[Federal Register Volume 62, Number 243 (Thursday, December 18, 1997)]
[Rules and Regulations]
[Pages 66442-66485]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-32795]



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Part V





Department of the Interior





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Bureau of Reclamation



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43 CFR Part 418



Adjustments to 1988 Operating Criteria and Procedures (OCAP) for the 
Newlands Irrigation Project in Nevada; Final Rule

  Federal Register / Vol. 62, No. 243 / Thursday, December 18, 1997 / 
Rules and Regulations  

[[Page 66442]]



DEPARTMENT OF THE INTERIOR

Bureau of Reclamation

43 CFR Part 418

RIN 1006-AA37


Adjustments to 1988 Operating Criteria and Procedures (OCAP) for 
the Newlands Irrigation Project in Nevada

AGENCY: Bureau of Reclamation, Interior.

ACTION: Final rulemaking.

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SUMMARY: This rule adjusts the 1988 Operating Criteria and Procedures 
(OCAP) for the Newlands Irrigation Project (Project). Adjustments are 
made to the Project efficiency requirements, maximum allowable 
diversion calculations, and Lahontan Reservoir storage targets in the 
1988 OCAP to reflect current irrigated acreage, court decrees which 
have lowered the water duty applicable to certain Project lands, and 
other factors affecting water demand. To better manage diversions from 
the Truckee River to the Project, the rule provides flexibility to 
adjust the water supply in response to Project demand, flexibility in 
using snowpack and runoff forecasts, and extends the time frame for 
storing water in Truckee River reservoirs in lieu of diversions to the 
Project from the Truckee River.

DATES: Effective December 16, 1997.

FOR FURTHER INFORMATION CONTACT: Dave Overvold, Acting Area Manager, 
Lahontan Area Office, Bureau of Reclamation, P.O. Box 640, Carson City, 
NV 89702, telephone (702) 882-3436; or Jeffrey Zippin, Team Leader, 
Truckee-Carson Coordination Office, 5665 Morgan Mill Road, Carson City, 
NV 89701, telephone (702) 887-0640. Copies of Adjusted OCAP regulations 
may be obtained from either office.

SUPPLEMENTARY INFORMATION:

Background

    On April 15, 1988, the Secretary of the Interior (Secretary) 
implemented new Operating Criteria and Procedures (OCAP) governing 
management of water diverted to and used within the Newlands Project. 
These 1988 OCAP were approved by the U.S. District Court for the 
District of Nevada, subject to a hearing on objections raised by 
various parties. In 1990, Congress directed in the Truckee-Carson-
Pyramid Lake Water Rights Settlement Act (Title II of Pub. L. 101-618, 
Section 209 (j) (104 Stat. 3294) that the 1988 OCAP remain in effect at 
least until December 31, 1997, unless changed by the Secretary in his 
sole discretion. Prior to the proposed rule, the 1988 OCAP had not been 
published in the Federal Register.
    These 1988 OCAP were designed to increase the reliance of the 
Project on water from the Carson River, minimize the use of water from 
the Truckee River as a supplemental supply, increase efficiency of 
water use in the Project, and establish a regulatory scheme to manage 
deliveries to Project water users including incentives for efficiency 
and penalties for inefficiency.
    An environmental impact statement (EIS) was prepared for the 1988 
OCAP. That EIS served as the basis for reviewing the environmental 
effects of these adjustments. The Department of the Interior (DOI) has 
prepared an environmental assessment on the adjustments which tiers off 
of the analysis in that EIS. Copies of the environmental assessment may 
be obtained from the Truckee-Carson Coordination Office.
    The Department is making a number of revisions to the 1988 OCAP to 
adjust for changes in use of water rights, to increase flexibility, and 
to clarify the language of the OCAP based on experience gained in 
administering the 1988 OCAP through nine irrigation seasons. These 
revisions are within the basic framework of the 1988 OCAP and its 
environmental documentation and are being published for codification.
    The need for additional changes to the 1988 OCAP beyond those in 
this rule may be appropriate as well, but consideration of such changes 
is expected to require further examination including the preparation of 
an EIS.

Description of the 1988 OCAP

    The 1988 OCAP provisions were preceded by a preamble which is 
equally applicable to the Adjusted OCAP. The 1988 OCAP preamble is 
reproduced with minor grammatical editing. The following 1988 OCAP 
Preamble is taken from the 1988 OCAP:

1988 OCAP Preamble

    The development of Operating Criteria and Procedures for the 
Newlands Project in western Nevada was initiated in the late 1960's 
and has proven to be a divisive, contentious issue for the people in 
Nevada who rely on the waters of the Carson and Truckee Rivers. 
Competition for the water in the Project's desert environment is 
intense and growing. The conflicts among uses are clearly apparent 
in the effects forecast on various areas where the DOI has program 
responsibilities. The issue is complicated further by the 
requirements of the Endangered Species Act and the listing of the 
Cui-ui, a fish inhabiting the lower Truckee River and Pyramid Lake.
    In order to proceed effectively and fairly, the DOI had to have 
guiding principles for the OCAP. These are to:

--Provide water deliveries sufficient to meet the water right 
entitlements of Project water users;
--Meet the requirements of the Endangered Species Act as they 
specifically relate to the Truckee River/Pyramid Lake Cui-ui;
--Fulfill Federal trust responsibilities to the Pyramid Lake Paiute 
Indian Tribe and the Fallon Paiute-Shoshone Tribes;
--Conserve wetland and wildlife values in both the Truckee and 
Carson River basins;
--Give cognizance to the State laws affecting water rights and uses;
--Provide for stable economies and improve quality of life in the 
region to the extent it is influenced by the DOI-managed resources 
and facilities;
--Allow local control and initiative to the maximum extent possible; 
and
--Provide stability and predictability through straightforward 
operation based on actual versus forecast conditions.

    The DOI believes that the proposed OCAP best satisfy these 
principles within the limits of the Department's legal authority. 
Each of the competing uses for the water is critical in its own 
right. They are all essentially separable for decision making 
purposes even though they clearly impact upon each other since the 
available supply is far less than the demand.
    The OCAP deal with the operation and use of Federal facilities 
related to the Newlands Project. Therefore, their primary 
responsibility is supplying the water rights to the Project water 
users. To the extent this can be done effectively and efficiently, 
then the remaining water supply is available for other competing 
uses. The secondary impacts of the OCAP must, however, act to 
support or encourage results which benefit the other competing uses.
    The basic structure of the OCAP relies on both rules and 
incentives which we believe will ensure reasonable, efficient water 
management through reliance on local control and initiatives. The 
direct consequences of the OCAP will be delivery of full water 
entitlements within the Newlands Project, protection of endangered 
species, fulfillment of trust responsibilities, and encouragement 
for the protection of other environmental and quality of life 
values.

Adjusted OCAP Proposed Changes

    The Notice of Proposed Rulemaking for the Adjusted OCAP, published 
in the Federal Register, 61 FR 64832, December 9, 1996, proposed a 
number of changes to the 1988 OCAP based, in part, on a comparison of 
the assumptions in the 1988 OCAP about the size of the Project and 
patterns of water use with Project size in 1995 and new patterns of 
water use. Specifically, the changes are:
     Acreage: The anticipated increase in acreage has not 
materialized; actual irrigated acreage in 1995 was 59,075 acres. This 
amount reflects efforts of the Bureau of Reclamation (BOR) to limit 
irrigation to water-righted lands and that, on average, irrigators have 
not

[[Page 66443]]

increased the acreage of lands in production. In the Notice of Proposed 
Rulemaking for Adjusted OCAP, the 1995 preliminary estimate of 
irrigated acreage for that year was shown in the text as 59,023. 
However, modeling was based on 59,075 irrigated acres. In this final 
rule, both the text, tables, and modeling consistently use 59,075 
irrigated acres for 1995. When this rule becomes effective, the 
provisions of section 418.22 will be used to adjust Lahontan Reservoir 
storage targets to reflect the current water demand.
     Average Water Duty: The average water duty for the project 
has been reduced as a result of the so-called ``bench/bottom'' 
litigation (1995 Order of Judge McKibben, in U.S. v. Alpine, United 
States District Court for the District of Nevada No. D-185). This 
bench/bottom court ruling approved a change in the designation of some 
Project lands from bench lands to bottom lands. Bench lands have a 
maximum water duty of 4.5 acre-feet/acre; bottom lands have a maximum 
water duty of 3.5 acre-feet/acre. (The Project includes pasture lands 
with a duty of 1.5 acre-feet/acre.) The bench/bottom decision 
reclassified approximately 9,000 acres of irrigated lands in the 
project, reducing Project water entitlements by approximately 9,000 
acre-feet. The change in demand is expected to be approximately 5,000 
acre-feet of water when measured at the farm headgates. This is based 
on historic use of about 90 percent of the headgate entitlement at 4.5 
acre-feet/acre versus projected use of 100 percent of the 3.5 acre-
feet/acre entitlement.
     Average Use of Entitlement: Actual water use as a 
percentage of entitlement is usually less than 100 percent, 
historically about 90 percent. The reduced percentage of entitlement 
use results from on-farm practices and efficiencies, fallowing of 
lands, and varying weather conditions. The current projected percent 
use of entitlement is 93.4 percent. This is based on irrigation use of 
91.8 percent and 95 percent for Carson and Truckee Divisions, 
respectively, and 100 percent water use for pasture lands and wetlands. 
Several factors will affect use of entitlement in the future:

--Irrigators whose lands were reclassified from bench lands with a 
water duty of 4.5 acre-feet per acre to bottom lands with a 3.5 acre-
feet per acre duty may use more than 90 percent of their entitlement.
--The Fallon Paiute-Shoshone Tribes reservation is within the Project 
and the Tribes have a cap on the water they receive. The Tribes are 
expected to use their full water entitlement under the cap every 
irrigation season.
--The Naval Air Station Fallon, as part of an agreement with the U.S. 
Fish and Wildlife Service (FWS), will use less of its irrigation water 
and is also developing less water intensive cropping strategies, 
decreasing percent use of entitlement.
--The FWS and the State of Nevada are acquiring water rights within the 
Newlands Project for restoration of wetlands at Stillwater National 
Wildlife Refuge. The FWS has been transferring the consumptive use 
portion, 2.99 acre-feet per acre, of the water rights they acquire. 
This changes their effective entitlement to 2.99 acre-feet per acre of 
which they are expected to take 100 percent, thus increasing percent 
use of entitlement.

    These and other changes in water use will cause the percent use of 
entitlement to vary from year to year. The percent use will be 
determined based on actual experience and will be used in calculating 
the expected irrigation diversion for each irrigation season.
     Efficiency: Within the same size project, more irrigated 
acreage results in greater efficiency; with less irrigated acreage 
lower efficiencies are expected. Project irrigated acreage never 
reached the level anticipated in the 1988 OCAP but the associated 
target efficiencies have remained in effect. As water rights are 
acquired for Stillwater Wildlife Refuge (Pub. L. 101-618, section 206), 
the effect on Project efficiencies may vary at first, but as more water 
is acquired and moves to the Refuge, efficiencies should improve 
stemming from the concentration of deliveries through the system.
    This rule addresses only those adjustments to the 1988 OCAP in the 
following areas:
    1. Target Efficiency Adjustments (Secs. 418.12 (c)(3), 418.13 (a), 
and Newlands Project Water Budget table): The 1988 OCAP envisioned and 
allowed for increasing irrigated acreage, assuming the Project would 
grow to over 64,850 irrigated acres by 1992 compared to a base of 
approximately 60,900 acres being irrigated in 1987. The annual 
calculations of the Maximum Allowable Diversion (MAD) to the Project 
and efficiency requirements currently in use are based on a Project 
consisting of 64,850 or more irrigated acres and a commensurate target 
efficiency of 68.4 percent. However, the acreage increase has not 
materialized and the 1995 irrigated acreage was approximately 59,075 
acres. The Project conveyance efficiency that can be achieved, which is 
the relationship between the total annual diversion to the Project and 
total delivery to farm headgates, is directly related to irrigated 
acreage; efficiency generally decreases as the irrigated acreage in the 
Project decreases. The 1988 OCAP does not accurately reflect the 
current acreage, and as a consequence, the higher efficiency 
requirement remains in effect. This may decrease the water available to 
the Project as calculated in the MAD and increases the likelihood of 
penalties for inefficiency.
    In response to less irrigated acreage and varying water demand, the 
DOI will calculate the annual Project water budget for each irrigation 
season in accordance with the elements in the Newlands Project Water 
Budget table of the Adjusted OCAP. Each year the MAD will be based on 
the projected irrigated acreage for that year and applicable water 
duties. The other elements in Newlands Project Water Budget, including 
appropriate Project efficiency at 100 percent use, would be calculated 
to determine the MAD and Project efficiencies for each year. Only the 
first 10 lines of the water budget would be calculated before the 
irrigation season to determine the MAD, then the remaining lines would 
be calculated after the irrigation season to determine target 
efficiency. Through this approach, the Project water budget can 
accommodate anticipated changes in Project characteristics.
    Using the 1995 Actual Acres column from the Newlands Project Water 
Budget, Maximum Headgate Entitlement (line 2) is the product of 
Irrigated Acres (line 1) and the average water duty (calculated 
annually). Variable distribution system losses of Canals/Laterals 
Evaporation (line 3), Canals/Laterals Seepage (line 5), and Operational 
Losses (line 7) are extrapolated to determine the Total Losses (line 8) 
for a given Project size. The combined Maximum Headgate Entitlement 
(line 2) and the Total Losses (line 8) determines the MAD (line 9), and 
the relationship of Maximum Headgate Entitlement (line 2) to Total 
Losses (line 8) estimates Project Efficiencies at 100 percent water use 
(line 10). Actual use of entitlement, based on historic patterns, is 
less than 100 percent (not all irrigators take all of their entitlement 
each year), so the Maximum Headgate Entitlement is adjusted by the 
projected percent use of entitlement (calculated annually) to yield 
Expected Headgate Entitlement Unused (line 11) and the Diversion 
Reduction for Unused Water (line 12). The Diversion Reduction for 
Unused Water (line 12) is subtracted from the MAD (line 9) to determine 
Expected

