[Federal Register Volume 59, Number 242 (Monday, December 19, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-31057]


[[Page Unknown]]

[Federal Register: December 19, 1994]


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DEPARTMENT OF THE INTERIOR
 

Central Utah Project Completion Act; Notice of Intent To Contract 
for Hydroelectric Power Development in the Diamond Fork Area of the 
Central Utah Project (CUP) and the Strawberry Valley Project (SVP), UT

AGENCY: Office of the Assistant Secretary for Water and Science, 
Department of the Interior.

ACTION: Notice of intent to accept proposals, select a lessee, and 
contract for hydroelectric power development in the Diamond Fork area.

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SUMMARY: Current Federal policy encourages non-Federal development of 
electrical power resource potential on Federal water resource projects. 
The Department of the Interior (Interior), in consultation with the 
Department of Energy, Western Area Power Administration (Western), will 
consider proposals for non-Federal development of hydroelectric power 
in the Diamond Fork area of the CUP and the SVP, Utah, consisting of 
the area from the outlet of the Syar Tunnel to the confluence of 
Diamond Fork Creek and the Spanish Fork River. Interior is considering 
such hydroelectric power development under a lease of power privilege. 
No Federal funds will be available for such hydroelectric power 
development. Western would have the first opportunity to purchase and/
or market the power that would be generated by such development under a 
lease of power privilege. The CUP and the SVP are Federal Bureau of 
Reclamation (Reclamation) projects. This notice presents background 
information, proposal content guidelines, information concerning 
selection of a non-Federal entity(s) to develop hydroelectric power in 
the Diamond Fork area of the CUP and the SVP, and power purchasing and/
or marketing considerations. Interested parties are invited to submit 
proposals.

DATES: A written proposal and seven copies must be submitted on or 
before May 1, 1995, to: Mr. Ronald Johnston, Program Director, CUP 
Completion Act Office, Department of the Interior, 302 East 1860 South, 
Provo, UT 84606-6154.
    A copy of the proposal should also be sent to: Mr. Kenneth G. 
Maxey, Area Manager, Western Area Power Administration, P.O. Box 11606, 
Salt Lake City, UT 84147-0606.

FOR FURTHER INFORMATION: Additional information on matters related to 
this Federal Register notice can be obtained at the address and 
telephone number set forth below: Mr. Ronald Johnston, Program 
Director, CUP Completion Act Office, Department of the Interior, 302 
East 1860 South, Provo, UT 84606-6154, Telephone: (801) 379-1103.
    Information related to Western's purchasing and/or marketing the 
power may be obtained at the address and telephone number set forth 
below: Mr. Kenneth G. Maxey, Area Manager, Western Area Power 
Administration, P.O. Box 11606, Salt Lake City, UT 84147-0606, 
Telephone: (801) 524-6372.
    Technical data may be obtained at the address and telephone number 
set forth below: Mr. Reed Murray, Program Coordinator, CUP Completion 
Act Office, Department of the Interior, 302 East 1860 South, Provo, UT 
84606-6154, Telephone: (801) 379-1237.

