[Federal Register Volume 59, Number 68 (Friday, April 8, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-8478]


[[Page Unknown]]

[Federal Register: April 8, 1994]


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DEPARTMENT OF ENERGY
Western Area Power Administration

 

Collections From Central Valley Project Power Contractors To 
Carry Out the Restoration, Improvement, and Acquisition of 
Environmental Habitat Provisions of the Central Valley Project 
Improvement Act of 1992

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of final procedures for the assessment and collection of 
restoration fund payments from the Central Valley Project power 
contractors.

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SUMMARY: The Central Valley Project (CVP) Improvement Act of 1992 (Act) 
(Pub. L. 102-575, 106 Stat. 4706 et seq.) establishes in the Treasury 
of the United States the ``Central Valley Project Restoration Fund'' to 
carry out the habitat restoration, improvement, and acquisition 
provisions of the Act. The Act further requires the Secretary of the 
Interior to assess and collect annual mitigation and restoration 
payments from CVP water and power contractors. The Secretary of the 
Interior, through the Bureau of Reclamation (Reclamation), is 
responsible for determining the CVP water contractors' share and the 
CVP power contractors' share of the Restoration Fund payments. Because 
Western Area Power Administration (Western) is responsible for the 
marketing of CVP power and maintains all CVP power contracts, Western 
has agreed to assess and collect the total CVP power contractors' share 
of the Restoration Fund payments, as determined by Reclamation, from 
the CVP power contractors. By publication of this notice, Western 
establishes procedures to accomplish the assessment and collection of 
Restoration Fund payments from the CVP power contractors as required by 
the Act.

DATES: The final procedures will become effective May 9, 1994 and will 
remain in effect until superseded.

ADDRESSES: Information regarding this final procedure, including 
spreadsheet analysis, comments, letters, memorandums, and other 
supporting documents made or kept by Western for the purpose of 
developing these procedures, is available for public inspection and 
copying at Western's Sacramento Area Office located at 1825 Bell 
Street, suite 105, Sacramento, CA 95825-1097.

FOR FURTHER INFORMATION CONTACT:

James C. Feider, Area Manager, Sacramento Area Office, Western Area 
Power Administration, 1825 Bell Street, suite 105, Sacramento, CA 
95825-1097, (916) 649-4418.

SUPPLEMENTARY INFORMATION: Section 3407 of the Act establishes in the 
Treasury of the United States the ``Central Valley Project Restoration 
Fund'' to carry out the habitat restoration, improvement, and 
acquisition provisions of the Act. The Act further requires the 
Secretary of the Interior to assess and collect annual mitigation and 
restoration payments from CVP water and power contractors. The 
Secretary of the Interior, through Reclamation, is responsible for 
determining and collecting the CVP water contractors' share and the CVP 
power contractors' share of the annual Restoration Fund payments.
    Because Western is responsible for the marketing of CVP power, 
Western has agreed to administer the assessment and collection of the 
Restoration Fund payments from the CVP power contractors. Western has 
executed a Letter of Agreement with Reclamation to establish procedures 
for depositing the collections from the CVP power contractors into the 
Restoration Fund.
    The total power Restoration Fund payment obligation, determined by 
Reclamation, will be assessed to the CVP power contractors. Every month 
each CVP power contractor will receive a bill reflecting the amount to 
be paid into the Restoration Fund. The CVP power contractor will pay 
that amount to Western, who will deposit all amounts collected from the 
CVP power contractors into the Restoration Fund.

Acronyms and Definitions

    Descriptions of the acronyms and definitions used in this Federal 
Register notice may be found in the Final Procedures.