[[Page 66444]]

Irrigation Diversions (line 13). Finally, the adjusted Project demand 
(calculated from line 2 minus line 11) is divided by the Expected 
Irrigation Diversions (line 13) to determine the Expected Efficiency 
(line 14).
    The effect of this is to have the Adjusted OCAP more accurately 
reflect the Project water demand. Reducing the annual Project 
efficiency target will recognize the limitation of the present water 
distribution system facilities and assist the Project in achieving 
efficiency requirements. No changes are proposed for the 1988 OCAP 
relative to how the MAD is calculated and administered, determination 
of eligible land, reporting, or calculation of credits or debits.
    2. Adjustments to Lahontan Reservoir Storage Targets (Secs. 418.20, 
418.21, and 418.22, and tables of Monthly Values for Lahontan Storage 
Computations, End of Month Storage Targets for July Through December, 
and Adjustments to Lahontan Reservoir Storage Targets): The 1988 OCAP 
prescribes when water may be diverted from the Truckee River to 
supplement Carson River inflow to Lahontan Reservoir to serve the 
Carson Division of the Project. (The Truckee Division of the Project is 
supplied entirely by water from the Truckee River.) The Truckee River 
diversion to the Carson Division is governed by end-of-month storage 
target levels in Lahontan Reservoir. Water is diverted from the Truckee 
to the Reservoir only if it is forecast that the storage target will 
not be met by Carson River inflow by the end of the month. In years of 
low flow on the Carson River, a greater percentage of the Carson 
Division Project water supply is diverted from the Truckee River. In 
wet years, the Carson Division supply may come entirely from the Carson 
River. Thus, storage targets are used to help maintain a steady water 
supply despite the natural climatic variability and differences in 
annual runoff between the two river basins.
    The formula used to determine how much water may be diverted to 
Lahontan Reservoir from the Truckee River in January through June 
relies, in part, on the runoff forecast for the Carson River. The 
imprecision inherent in such forecasting can lead to variable 
consequences. Sometimes more Truckee River water is diverted than is 
needed to serve Project water users. This is particularly problematic 
when the Carson River fills Lahontan Reservoir to the point that water 
spills over Lahontan Dam or so that a precautionary spill (release) of 
water must be made to avoid later flooding. In either situation, 
spilled water that cannot be transported to water-righted lands or 
Lahontan Valley wetlands flows into Carson Sink in the desert. This 
situation occurred most recently in 1995, 1996, and 1997 with the 
consequence that Truckee River water that could have flowed into 
Pyramid Lake contributed to water that was spilled.
    Because of their imprecision, forecasts for Carson River runoff do 
not always reflect actual conditions and the water may not materialize. 
If not enough water was brought over from the Truckee River earlier in 
the water year, or Truckee River flow is insufficient to make up for 
the shortfall from the Carson River, then the water supply may be 
inadequate to meet the annual irrigation demand. This situation 
occurred in 1994 when the Carson River was forecast to have a 100 
percent water year but only produced a 50 percent water supply.
    Two of the objectives of OCAP are to minimize spills and moderate 
shortages. It is important to note that for the 95 years of records, 
the climatic/hydrologic variability of both rivers is so great that 
even if there were no limits on the diversion of Truckee River water, 
in some years shortages would result. Conversely, even if no Truckee 
River water were diverted, in some years Lahontan Reservoir would spill 
just from Carson River inflow.
    The 1988 OCAP has a June end-of-month storage target of 215,000 
acre-feet in Lahontan Reservoir. The 215,000 acre-feet would serve at 
least 4,000 to 5,000 more acres of water-righted and irrigated land 
than has been irrigated in actual practice. The reclassification of 
some bench lands to bottom lands further reduces water demand in the 
Carson Division. The difference in headgate demand between what the 
1988 OCAP projected and current Carson Division demand is approximately 
21,000 acre-feet. The current storage targets permit unnecessary 
diversions from the Truckee River to the Project. The proposed Adjusted 
OCAP storage targets were based on the lower Carson Division demand and 
reducing water loss to seepage, evaporation, and spill. Accordingly, 
the proposed end-of-June storage target was adjusted to 174,000 acre-
feet, and the July through December targets were lowered as shown in 
Table A. However, in this final rule, the end-of-June storage target is 
190,000 acre-feet, as shown in the table Monthly Values for Lahontan 
Storage Calculations (section 418.20 of the rule), while the January-
May targets are retained, subject to the adjustment procedures 
described below. July and August end-of-month storage targets are also 
increased to help maintain recreation levels in Lahontan Reservoir. 
This is discussed in the Response to Comments, II.7., in this preamble.
    A comparison of the 1988 OCAP, the proposed Adjusted OCAP, and the 
final Adjusted OCAP storage targets for Lahontan Reservoir are shown in 
Table A of this preamble. In addition, this final Adjusted OCAP, in 
response to comments, adopts a flexible storage target regime that can 
respond to future changes in Project water demand. This is discussed in 
the Response to Comments, II.1, in this preamble and set out in section 
418.22 of the rule. The new storage targets will be used to calculate 
diversions from the Truckee River in accordance with section 418.20 et 
seq. of the proposed rule.

BILLING CODE 4310-RK-P

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[GRAPHIC] [TIFF OMITTED] TR18DE97.000



BILLING CODE 4310-RK-C

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    The storage targets were developed using the Truckee River 
settlement negotiations water balance model. The model was used to 
examine how different storage targets affected spills, inflow to 
Pyramid Lake, and other parameters. Key assumptions used in modeling 
were reduced Project water demand from the 1988 OCAP, lower efficiency 
targets, current Truckee River operations, and Project shortages 
consistent with the 1988 OCAP. The model uses the 95-year (1901-1995) 
historic hydrologic record for the Truckee and Carson Rivers.
    For the proposed Adjusted OCAP, a series of modeled storage targets 
was evaluated based on the degree to which a set of targets reduced 
spills, increased inflow to Pyramid Lake, increased the estimated 
number of spawning years for cui-ui, increased the estimated number of 
cui-ui, reduced Lahontan Reservoir and Truckee Canal seepage and 
evaporation losses, and held frequency and magnitude of Project 
shortages consistent with the 1988 OCAP. These goals are consistent 
with the Secretary of the Interior's responsibilities as the District 
Court ruled in Pyramid Lake Paiute Tribe of Indians v. Rogers C.B. 
Morton (Tribe v. Morton), 354 F. Supp. 252 (D.D.C. 1973).
    Though not a specific feature of the Adjusted 1988 OCAP, the 
modeling used in making decisions on this proposed rule took cognizance 
of the 4,000 acre-foot minimum pool that the Truckee-Carson Irrigation 
District (TCID), the Project operator, voluntarily has maintained in 
Lahontan Reservoir to protect fish resources there. Though this action 
to maintain a minimum pool is purely voluntary on the part of TCID and 
Newlands Project water right holders, it provides environmental 
benefits, was assumed to be continued into the future, and was credited 
in the modeling used to establish new Lahontan storage targets; that is 
to say, the targets would have been somewhat lower to achieve the same 
release shortage percentage and Truckee River inflow volume to Lahontan 
Reservoir assuming no anticipation of the 4,000 acre-foot minimum pool.
    Table A presents the model results examined in developing the 
Adjusted OCAP, and the values are averages for the 95-year period of 
record. Modeled results for the 1988 OCAP with current hydrology are 
compared to the Current Conditions, the proposed Adjusted OCAP, and the 
final Adjusted OCAP. In a number of categories, the modeled results 
show improvements under the final Adjusted OCAP storage targets as 
compared with the 1988 OCAP. For example, there is less Truckee Canal 
loss (line 3), less Lahontan Reservoir loss (line 12), and less 
Lahontan Reservoir spill (line 14). Compared to the Current Conditions, 
the final Adjusted OCAP is an improvement in all areas except for 
Project water supply (line 18) and the additional shortage year (line 
19). The modeled reduction of water loss and spill from the Project 
increases inflow to Pyramid Lake under the final Adjusted OCAP (line 
23). Compared to the Current Conditions, approximately 19,800 acre-feet 
of water is modeled to be saved from the Truckee River under the Final 
Adjusted OCAP from reduced Truckee Canal loss, reduced Lahontan 
Reservoir loss, and reduced spills. Of this 19,800 acre-feet of Truckee 
River water saved, approximately 2,550 acre-feet of the water saved 
reduces Project water supply compared to Current Conditions.
    3. Truckee River Storage in Lieu of Diversions (Sec. 418.20 (f)): 
Project diversions from the Truckee River may be fine-tuned by 
retaining water in upper Truckee River reservoirs that would otherwise 
have been diverted to Lahontan Reservoir to meet storage targets. 
Depending upon how much Carson River runoff reaches Lahontan Reservoir 
and whether storage targets are met by the Carson River inflow, the 
water retained in storage may be released later in that year and 
diverted to Lahontan Reservoir for delivery to the Carson Division, or 
retained for Pyramid Lake if the water is not needed for Carson 
Division irrigation.
    Under the 1988 OCAP, water was allowed to be stored upstream on the 
Truckee River in lieu of diversion only from April to June. In 1995, 
this limitation contributed to approximately 80,000 acre-feet of water 
being diverted from the Truckee River to Lahontan Reservoir before 
March 31, then spilling because of high Carson River runoff. None of 
the Truckee River water was needed because the Carson River more than 
filled Lahontan Reservoir and precautionary releases were made to avoid 
spilling over the dam. While the 80,000 acre-foot-diversion from the 
Truckee was controversial, it resulted from managing the diversion in 
strict adherence with the 1988 OCAP targets. In the 1996 and 1997 water 
years, respectively, 6,000 and 22,000 acre-feet were diverted from the 
Truckee River in late fall and winter, and again spilled. It is 
possible that a similar occurrence may result in the 1998 water year 
from continued application of the 1988 OCAP storage targets. The 
proposed Adjusted OCAP provided more flexibility to reduce such 
unnecessary diversions.
    Consistent with managing Project diversions from the Truckee River, 
the proposed Adjusted OCAP expanded the opportunity to credit store 
water for the Project in reservoirs on the upper Truckee River by 
allowing storage as early as January of each year. In this final 
Adjusted OCAP, Truckee River storage would be allowed as early as 
November of the previous year. The water would be credited based on 
water actually retained in Truckee River reservoirs or, if water was 
not being released for Project diversion, credited as Newlands Project 
water in Stampede Reservoir adverse to other water (fish water) stored 
in Stampede Reservoir. In the latter situation, concurrence by the FWS 
will be required. For example, a reduction of diversions in January 
through March of 1995, would have required FWS approval to create 
Newlands Project credit water out of Stampede Reservoir water because 
water was not being released for Project diversion. Newlands Project 
credit water could be released for diversion to Lahontan Reservoir, if 
needed, as early as July 1 through the end of the irrigation season, 
but not thereafter. The water would only be used for the Carson 
Division. Water in storage could be exchanged to other reservoirs but 
it will not carry over to the next year for use in the Project. If it 
is not used in the year in which it is stored, it will not be available 
thereafter to the project. To protect the water users, the water held 
in storage on the Truckee River would not be reduced by evaporation and 
would be gaged at the US Geological Survey gage on the Truckee Canal 
near Wadsworth, Nevada, to ensure that diversion to the Project matches 
the diversion foregone earlier in the season. Water could spill, but if 
spilled, it would be subject to diversion to Lahontan when needed to 
meet storage targets. Water stored but not needed for the Project would 
be managed to benefit cui-ui and Lahontan cutthroat trout in Pyramid 
Lake.
    This change provides flexibility to reduce excessive diversions 
from the Truckee River. The BOR is expected to use this proposed 
provision only in years when Carson River runoff is forecast to be 
above average and is intended to fine tune diversions and avoid over-
diversions from the Truckee River. Such storage in Stampede Reservoir 
or other Truckee River Reservoirs is not intended to make up for 
shortages in drier years.
    There is little advantage to foregoing diversions in below average 
runoff years if the likelihood is that all the credit stored water 
would need to be diverted to the Project in any event. The changes in 
Section 418.20 (f) of the rule include provisions for BOR to consult 
with

[[Page 66447]]

TCID, the Federal Water Master, FWS, Bureau of Indian Affairs (BIA), 
and the Pyramid Lake Paiute Tribe before any credit storing is 
initiated.
    4. Expanded Forecasting (section 418.20 (a)): In calculating the 
January to June monthly diversions from the Truckee River, the 1988 
OCAP uses the monthly forecast for April through July runoff published 
by the Natural Resources Conservation Service (NRCS) (formerly the Soil 
Conservation Service). Rather than continuing to rely on that forecast 
alone, the proposed Adjusted OCAP provided flexibility to examine other 
forecasts and allow the use of a deliberative process to determine how 
to manage Truckee River diversions. This provision remains unchanged in 
this final Adjusted OCAP. The intent of this change is to allow the BOR 
to take advantage of other forecasts and the experience and knowledge 
of the Federal Water Master, the TCID water master, and other parties. 
The desired effect of this change is to improve precision in 
forecasting and managing the Truckee River diversion to the Project to 
avoid spills and shortages.
    5. Additional Revisions: In addition to the changes identified in 
1. through 4. above, a number of minor revisions have been made to the 
1988 OCAP. Most changes are editorial and do not affect the meaning of 
the text. Some changes provide opportunities for consultation with 
interested and affected parties before BOR makes a decision.
    A few changes add language to clarify or interpret the meaning of 
the 1988 OCAP in light of experience administering the OCAP, passage of 
time, or new statutory provisions. Changes to the text of the 1988 OCAP 
occur at:
    Section 418.2: Other Project purposes are added in accordance with 
Pub. L. 101-618, 104 Stat. 3289, Sec. 209 (a) (1).
    Section 418.13 (a) (3): Explains the use of efficiencies in 
calculating the MAD.
    Section 418.18 (b): Calculates terminal flow in the Truckee Canal 
by averaging flows during the time when water is not being diverted to 
Lahontan Reservoir.
    Section 418.24: Water captured in Project facilities from a spill 
or precautionary drawdown is used to make deliveries to eligible lands 
but does not count as a Project diversion or as Lahontan Reservoir 
storage.
    Section 418.29: Deletes the reference to the February 14, 1984, 
Contract for Operation and Maintenance between the United States and 
the District.
    Section 418.37 (d): Adds new text clarifying that a natural drought 
greater than or equal to the debit will eliminate the debit.
    Section 418.38 (b): Allows TCID to divert up to the MAD if needed 
to meet headgate entitlements.