Background Information

    The CUP, Bonneville Unit, located in northern Utah, was authorized 
for construction, including hydroelectric power, by the Colorado River 
Storage Project (CRSP) Act of April 11, 1956, (70 Stat. 105) (CRSP Act) 
as a participating project, and the Central Utah Project Completion Act 
(Titles II through VI of Public Law 102-575, 106 Stat. 4605) (CUPCA). 
The United States has constructed a portion of the Bonneville Unit of 
the CUP (initial phase), including, among other features, Upper 
Stillwater Dam, Bottle Hollow Dam, Starvation Dam, Currant Creek Dam, 
Jordanelle Dam, Soldier Creek Dam for the enlarged Strawberry 
Reservoir, the Syar Tunnel, and the Sixth Water Aqueduct and Tunnel. 
The Central Utah Water Conservancy District (District) is constructing 
other features of the Bonneville Unit pursuant to CUPCA. Section 208 of 
the CUPCA provides that power generation facilities associated with the 
CUP be developed and operated in accordance with the CRSP Act, which 
explicitly embodies all Reclamation law except as otherwise provided in 
the CRSP Act. The District, under its contracts with the United States, 
has certain operation, maintenance, replacement, and repayment 
responsibilities and obligations concerning the Bonneville Unit.
    The United States constructed the SVP, comprising the Strawberry 
Dam and Reservoir, the Strawberry Tunnel, the Upper Spanish Fork 
Powerplant and transmission lines, the High Line Canal, the Mapleton 
and Springville Lateral and related collection, diversion, conveyance, 
and distribution works, all of which were substantially completed in 
approximately the year 1915. The Strawberry Water Users Association 
(Association), under its contracts with the United States, has the 
right to lease power privileges (subject to approval by Interior) and 
has operation, maintenance, replacement, and repayment responsibilities 
and obligations concerning the SVP.
    Interior, in consultation with Western, is considering only a 
consolidated system for hydroelectric power development in the Diamond 
Fork area (Project), involving both the CUP and the SVP, through a 
lease of power privilege. The general authority for lease of power 
privilege under Reclamation law includes the Town Sites and Power 
Development Act of 1906 (43 U.S.C. Sec. 522) and the Reclamation 
Project Act of 1939 (43 U.S.C. Sec. 485h(c)) (1939 Act).
    A lease of power privilege is an alternative to Federal 
hydroelectric power development. The lease of power privilege would 
grant to a non-Federal entity(s) the right to utilize, consistent with 
CUP and SVP purposes, water power head or storage at and/or 
operationally in conjunction with the CUP and the SVP, for non-Federal 
electric power generation and sale by the lessee(s). Any lease of power 
privilege in the Diamond Fork area of the CUP and SVP must accommodate 
pre-existing legal rights of the District and the Association.
    Interior would be the lead Federal agency for compliance with the 
National Environmental Policy Act (NEPA) for any lease of power 
privilege to develop the Project. Issuance of a lease(s) of power 
privilege for hydroelectric power development in the Diamond Fork area 
will require compliance with Federal fish, wildlife, recreation, and 
environmental laws, as determined by Interior.
    Western would have the first opportunity to purchase and/or market 
the power that would be generated by the Project under a lease(s) of 
power privilege. Under this process, Western would either purchase and 
market the power as Salt Lake City Area--Integrated Projects (SLCA-IP) 
power or market the power independently by first offering it to 
preference entities and secondly to non-preference entities.
    All Project study and development costs, including compliance with 
Federal fish, wildlife, recreation and environmental laws, would be the 
expense of the lessee(s). Lease payments to the United States will be 
deposited in the Upper Colorado River Basin Fund.

Proposal Content Guidelines

    Interested parties should submit proposals explaining in as precise 
detail as is practicable how the Project would be developed. Factors 
which a proposal(s) should consider and address include, but are not 
limited to, the following:
    A. Provide qualifications of the proposing entity(s). Include 
information on preference status, type of organization, length of time 
in business, experience in funding and design and construction of 
similar projects, industry rating(s) that indicate financial soundness 
of the potential lessee(s), experience of key management personnel, 
history of any reorganizations or mergers with other companies, and any 
other information that demonstrates the adequacy of the proposal and 
financial ability to fund all studies, designs, and construction. The 
term ``preference,'' as applied to a lease of power privilege, means an 
entity qualifying for preference to develop non-Federal hydroelectric 
power, under Section 9(c) of the 1939 Act, as a municipality, public 
corporation or agency, or cooperative or other nonprofit organization 
financed in whole or in part by loans made pursuant to the Rural 
Electrification Act of 1936.
    B. Provide geographical locations and describe principal structures 
and other important features of the Project including roads and 
transmission lines. Estimate and describe installed capacity and the 
capacity of the power facilities under dry, average, and wet 
hydrological conditions. Also describe seasonal or annual generation 
patterns. Include estimates of the amount of electrical energy that 
would be produced from each facility for each month of average, dry, 
and wet water years. If capacity and energy can be delivered to another 
location, either by the proposing entity or by potential wheeling 
agents, specify where capacity and energy can be delivered. Include 
concepts for power sales and contractual arrangements, involved parties 
and the proposed approach to wheeling if required.
    C. Indicate title arrangements and the ability for acquiring title 
to or the right to occupy and use lands necessary for the Project, 
including such additional lands as may be required during construction.
    D. Identify water rights applicable to the proper operation of the 
Project, the holder of such rights, and how these rights would be 
acquired or perfected.
    E. Explain studies necessary to adequately define impacts on the 
CUP and the SVP and the environment in order to facilitate the decision 
making process. Explain any proposed use of the Project for 
conservation and utilization of the available water resources in the 
public interest. Describe any significant environmental issues and the 
approach for gathering data and handling the environmental issues to 
protect and enhance the quality of the environment.
    F. Describe anticipated contractual arrangements with the District 
and the Association and define how the Project would operate in harmony 
with the CUP and the SVP.
    G. Provide a management plan to accomplish such activities as 
planning, NEPA compliance, design, construction, operation, and 
maintenance. Prepare schedules of these activities as is applicable. 
Describe what studies are necessary to accomplish the hydroelectric 
power development and how the studies would be implemented.
    H. Estimate Project development cost. This cost should include all 
investment costs such as the cost of studies to determine feasibility, 
NEPA compliance, design, construction, and financing as well as the 
amortized annual cost of the investment; also, the annual operation, 
maintenance, and replacement expense for the Project and other expenses 
associated with the CUP and the SVP. If there are additional 
transmission or wheeling expenses associated with the development of 
the Project, these should be included. Identify proposed methods of 
financing the Project. An economic analysis should be presented that 
compares the present worth of all benefits and costs of the Project. 
Additionally, a financial analysis should be presented that compares 
monies available to the United States for use of Federal facilities and 
costs to the CUP and the SVP.