Public Notice and Comments

    The process used by Western to ensure involvement of interested 
parties in the development of these final procedures for assessing and 
collecting Restoration Fund payments from the CVP power contractors is 
summarized below.
    1. On October 1, 1993, Western issued a letter to all CVP customers 
announcing Reclamation's determination of a total power Restoration 
Fund payment obligation of $7,092,800 for fiscal year (FY) 1994.
    2. On October 29, 1993, in a letter to all CVP power customers, 
Western announced the plans to implement collections from the CVP power 
contractors for the Restoration Fund on an interim basis, beginning 
with a November 24, 1993, bill.
    3. A Federal Register notice was published at 58 FR 62343, November 
26, 1993, officially announcing the proposed procedures for the 
assessment and collection of the Restoration Fund payments from the CVP 
power contractors, initiating the public consultation and comment 
period, announcing the public information forum and public comment 
forum, and presenting procedures for public participation.
    4. On December 1, 1993, in a letter to all CVP customers and 
interested parties, Western announced that the public consultation and 
comment period had begun; announced the dates, times, and locations of 
the public information forum and the public comment forum; and enclosed 
a copy of the November 26, 1993, Federal Register notice.
    5. At the public information forum held on December 16, 1993, 
Western's staff presented the proposed procedures for the assessment 
and collection of Restoration Fund payments and discussed the 
methodologies and studies that were used in developing the proposed 
procedures.
    6. A public comment forum was held on December 16, 1993, to give 
the public the opportunity to comment for the record. Three persons 
representing customers made oral comments.
    7. Fifteen comment letters were received during the 30-day 
consultation and comment period. The consultation and comment period 
ended December 26, 1993. All formally submitted comments have been 
considered in the preparation of the final procedures.
    8. On December 30, 1993, copies of all written comments received 
during the 30-day comment period were sent to all CVP customers and 
interested parties.
    9. Based on customer comments regarding the proposed assessment and 
collection method, Western analyzed various alternative methods to 
address certain concerns. Upon request, Western shared these analyses 
at a Northern California Power Agency members meeting on January 13, 
1994, and a CVP Customer Technical Committee Meeting on January 19, 
1994.
    10. On February 3, 1994, in a letter addressed to the Restoration 
Fund commentors, Western provided copies of all handouts distributed 
during the meetings specified in item 9 above.

Comments

    During the 30-day consultation and comment period, Western received 
15 written comments from 14 different sources. In addition, three 
persons commented during the December 16, 1993, public comment forum.
    Written comments were received from the following sources:

Alameda, City of (California)
Arvin Edison Water Storage District (California)
Calaveras Public Power Agency (California)
Modesto Irrigation District (California)
Palo Alto, City of (California)
Petershagen, Mr. George F. (California)
Redding, City of (California)
Roseville, City of (California)
Sacramento Municipal Utility District (California)
Santa Clara, City of (California)
Shasta Lake, City of (California)
Trinity County Public Utility District (California)
Tuolomne County Public Power Agency (California)
Westlands Water District (California).

    Representatives of the following organizations made oral comments:

Redding, City of (California)
Roseville, City of (California)
Sacramento Municipal Utility District (California).

    Most of the comments Western received dealt with assessing the 
total Restoration Fund payment obligation to scheduled or delivered 
energy, the authority to collect interim bills and assess late payment 
charges during the interim period, the issuance of separate bills, and 
establishing a review process for the final procedures. Additional 
comments were received regarding assessing excess energy and capacity 
sales, excluding first preference customers from the assessment, 
assessing project use, changing the amount allocated to power by 
Reclamation, and conducting an informal workshop. Discussion of the 
comments will be grouped by these issues, with all other comments 
placed under the heading of ``Other.'' In some cases Western will 
address several comments with one response. The comments, paraphrased 
for brevity, and responses are presented below.

Assessing to Scheduled or Delivered Energy

    Comment: The agricultural power users consider Western's proposal 
to be a fair and equitable method of allocating Restoration Fund 
payment obligations.
    Comment: The proposal states that total collections will be the 
same each month which could penalize seasonally diverse customers. It 
seems appropriate that the collections more nearly reflect monthly 
revenues.
    Comment: Energy alone is not an adequate assessment factor to 
reflect utilization of the CVP. Factors such as actual demand and CVP 
allocation used either separately or together could be more 
representative than just energy alone.
    Comment: The proposal is likely to foster a market environment in 
which Western's scheduling power contractors compete against other 
Western power contractors to minimize the impact of the Restoration 
Fund. Establish the assessment based on a system-wide per-kilowatthour 
(kWh) basis.
    Comment: By assessing monthly energy, Western would distort 
recently approved rates by effectively increasing the energy rate but 
not the other charges included in bills. This could cause an 
undesirable and/or unexpected response by customers who have resource 
flexibility.
    Comment: An assessment of the payment as a fixed surcharge based on 
a percentage of monthly energy entitlement would totally eliminate the 
incentive to avoid restoration payments through reducing scheduled 
energy.
    Comment: Assess the Restoration Fund payment obligation based on 
total Contract Rate of Delivery (CRD). Under the proposed plan, 
contract users could direct their energy needs from other sources in 
order to evade payment of the Restoration Fund assessment leaving 
customers with limited resource options to pay a larger portion of the 
payment.
    Comment: The recent CVP rate process found that a 40-percent 
capacity and 60-percent energy split is most equitable. The Restoration 
Fund collections should also be assessed in this manner.
    Comment: Western has considered the cost allocation issue in 
length, in the CVP general rate case proceeding, and determined that 
the appropriate allocation of revenue requirements (costs) is 40 
percent to capacity/60 percent to energy. We recommend Western utilize 
this same methodology to allocate the Restoration Fund costs.
    Comment: Diversify the proposal to collect 50 percent on capacity 
sales and 50 percent on energy sales; this will distribute and dilute 
any uncontrollable price signals and discourage defensive gaming.
    Response: Western shares in the concerns of customers who felt the 
proposed method would (1) penalize seasonally diverse customers, (2) 
send adverse pricing signals, and/or (3) allow for adverse actions on 
behalf of certain customer groups. Therefore, Western has decided to 
prorate the total Restoration Fund payment obligation among actual 
delivered or scheduled energy and capacity on a 50/50 basis.
    Western considered the comments recommending the allocation be 
based on actual energy entitlement or CRD. Western believes the 
assessment should reflect actual use of the CVP power system and not a 
customer's upper limit on use of the CVP system.
    Western agrees that extensive analyses for the recent CVP rate 
process indicated that Western's costs are best represented in a 40-
percent capacity 60-percent energy ratio. Western also agrees that 
heavily assessing CVP energy costs may send adverse pricing signals. 
However, as stated above, it is Western's position that the Restoration 
Fund should be assessed based on the actual use of the resource 
provided rather than the costs associated with that resource use. The 
50/50 basis was chosen because it reflects an assessment to both types 
of long-term power services available from the CVP. Adverse pricing 
signals that may be caused by an inequitable assessment to capacity or 
energy will be reduced with a 50-percent delivered or scheduled energy, 
50-percent delivered or scheduled capacity assessment.

