane
Reservation to ensure additional opportunities for tribal
consultation and input during Reclamation's permitting process
for the proposed Banks Lake pumped storage project. This
section does not apply to other pumped storage projects
employing two Reclamation facilities.
H.R. 2641 was enacted as sections 40335 and 40336 of the
Infrastructure Investment and Jobs Act\3\ (the ``IIJA,'' or
sometimes called the Bipartisan Infrastructure Framework or
``BIF'' or the Bipartisan Infrastructure Law or ``BIL''), which
became public law on November 15, 2021. With the enactment of
the IIJA, the jurisdiction of the proposed Banks Lake project
is now fully under Reclamation.
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\3\Pub. L. No. 117-58, 135 Stat. 429 (2021), https://
uscode.house.gov/statviewer.htm?volume=135&page=429.
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Committee Action
H.R. 2641 was introduced on April 19, 2021, by
Representative Dan Newhouse (R-WA). The bill was referred
solely to the Committee on Natural Resources, and within the
Committee to the Subcommittee on Water, Oceans, and Wildlife
and to the Subcommittee for Indigenous Peoples of the United
States. On May 26, 2021, the Natural Resources Committee met to
consider the bill. The Subcommittees were discharged by
unanimous consent. No amendments were offered, and the bill was
adopted and ordered favorably reported to the House of
Representatives by unanimous consent.
Hearings
Regarding clause 3(c)(6) of House rule XIII, the Committee
does not expect the measure to be considered pursuant to a
special order of business reported by the Committee on Rules,
as it has already been enacted via another bill.
Committee Oversight Findings and Recommendations
Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of
rule XIII of the Rules of the House of Representatives, the
Committee on Natural Resources' oversight findings and
recommendations are reflected in the body of this report.
Compliance With House Rule XIII and Congressional Budget Act
1. Cost of Legislation and the Congressional Budget Act.
With respect to the requirements of clause 3(c)(2) and (3) of
rule XIII of the Rules of the House of Representatives and
sections 308(a) and 402 of the Congressional Budget Act of
1974, as well as clause 3(d) of rule XIII of the Rules of the
House of Representatives, the Committee has received the
following estimate for the bill from the Director of the
Congressional Budget Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, July 26, 2021.
Hon. Raul M. Grijalva,
Chairman, Committee on Natural Resources,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2641, the Pacific
Northwest Pumped Storage Hydropower Development Act of 2021.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Aurora
Swanson.
Sincerely,
Phillip L. Swagel,
Director.
Enclosure.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Under current law, nonfederal entities that propose to
develop hydropower at reservoirs administered by the Bureau of
Reclamation (BOR) must enter into a lease with BOR or obtain a
license from the Federal Energy Regulatory Commission (FERC).
The regulatory jurisdiction of each BOR reservoir was
previously negotiated by the agencies to clarify which
permitting process would be in effect for each reservoir.
At least one project, a proposal to develop pumped storage
hydropower within BOR's Colombia Basin Project (CBP) in the
state of Washington, would need permits from both agencies
because it would be constructed on two reservoirs; Banks Lake
would require a BOR lease and Lake Roosevelt reservoir would
require a FERC license. (Pumped storage hydropower is a type of
storage for hydroelectric energy used by electric power systems
for load balancing.) H.R. 2641 would make BOR the sole
regulatory authority for developers seeking a lease for a
pumped storage hydropower facility at federal reservoirs.
The bill also would require the nonfederal developer to
negotiate an agreement with the Confederated Tribes of the
Colville Reservation and the Spokane Tribe of Indians of the
Spokane Reservation as a condition for a BOR lease on CBP
facilities. The agreement would establish the terms for
interactions between the developer and tribes including studies
to analyze the potential adverse effects of the project on
annual payments due to the tribes under their respective
settlements; on hunting, fishing, and boating rights of the
Tribes; and on the environment. The bulk of the costs for those
studies would be incurred by the project developer while the
rest would be incurred by BOR; however, most of those costs to
the agency would ultimately be paid by the developer under the
terms of a cost recovery agreement between BOR and the
developer.
CBO estimates that enacting H.R. 2641 would increase
offsetting receipts (which are recorded as reductions in direct
spending) from payments the project developer would make to BOR
in advance for the costs of additional staff hours to negotiate
lease agreements and to facilitate development of the planned
studies and agreement between the developer and the tribes.
Using information from BOR, CBO estimates that those offsetting
receipts would total about $1 million over the 2021-2031
period. However, because BOR is authorized to spend amounts
collected without further appropriations action, CBO estimates
that the net effect on direct spending would be negligible over
that period.