Rulemaking Process

    The DOI announced in 1995 that it intended to revise the 1988 OCAP 
through adjustments to that OCAP. In the summer of 1995 the TCCO held 
four public workshops in Fernley, Nevada to invite affected and 
interested parties to offer their thoughts on changes to the 1988 OCAP 
affecting storage targets, conveyance efficiency, storage in lieu of 
diversions, and the use of runoff forecast data.
    The Notice of Proposed Rulemaking on the Adjusted OCAP was 
published December 9, 1996, with the 60-day comment period scheduled to 
close on February 7, 1997. As a result of being preoccupied with the 
worst floods in decades on both the Carson and Truckee Rivers in 
January 1997, the DOI received many requests for an extension of the 
comment period. By notice in the Federal Register on February 18, 1997, 
the comment period was extended an additional 60 days until April 8, 
1997. The Notice extending the comment period also included frequently 
asked questions and answers regarding the Adjusted OCAP, and made known 
the availability of general and detailed modeling results related to 
the rulemaking.
    During the initial comment period, the TCCO conducted an 
information briefing for the State of Nevada, TCID, Fallon Tribe, and 
Pyramid Lake Tribe. Two public workshops to explain and answer 
questions about the proposed rule were held in Fallon and Fernley, 
Nevada. The TCCO received 47 written comments on the proposed rule. 
Comments addressed the proposed rule and are responded to in this 
preamble. Many comments addressed the draft environmental assessment 
(EA), which had been made available for review, and have been responded 
to with changes in the EA. Two commenters submitted pleadings in 
litigation on the 1988 OCAP which were not addressed in this final rule 
because they were already addressed in the United States' responsive 
pleadings in that case.

Changes Made in This Final Rule

    In response to comments and additional information, the DOI has 
made several changes in this final Adjusted OCAP rule. The proposed 
change in Lahontan Reservoir storage targets received more comments 
than any other issue in the proposed rule. This final Adjusted OCAP 
addresses two storage target issues raised in comments: future 
increases or decreases in Project water demand, and effects of lower 
storage targets on recreation. In this final rule, a system of demand 
responsive storage targets is implemented to provide a stable water 
supply to the Project over a range of water demands that may result 
from changes in irrigated acres, use of entitlements, or other 
circumstances. In addition, summer storage targets have been increased 
to help maintain recreation levels at Lahontan Reservoir, without 
substantial effect on Pyramid Lake inflow or threatened and endangered 
fish recovery. This also provides a slight benefit to Project water 
supply. These changes are described in sections II.1. and II.7. of the 
Response to Comments in this preamble and sections 418.20, 418.21, and 
418.22 of the rule.
    The Adjusted OCAP proposal to extend the period for storage of 
Truckee River water in lieu of diversions back to January each year has 
been changed in the final rule by extending it back to include November 
and December. November and December targets increase significantly to 
take advantage of winter flows in the Truckee River when the water will 
clearly be needed in the Project. Adding storage in lieu of diversions 
in November and December will help avoid a repeat of the situation that 
developed in late 1996 and early 1997 when all reservoir storage levels 
were up yet diversions from the Truckee River to the Project continued 
through the end of December, only to begin spilling as a precautionary 
release from Lahontan Reservoir on January 1, 1997. The final rule also 
allows Newlands credit water spilled from Truckee River reservoirs to 
be diverted to Lahontan Reservoir subject to applicable storage 
targets. These changes are described in sections II.5 of the Response 
to Comments in this preamble and section 418.20(f) of the rule.
    The proposed Adjusted OCAP lowered the Project conveyance 
efficiency target based on increases in the percent use of entitlements 
and decreases in the Project size. The intent was for the conveyance 
efficiency target to be dynamic and continue to vary with the use of 
entitlements and the Project size. However, Figure 1, the graph in 
Appendix A at the end of the proposed rule, showed target efficiencies 
varying only in proportion to percent use of entitlement. This has been 
replaced in the rule at section 418.13(a)(4) and by the table Expected 
Project Distribution System Efficiency that shows required efficiency 
for a range of irrigated acreage and a range of percent use of 
entitlement. The table also provides the

[[Page 66448]]

slope and y-intercept so that a new graph may be prepared. Appendix A 
in this final rule has a table Calculation of Efficiency Equation which 
shows how the Expected Project Distribution System Efficiency is 
calculated using a range of percent use of entitlement from 100 percent 
to 75 percent.
    The proposed Adjusted OCAP made several corrective adjustments to 
the 1988 OCAP to have the Adjusted OCAP reflect actual Project 
operations. One of these affected how water released into Rock Dam 
Ditch was counted. Rock Dam Ditch may receive water directly from 
releases at Lahontan Reservoir, or may get water directly from the 
Truckee Canal via a siphon pipe under the stilling basin below Lahontan 
Dam. In the proposed Adjusted OCAP rule, diversions directly from the 
Truckee Canal would have counted against the Truckee Division. As was 
noted in comments, this is incorrect, as the water that reaches Rock 
Dam Ditch would, in all cases, come from water in Lahontan Reservoir or 
destined to arrive in Lahontan Reservoir. This change is noted at 
section III.1 of the preamble and in the rule at section 418.23.
    Modeling used to compare various OCAP scenarios and storage target 
regimes has been updated since the proposed rule was published. The new 
modeling retains the Project acreage and water use assumptions from the 
proposed rule but is modeled over the 95-year period 1901-1995, it also 
includes the additional hydrology for 1995, and does not include 
storage in Lahontan Reservoir on the flash boards above 295,500 acre-
feet.
    Based on technical comments from the BOR, which will administer 
this rule, the language in section 418.13(a) has been revised to 
clarify the timing and procedures for recalculating the Project water 
budget, the MAD, and the required conveyance efficiency. At the start 
of the irrigation season, a provisional water budget and MAD will be 
recalculated. After the irrigation season when actual irrigated acres 
and percent use of headgate entitlement is known, a final target 
conveyance efficiency will be determined from the table Expected 
Project Distribution System Efficiency.
    This final rule has been revised to conform to numbering and plain 
language requirements for publication of the Adjusted OCAP rule in the 
Code of Federal Regulations. Some extraneous introductory text has been 
removed or incorporated into the preamble. Throughout the text of the 
rule, ``must'' or other appropriate wording replaces ``shall'' and 
references to ``these OCAP'' has been replaced by ``this part.'' 
Additional text has been changed only to clarify the meaning. The new 
format includes a section on definitions and has moved a few sections 
forward as General Provisions of Adjusted OCAP. Also, the rule has been 
divided into more sections, each dealing more discretely with each 
subject. With these exceptions, the text of this rule appears in the 
same order as in the Notice of Proposed Rulemaking and can be easily 
compared.

Need for Immediate Effect

    This adjusted OCAP rule is effective December 16, 1997, to allow 
its provisions to address imminent diversions of water from the Truckee 
River to Lahontan Reservoir. Under the Administrative Procedure Act, 
sec. 553(d)(3), a rule may have immediate effect when the agency finds 
that there is good cause for waiving the normal 30-day period between 
publication of the rule and its effective date. This waiver of the 
normal 30-day waiting period for this rule to become effective is 
critical for the Secretary to meet all obligations in the Truckee River 
basin. A 30-day delay in implementation will compromise the 
effectiveness of the Adjusted OCAP by allowing unnecessary diversions 
of more than 14,000 acre-feet of water from the Truckee River.
    Delayed implementation of the rule would be contrary to the public 
interest. The Adjusted OCAP more accurately limits Truckee River 
diversions to only that amount of water that the water users in the 
Project require. In the past three years, the 1988 OCAP storage targets 
have allowed Truckee River diversions of about 80,000 acre-feet, 6,000 
acre-feet, and 22,000 acre-feet of water that was not needed to satisfy 
diversionary rights and which ultimately was spilled during required 
precautionary drawdowns of Lahontan Reservoir increasing the danger of 
flooding in the Carson River valley.
    Immediate implementation will not harm those affected by the rule 
because there will be sufficient water available to serve water rights 
during the 1998 irrigation season. Lahontan Reservoir storage levels in 
November resulted in diversions of nearly 10,400 acre-feet of Truckee 
River water under the existing 1988 OCAP storage targets. Projections 
for December 16-31, 1997, indicate that an additional 14,000 acre-feet 
of water might need to be diverted from the Truckee River to meet 1988 
OCAP storage targets. Under the Adjusted OCAP storage targets in this 
rule, no water would have been diverted in November or would need to be 
diverted in December. Moreover, the November and December diversions 
are not needed to serve Project water rights. The 160,000 acre-feet 
already in Lahontan Reservoir, less evaporation and seepage, along with 
the water that would be available if needed from the Truckee River 
based on current water storage in Truckee River reservoirs, indicates 
that there will be sufficient water to meet Project requirements for 
the 1998 irrigation season. Therefore, immediate implementation is 
necessary to prevent the waste of at least 14,000 acre-feet of water 
that will be diverted from the Truckee River in December if the 
Adjusted OCAP is not in effect. If the rule were not in effect until 
January 16, 1998, additional water would be diverted that will not be 
needed.
    In addition, immediate implementation will benefit Pyramid Lake by 
maintaining needed Truckee River flows with no attendant harm to 
Project water users, because the Adjusted OCAP does not affect decreed 
water rights. Conversely, diversions at Derby Dam in December pursuant 
to the existing 1988 OCAP storage targets would significantly decrease 
Truckee River flows to the detriment of Lahontan Cutthroat Trout, which 
is a threatened species under the Endangered Species Act.
    A 30-day delay in implementation would result in an irretrievable 
commitment of at least 14,000 acre-feet of water from the Truckee River 
to Lahontan Reservoir. Immediate implementation of the Adjusted OCAP 
will allow better management of the Project, and will avoid potential 
threats to public health and safety due to the increased risk under the 
1988 OCAP of flooding those downstream of Lahontan Reservoir.
    The main reason for a 30-day waiting period prior to implementation 
is to provide affected parties with an opportunity to adjust their 
actions. The need for this is obviated by the fact that the Adjusted 
OCAP are an outgrowth of the 1988 OCAP. They are designed to fine tune 
the 1988 OCAP, not to replace them with an entirely new regulatory 
scheme. The revisions fall within the basic framework of the 1988 OCAP, 
a regulatory system that the affected parties have been operating under 
for nine years. Further, the Adjusted OCAP have been in circulation for 
many months, and all affected entities have had ample opportunity to 
participate in workshops on the proposed rule and to comment.
    The affected parties have participated in the development of the 
Adjusted OCAP and are aware of the content of the rule as well as the 
approximate time it would be implemented. In spring

[[Page 66449]]

1997, the DOI extended the period for comment on the proposed rule for 
60 days to accomodate interested parties who had been preoccupied by 
flooding during the original comment period. This 60-day delay should 
not be allowed to compromise the rationale underlying the Adjusted 
OCAP's development. The potential for harm to the public outweighs any 
possible prejudice to the affected parties. Therefore, the Department 
finds that there is good cause for the Adjusted OCAP to be effective on 
December 16, 1997.

Response to Comments on Proposed Rule

    The proposed rulemaking provided a 60-day public comment period 
which was later extended another 60 days to end on April 8, 1997. The 
Truckee-Carson Coordination Office (TCCO) received 46 letters from 
commenters during the comment period. One additional commenter 
submitted late comments that TCCO received on April 9, 1997, and 
accepted for review, for a total of 47 comments. Fifteen comments were 
from an irrigation district, twelve from interested parties, seven from 
local governments, six from organizations or public interest groups, 
three from Nevada State agencies, two from Tribes, one from a public 
utility, and one from a Federal agency.
    We reviewed and analyzed all comments, and in some instances 
revised the final rule based on these comments. The following is a 
discussion of the comments received and our response. First, we 
addressed general comments and concerns. Second, we responded to 
specific comments referred to by regulation section.