Authority To Assess and Collect Interest on Interim Bills

    Comment: Will interest accrue on interim billing or after the 
public process becomes final?
    Comment: Western does not have the authority to require customers 
to pay interim bills or assess interest before a final procedure is 
adopted.
    Comment: Western should formally acknowledge that payment during 
the interim period is optional.
    Comment: We appreciate your interest to minimize cash flow impacts 
by starting collections as soon as possible. However, some customers 
may prefer to wait until the public process is complete. We suggest 
that the interim procedures be made optional.
    Comment: Current contract provisions do not provide for the 
assessment of the Restoration Fund fees.
    Response: Western initiated the interim assessment and collection 
process during the public process to reduce the economic impact to the 
CVP power contractors, to proactively support the provisions of the 
Act, and to assist Reclamation. Payments made by the CVP power 
contractors during the interim period are considered by Western to be 
optional. Bills not paid during the interim period did not accrue 
interest. All billing notices sent to the CVP power contractors during 
the interim period stated, ``Interim billing is not subject to a late 
charge assessment.'' Although Restoration Fund payments are not 
included in the CVP power sales contracts, collection is mandated by 
the Act. Adoption of these final procedures provides Western the legal 
authority to collect Restoration Fund payments. Interest will accrue on 
Restoration Fund bills in the first billing cycle 30 days after the 
publication of the final procedures in the Federal Register.

Separate Billing

    Comment: Are the bills separate? Why is there a separate bill 
versus inclusion in the current power bill from Western?
    Comment: Does the Act mandate monthly payments? What governed the 
timing of the collection? Could collections be made on a quarterly 
basis?
    Comment: The Act provides for annual, not monthly, payments to be 
collected from the CVP water and power customers.
    Comment: We would like to avoid the administrative burden of an 
additional monthly bill.
    Comment: We support the Western proposal to utilize a separate 
billing for the Restoration Fund. This approach allows all parties to 
clearly identify the payments that are being made pursuant to the 
Central Valley Project Improvement Act.
    Comment: We support the proposed separate billing; this will aid in 
tracking our share of the Restoration Fund.
    Response: Western will use separate bills to assess the Restoration 
Fund payments to the CVP power contractors. The Secretary of the 
Interior, through Reclamation, is responsible for determining and 
collecting the CVP water contractors' share and the CVP power 
contractors' share of the annual Restoration Fund payments. Because 
Western is responsible for the marketing of CVP power, Western has 
agreed to administer the assessment and collection of the Restoration 
Fund payments from the CVP power contractors on behalf of Reclamation. 
Western is assessing the total Restoration Fund payment obligation 
among the CVP power contractors as a pass-through surcharge from 
Reclamation. The Restoration Fund assessment is not associated with 
current CVP rates or power revenues; the funds will not flow through 
the CVP power repayment study, nor will they be deposited into the 
Reclamation Fund to be applied to the repayment of CVP investment. In 
addition, the amounts collected for the Restoration Fund are deposited 
into a separate Treasury account and late payment interest charges are 
assessed in a different manner than those imposed by the General Power 
Contract Provisions included in the CVP power contractors' power sales 
contracts. Western has adopted assessment and collection of the 
Restoration Fund payments on a monthly basis to assure adequate cash 
flow to Reclamation to carry out the goals of the Act.