Selection of Lessee

    Interior, in consultation with Western, will evaluate proposals 
received in response to this published notice. A proposal will be ruled 
unacceptable if it is not complete, is not consistent with both CUP and 
SVP purposes, and does not accommodate pre-existing legal rights of the 
District and the Association, as determined by Interior.
    Selection of a lessee will be based on the following 
considerations:
    A. First consideration will be given to preference entities. 
Interior will give added consideration to proposals that (1) are 
especially well-adapted to developing, conserving, and utilizing the 
water and natural resources; (2) are harmonious with CUP and SVP 
purposes; and (3) would provide significant economic benefits to the 
CUP, the SVP, and the United States.
    B. Second consideration will be given to non-preference entities. 
Interior will give added consideration to proposals that (1) are 
especially well-adapted to developing, conserving, and utilizing the 
water and natural resources; (2) are harmonious with CUP and SVP 
purposes; and (3) would provide significant economic benefits to the 
CUP, the SVP, and the United States.

Power Purchasing and/or Marketing Considerations

    Western would have the first opportunity to purchase and/or market 
the power that would be generated by the Project under a lease(s) of 
power privilege. Western will consult with Interior on such power 
purchasing and/or marketing considerations.
    Western would determine its interest in purchasing the electric 
power from the lessee(s) as a replacement resource for its Salt Lake 
City Area Integrated Projects (SLCA/IP) under principles and processes 
being considered as part of Western's Replacement Power Process under 
the Grand Canyon Protection Act. Western would also apply Integrated 
Resource Planning principles in comparing this resource with all other 
potential resource purchases available to Western.
    Alternatively, Western may market the power available from the 
Project on a stand-alone basis, first to preference entities qualified 
under criteria established by Western and second to non-preference 
entities, by developing an individual marketing plan for this power. 
This marketing plan would be developed through a separate subsequent 
public process beginning with a notice in the Federal Register of 
Western's intent to market the power. The marketing plan would include 
all aspects of marketing the power, including assignment of power to 
qualified preference and/or non-preference entities, pricing, 
transmission, and delivery of power. Western would recover the costs it 
would incur in purchasing and/or marketing the power through the rates 
charged for the power. Firm power rates would be established through a 
public process, initiated by a notice in the Federal Register, separate 
from the marketing plan.
    In the event Western elects to not purchase and/or market the power 
generated by the Project or such a decision cannot be made prior to 
execution of the lease of power privilege, the lessee(s) would be 
responsible for marketing the power generated by the Project with 
priority given to preference entities as heretofore defined in PROPOSAL 
CONTENT GUIDELINES, paragraph A.

Notification of Selection of Lessee and Negotiations for a Lease of 
Power Privilege

    After Interior selects a lessee, Interior will notify, in writing, 
all entities submitting proposals of Interior's decision regarding 
selection of the potential lessee(s). The selected potential lessee(s) 
will have five years from the date of such notification to enter into a 
lease(s) of power privilege for the site or sites identified in the 
proposal. Lease of power privilege negotiation sessions will be public. 
If Western elects to purchase and/or market the power, such lease(s) of 
power privilege will state how Western will be involved in purchasing 
and/or marketing the power.
    Any excessive delay resulting from compliance with the provisions 
of Federal environmental laws or administrative review by a Federal 
agency, pertaining to the Project, may extend the five year time period 
for a period equal to that of the delay. In the event of litigation 
related to the proposed Project, the five year time period will be 
extended for a period equal to that of the delay, provided such 
litigation was initiated by parties other than the selected potential 
lessee(s) or its employees, officers, agents, assigns, shareholders, 
customers or persons or groups served by or in privity with the 
potential lessee(s).

    Dated: December 13, 1994.
Ronald Johnston,
CUP Program Director, Department of the Interior.
[FR Doc. 94-31057 Filed 12-16-94; 8:45 am]
BILLING CODE 4310-RK-P