I. General Concerns

    1. Why Propose These Changes? Some commenters asked what the 
purpose and need was for making adjustments to the 1988 OCAP. One 
commenter asked when the continued encroachment on water rights by 
successive OCAP's will end. Other commenters said that the proposed 
Adjusted OCAP rule does not meet the goals stated in the 1988 OCAP 
regarding service of water entitlements, conservation of wetlands and 
wildlife, Trust obligations to the Fallon Paiute-Shoshone Tribes 
(FPST), stable economies, and stability of operations. Other commenters 
argued that the diversion and subsequent spill of more than 100,000 
acre-feet of Truckee River water in the past three seasons points to 
the need to adjust the 1988 OCAP to avoid a recurrence of such 
diversions and spills. Finally, one commenter suggested that instead of 
having an OCAP, that a discussion process be used to determine the need 
for fall or winter diversions from the Truckee River.
    Response: As explained in the preamble to the proposed Adjusted 
OCAP rule published in December 1996, the primary purpose of this rule 
is to adjust the OCAP to reflect the fact that demand for water to meet 
Newlands Project water rights is less than projected at the time the 
1988 OCAP were adopted and the OCAP can be adjusted to better reflect 
new water demand assumptions which will increase Newlands Project 
reliance on the Carson River as the primary source of water for the 
Carson Division. Other adjustments are made to provide flexibility in 
operations to help conserve water based on experience gained in the 
past nine years. The changes in this rule are designed to reduce 
diversions from the Truckee River in such a way that approximately 87 
percent of the reduction comes from reduced Truckee Canal loss, reduced 
reservoir loss, and reduced spills. For the reasons explained above 
under the heading, ``Adjusted OCAP Proposed Changes,'' demand for water 
to serve water rights has been less than anticipated in the 1988 
decision which means that more water is being diverted from the Truckee 
River under the 1988 OCAP than is necessary to serve Newlands Project 
water rights. This is inconsistent with the Secretary's trust 
responsibility as spelled out in the Gesell decision in Tribe v. Morton 
to ensure that only the water needed to serve Project water rights is 
diverted from the Truckee River and away from Pyramid Lake. As such, 
this is not an encroachment on Newlands Project water rights, but a 
limited refinement of diversion criteria to assure that Project water 
rights are met but with maximum reliance on the Carson River.
    This final OCAP rule is consistent with the 1988 OCAP goals. Water 
entitlements in the Newlands Project are served subject to such 
regulations or requirements as the Secretary may impose. This final 
rule is the Secretary's OCAP regulation for the Project, provides for 
the full service of water rights so long as the water is available, 
meets the OCAP goal of satisfying entitlements, and therefore, fulfills 
the Alpine and Orr Ditch decrees. The Adjusted OCAP is not expected to 
interfere with efforts to restore Lahontan Valley wetlands and wildlife 
resources because the proposed Adjusted OCAP was considered in the 
decision making process for the FWS Water Rights Acquisition Program 
(WRAP) EIS and it is being considered as the FWS develops its 
comprehensive management plan for Stillwater National Wildlife Refuge. 
The DOI is negotiating an agreement with the FPST on a number of issues 
including maintaining the Tribe's irrigation water supply. This 
agreement with the FPST is expected to help ensure that the DOI will 
meet its trust responsibilities to the Tribe under the Adjusted OCAP.
    The Adjusted OCAP decreases slightly-- from 98.41 percent to 97.48 
percent--the average water supply in the Carson Division of the Project 
and would have an effect on farm production, profits, and income in 
drought years (see response to I-12). However, the modeled average 
water supply under Adjusted OCAP is similar to the modeled supply in 
the 1988 OCAP EIS assumptions under current conditions (1988 OCAP in 
Table A), therefore the economic stability of the Project is not 
expected to change compared to 1988 OCAP projected conditions. Finally, 
the Adjusted OCAP rule does not impose new operational requirements and 
is, therefore, consistent with the goal of stability in operations.
    This Adjusted OCAP addresses the comment regarding the need to 
manage early season diversions of Truckee River water to Lahontan 
Reservoir to avoid subsequent spills. We believe the proposed storage 
target regime in the rule will minimize, but cannot eliminate, the 
possibility of Truckee River diversions being spilled later. We 
believe, further, that we cannot legally abandon OCAP in favor of a 
discussion process as the basis for controlling Truckee River 
diversions.
    2. Why Change the OCAP Now? A number of commenters questioned why 
the DOI is changing the OCAP at this time. They cite the December 31, 
1997, expiration of the prohibition on litigation on the 1988 OCAP in 
Section 209 of the Truckee-Carson-Pyramid Lake Water Rights Settlement 
Act (Pub. L. 101-618), the absence of any court order for a new OCAP, 
and question why the DOI was moving ``swiftly'' on Adjusted OCAP in 
light of numerous concerns. Some commenters questioned the timing and 
need for the Adjusted OCAP in light of the DOI's announced plans to 
develop a revised, long-term OCAP. Other commenters asked to have the 
Adjusted OCAP rule in effect by October 1, 1997, to avoid potentially 
unnecessary diversions from the Truckee River.
    Response: Section 209 of Pub. L. 101-618 allows the Secretary to 
decide, in his sole discretion, that changes to the OCAP are necessary 
to comply with his obligations. No court order is needed to

[[Page 66450]]

make these changes. The experience of initially seven and now nine 
years implementing the 1988 OCAP indicates that a number of changes 
could be made to save additional diversions of Truckee River water 
within the framework of the 1988 OCAP. The timing of this rulemaking 
relative to December 31, 1997, is coincidental since the rulemaking 
started in 1995. The DOI announced its intent to develop an interim or 
Adjusted OCAP in March 1995, held public planning workshops on Adjusted 
OCAP in August 1995, published a proposed rule in December 1996, held 
public workshops on the proposed rule in December 1996 and January 
1997, and extended the comment period by 60 days in February 1997. We 
believe this history reflects the ample opportunities for public input 
and the deliberative pace of rulemaking to allow due consideration of 
issues.
    The DOI's intention to develop a revised OCAP was also announced in 
March 1995. Unlike the Adjusted OCAP which makes some changes in the 
1988 OCAP as an interim correction, the revised OCAP contemplates more 
fundamental changes to OCAP, will take a number of years to develop, 
and will be the subject of an EIS that also considers other related 
water management issues. The fact that the DOI conducted EIS scoping 
meetings for this EIS during the comment period on the Adjusted OCAP is 
more a reflection on the lengthy EIS process than on the DOI's intent 
to rush into the next OCAP before this rulemaking is concluded.
    As to when the rule will go into effect, it had been the DOI's hope 
to have the Adjusted OCAP in effect prior to when Truckee River 
diversions might have begun under the current OCAP storage targets.
    3. What is the legal authority for changing OCAP and for making 
OCAP a regulation? A number of commenters questioned the DOI's 
authority and the legal basis to make changes to the 1988 OCAP and to 
do so via rulemaking. One commenter made the point that this rulemaking 
will ``grandfather'' the 1988 OCAP which never was published in the 
Federal Register, never underwent notice and comment rulemaking, and 
which has not undergone judicial review. Another commenter asked if the 
Secretary had the approval of the Pyramid Lake Paiute Tribe (PLPT) to 
change OCAP.
    Response: The Secretary of the Interior is authorized to promulgate 
regulations for the operation of irrigation projects under the 
Reclamation Act of 1902, as amended. Promulgation of the Adjusted OCAP 
rules replaces the existing 1967 OCAP regulations and a number of court 
approved OCAPs. Promulgation of Adjusted OCAP affords the public a 
formal opportunity to participate and have their concerns considered in 
the rulemaking process.
    The Adjusted OCAP is based on the 1988 OCAP framework with changes 
in efficiency requirements, storage targets, upstream storage, and 
forecasting. It is correct that the 1988 OCAP was not published in the 
Federal Register, was not included in the Code of Federal Regulations, 
and has not gone completely through judicial review. However, Congress, 
through Pub. L. 101-618, directed the 1988 OCAP to remain in effect 
until changed by the Secretary, at his sole discretion, and to be 
barred from judicial review until December 31, 1997. The public law 
also declared valid all actions taken by the Secretary under any OCAP 
prior to that law, including implementation of the 1988 OCAP, and not 
subject to judicial review.
    Newlands Project OCAP may be implemented through approval by the 
Tribe versus Morton court, or with the approval of the PLPT. The DOI 
believes it has received the approval of the PLPT through the Tribe's 
comments on the proposed Adjusted OCAP rule.
    4. Adjusted OCAP Violates Water Rights under the Alpine and Orr 
Ditch Decrees: A number of commenters contend that the Adjusted OCAP 
reduces the water supply to the Newlands Project, and that any 
reduction in water supply affects water rights in violation of Nevada 
water law. These commenters also view this as a violation of water 
rights adjudicated under the Orr Ditch and Alpine decrees. Several 
commenters cite the court's decision in Tribe v. Morton which said that 
OCAPs should not alter the Orr Ditch or Alpine decrees.
    Response: Under Nevada water law, water rights holders are entitled 
to a certain water duty per acre which represents the maximum amount of 
irrigation water that can be beneficially used on water righted lands. 
This water duty is neither a minimum amount of the entitlement that 
must be received, nor is it a guarantee that that amount of water will 
always be available. As the Carson and Truckee Rivers' runoff varies 
from year to year, so too does the water supply, resulting in full 
years serving up to the water duty, and in drought years where the 
available water supply serves less than the water duty.
    As shown in Table A, line 19, under final Adjusted OCAP there is an 
additional shortage year compared to the current condition. The 
additional shortage year results from reduced carry over storage of 
Truckee River water in Lahontan Reservoir. Under Judge Gesell's 
decision in Tribe v. Morton, the Truckee River water left in Lahontan 
Reservoir at the end of the irrigation season is water that was not 
needed to serve water rights, and the Project is not entitled to this 
water.
    Nothing in the Adjusted OCAP changes anyone's water right or 
affects the Orr Ditch or Alpine decrees. What OCAP does is determine 
under what conditions Truckee River water may be diverted to Lahontan 
Reservoir to supplement the water supply from the Carson River for 
purposes of serving such rights that year. That combined supply in 
Lahontan Reservoir is the water supply available to meet the water 
demand in the Carson Division in a given year. Our modeling analysis of 
the Adjusted OCAP, which considers the hydrologic record for the Carson 
and Truckee Rivers from 1901 to 1995, indicates that in more than 9 out 
of 10 years Lahontan Reservoir has enough water to fully satisfy the 
Carson Division demand, with an average water supply of more than 97 
percent of demand. This combined use of Carson and Truckee River 
ensures a more secure and consistent water supply for the Carson 
Division than most other Alpine decree water rights holders experience 
on the Carson River.
    5. The Adjusted OCAP Affects Property Rights: Commenters have 
expressed concern that Adjusted OCAP may cause shortages that are a 
taking of property rights. A State Agency believes that any action by 
the Federal government that results in water rights holders not 
receiving their legal entitlement of water is a taking of personal 
property. Also, because the State Agency is a holder of water rights in 
the Newlands Project, it says that Adjusted OCAP may devalue its water 
right holdings when they receive less water than is available in the 
system. Other commenters say this is stealing water or a taking without 
just compensation.
    Response:  Newlands Project irrigators do indeed have a property 
right in their water rights, as do other water rights holders in 
Nevada. However, as pointed out in the response to issue number 4, the 
Adjusted OCAP has no effect on water rights or on the Alpine and Orr 
Ditch decrees. In addition, these water rights are not an entitlement 
to a certain amount of water every year, but rather an entitlement to 
receive up to a certain amount of water, when that water is available. 
In drought years, water may not be available to serve all entitlements. 
Thus, the water that reaches and is retained in Lahontan

[[Page 66451]]