Establish a Review Process for the Final Procedures

    Comment: What would happen if the Act is overturned or its 
implementation is delayed?
    Comment: Is there a sunset clause? What will happen if Congress 
increases the limit significantly?
    Comment: Is the proposed procedure permanent for the duration of 
the Fund?
    Comment: Include an opportunity to reopen the public process in the 
final methodology, in case of unforeseen problems.
    Comment: Build in the flexibility to review every 2, 3, or 5 years 
at the longest.
    Comment: We recommend that the final procedures include a statement 
that Western will automatically reopen the surcharge matter for comment 
and revision, in conjunction with the CVP's normal 5-year ratemaking 
process.
    Comment: The assessment method should include a review process to 
accommodate change and improvements that will become necessary as we 
gain experience with the method and its effects.
    Response: Western agrees with customer comments and concerns and 
has included a review process in the final procedures. Minimally, 
Western will review the assessment method every 5 years from the 
effective date of the final procedures or if one of the following 
occurs:
    (1) If there is a significant change to or suspension of the 
legislation,
    (2) If a material issue arises, or
    (3) If an apparent inequity in the assessment method is discovered.

Assess Excess Capacity and Energy Sales

    Comment: Why were Energy Account Number 2 (EA2) and excess capacity 
sales excluded from the allocation?
    Comment: Does Western do any other sales to Pacific Gas and 
Electric Company (PG&E)?
    Comment: Entities receiving excess energy may escape an assessment; 
this will increase the assessment to long-term power contractors, and 
the increased assessment would be for energy not yet received. This 
does not appear equitable.
    Comment: Seasonal CVP capacity is provided by CVP generating 
facilities and ``impacts'' the CVP waterways in the same manner normal 
sales of CVP capacity and energy might ``impact'' waterways. To 
disregard an allocation to this type of sale would allow certain 
customers to benefit from CVP power without paying for a portion of the 
Restoration Fund.
    Comment: Excess power sales should be assessed because those end 
users are also benefiting from the CVP.
    Response: Western sells two types of surplus power: surplus energy 
and surplus capacity. Surplus power is only available for sale by 
Western after contractual obligations are fulfilled. Western proposed 
the total power Restoration Fund payment obligation be assessed to the 
CVP power contractors that purchase power on a long-term basis because 
Western believes that the assessment should be made on power sales that 
are predictable during the year and should be billed to customers that 
are fully benefiting from the CVP resource. By definition, this 
excludes sales of surplus power because surplus power is not normally 
available for a period in excess of 1 year.
    Surplus energy is normally sold to PG&E, under contract number 14-
06-200-2948A, into EA2. Later, Western may repurchase the energy from 
PG&E at rates that reflect savings incurred by PG&E in the original 
purchase price from Western. If EA2 sales are assessed a portion of the 
total power Restoration Fund payment obligation, the increased cost to 
PG&E would be reflected in the repurchase of the energy upon withdrawal 
from EA2, which would result in a higher cost for energy. Such higher 
costs will be passed on to the CVP power customers in future power 
rates or the revenue adjustment clause.
    Excess capacity sales may be offered to scheduling utilities 
normally at rates that reflect Western's costs associated with 
capacity. Revenues from these sales increase the total revenue 
available for CVP repayment. If the excess capacity sales included the 
Restoration Fund assessment, less revenue would be available for the 
repayment of CVP investment. Furthermore, Western's excess capacity 
sales compete in the market and the addition of the Restoration Fund 
assessment may make this service noncompetitive.

Exclude First Preference Customers From the Assessment

    Comment: Western's proposed procedures for the collection of 
Restoration Fund payments provides for two exclusions: EA2 sales and 
excess capacity sales. A third exclusion should be added for first 
preference customers because these customers' counties natural 
resources were appropriated to build facilities of the CVP and because 
the fish and wildlife restoration goals for the Trinity River are not 
funded by the Restoration Fund, but by the Trinity River Basin Fish and 
Wildlife Restoration Program (Pub. L. 98-541).
    Response: The Act was designed to benefit many interests within the 
State of California. In section 3402 of the Act, Congress provided for 
a wide variety of purposes. These purposes include the protection, 
restoration, and enhancement of fish, wildlife, and associated habitats 
in the Central Valley and Trinity River basins of California; an 
attempt to achieve a reasonable balance among competing demands for the 
use of CVP water; and other benefits to particular areas of the State 
of California, and to the State as a whole. Because the Act and the 
Restoration Fund were designed to service varied interests, including 
those within the first preference customers' home counties, Western has 
chosen not to make payment into the Restoration Fund connected to 
benefits to be received from the Restoration Fund.
    The first preference customers have, by legislation, been allowed a 
significant benefit over other preference entities in Western's service 
area. Other preference entities must compete for an allocation of 
Federal power under each marketing plan, and many eligible preference 
entities receive no allocation. Congress sought to compensate these 
counties for the natural resources appropriated when the Trinity and 
New Melones facilities were constructed by allowing them this first 
preference. In all other respects, the first preference customers are 
to be treated as any other CVP preference power customer. See, Trinity 
County Public Utilities District, et al. v. Harrington, 781 F.2d 163 
(9th Cir. 1986). Western has chosen not to administratively extend 
benefits of the first preference customers by excusing them from 
payments made into the Restoration Fund.