Some costs incurred by BOR to litigate appeals related to
the agreement may not be recoverable from the project developer
and instead would be covered by the agency's regular
appropriation. CBO estimates that those costs would total less
than $500,000 over the 2021-2026 period; such spending would be
subject to the availability of appropriated funds.
Lastly, FERC recovers 100 percent of its costs, which are
controlled by annual appropriations, through user fees. Thus,
any reduction in FERC's costs resulting from shifting its
licensing responsibilities to BOR would be offset by an
equivalent change in fees, resulting in no net change in
discretionary spending.
The CBO staff contact for this estimate is Aurora Swanson.
The estimate was reviewed by H. Samuel Papenfuss, Deputy
Director of Budget Analysis.
2. General Performance Goals and Objectives. As required by
clause 3(c)(4) of rule XIII, the general performance goals and
objectives of this bill are to amend the Reclamation Project
Act of 1939 to authorize pumped storage hydropower development
utilizing multiple Bureau of Reclamation reservoirs.
Earmark Statement
This bill does not contain any Congressional earmarks,
limited tax benefits, or limited tariff benefits as defined
under clause 9(e), 9(f), and 9(g) of rule XXI of the Rules of
the House of Representatives.
Unfunded Mandates Reform Act Statement
According to CBO, this bill contains no unfunded mandates
as defined by the Unfunded Mandates Reform Act.
Existing Programs
This bill does not establish or reauthorize a program of
the federal government known to be duplicative of another
program.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Preemption of State, Local, or Tribal Law
Any preemptive effect of this bill over state, local, or
tribal law is intended to be consistent with the bill's
purposes and text and the Supremacy Clause of Article VI of the
U.S. Constitution.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
RECLAMATION PROJECT ACT OF 1939
* * * * * * *
Sec. 9. (a) No expenditures for the construction of any new
project, new division of a project, or new supplemental works
on a project shall be made, nor shall estimates be submitted
therefor, by the Secretary until after he has made an
investigation thereof and has submitted to the President and to
the Congress his report and findings on--
(1) the engineering feasibility of the proposed construction;
(2) the estimated cost of the proposed construction;
(3) the part of the estimated cost which can properly be
allocated to irrigation and probably be repaid by the water
users;
(4) the part of the estimated cost which can properly be
allocated to power and probably be returned to the United
States in net power revenues;
(5) the part of the estimated cost which can properly be
allocated to municipal water supply or other miscellaneous
purposes and probably be returned to the United States.
If the proposed construction is found by the Secretary to have
engineering feasibility and if the repayable and returnable
allocations to irrigation, power, and municipal water supply or
other miscellaneous purposes found by the Secretary to be
proper, together with any allocation to flood control or
navigation made under subsection (b) of this section, equal the
total estimated cost of construction as determined by the
Secretary, then the new project, new division of a project, or
supplemental works on a project, covered by his findings, shall
be deemed authorized and may be undertaken by the Secretary. If
all such allocations do not equal said total estimated cost,
then said new project, new division, or new supplemental works
may be undertaken by the Secretary only after provision
therefor has been made by Act of Congress enacted after the
Secretary has submitted to the President and the Congress the
report and findings involved.
(b) In connection with any new project, new division of a
project, or supplemental works on a project there may be
allocated to flood control or navigation the part of said total
estimated cost which the Secretary may find to be proper. Items
for any such allocations made in connection with projects which
may be undertaken pursuant to subsection (a) of this section
shall be included in the estimates of appropriations submitted
by the Secretary for said projects, and funds for such portions
of the projects shall not become available except as directly
appropriated or allotted to the Department of the Interior. In
connection with the making of such an allocation, the Secretary
shall consult with the Chief of Engineers and the Secretary of
the Army, and may perform any of the necessary investigations
or studies under a cooperative agreement with the Secretary of
the Army. In the event of such an allocation the Secretary of
the Interior shall operate the project for purposes of flood
control or navigation, to the extent justified by said
allocation therefor.