Reservoir constitutes the available water for Newlands Project 
irrigators in the Carson Division. Further, these water rights are 
subject to applicable laws, rules, and judicial decrees. The supply of 
water in Lahontan Reservoir, out of which Carson Division water rights 
are served, is subject at least to the segmentation and priority 
provisions of the Alpine decree for the Carson River, and to the 
Floriston flow rate and priority provisions of the Orr Ditch decree for 
the Truckee River. Under Pub. L. 101-618 and Tribe v. Morton, OCAP may 
not affect the decrees; it merely provides that the deliveries be 
limited to those actually needed to serve water rights. As such, this 
is not a taking of a constitutionally protected property right by the 
Adjusted OCAP.
    6. The Adjusted OCAP Denies Carry Over Storage Rights: Carry over 
storage refers to the ability to store in a reservoir water that is not 
needed in one year for use in the next year, if needed. Five commenters 
believe the Adjusted OCAP, as well as the 1988 OCAP currently in place, 
take away carry over rights in Lahontan Reservoir by limiting the 
diversion of Truckee River water. They contend the diminution of carry 
over storage under Adjusted OCAP erodes the principle of storing in 
times of plenty for times of drought. Further, one commenter contends 
that carry over storage is a right that was given to irrigators when 
they traded their pre-Project vested water rights to the Federal 
government for water rights in Lahontan Reservoir. In contrast, one 
commenter felt that the proposed end-of-month storage target for 
October of 52,000 acre-feet was too high because it could allow carry 
over of Truckee River water diverted right at the end of the irrigation 
season.
    The Adjusted OCAP provides for storage of Truckee River water in 
Stampede Reservoir in lieu of diversions to Lahontan. One commenter 
asked why the Adjusted OCAP would not allow carry over storage of 
Newlands Project water in Stampede Reservoir.
    Response: All water remaining in Lahontan Reservoir at the end of 
the irrigation season does carry over to the next year and this is not 
changed by the Adjusted OCAP. The Project water users benefit from 
carry over storage of all the Carson River water that remains in 
Lahontan Reservoir and provides protection against future droughts. 
However, to the extent that any portion of the water remaining in 
Lahontan Reservoir is water that had been diverted from the Truckee 
River, such water is, by definition, water that was not needed to serve 
Project water rights. It is the presence of this Truckee River water in 
Lahontan Reservoir at the end of the irrigation season that Adjusted 
OCAP seeks to minimize because it conflicts with the court's basic 
requirement of OCAP: that the Newlands Project receive only the Truckee 
River water needed to serve water rights so that the Secretary's trust 
responsibility to the PLPT may be fulfilled. Likewise, for Newlands 
Project water stored in Truckee River reservoirs, any water left over 
at the end of the season is water that was not needed to serve Project 
water rights and, therefore, should go to Pyramid Lake.
    The goal of OCAP is to divert just that amount of Truckee River 
water needed to serve water rights in the Project and to let the rest 
continue to Pyramid Lake. The ideal OCAP would be based on demand and 
only allow diversions of Truckee River water to Lahontan Reservoir when 
it was actually needed for the Carson Division, and then, in quantities 
sufficient to always meet the water demand. This would ensure serving 
all water rights all the time with no over-diversions of water and no 
Truckee River water spilled from Lahontan Reservoir. Unfortunately, our 
analysis indicates that such a ``demand only'' OCAP would not serve 
water rights because of the variability in the amount of water 
available for diversion from the Truckee River from month to month, and 
because of the capacity limits of the Truckee Canal.
    Instead of a demand-only OCAP, the Adjusted OCAP rule continues to 
allow diversions of Truckee River water to Lahontan Reservoir, even at 
times when the water is not immediately needed to serve water rights at 
the time of diversion, as a safeguard for a water supply later in the 
year against the unpredictability of the runoff from the Carson River. 
This is why the Adjusted OCAP includes a storage target greater than 
zero for October. The modeling analysis of the Adjusted OCAP indicates 
that it provides a water supply for the Newlands Project consistent 
with the water supply evaluated in the 1988 OCAP, even though the 
supply is less than under current (i.e., 1997) conditions.
    7. There was Inadequate Information Provided to Evaluate the 
Proposed Rule: Eight commenters raised questions and concerns about the 
amount of information made available by the DOI in support of the 
Notice of Proposed Rulemaking. These concerns centered on modeling 
evaluations of the proposed Adjusted OCAP and alternative OCAP 
scenarios that had been considered. Some commenters believe that due 
process is being ``trampled'' or that modeling results were skewed 
because all of the information in the government's possession was not 
made public. Others questioned how the proposed rule could be evaluated 
without foundational data and assumptions. Yet another commenter chided 
DOI for manipulating data to achieve a predetermined result. Specific 
questions were posed regarding the need for a modeling scenario that 
allowed Lahontan Reservoir to fill without storage target limits and 
another modeling scenario for current conditions.
    Response: In developing the Adjusted OCAP rulemaking, the DOI 
evaluated five OCAP alternatives based on different storage target 
regimes. These were modeled and compared with modeled scenarios for 
current conditions and for the 1988 OCAP with 1988 time frame 
assumptions and 1994 time frame assumptions. In all, nine modeling runs 
were examined. The printout from each modeling run is approximately 400 
pages long. To facilitate comparisons of the modeling runs a single 
summary table labeled Table 9 was prepared listing 9 input assumptions 
and 53 key output parameters for each run. The DOI did not model a 
``full reservoir'' scenario because it would not be consistent with the 
decision in Tribe v. Morton and would serve no practical purpose.
    In response to requests for information on modeling runs considered 
by the DOI, Table 9 was made available to all parties. In response to 
requests for more detailed information, we also provided copies of the 
full 400-page proposed rule modeling run and a 36-page document of 94 
years of modeled monthly output for 29 parameters. Table 9 was made 
available at three public workshops on the proposed rule and the 
availability of the remaining materials was announced in a Federal 
Register notice dated February 18, 1997, extending the comment period 
on the proposed rule by 60 days. The DOI believes that the modeling 
information provided was specific to the proposed rule and sufficient, 
when used in conjunction with the Notice of Proposed Rulemaking, to 
allow the public to evaluate and comment on the proposed rule.
    8. OCAP Modeling: Many questions and comments were received 
regarding the Truckee River operations model used in developing the 
Adjusted OCAP. Commenters noted concerns both with the model itself and 
with DOI's use of the modeled data. One commenter noted that DOI is 
relying on a long string of assumptions in using the

[[Page 66452]]

model, and that the model cannot be used to determine the water supply 
for decreed rights. Another believes the operations model to be a 
product of collusion between the United States, the Pyramid Lake Paiute 
Tribe of Indians, and Sierra Pacific Power Company.
    Several commenters wanted to know if and how the operations model 
had been calibrated or verified. There were also questions about the 
reliability of the model's estimates of parameters like seepage and 
evaporation, sensitivity to various parameters, and about the 
uncertainty these parameters create in the modeled output. One 
commenter asked if the model was available for review.
    Another series of comments questioned why ``real data'' were not 
used and the model generates certain input data for missing stream 
gauges or extrapolates reservoir operations for time periods when the 
reservoirs were not in existence. Commenters also questioned why the 
model examines a 94 year time period instead of the last 30 years, 
especially when early stream gauges were not accurate.
    Commenters also addressed the modeling results. Several noted that 
the modeled results do not match what actually occurred in some years 
and asked if DOI would monitor the actual Project hydrology, and if DOI 
would change the OCAP if it did not match what actually happens. 
Modeling was also thought by some to underestimate or to cover the 
actual effects of shortages that result from not achieving high 
efficiency requirements. One commenter suggested that the model does 
not show the economic effect of lower Lahontan Reservoir storage on 
hydropower generation, and does not account for the effect of upstream 
storage in lieu of diversions to the Project. Some recommended 
identifying shortages, or using the first year of a drought instead of 
listing average shortages because averages do not show the one in ten 
year event.
    Response: The Truckee River operations model, a monthly river and 
reservoir operations accounting model, was developed by the BOR and has 
been added to and upgraded by contractors and BOR staff. The model is 
in the public domain and has been used as an analytical tool in a 
number of negotiations in western Nevada and has been accepted by 
parties to these negotiations as the best modeling program available 
for evaluating various Truckee River and Newlands Project operating 
scenarios. Over the years, various versions of the model have been made 
available to many organizations to use independently, including Sierra 
Pacific Power Company, the Pyramid Lake Paiute Tribe, TCID, and the 
States of Nevada and California.
    Critics of the model point out that it does not use ``real'' data 
and its results do not replicate the historic record. The reason is 
that the model uses historic hydrology of the Truckee and Carson Rivers 
starting with 1901, but has to extrapolate to fill data gaps from the 
early 1900's. Also, the Truckee River operations and hydrology are 
modified in the model to assume that all the reservoirs and operations 
in place today have been in place since 1901, which is not this case. 
This allows the model to keep a single accounting book of reservoir 
records rather than having a new set of accounting books added to the 
program when each new reservoir was built. Thus, modeled output 
reflects operating the rivers with today's reservoirs and physical 
features in place using 94 or 95 years of hydrology. Though suggestions 
have been made to use a shorter time period such as 30 years of 
hydrology, we believe the longer time period is a more robust data 
base.
    The model has undergone reviews by a number of modeling peers and 
users of the model and has been evaluated for sensitivity to certain 
parameters. Its input parameters for terms like seepage and evaporation 
are based on field tests and observations. Because the model has been 
widely accepted for use as a comparative tool for examining different 
water management scenarios, it has not been calibrated for or verified 
against any particular year or period of record.
    The model uses historic hydrology, so it cannot be used 
predictively, and by standardizing physical features, it cannot be used 
to create an accurate hindcast. However, standardizing the river and 
reservoir operations allows users to look prospectively at what might 
happen in the future if the range of hydrology of the past is 
representative of what might happen in the future.
    By holding the physical features and hydrology constant, the DOI 
uses the model to examine, compare, and contrast different operations 
scenarios. The modeling is only used for comparative purposes and not 
to suggest a specific future condition will exist. Operations under the 
Adjusted OCAP will be monitored, but not for the purpose of comparing 
the day to day operations in the Project with modeled results. As one 
commenter noted, upstream storage in lieu of diversions to Lahontan is 
not accounted for in the model. Upstream storage is intended to refine 
the Truckee River diversion so that there is no inadvertent over 
diversion. Because the model does account for forecasting errors and so 
allows occasional over diversion, it may overestimate the water supply 
in years when upstream storage might be used. Also, the model does not 
consider the effects of lower reservoir levels on hydropower 
production; this is considered in the environmental assessment for the 
Adjusted OCAP rulemaking.
    The DOI has examined and considered the severity of drought years 
besides looking only at average water supplies. Table B shows the 
modeled water supply for drought years in four modeled scenarios: 1988 
OCAP assumptions with current hydrology; the Current Conditions, 
Proposed Adjusted OCAP, and Final Adjusted OCAP. The Project water 
supply under Final Adjusted OCAP is comparable to, though slightly 
better than, what was modeled for the 1988 OCAP with the demand 
assumptions for 1992, however it is less than the Current Condition 
water supply. In the nine driest years, Final Adjusted OCAP is better 
than what the Project is modeled to experience under the 1988 OCAP, but 
worse than Current Conditions by 27,000 acre-feet on average for those 
nine years. The additional shortage is the result of reduced carry over 
of Truckee River in Lahontan Reservoir at the start of each year under 
Adjusted OCAP.

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    9. OCAP Development and Alternatives Selection: When it was first 
announced in March 1995 that the DOI would be making adjustments to the 
1988 OCAP, then Assistant Secretary for Water and Science Betsy Rieke 
made a commitment to the TCID and Newlands Water Protective Association 
(NWPA) that they would be consulted about changes the DOI was 
considering before any decisions were made. Several commenters have 
argued that the government did not fulfill this commitment, while 
others have asked for a new proposed rule to be developed in 
cooperation with all parties. One commenter objected to the rulemaking 
process because they were not invited to a briefing on the proposed 
rule after the Federal Register notice was published. Another commenter 
asked if the State of Nevada had been informed about the proposed rule. 
One commenter viewed the proposed rulemaking as a ``take it or leave 
it'' ultimatum without consideration of reasonable alternatives, and 
suggested that a new proposal should be developed in cooperation with 
other parties. Two commenters believe the attorney for the PLPT had 
``inside knowledge'' of the proposed rule and that TCID and NWPA were 
excluded from participation while the PLPT and DOI developed the rule. 
Another cited DOI's alleged fiduciary responsibility to water right 
owners that the DOI must fulfill. Yet another commenter supported the 
proposed rule but thought that DOI should have selected an alternative 
that provided more benefits to Pyramid Lake. A State agency recommended 
delaying the rule for more complete environmental and economic 
evaluations and to await completion of negotiations between TCID and 
PLPT. Commenters also suggested that the DOI take notice of the draft 
Truckee-Carson River Basin Study for the Western Water Policy Review 
Advisory Commission.
    Response: The rulemaking was conducted in accordance with 
Administrative Procedure Act requirements, which included notice 
published in the Federal Register and an opportunity for comment by all 
interested parties, as detailed in the Rulemaking Process section of 
the preamble. In addition, certain parties were advised early in 1995 
that before a decision was made, they would have an opportunity to 
review changes DOI was considering making to the 1988 OCAP. The DOI 
honored this by meeting with TCID, NWPA, PLPT, FPST, the State of 
Nevada, and other parties to brief them on the content of the proposed 
rule after it was published in the Federal Register. For interested 
parties that did not attend this briefing, the same presentation was 
made later at two public workshops on the proposed rule.
    The view that the Adjusted OCAP is a ``take it or leave it'' 
proposal without considering alternatives presumes that the proposed 
rule was a negotiating position. It was not. The DOI has been 
unsuccessful in several multiparty efforts to negotiate an OCAP 
settlement for the Newlands Project. The most recent effort, outside of 
current ``out of court'' discussions to settle pending litigation, was 
a facilitated negotiation that ended in March 1995, after which the DOI 
announced its intention to proceed with changes to the 1988 OCAP. In 
developing the Adjusted OCAP rule, the DOI has examined a wide range of 
alternatives, including those that were presented during the 
facilitated negotiations. The DOI held four well-attended public 
workshops in August and September 1995 to discuss possible changes to 
the 1988 OCAP and afford the public early input to developing the 
Adjusted OCAP. With the exception of these public workshops, no outside 
parties participated in DOI's development of the Notice of Proposed 
Rulemaking. As well, to our knowledge, no outside party has 
participated or been privy to development of this Notice of Final 
Rulemaking.
    The DOI has reviewed and takes notice of the draft Western Water 
Policy Review Advisory Commission report.
    The DOI selection of Alternative D for the proposed Adjusted OCAP 
and as the basis for the final Adjusted OCAP is primarily based on the 
mix of water savings and water supply impacts this alternative 
provides. The obligation owed to the water rights holders in the 
Newlands Project is a contractual obligation, not a fiduciary 
obligation. In evaluating OCAP alternatives, the DOI must seek to 
satisfy its contractual obligation to serve water rights, and to meet 
its Trust responsibility to the PLPT. Also, the DOI has completed both 
environmental and economic analyses in promulgating this rule.
    10. Relationship of OCAP to the Truckee River Operating Agreement: 
Three commenters raise concerns regarding ongoing Truckee River 
Operating Agreement (TROA) negotiations which address, in part, storage 
in Truckee River reservoirs. Their concerns fall into three areas. 
First, that absent the TROA, the DOI has no authority to implement the 
upstream storage provisions necessary for storage in lieu of 
diversions, and therefore the Adjusted OCAP cannot precede TROA. 
Second, that until the TROA is completed there is no way for the DOI to 
evaluate opportunities for storage in lieu of diversions or assess what 
impact TROA may have on Truckee River flows available to the Project. 
Third, that the relationship of OCAP storage to other storage under 
TROA is not clear, and OCAP storage cannot adversely affect existing 
storage agreements.
    Response: The Adjusted OCAP rule does not establish credit storage 
in lieu of diversions; that was established in the 1988 OCAP already in 
effect. This Adjusted OCAP rule extends the time period during which 
water may be credit stored, from April-June, to November-June, and it 
clarifies the procedures for storage in lieu of diversions. Therefore, 
the TROA negotiations need to address OCAP storage regardless of 
whether the 1988 OCAP is replaced by Adjusted OCAP or not. Also, the 
United States already has the authority to capture this water in 
Stampede Reservoir or to credit store the water out of fish water in 
Stampede by exchange and does not need TROA to be in place.
    Modeling for the Adjusted OCAP does not assume that the TROA is in 
effect and therefore does not assess whether the TROA would have any 
impact on the Newlands Project. However, Pub. L. 101-618 mandates that 
the TROA must not adversely affect water rights. Preliminary modeling 
results for the draft TROA EIS indicate that flows in the Truckee River 
are affected by increased water use over time in the Truckee Meadows, 
and by effluent reuse programs associated with the Water Quality 
Settlement Agreement.
    The effect of OCAP storage is unclear, but the DOI has agreed 
preliminarily that it will not credit store water in lieu of diversions 
if such credit storage would adversely impact the storage, retention, 
or use of other categories of credit water under TROA. The text of the 
Adjusted OCAP in section 418.3(e)(8) has been modified to ensure that 
OCAP storage does not interfere with other storage in Truckee River 
reservoirs. It should be noted that TROA is the subject of continuing 
negotiations among many parties and that its timing and configuration 
are not yet known.
    11. Compliance with National Environmental Policy Act (NEPA): The 
DOI received many comments on the draft EA that accompanied publication 
of the proposed Adjusted OCAP rule. Those comments, including 
recommendations for mitigation of environmental effects, are addressed 
in the final EA.
    Eight commenters questioned the DOI's preliminary determination 
that