Project Use

    Comment: Are project use sales being assessed?
    Comment: Wouldn't the amount charged to preference customers be 
less if project use was assessed by Western?
    Response:  Project use is assessed by Reclamation in the amount 
allocated to the water contractors. Because the allocation percentage 
used by Reclamation to determine the total power Restoration Fund 
payment obligation if for commercial power only, and does not include 
project use, these sales will not be assessed.

Changing the Amount Allocated to Power by Reclamation

    Comment: Revise the proposed procedures and eliminate any reference 
of the willingness to pay whatever Reclamation requests into the 
Restoration Fund. Congress, not Reclamation, determined the amount to 
be allocated to power and water.
    Comment: The 18 percent that Reclamation has assessed to power 
needs to be addressed and made more equitable to all CVP users by 
placing a larger portion on water users and less on electric 
contractors.
    Comment: Establish a balancing account to ensure sufficient funds 
by collecting 10 percent more than Reclamation assesses.
    Response: Western does not have the legal authority to increase or 
decrease the amount allocated to power by Reclamation. The Act states, 
``* * * the Secretary shall assess and collect annual mitigation and 
restoration fund payments * * * that will result in collection, during 
each fiscal year, of an amount that can be reasonably expected to equal 
the amount appropriated each year * * * the Secretary shall require the 
CVP water and power contractors to make such additional annual payments 
as are necessary to yield * * * the amount required * * *.'' Although 
Western has in the past and will in the future attempt to work with 
Reclamation to assure that Restoration Fund allocations are reasonable, 
Reclamation has final authority under the Act to determine the level of 
allocations. Western is collecting the Restoration Fund assessment to 
the CVP power contractors under the terms of an agreement between 
Western and Reclamation. Issues regarding the amount allocated to power 
by Reclamation should be addressed to Reclamation.

Conduct an Informal Workshop Prior to Publication of Final Procedures

    Comment: An informal workshop might help to develop a mutually 
acceptable surcharge for the CVP power customers.
    Comment: Allowing only 5 days between the public information 
meeting and public comment forum and the final written comments is too 
restrictive. We urge you to extend the comment period or hold an 
additional workshop prior to publishing the final procedures in the 
Federal Register.
    Response: Western believes that interested parties had adequate 
time to comment on its proposed procedures. In response to customer 
comments regarding the proposed assessment and collection method, 
Western attended informal workshops and analyzed various alternative 
methods to address certain concerns. Upon request, Western shared these 
analyses at a Northern California Power Agency members meeting on 
January 13, 1994, and a CVP Customer Technical committee meeting on 
January 19, 1994. On February 3, 1994, in a letter addressed to the 
Restoration Fund commentors, Western provided copies of all handouts 
distributed during the above-mentioned meetings.

Other

    Comment: Will Restoration Fund payment impact the current CVP 
rates?
    Response: No. Western is assessing the total power Restoration Fund 
payment obligation among the CVP power contractors as a pass-through 
surcharge from Reclamation. The Restoration Funds are not associated 
with current CVP rates or power revenues; the funds will not flow 
through the CVP power repayment study nor will they be deposited into 
the Reclamation Fund to be applied to the repayment of CVP investment.
    Comment: The proposed procedure involves retroactive billing which 
is precedent setting and undesirable.
    Response: Western has revised the final procedures. Under the final 
procedures, CVP power contractors will know the amount of the 
Restoration Fund assessment at the time the power purchase is made. The 
assessment month is now defined as the period 1 month prior to the 
billing month. This is consistent with Western's other current power 
billing practices.
    Comment: The assessment to the power contractors should be based on 
CVP revenue requirements.
    Response: Western feels that basing the Restoration Fund assessment 
on revenue requirements would reflect the cost of the resources rather 
than the use of those resources. It is Western's position that the 
Restoration Fund should be assessed based on the actual use of the 
resource provided rather than the costs associated with that resource.
    Comment: Western's assessment includes both water and electric 
contract users, therefore users with both water and power contracts 
receive a double assessment.
    Response: The Act requires an assessment to both CVP power and 
water contractors. While this type of customer may or may not be the 
only customers receiving two separate Restoration Fund assessments, 
these customers are receiving the benefit of two clearly separable 
resources.