(c)
(1) The Secretary is authorized to enter into
contracts to furnish water for municipal water supply
or miscellaneous purposes: Provided, That any such
contract either (A) shall require repayment to the
United States, over a period of not to exceed forty
years from the year in which water is first delivered
for the use of the contracting party, with interest not
exceeding the rate of 3\1/2\ per centum per annum if
the Secretary determines an interest charge to be
proper, of an appropriate share as determined by the
Secretary of that part of the construction costs
allocated by him to municipal water supply or other
miscellaneous purposes; or (B) shall be for such
periods, not to exceed forty years, and at such rates
as in the Secretary's judgment will produce revenues at
least sufficient to cover an appropriate share of the
annual operation and maintenance cost and an
appropriate share of such fixed charges as the
Secretary deems proper, and shall require the payment
of said rates each year in advance of delivery of water
for said year. Any sale of electric power or lease of
power privileges, made by the Secretary in connection
with the operation of any project or division of a
project, shall be for such periods, not to exceed forty
years, and at such rates as in his judgment will
produce power revenues at least sufficient to cover an
appropriate share of the annual operation and
maintenance cost, interest on an appropriate share of
the construction investment at not less than 3 per
centum per annum, and such other fixed charges as the
Secretary deems proper: Provided further, That in said
sales or leases preference shall be given to
municipalities and other public corporations or
agencies; and also to cooperatives and other nonprofit
organizations financed in whole or in part by loans
made pursuant to the Rural Electrification Act of 1936
and any amendments thereof. Nothing in this subsection
shall be applicable to provisions in existing
contracts, made pursuant to law, for the use of power
and miscellaneous revenues of a project for the benefit
of users of water from such project. The provisions of
this subsection respecting the sales of electric power
and leases of power privileges shall be an
authorization in addition to and alternative to any
authority in existing laws related to particular
projects[, including small conduit hydropower
development] and reserve to the Secretary the exclusive
authority to develop small conduit hydropower using
Bureau of Reclamation facilities and pumped storage
hydropower exclusively using Bureau of Reclamation
reservoirs. No contract relating to municipal water
supply or miscellaneous purposes or to electric power
or power privileges shall be made unless, in the
judgment of the Secretary, it will not impair the
efficiency of the project for irrigation purposes.
(2)(A) When carrying out this subsection, 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 time
frame for the irrigation district or water
users association to accept or reject a lease
of power privilege offer for a small conduit
hydropower project.
(B) If the irrigation district or
water users association elects not
accept a lease of power privilege offer
under subparagraph (A), the Secretary
shall offer the lease of power
privilege to other parties in
accordance with this subsection.
(3) 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 subsection,
excluding siting of associated transmission
facilities on Federal lands.
(4) The Power Resources Office of the Bureau
of Reclamation shall be the lead office of
small conduit hydropower policy and procedure-
setting activities conducted under this
subsection.
(5) Nothing in this subsection shall obligate
the Western Area Power Administration, the
Bonneville Power Administration, or the
Southwestern Power Administration to purchase
or market any of the power produced by the
facilities covered under this subsection and
none of the costs associated with production or
delivery of such power shall be assigned to
project purposes for inclusion in project
rates.
(6) Nothing in this subsection 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,
nor shall it create any unmitigated financial
or physical impacts to the project or division
involved. The Secretary shall notify and
consult with the irrigation district or water
users association operating the transferred
conduit before offering the lease of power
privilege and shall prescribe terms and
conditions that will adequately protect the
planning, design, construction, operation,
maintenance, and other interests of the United
States and the project or division involved.
(7) Nothing in this subsection shall alter or
affect any existing agreements for the
development of conduit hydropower projects or
disposition of revenues.
(8) Nothing in this subsection shall alter or
affect any existing preliminary permit,
license, or exemption issued by the Federal
Energy Regulatory Commission under Part I of
the Federal Power Act (16 U.S.C. 792 et seq.)
or any project for which an application [has
been filed with the Federal Energy Regulatory
Commission as of the date of the enactment of
the Bureau of Reclamation Small Conduit
Hydropower Development and Rural Jobs Act] was
filed with the Federal Energy Regulatory
Commission before August 9, 2013, and is still
pending.
(9) In this subsection:
(A) Conduit.--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.
(B) Irrigation district.--The term
``irrigation district'' means any
irrigation, water conservation or
conservancy, multicounty 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.
(C) Reserved conduit.--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.
(D) Transferred conduit.--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.
(E) Small conduit hydropower.--The
term ``small conduit hydropower'' means
a facility capable of producing 5
megawatts or less of electric capacity.