[[Page 66455]]

the Adjusted OCAP is not a significant Federal action requiring 
preparation of an EIS, citing general impacts to wildlife, wetlands, 
ground water, and socio-economic effects. One commenter suggested that 
because the Adjusted OCAP violated laws related to water rights, this 
must be considered a significant impact under NEPA. Several commenters 
cited the need for a programmatic EIS to be prepared on the Adjusted 
OCAP and all other actions under Pub. L. 101-618.
    Response: All comments received regarding environmental effects 
have been considered and addressed in the EA. While the EA does discuss 
possible effects on wildlife, wetlands, ground water, and socio-
economic impacts, none of these were considered to be significant for 
NEPA purposes. Further, nothing in this Adjusted OCAP rule causes a 
violation of law. Where appropriate, mitigation measures and their 
environmental benefits are discussed in the EA.
    A number of parties have advocated that the DOI must prepare a 
single, programmatic EIS on all actions under Pub. L. 101-618, 
including for the Adjusted OCAP. The DOI disagrees with this position. 
This issue was the subject of litigation brought by Churchill County 
and the Town of Fallon, was dismissed by the U.S. District Court for 
Nevada, and is currently the subject of an appeal to the United States 
Court of Appeals for the Ninth Circuit.
    12. Compliance with Executive Orders: One commenter questioned 
whether this rulemaking complies with various Executive Orders that 
must be considered in promulgating regulations. This person believes 
the more than 120,000 acre-foot reduction in storage targets in 
Lahontan Reservoir poses an unreasonable cost on society and triggers 
the need for the rule to be reviewed by the Office of Management and 
Budget (OMB) in accordance with Executive Order (E.O.) 12866. Under 
E.O. 12612 on Federalism, the commenter questions whether the DOI has 
properly evaluated the need for Federal action and the impacts of the 
Adjusted OCAP on the State of Nevada's sovereignty and costs or burdens 
on the State. The commenter asks that DOI not adopt the Adjusted OCAP 
rule until it completes the requirements of E.O. 12606 on the Family, 
particularly with respect to impacts on family earnings. The commenter 
also believes the Adjusted OCAP rulemaking does not comply with E.O. 
12988 on Civil Justice Reform because of the likelihood that the DOI 
will be sued on the rule.
    Response: The cited change in Lahontan Reservoir storage targets is 
inaccurate and is not a basis for review of the Adjusted OCAP 
rulemaking by OMB. The proposed Adjusted OCAP reduced the key January 
to June storage target from the 1988 OCAP level of 215,000 acre-feet to 
174,000 acre-feet, a reduction of 41,000 acre-feet. The reference to 
``more than 120,000 acre-feet'' assumes a reduction from the reservoir 
capacity of 295,000 acre-feet to 174,000 acre-feet. The changes in 
storage targets only affect the trigger points for diversion of Truckee 
River water to Lahontan Reservoir. The storage targets do not impose 
any limit on the amount of Carson River water or the total amount of 
water that can be held in Lahontan Reservoir. Further, in response to 
comments, the DOI has revised the end-of-June storage target to 190,000 
acre-feet, though retains the January-May targets at 174,000 acre-feet, 
subject to the adjustment procedure in section 418.22 of the rule.
    The economic threshold for OMB review under E.O. 12866 is if the 
proposed rule is anticipated to have an economic impact of $100 million 
or more on a single entity or an economic sector. The economic impact 
of the Adjusted OCAP rule is based on average changes to the water 
supply and its effects on foregone production of alfalfa. These effects 
would only be experienced in drought years, the intensity of which 
would determine any actual changes in production. The average effect is 
calculated to be in the range of $561,000 to $283,000 per year, gross, 
to the agricultural sector. This estimate reflects the price of alfalfa 
without subtracting production costs. A 1994 study by the University of 
Nevada Cooperative Extension (Fact Sheet 94-22, Alfalfa Production 
Costs for Fallon, Nevada Area, by Wheeler and Meyer) concluded that the 
per acre profit for alfalfa was approximately $220 per acre which 
places the economic impact of the Adjusted OCAP at approximately 
$160,380 based on the rule having a water supply impact that might 
otherwise have served 729 acres. Nor does the Adjusted OCAP rule meet 
any of the other criteria for significance under E.O. 12866 regarding a 
serious conflicting action with another Federal agency, creating a 
budgetary impact, or raising novel legal or policy issues.
    The Adjusted OCAP makes changes to four existing provisions of the 
1988 OCAP. It neither creates any new requirement affecting the 
sovereignty of the State of Nevada, nor changes the role of the State 
or its rights and responsibilities with respect to regulating the 
Newlands Irrigation Project. The State was notified of the DOI's intent 
to proceed with the Adjusted OCAP rulemaking in 1995, participated in 
workshops on developing the proposed rule, and was consulted with 
before publication of the proposed rule. The DOI believes the 
requirements of E.O. 12612 on Federalism have been satisfied.
    The DOI has examined the impact on family income as a result of the 
Adjusted OCAP in accordance with E.O. 12606. The economic impact of the 
Adjusted OCAP, which is experienced only within the Carson Division of 
the Project and only during the first year of a drought, translates 
into an estimated average economic impact on production of between $10 
and $5 per acre per year, and an impact on profits of approximately 
$2.90 per acre per year. This cost is neither considered to have a 
significant impact on family budgets, nor expected to have any effect 
on any other family criteria under E.O. 12606. In addition, each 
farmer's strategy for managing a reduced water supply in a drought will 
affect their costs of production, which are typically $450 to $476 per 
acre, and gross receipts, which may mitigate or exacerbate the effects 
of the rule. If a farmer's net return is $220 per acre as noted, it is 
possible that leasing water in a drought year would generate more 
profit than alfalfa production in a full water year. However, none of 
these economic assessments includes the costs of replanting crops which 
might be necessary following severe droughts or leasing water. While 
the precise impact to each family budget is unknown, the DOI is 
cognizant of and has considered these overall effects in this 
rulemaking.
    The applicable standards of E.O. 12988 on Civil Justice Reform do 
not set a threshold on the possibility of litigation as a consequence 
of the rulemaking. While we seek to avoid litigation, we recognize that 
all rulemaking holds the possibility of litigation by an allegedly 
aggrieved party. The DOI does not consider the litigious and turbulent 
history of Newlands Project OCAPs to be dissuasive in pursuing its 
responsibilities.

II Adjusted OCAP Issues

    1. Project Acreage Base: The adjustments to the 1988 OCAP are 
based, in part, on anticipated increases in irrigated Project acreage 
that did not take place under that OCAP and some changes that did take 
place. The 1988 OCAP anticipated and was based upon the acreage in the 
Project increasing to 64,850 acres with an attendant headgate 
entitlement of 237,485 acre-feet and a total diversion demand of 
346,985 acre-feet. Instead, the project acreage is

[[Page 66456]]

currently approximately 59,000-60,000 acres with a headgate entitlement 
of approximately 206,500-210,000 acre-feet and a total diversion demand 
of approximately 301,900-307,000 acre-feet. The current diversion 
demand figures for the Project are the result of a smaller acreage base 
than had been anticipated in the 1988 OCAP, reduced entitlements based 
on the so-called ``bench/bottom'' litigation (1995 Order of Judge 
McKibben, in U.S. v. Alpine, United States District Court for the 
District of Nevada No. D-185), ongoing water transfer litigation, a cap 
on water use by the Fallon Paiute-Shoshone Tribes, and a transfer rate 
of 2.99 acre-feet per acre for acquired wetland water rights as has 
been transferred to date instead of 3.5 or 4.5 acre-feet per acre. In 
response to the reduced water demand, the Adjusted OCAP changes the 
Lahontan Reservoir storage targets to provide a commensurate reduction 
in water supply from the Truckee River.
    The DOI has received comments from eight parties objecting to the 
proposed storage targets using a 1995 acreage base of 59,075 water-
righted, irrigated acres, when there are nearly 73,000 acres in the 
Project assessed annual charges for operations and maintenance (O&M). 
Commenters also disagree with BOR's determinations as to which lands 
are eligible for water deliveries. They contend that acreages and 
entitlements could change as a result of rulings favorable to 
irrigators in the transfer litigation and individual readjudications of 
the bench/bottom decision.
    Response: The DOI agrees that the Project water demand may change 
over time. When the Notice of Proposed Rulemaking was published, the 
DOI assumed that changes affecting water demand might not occur for 
some years. It appears, now, that resolution for some proposed water 
rights transfers may occur sooner. Also, the 1995 actual irrigated 
acreage figure used in developing the Adjusted OCAP may have been 
depressed following several years of drought. The irrigated acreage 
reported for 1996 and estimated for 1997 has increased somewhat. On the 
other hand, additional acreage has been acquired for wetlands use at 
2.99 acre-feet per acre which would tend to reduce water demand on the 
Project.
    In response to these comments, the DOI is adopting, in effect, a 
sliding scale of storage targets predicated on holding the water supply 
available to the Project commensurate over a range of water demands. 
The table Adjustments to Lahontan Reservoir Storage Targets in the rule 
shows targets corresponding to water demands from 249,800 acre-feet to 
290,200 acre-feet, and section 418.22 includes formulae for demands 
below and above those levels. For all levels of demand, the average 
annual water supply is about 97.4 percent. As an example of using the 
storage targets to match demand, Table C shows key modeling results for 
two demand levels below the Adjusted OCAP level and two above the 
Adjusted OCAP. In the four variations, the water supply to the 
individual irrigators remains at approximately the same level 
consistent with the proposed Adjusted OCAP water supply level.

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[[Page 66458]]