Changes to Proposed Procedures

    Western has considered all comments received during the 30-day 
consultation and comment period from the CVP customers and interested 
parties and has made changes to the proposed procedures. While the 
decisions outlined in the final procedures may not reflect a consensus 
on every issue, Western believes the final procedures to be an 
equitable distribution of the total Restoration Fund payment obligation 
among the CVP power customers. The final procedures will provide the 
mechanism required to assess and collect an amount that can be 
reasonably expected to equal the amount appropriated by Congress and 
allocated to power by Reclamation.
    The proposed procedures provided that the total power Restoration 
Fund payment obligation assigned by Reclamation be prorated over the FY 
to determine a total monthly obligation. Each month the total monthly 
obligation was assessed to the CVP power contractors as a ratio of the 
individual power contractor's delivered or scheduled energy to the 
total delivered or scheduled energy recorded in the assessment month. 
The assessment month was previously defined as the month 2 months prior 
to the billing month. This definition has been changed; the assessment 
month will be 1 month prior to the billing month. In the final 
procedures, the total power restoration fund payment obligation will be 
assessed on a 50/50 basis to both delivered or scheduled energy and 
capacity. An energy and capacity multiplier will be derived from the 
prior FY actual delivered or scheduled energy and capacity, adjusted 
for any anticipated changes to the CVP power contractor base. The 
multiplier will then be applied during the assessment month to each 
power contractor's actual current year delivered or scheduled energy 
and capacity.
    The final procedures include a mid-year review of the assessment 
method. If the actual amount assessed is 25 percent greater or less 
than the projected assessments, Western will adjust the energy and 
capacity multipliers. The CVP power contractors will be notified by 
letter, and the adjusted multipliers will be applied for the remaining 
months of the current FY. All other deviations in the amounts actually 
collected or assessed will be rolled into the following FY assessment. 
Finally, Western has agreed to review the final procedures at a minimum 
of every 5 years or to accommodate for unforeseen changes or problems.

Interim Billing Adjustments

    The total power Restoration Fund payment obligation assigned by 
Reclamation to the CVP power contractors for FY 1994 is $7,092,800. In 
an effort to implement collections for the Restoration Fund, Western 
began issuing bills during an interim period on November 24, 1993. The 
total power Restoration Fund payment obligation was prorated among the 
CVP power contractors, and since November 1993, each CVP power 
contractor has received a bill reflecting this prorated amount. The 
amount assessed and collected from the CVP power contractors during the 
interim period will be compared retroactively to the amount that should 
be assessed and collected under the terms of the final procedures, as 
follows:
    Western will prorate the FY 1994 total Restoration Fund payment 
obligation of $7,092,800 assessing 50 percent of the total to delivered 
or scheduled energy and 50 percent to delivered or scheduled capacity. 
This results in an equal assessment of $3,546,400 to delivered or 
scheduled energy and capacity. Western has determined the FY 1993 total 
delivered or scheduled energy and capacity and has made adjustments for 
anticipated changes to the CVP power contractor base. The FY 1994 
energy multiplier will be equal to $3,546,400 divided by the adjusted 
delivered or scheduled energy of 7,314,510 megawatt-hours, or 0.48 
mills/kWh. The FY 1994 capacity multiplier will be equal to $3,546,400 
divided by the adjusted delivered or scheduled capacity of 14,373 
megawatts, or $0.25/kilowatt-year. These multipliers will then be 
applied to each CVP power contractor's actual energy and capacity since 
October 1, 1993, to determine the total Restoration Fund payment due 
from the contractor.
    The total Restoration Fund payment due will be netted with the 
total Restoration Fund payments assessed and collected during the 
interim period. Any resulting increase/decrease will be assessed in the 
first Restoration Fund bill issued after the final procedures become 
effective, which is 30 days after the publication of this notice in the 
Federal Register. If a CVP power contractor has paid more during the 
interim period than should have been collected under the terms of the 
final procedures, that CVP power contractor will not receive an 
additional FY 1994 assessment until the over-collection meets the 
current FY 1994 obligation. Late payment charges will accrue on 
delinquent Restoration Fund payments in accordance with the terms 
outlined in the final procedures.