(d) No water may be delivered for irrigation of lands in
connection with any new project, new division of a project, or
supplemental works on a project until an organization,
satisfactory in form and powers to the Secretary, has entered
into a repayment contract with the United States, in a form
satisfactory to the Secretary, providing among other things--
(1) That the Secretary may fix a development period
for each irrigation block, if any, of not to exceed ten
years from and including the first calendar year in
which water is delivered for the lands in said block;
and that during the development period water shall be
delivered to the lands in the irrigation block involved
at a charge per annum per acre-foot, or other charge,
to be fixed by the Secretary each year and to be paid
in advance of delivery of water: Provided, That where
the lands included in an irrigation block are for the
most part lands owned by the United States, the
Secretary, prior to execution of a repayment contract,
may fix a development period, but in such case
execution of such a contract shall be a condition
precedent to delivery of water after the close of the
development period: Provided further, That when the
Secretary, by contract or by notice given thereunder,
shall have fixed a development period of less than ten
years, and at any time thereafter but before
commencement of the repayment period conditions arise
which in the judgment of the Secretary would have
justified the fixing of a longer period, he may amend
such contract or notice to extend such development
period to a date not to exceed ten years from its
commencement, and in a case where no development period
was provided, he may amend such contract within the
same limits: Provided further, That when the Secretary
shall have deferred the payment of all or any part of
any installments of construction charges under any
repayment contract pursuant to the authority of the Act
of September 21, 1959 (73 Stat. 584), he may, at any
time prior to the due date prescribed for the first
installment not reduced by such deferment, and by
agreement with the contracting organization, terminate
the supplemental contract by which such deferment was
effected, credit the construction payments made, and
exercise the authority granted in this section. After
the close of the development period, any such charges
collected and which the Secretary determines to be in
excess of the cost of the operation and maintenance
during the development period shall be credited to the
construction cost of the project in the manner
determined by the Secretary.
(2) That the part of the construction costs allocated
by the Secretary to irrigation shall be included in a
general repayment obligation of the organization; and
that the organization may vary its distribution of
construction charges in a manner that takes into
account the productivity of the various classes of
lands and the benefits accruing to the lands by reason
of the construction: Provided, That no distribution of
construction charges over the lands included in the
organization shall in any manner be deemed to relieve
the organization or any party or any land therein of
the organization's general obligation to the United
States.
(3) That the general repayment obligation of the
organization shall be spread in annual installments, of
the number and amounts fixed by the Secretary, over a
period of not more than 40 years, exclusive of any
development period fixed under paragraph (1) of this
subsection, for any project contract unit or, if the
project contract unit be divided into two or more
irrigation blocks, for any such block, or as near to
said period of not more than forty years as is
consistent with the adoption and operation of a
variable payment formula which, being based on full
repayment within such period under average conditions,
permits variance in the required annual payments in the
light of economic factors pertinent to the ability of
the organization to pay.
(4) That the first annual installment for any project
contract unit, or for any irrigation block, as the case
may be, shall accrue, on the date fixed by the
Secretary, in the year after the last year of the
development period or, if there be not development
period, in the calendar year after the Secretary
announces that the construction contemplated in the
repayment contract is substantially completed or is
advanced to a point where delivery of water can be made
to substantially all of the lands in said unit or block
to be irrigated; and if there be no development period
fixed, that prior to and including the year in which
the Secretary makes said announcement water shall be
delivered only on the toll charge basis hereinbefore
provided for development periods.
(e) In lieu of entering into a repayment contract pursuant to
the provisions of subsection (d) of this section to cover that
part of the cost of the construction of works connected with
water supply and allocated to irrigation, the Secretary, in his
discretion, may enter into either short- or long-term contracts
to furnish water for irrigation purposes. Each such contract
shall be for such period, not to exceed forty years, and at
such rates as in the Secretary's judgment will produce revenues
at least sufficient to cover an appropriate share of the annual
operation and maintenance cost and an appropriate share of such
fixed charges as the Secretary deems proper, due consideration
being given to that part of the cost of construction of works
connected with water supply and allocated to irrigation; and
shall require payment of said rates each year in advance of
delivery of water for said year. In the event such contracts
are made for furnishing water for irrigation purposes, the
costs of any irrigation water distribution works constructed by
the United States in connection with the new project, new
division of a project, or supplemental works on a project,
shall be covered by a repayment contract entered into pursuant
to said subsection (d).
(f) No less than sixty days before entering into or amending
any repayment contract or any contract for the delivery of
irrigation water (except any contract for the delivery of
surplus or interim irrigation water whose duration is for one
year or less) the Secretary shall--
(1) publish notice of the proposed contract or
amendment in newspapers of general circulation in the
affected area and shall make reasonable efforts to
otherwise notify interested parties which may be
affected by such contract or amendment, together with
information indicating to whom comments or inquiries
concerning the proposed actions can be addressed; and
(2) provide an opportunity for submission of written
data, views and arguments, and shall consider all
substantive comments so received.
* * * * * * *
Supplemental, Minority, Additional, or Dissenting Views
None.
[all]