    The BOR will determine at the end of each irrigation season what 
change, if any, is to be made to the monthly Lahontan Reservoir storage 
target for the next year, starting with the November end-of month 
storage target. Changes in the storage targets shall be implemented in 
whole increments of 1,000 acre-feet as indicated on the Table. For 
water demands above or below the values shown on the table Adjustments 
to Lahontan Reservoir Storage Targets, the two formulae associated with 
the table will be used to calculate the target adjustments, but will 
only be implemented in whole units of 1,000 acre-feet.
    Carson Division water demand from the previous full water year (100 
percent supply) will be the basis for changes in storage targets. 
Following any water year there will be a one-year lag in water demand 
data because verification of the irrigated acreage cannot be determined 
until about March for the prior irrigation season ending in October. 
For example, the Carson Division water demand for the 1997 irrigation 
season, a full water year, will not be known until March 1998. Under 
this rule, any further adjustments to storage targets could not go into 
effect before November 1998.
    These flexible storage targets in Adjusted OCAP will address the 
concern that the DOI has selected an unreasonably low acreage or is 
relying on an inflexible demand base for setting Lahontan Reservoir 
storage targets. This provision assures the irrigators a consistent 
water supply as Project acreage changes.
    2. Changes in Storage Targets: The Adjusted OCAP change Lahontan 
Reservoir storage targets to bring the water supply in Lahontan 
Reservoir in line with the Carson Division water demand in a manner 
that is consistent with the 1988 OCAP. The DOI received specific 
comments from nine parties, some saying that this change in storage 
targets will cause shortages and artificial droughts. Some comments say 
the reduced December and winter storage targets will cause diversions 
to begin later in the spring and summer when less water is available in 
the Truckee River. This will cause shortages that will prevent water 
entitlements from being satisfied or will satisfy entitlements in 
normal water years but leave less water in storage at the end of the 
irrigation season creating new droughts or worsening droughts in future 
years. In turn, this will reduce crop yields, and in drought years, 
more farmland will be fallowed, requiring larger capital investment to 
replant after a drought. One commenter asked if DOI only looked at 
elements that might reduce Truckee River diversions rather than 
increase them. It appears to some that the DOI is deliberately creating 
shortages in the Project water supply by only adjusting OCAP provisions 
that increase shortages, and asking the water rights owners to bear 
these shortages and the related economic effects. After all, one asks, 
isn't the goal to reduce risks of shortages? Another commenter said 
basing reduced diversions on trust obligations is disingenuous because 
the real reason is to allow growth in the Reno and Sparks area.
    Another area of stated concern in comments is that the change in 
Lahontan Reservoir storage targets is unjustified because the 
percentage reduction in storage targets exceeds the percentage 
reduction in Project acreage. One commenter asks whether DOI is 
assuming a 1:1 relationship of storage targets to water demand and 
whether that same relationship applies to the current project acreage.
    Other commenters suggest that the Adjusted OCAP storage targets are 
too high and the October storage target should be reduced to 4,000 
acre-feet, the November and December targets reduced, and, in years of 
high precipitation, the October to December targets reduced. One 
suggests that the 4,000 acre-foot minimum pool in Lahontan should be 
eliminated or maintained out of water rights acquired for that purpose, 
otherwise it is, in effect, maintained out of the Truckee River by a 
higher storage target.
    Response: The Adjusted OCAP do not lower storage targets for the 
purpose of creating water shortages in the Project. The purpose of 
lower targets is to reduce unnecessary diversions of water from the 
Truckee River. The storage targets are calibrated to meet the 
Secretary's trust responsibility to minimize Truckee River diversions 
while satisfying the Secretary's contractual obligation to provide an 
appropriate water supply to serve Project water rights. Also, the 
benefits of reduced Truckee River diversions accrue to water users 
downstream of Derby Dam and to Pyramid Lake. Reno and Sparks derive no 
benefits from Adjusted OCAP.
    The 1988 OCAP established a set of Lahontan Reservoir storage 
targets that were expected to satisfy the existing and increasing 
future water demands of the Newlands Project. It was assumed that the 
Project would grow to 64,850 acres and be served in the Carson Division 
by the 215,000-acre-foot-storage-target set defined in the 1988 OCAP. 
Modeling indicates that the 1988 OCAP with conditions projected for 
1992 would provide approximately a 97.27 percent water supply. However, 
the Project did not attain the size envisioned. The fortuitous 
consequence for the Carson Division water users has been to have the 
current acreage level and corresponding water demand served out of a 
water supply capable of serving a larger Project. Thus, the Project 
today enjoys an average water supply modeled at 98.34 percent, but also 
increased spills and other losses at the expense of the Truckee River 
and Pyramid Lake. The proposed Adjusted OCAP would have provided an 
average water supply of 97.38 percent, a reduction from current 
conditions by about 2,550 acre-feet on average. This Adjusted OCAP 
final rule, by increasing the end-of-June storage target to 190,000 
acre-feet, provides a modeled average water supply of 97.40 percent, 
which is approximately the same supply the 1988 OCAP would have 
provided with expected growth.
    The lower Lahontan Reservoir storage targets do reduce, as noted in 
comments, the available Project water supply, but still serve water 
right entitlements for full water years in nine out of ten years, based 
on the historic hydrologic record. Lower storage targets also result in 
less water remaining in the Reservoir at the end of each season which 
means that in the approximately one year in ten when there is a 
drought, there is less water carried over to cushion the Project from 
the drought, as shown in Table B. Generally, if a drought lasts for 
more than one year, the storage targets have no effect on the Project 
water supply because the target limits are never met and TCID can 
continue diversions of water from the Truckee River that may be 
available, subject to higher priority Orr Ditch water rights. Any 
additional shortage resulting from Adjusted OCAP has an economic 
effect, which is discussed in I.12. of this preamble.
    Regarding percentage reductions in acreage and targets, there is 
not a one to one relationship between Project acreage and storage 
targets under the Adjusted OCAP or the 1988 OCAP. Storage target levels 
determine when TCID can divert water from the Truckee River to Lahontan 
Reservoir. Under the Adjusted OCAP, during January through May when 
Lahontan Reservoir storage is forecast to be below 174,000 acre-feet at 
the end of June, TCID may divert Truckee River water to Lahontan. If 
the water level in Lahontan Reservoir is forecast to be above the 
storage level of 174,000 acre-feet at the end of June, then TCID may 
not divert Truckee River water to Lahontan. The 174,000-acre-foot 
target is not a new limit on how much water Lahontan Reservoir may

[[Page 66459]]

hold. Lahontan Reservoir can still fill to capacity with Carson River 
water, as it has done, for instance, in the past three years.
    The percentage change in Project acreage from a projected 64,850 
acres to 59,075 acres is an 8.9 percent reduction. Acreage is directly 
related to water demand and OCAP's goal is to provide the appropriate 
water supply to meet the demand for water righted acreage in 
irrigation. In the Adjusted OCAP rule, storage targets are adjusted so 
that in most years, the Project water supply in Lahontan matches or 
exceeds (based primarily on Carson River inflow) the water demand at 
current acreage levels. The corresponding percentage reduction in 
average water supply from the 1988 OCAP with 1992 assumptions to the 
Final Adjusted OCAP (from Table A) is modeled to be about a 7 percent 
reduction (284,020 acre-feet and 263,950 acre-feet, respectively). 
Separate from the percentage reductions in acreage and water demand, 
the OCAP determines how to get enough water in Lahontan Reservoir to 
satisfy the water demand. Lahontan Reservoir receives an average annual 
inflow of approximately 355,000 acre-feet of which, on average, about 
80 percent is Carson River inflow and 20 percent Truckee River 
diversions to Lahontan. Therefore, a given percentage reduction in the 
storage target for Truckee River diversions has a much smaller 
percentage effect on the total water supply in Lahontan Reservoir. For 
example, a 50 percent reduction in storage targets would still provide, 
on average, about a 90 percent supply to the Project; a 100 percent 
reduction in storage targets (no Truckee River water) would still leave 
an 80 percent water supply, on average.
    On the issue of maintaining a 4,000 acre-foot minimum storage in 
Lahontan Reservoir, that is not a provision of OCAP, but rather appears 
to be an informal agreement between TCID and the Nevada Department of 
Conservation and Natural Resources to provide some water for fish in 
the Reservoir. Although Lahontan Reservoir was designed for irrigation 
water storage, Pub. L. 101-618 expands the authorized purposes of the 
Newlands Project to include recreation and fish and wildlife (Section 
209 (a)), though no water rights have been transferred to the Reservoir 
for that purpose. The DOI supports maintenance of the recreational 
fishery at Lahontan Reservoir, and by modeling the Reservoir with a 
4,000 acre-foot minimum level, the DOI acknowledges that this amount of 
water is, in effect, unavailable for use in the Project. Also, the 
minimum reservoir pool is beneficial to dam safety and operations 
because both the dam and the valves and packing in the outlet works 
perform best if kept wet instead of being subject to frequent wetting 
and drying.
    3. Project Conveyance Efficiency: The Adjusted OCAP does not change 
the assumptions underlying the conveyance efficiency provision in the 
1988 OCAP, but it does reduce the conveyance efficiency requirement 
based on less Project acreage than was envisioned in the 1988 OCAP. The 
basis for the new, lower conveyance efficiency requirement is that 
conveyance efficiency generally decreases as the irrigated acreage in 
the Project decreases because conveyance losses (seepage and 
evaporation) are about the same even though deliveries to headgates 
decrease.
    Thirteen commenters questioned why DOI was continuing to rely on 
the efficiency assumptions in the 1988 OCAP. The comments focus on a 
table of 22 Potential Water Conservation Measures for the Newlands 
Project first published as Table 4 in the 1988 OCAP and republished in 
a modified form in the Adjusted OCAP proposed rule. Commenters object 
to using this table because the conservation measures, many of which 
were implemented by TCID, have not always achieved the water savings 
predicted in the 1988 OCAP. Some stated that continuing to cite these 
conservation measures perpetuates in the Adjusted OCAP the errors from 
the 1988 OCAP. Some feel that DOI has not recognized the efforts of 
TCID in trying to achieve the conveyance efficiency requirements by 
relying on these conservation measures. One commenter stated that DOI 
had used these conservation measures to justify unreasonable conveyance 
efficiency requirements in the 1988 OCAP, while another commenter 
stated that the requirements were made artificially high to run up 
Project debits. Another commenter stated that the conservation measures 
had interfered with getting irrigation deliveries at the optimum times 
for plants. Several commenters wanted to know what other irrigation 
projects the Newlands Project had been compared to in determining what 
level of conveyance efficiency was possible.
    Five commenters raised questions about how the Adjusted OCAP 
conveyance efficiency was developed, whether DOI had considered the 
1994 Report to Congress on the Newlands Project Efficiency Study, how 
the lower storage targets relate to efficiency, and if we can be very 
accurate in measuring conveyance efficiency.
    Two commenters stated that the conveyance efficiency requirement 
should not be lowered because the 1994 BOR Efficiency Study shows that 
efficiencies could be increased to 75 percent, and that lower 
efficiencies were inconsistent with BOR policy on water conservation.
    Response: In planning the adjustments to be made to the 1988 OCAP, 
the DOI identified four changes within the scope of the 1988 OCAP: 
adjustments to Lahontan Reservoir storage targets based on current 
irrigated acres, conveyance efficiency requirements based on current 
irrigated acres, extending the time period for storage in lieu of 
diversions to avoid winter over diversions, and giving BOR flexibility 
in determining what snowpack/runoff forecasts to use. The DOI was asked 
to consider more fundamental changes to the 1988 OCAP approach to 
conveyance efficiency; however, the suggested changes were far beyond 
the scope of the Adjusted OCAP analysis. The DOI has committed to a 
review of conveyance efficiency requirements and conservation measures 
as part of long-term revisions to OCAP, but not as part of Adjusted 
OCAP.
    The expected water savings from the 22 conservation measures 
identified in Table 4 in the 1988 OCAP were based on information 
available at the time. Many of those measures were suggested as a 
relatively inexpensive means to achieve the conveyance efficiency 
requirements in the 1988 OCAP. Some of the measures in Table 4 were 
expensive and some of the predicted savings have not been achieved in 
practice. Many of the 22 measures were implemented by TCID, although 
not always consistently, but the predicted water savings were not 
realized in all cases. In its 1994 Efficiency Study, the BOR recognized 
the differences between the water savings predicted in the 1988 OCAP 
and what had been achieved. It also identified other measures, some at 
quite low cost, that could increase project efficiency. The Adjusted 
OCAP incorporates the new information from the 1994 Efficiency Study 
and updates the table on Potential Water Conservation Measures. 
However, the 1988 OCAP neither required those specific measures from 
Table 4 to be implemented nor precluded the Project from implementing 
any other measures to improve water conservation and meet the 
efficiency requirement. The conservation measures are not a means of 
justifying conveyance efficiency requirements but were suggested as a 
way to achieve those requirements. Nor are the conveyance efficiency 
requirements a way to increase debits in the Project.

[[Page 66460]]

    As suggested in a comment, it is difficult to know with precision 
how a particular conservation measure improves conveyance efficiency. 
One of the problems--and one of the twenty-two conservation measure 
suggestions--is the inaccuracy of measuring deliveries to headgates. As 
a result of the new Project O&M contract, TCID is undertaking 
installation of water measurement devices to improve measurement of 
headgate deliveries. The efficiency study estimates that this will 
actually increase efficiency by about 7.5 percent because the current 
measurement is inaccurate and seems to produce systematic over-
diversions to Project irrigators.
    In formulating the conveyance efficiency requirements for the 1988 
OCAP, BOR compared the Newlands Project to two other irrigation 
projects concerning the conveyance efficiencies that might be achieved. 
The BOR looked at the Payette Division of the Boise Project and the 
South Side Pumping Division of the Minidoka Project, both in Idaho. The 
observed conveyance efficiency in the Payette Division is 66.3 percent 
and in the South Side Pumping Division 64.4 percent. As might be 
expected, the Newlands Project shares some characteristics with these 
projects and is different from them in other ways. The 1988 OCAP 
considered these to be ``comparable'' projects, but no assessment has 
been made of the validity of any comparisons.
    The Adjusted OCAP reduction in the conveyance efficiency 
requirement is calculated based solely on the current Project acreage 
compared with the 1988 OCAP acreage assumptions and is unrelated to the 
calculation of the Adjusted OCAP storage targets. The conveyance 
efficiency requirement will be extrapolated each year using the 1988 
OCAP acreage assumptions and the current acreage.
    The DOI believes the reduced efficiency requirement to be 
consistent with other changes in the Adjusted OCAP based on Project 
acreage. This change recognizes the difficulty in meeting the 
efficiency requirements when headgate deliveries are lower. It is not a 
windfall for the irrigators because the reduced efficiency requirement 
still cannot be met without physical or operational improvements in the 
Project, although there is a benefit because it will reduce the debit 
the Project may incur in certain years.
    4. Effects of Other Actions on Efficiency: One commenter noted that 
various water rights acquisition programs could result in the 
acquisition and transfer out of the Newlands Project of a significant 
portion of the water rights in the Truckee Division. The conveyance 
efficiency in the Truckee Division is approximately 74 percent, and 
this higher conveyance efficiency improves the overall Project 
conveyance efficiency. The commenter is concerned that Truckee Division 
water rights acquisitions will shift more of the burden of meeting 
efficiency targets to the less efficient Carson Division.
    Four other commenters say that the wetlands water rights 
acquisition program managed by the FWS to acquire water rights for 
Stillwater National Wildlife Refuge will make it difficult to achieve 
the required efficiencies. The wildlife refuge is at the end of the 
Project delivery system and commenters contend delivering increasing 
amounts of water to the end of the system will reduce conveyance 
efficiency. Another concern is that the pattern of water rights 
acquisitions may eliminate deliveries to some properties along a 
delivery lateral and result in less efficient water deliveries to other 
remaining properties on the lateral. One commenter disagreed with the 
assumption that the water rights acquisition program will, over time, 
help to improve conveyance efficiency in the Carson Division, and cited 
the 1994 BOR Efficiency Study to support this claim .
    Response: While the concern for conveyance efficiency is 
legitimate, the specific argument is questionable considering that 
wasteful deliveries occur, including one at no more than about five 
percent efficiency.
    The DOI continues to believe that the pattern of purchases, 
predominantly in the Stillwater and St. Clair Districts, the areas 
closest to the wetlands, will improve Project efficiencies by 
concentrating deliveries through the system. This is consistent with 
the 1994 BOR Efficiency Study which states that delivery of more water 
to wetlands should not affect seepage because the canals used to 
deliver water to the wetlands are generally full throughout the 
irrigation season, and that the wetted area of the canal and not flow 
determines seepage.
    The DOI recognizes that absent targeted water rights acquisitions, 
the FWS may buy water rights in other areas of the Project. It is the 
DOI position that if, at some appropriate point in the future, water 
rights acquisitions in the Truckee Division or the Carson Division are 
shown, on the whole, to have a demonstrable adverse effect on Project 
conveyance efficiency, the calculation of Project conveyance efficiency 
may be adjusted. This would be done solely at the discretion of the BOR 
and only if a feasible technical approach can be developed to remove 
the inefficient component of the delivery system from the calculation 
of conveyance efficiency.
    This should not affect the Secretary's carrying out his trust 
obligations to the PLPT because each wetlands acquisition reduces the 
demand for Truckee River water in the Project by transferring to the 
wetlands only 2.99 acre-feet of every 3.5 or 4.5 acre-feet acquired. 
Also, the conveyance efficiency improvements from concentrating 
deliveries to the wetlands further reduces the demand for Truckee River 
water in the Carson Division.
    5. Credit Storage in Lieu of Diversions: The proposed Adjusted OCAP 
rule extended the time period during which water might be stored in 
Stampede Reservoir on the Truckee River in lieu of diverting that water 
to Lahontan Reservoir. The 1988 OCAP allowed storage in lieu of 
diversion from April through June. The proposed rule extended storage 
in lieu of diversion to begin as early as January each year.
    Six commenters raised a number of questions, foremost seeking a 
better description of when credit storage provisions would be utilized, 
how much water could be stored, when it would be released from storage, 
and how it relates to storage targets. Another question was why DOI was 
using credit storage to address unique events like high runoff years, 
but not drought years. One commenter suggested that there would be 
little benefit for the Truckee River or Pyramid Lake if credit storage 
is only used in years that are full water years or better. Some 
comments expressed concern for water levels in Lahontan Reservoir when 
water was being stored in Truckee River reservoirs, and saw the 
potential for less carry over storage in Lahontan and more diversions 
from the Truckee River. One commenter questioned why unused Newlands 
Project water could not be carried over to the next year in Truckee 
River reservoirs. Another commenter asked why the credit water could 
only be used in the Carson Division when the greater need for the water 
might be in the Truckee Division.
    Two commenters recommended that the credit storage in lieu of 
diversions start in October to avoid excess diversions, particularly in 
November and December. One commenter suggested that storage in lieu of 
diversions should be done whenever possible, regardless of runoff 
forecasts, and that credit water only be taken to Lahontan Reservoir 
after June and then only to meet storage targets.
    One commenter was concerned about the effects of storage in Truckee 
River