Final Procedures

Acronyms and Definitions

    As used herein, the following acronyms and definitions apply:

Assessment Month: The service month which is 1 month prior to the 
billing month. The data derived from this service month will serve as 
the basis for calculating the monthly Restoration Fund bills.
Billing Month: The month each CVP power contractor will be billed for 
the Restoration Fund payment.
CVP: Central Valley Project.
CVP Power Contractor: Any entity purchasing firm capacity and/or energy 
from Western for a period in excess of 1 year.
CVP Power Contractor's Restoration Fund Payment: The amount recorded as 
payable on the CVP power contractor's Restoration Fund bill.
FY: Fiscal year beginning October 1 and ending September 30.
kWh: Kilowatthour.
Reclamation: Bureau of Reclamation, United States Department of the 
Interior.
Restoration Fund: The Central Valley Project Restoration Fund created 
by section 3407 of Public Law 102-575, 106 Stat. 4726 et seq.
Restoration Fund Bill: The instrument prepared and issued monthly by 
Western as a mechanism for collecting the Restoration Fund payments 
from the CVP power contractors.
Total Power Restoration Fund Payment Obligation: The total annual 
Restoration Fund payment obligation calculated and assigned to the CVP 
power contractors by Reclamation.
Western: Western Area Power Administration, United States Department of 
Energy.

Determination of the Total Power Restoration Fund Payment Obligation

    Reclamation is responsible for determining the total power 
Restoration Fund payment obligation for the CVP power and water 
contractors. Prior to each FY Reclamation will, by written 
communication, provide to Western's Area Manager, Sacramento Area 
Office, the amount determined to be the total power Restoration Fund 
payment obligation, and a detailed explanation of the computation of 
the amount. Upon receiving the written communication from Reclamation, 
Western will notify the CVP power contractors of the total power 
Restoration Fund payment obligation, and the multipliers to be used in 
assessing that obligation to the CVP power contractors.

Assessing the Total Power Restoration Fund Payment Obligation

    Each FY, Western will prorate the total power Restoration Fund 
payment obligation to both delivered or scheduled energy and capacity. 
Western will assess 50 percent of the total power Restoration Fund 
payment obligation to delivered or scheduled energy and 50 percent to 
delivered or scheduled capacity. Western will determine an energy and 
capacity multiplier based on the prior FY total delivered or scheduled 
energy and capacity amounts, adjusted for any anticipated changes in 
the CVP power contractor base. The total power Restoration Fund payment 
obligation for the current FY to be prorated to energy will be divided 
by the adjusted prior FY delivered or scheduled energy to determine the 
energy multiplier. The same process will be repeated using the total 
power Restoration Fund payment obligation prorated to capacity divided 
by the adjusted prior FY delivered or scheduled capacity to determine 
the capacity multiplier. During the assessment month, these multipliers 
will then be applied to each CVP power contractor's scheduled or 
delivered energy and capacity to determine the power contractor's 
Restoration Fund payment. The total amount recorded in the assessment 
month will be reflected in the CVP power contractor's Restoration Fund 
bill.

Assessing the Total Power Restoration Fund Payment Obligation

    Reclamation is responsible for determining the total power 
Restoration Fund payment obligation for the CVP power and water 
contractors. Prior to each FY Reclamation will, by written 
communication, provide to Western's Area Manager, Sacramento Area 
Office, the amount determined to be the total power Restoration fund 
payment obligation, and a detailed explanation of the computation of 
the amount. Upon receiving the written communication from Reclamation, 
Western will notify the CVP power contractors of the total power 
Restoration Fund payment obligation, and the multipliers to be used in 
assessing that obligation to the CVP power contractors.

Assessing the Total Power Restoration Fund Payment Obligation

    Reclamation is responsible for determining the total power 
Restoration Fund payment obligation for the CVP power and water 
contractors. Prior to each FY Reclamation will, by written 
communication, provide to Western's Area Manager, Sacramento Area 
Office, the amount determined to be the total power Restoration fund 
payment obligation, and a detailed explanation of the computation of 
the amount. Upon receiving the written communication from Reclamation, 
Western will notify the CVP power contractors of the total power 
Restoration Fund payment obligation, and the multipliers to be used in 
assessing that obligation to the CVP power contractors.

Assessing the Total Power Restoration Fund Payment Obligation

    Reclamation is responsible for determining the total power 
Restoration Fund payment obligation for the CVP power and water 
contractors. Prior to each FY Reclamation will, by written 
communication, provide to Western's Area Manager, Sacramento Area 
Office, the amount determined to be the total power Restoration fund 
payment obligation, and a detailed explanation of the computation of 
the amount. Upon receiving the written communication from Reclamation, 
Western will notify the CVP power contractors of the total power 
Restoration Fund payment obligation, and the multipliers to be used in 
assessing that obligation to the CVP power contractors.

Assessing the Total Power Restoration Fund Payment Obligation

    Reclamation is responsible for determining the total power 
Restoration Fund payment obligation for the CVP power and water 
contractors. Prior to each FY Reclamation will, by written 
communication, provide to Western's Area Manager, Sacramento Area 
Office, the amount determined to be the total power Restoration fund 
payment obligation, and a detailed explanation of the computation of 
the amount. Upon receiving the written communication from Reclamation, 
Western will notify the CVP power contractors of the total power 
Restoration Fund payment obligation, and the multipliers to be used in 
assessing that obligation to the CVP power contractors.

Collection of CVP Power Contractor's Restoration Fund Bill

    Each CVP power contractor will receive a Restoration Fund bill on 
or about the 25th, but no later than the 30th, of each billing month 
designating the amount payable. Within 20 days of the date shown on the 
Restoration Fund bill, the total amount payable as set forth on the 
bill will be due. The first Restoration Fund billing cycle, for each 
FY, will begin at least 30 days after (1) October 1 or (2) the date 
written notification of the total power Restoration Fund payment 
obligation is received from Reclamation, whichever occurs later.

Payment Due Date

    All CVP power contractors' Restoration Fund payments are due and 
payable by the CVP power contractors before the close of business on 
the 20th calendar day after the date of issuance of each Restoration 
Fund bill or the next business day thereafter if said day is a 
Saturday, Sunday, or Federal holiday.

Late Payment Charges Assessed to Delinquent Restoration Fund Payments

    Western will calculate and assess late payment charges on all CVP 
power Restoration Fund payment obligations which are not paid in full 
by the due date as specified above. The late payment charge will be the 
interest accrued on all unpaid balances and will be compounded 
quarterly at the average prime interest rate values published in the 
Federal Reserve Bulletin for each calendar quarter.

Deposit of CVP Power Contractor's Restoration Fund Payments into the 
Restoration Fund

    On or about the 21st day of the month following each billing month, 
Western will deposit all of the CVP power contractors' Restoration Fund 
payments received, including late payment charges, into the Restoration 
Fund.

Adjustment to Collections

    By April 30, Western will review the Restoration Fund assessments, 
for the period October 1 through March 31. If the actual amount being 
assessed is 25 percent greater or less than projected assessments, 
Western will adjust the delivered or scheduled energy and capacity 
multipliers for the remaining months of the current FY. The CVP power 
contractors will be notified by letter, no later than May 15, of any 
adjustment to the multipliers. Beginning June 1, and continuing 
throughout the balance of the current FY, the adjusted multipliers will 
be applied to the CVP power contractors' delivered or scheduled energy 
and capacity. All other deviations, in the amounts actually collected 
or assessed, will be rolled into the following FY and added to or 
subtracted from the amount to be assessed in that FY.

Review Process

    Minimally, Western will review the assessment method every 5 years 
or if one of the following occurs:
    (1) If there is a significant change to or suspension of the 
legislation,
    (2) If a material issue arises, or
    (3) If an apparent inequity in the assessment method is discovered.

Availability of Information

    Information regarding this final procedure, including spreadsheet 
analysis, comments, letters, memorandums, and other supporting 
documents made or kept by Western for the purpose of developing these 
procedures, is available for public inspection and copying at Western's 
Sacramento Area Office located at 1825 Bell Street, suite 105, 
Sacramento, CA 95825-1097.

Regulatory Flexibility Analysis

    Pursuant to the Regulatory Flexibility Act of 1980, 5 U.S.C. 601 et 
seq., each agency, when required to publish proposed procedures, is 
further required to prepare and make available for public comment an 
initial regulatory flexibility analysis to describe the impact of the 
procedures on small entities. Western has determined that (1) This 
rulemaking relates to services offered by Western and, therefore, is 
not a rule within the purview of the Act and (2) the impacts of an 
assessment from Western would not cause a substantial adverse economic 
impact to such entities. The requirements of this Act can be waived if 
the head of the agency certifies that the rule will not, if 
promulgated, have a significant economic impact on a substantial number 
of small entities. By execution of this Federal Register notice, 
Western's Administrator certifies that no significant economic impact 
on a substantial number of small entities will occur.

Executive Order 12866

    DOE has determined that this is not a significant regulatory action 
because it does not meet the criteria of Executive Order 12866, 58 FR 
51735. Western has an exemption from centralized regulatory review 
under Executive Order 12866; accordingly, no clearance of this 
procedure by the Office of Management and Budget is required.

Environmental Evaluation

    In compliance with the National Environmental Policy Act of 1969, 
42 U.S.C. 4321 et seq., and the Council on Environmental Quality 
Regulations (40 CFR part 1500-1508), Reclamation is performing a 
programmatic environmental impact statement (PEIS) on implementation of 
the Act. Western is a cooperating agency in that PEIS. The proposed 
procedures for the Restoration Fund payments covered by this notice 
fall within Western's routine activities and operations categorical 
exclusion issued January 7, 1993, and will have no environmental 
impact.

    Issued at Golden, Colorado, March 30, 1994.
William H. Clagett,
Administrator.
[FR Doc. 94-8478 Filed 4-7-94; 8:45 am]
BILLING CODE 6450-01-M