[[Page 66461]]

reservoirs and recommended that water be stored in all Truckee River 
reservoirs, not just Stampede reservoir, and that unused portions of 
the credit storage should revert to the reservoir in which the water 
would have been captured. The commenter wanted the storage priority for 
OCAP credit water to be junior to all existing categories of stored 
water and junior to all future storage under the TROA, and that it not 
be stored adverse to Floriston rates without a hydropower waiver from 
Sierra Pacific Power Company. Also, they indicated that the OCAP credit 
storage should be subject to reductions by evaporation and spills.
    Response: Extending the time period during which the credit storage 
provision is applicable is intended to fine-tune the amount of water 
the Project receives from the Truckee River. It is a way to avoid 
excess winter diversions of Truckee River water that ultimately spills 
from Lahontan Reservoir, as occurred in 1995, 1996, and 1997. The 
following discussion is intended to clarify when and how the credit 
storage provision (Sec. 418.20 (f)) will be used. In response to 
comments received, and in consideration of the experience in December 
1996 when approximately 22,000 acre-feet of water was diverted from the 
Truckee River to Lahontan Reservoir and then was spilled in January 
1997 due to high Carson River runoff, the Adjusted OCAP rule extends 
credit storage in lieu of diversion to include November and December. 
October was not included because it is during the irrigation season and 
because it is the month with the lowest storage target--52,000 acre-
feet--so there is little risk that Truckee River diversions to meet 
that target would result in a spill. As revised, this Adjusted OCAP 
rule provides the BOR flexibility to determine, in consultation with 
other parties, whether to initiate credit storage any time from 
November through June of the next year.
    Under this credit storage provision, water that otherwise would 
have been released for diversion to Lahontan Reservoir that is actually 
retained in Truckee River reservoirs would be credited as Newlands 
Project credit water. Also, water that could be diverted to Lahontan 
Reservoir but is allowed to pass Derby Dam may be credited as Newlands 
Project credit water in Stampede Reservoir from the fish water stored 
in Stampede Reservoir. In the latter situation, concurrence by the FWS, 
and as appropriate, the PLPT, will be required because they control the 
use of fish water, and the storage would have to be accomplished by 
exchange with water dedicated to help restore endangered and threatened 
fish at Pyramid Lake. For example, a reduction of diversions in January 
through March of 1995, would have required FWS approval because water 
was not being released for Project diversions.
    Newlands Project credit water could be exchanged to other special 
categories of water in Truckee River reservoirs such as project water 
held for fish recovery, and can be retained in storage until the end of 
the irrigation season. The number of categories available for such 
exchanges is expected to increase if the TROA currently in negotiation 
is completed and entered into effect.
    Newlands Project credit water that spills may be captured and 
diverted to the Project at Derby Dam if the diversion is within the 
applicable OCAP storage targets. However, Newlands Project credit water 
remaining in storage at the end of the Project irrigation season will 
be managed to benefit threatened or endangered fish in Pyramid Lake.
    Newlands Project credit water may be released for diversion to 
Lahontan Reservoir, if needed, as early as July 1 through the end of 
the irrigation season, but not thereafter. Credit water can be diverted 
to Lahontan Reservoir only to meet applicable storage targets during 
the irrigation season. Newlands Project credit water will not carry 
over to the next year for use in the Project, therefore, if it is not 
used in the year in which it is stored, it will not be available 
thereafter to the Project. To protect the water users, the Newlands 
Project credit water held in storage on the Truckee River will not be 
reduced as a result of seepage or evaporation. If Newlands Project 
credit water spills from Truckee River reservoirs it can be diverted at 
Derby Dam for Lahontan Reservoir subject to applicable storage targets.
    If the entire amount in credit storage is needed to meet Lahontan 
Reservoir storage targets, then the amount of water released from 
Truckee River reservoirs will be the amount actually captured in 
storage. If the Newlands Project credit storage is based on water that 
was allowed to pass Derby Dam, then sufficient water will be released 
from credit storage to ensure that the diversion to the Project, as 
measured at the U.S. Geological Survey gauge on the Truckee Canal near 
Wadsworth, Nevada, matches the diversion foregone earlier in the 
season.
    The BOR is expected to apply this provision starting in November or 
December only in years when the water levels in Lahontan Reservoir and 
Truckee River Federal reservoirs are high enough to indicate that a 
normal or near normal water year would be expected to satisfy Project 
water demand. For example, there would be no point in credit storing 
potential Truckee River diversions in November or December if Lahontan 
Reservoir were nearly empty due to a drought in the preceding 
irrigation season. Thereafter, Newlands Project credit water will be 
stored in lieu of diversion if the Carson River runoff is forecast to 
provide a full supply of water to Lahontan Reservoir.
    The reason Newlands Project credit storage is not allowed to carry 
over to subsequent years is because, by definition, the water left in 
storage at the end of the irrigation is water that was not needed to 
serve Project water rights. In accordance with Tribe v. Morton, the 
credit water remaining is water that must flow to Pyramid Lake.
    The effect of this provision on water levels in Lahontan Reservoir 
will vary from year to year, depending on the amount and timing of the 
Carson River spring runoff. The information on storage levels in Table 
D does not include any effects from storage in lieu of diversion. If, 
as expected, credit storage is exercised only during above average 
water years, it may have little effect on recreation levels in Lahontan 
Reservoir. Credit storage will tend to reduce water levels in Lahontan, 
particularly in the spring and early summer recreation seasons, but if 
the credit water is needed and taken to Lahontan later in the summer it 
will increase water levels. The fine tuning facilitated by credit 
storing will tend to reduce carry over of Truckee River water in 
Lahontan and this will decrease spills.

BILLING CODE 4310-RK-P

[[Page 66462]]

[GRAPHIC] [TIFF OMITTED] TR18DE97.003



BILLING CODE 4310-RK-C

[[Page 66463]]

    The Newlands Project credit water is not intended to be used to 
balance the water supply between the Truckee and Carson Divisions of 
the Project. The credit storage is created out of water that would have 
gone to Lahontan Reservoir. If the credit water is needed to meet 
storage targets in Lahontan Reservoir but it is instead diverted for 
use in the Truckee Division, that leaves the Reservoir below targets 
and places an additional call on Truckee River water. On the other 
hand, if diversions out of winter and spring Truckee River water would 
have met Lahontan storage targets and summer and fall flows are 
insufficient to meet current demand there would be no bar to using a 
portion of the stored water to equalize deliveries between the two 
Divisions. It is expected that this situation could occur rarely, if at 
all, since the intention is to divert sufficient water, when available, 
to serve water rights and to store water in Stampede Reservoir only 
when Carson River flows are expected to meet the Lahontan Reservoir 
storage target criteria.
    The priority of storage for Newlands Project credit water in 
relation to other stored water and to Sierra Pacific Power Company's 
hydropower right is expected to be resolved in TROA negotiations which 
are not yet completed. (See also the response I.10. on the relationship 
of Adjusted OCAP to TROA.)
    6. Cui-ui Fish: Measures to recover the endangered cui-ui, a fish 
species unique to Pyramid Lake, are detailed in the 1992 Cui-ui 
Recovery Plan prepared by the FWS. These measures include increasing 
the inflow of the Truckee River to the Lake to first stabilize what has 
been a falling lake level, then increasing the water level in the Lake 
so that the fish can eventually swim unaided up the Truckee River to 
the fish passage facility at Marble Bluff Dam where they are passed 
upstream to spawn. If the Lake level rises above Marble Bluff Dam, the 
cui-ui will be able to spawn upstream without human assistance to get 
over the dam.
    Three good water years and four years of cui-ui spawning runs have 
dramatically increased the population of cui-ui in Pyramid Lake, 
although much of the increased population is juvenile fish which have 
yet to contribute to spawning. Along with successful spawning and 
increasing population have come questions about how much water the cui-
ui need for recovery. Nine commenters raised a number of issues 
regarding cui-ui, the heart of which is questioning the need for 
Adjusted OCAP in light of recent increases in the cui-ui population. 
The underlying assumption is that the Adjusted OCAP's purpose is to 
obtain more water from the Newlands Project for cui-ui recovery. This 
notion was probably reinforced by the Endangered Species Act (ESA) 
consultation on the 1988 OCAP which effectively limited the maximum 
allowable diversion in the Project to 320,000 acre-feet per year to 
avoid jeopardizing the continued existence of cui-ui. One commenter 
asked what the current biological opinion shows for cui-ui at current 
population levels.
    One commenter asked why the 1988 OCAP was being changed when the 
Recovery Plan was still under review by the National Academy of 
Science. Two commenters questioned if a water demand for Pyramid Lake 
or cui-ui had been defined or if DOI had performed a demand study for 
the Newlands Project and concluded it needed 110,000 acre-feet for cui-
ui. Several commenters believed that modeling done for Adjusted OCAP is 
flawed because it doesn't reflect current cui-ui data on population or 
lake level relationships, and there is no information on how the cui-ui 
index was formulated. These commenters also thought too much water 
might be going to Pyramid Lake and could affect boating, the delta 
wetlands, pelicans, and grazing. One commenter questioned why getting 
110,000 acre-feet of water to Pyramid Lake for recovery of the cui-ui 
was the sole responsibility for the Newlands Project.
    Response: The original litigation in Tribe v. Morton is the basis 
for the current OCAP for the Newlands Project, and that case is based 
on the Secretary's trust responsibilities to the Pyramid Tribe, not the 
Secretary's responsibilities under ESA to recover cui-ui. This is not 
to say that cui-ui recovery is ignored in developing OCAP. As with any 
action that may affect a species listed under the ESA, the Secretary 
had to consider the effects of the 1988 OCAP on cui-ui and consult with 
the FWS which resulted in the 1988 biological opinion. We have again 
consulted with the FWS on this Adjusted OCAP and the FWS has confirmed 
that the Adjusted OCAP will not adversely affect listed species, 
including the endangered cui-ui. The recent population increase does 
not alter the Secretary's trust responsibility to ensure that only the 
water needed to serve Project water rights is diverted from the Truckee 
River.
    The Cui-ui Recovery Plan calls for annual inflow to Pyramid Lake to 
increase by 110,000 acre-feet, although some of this water may be in 
the form of equivalent benefits like improvements in lower Truckee 
River habitat or enhanced fish passage over Marble Bluff Dam. This 
amount of water or its equivalent is not based on a study of how much 
water can or should be taken from the Newlands Project for cui-ui, but 
on a determination of the water flows and Lake levels needed to ensure 
the persistence of the species.
    A revised provisional version of the cui-ui model has undergone 
peer review and will be submitted to the cui-ui recovery team for their 
consideration of the model and its results. The revised model includes 
new information on cui-ui spawning and survival developed since the 
current model version was developed. The revised model is expected to 
better mirror the recent increases in cui-ui population. Even with the 
current cui-ui model, the cui-ui results presented in Table A show a 
marked increase in cui-ui numbers over the proposed rule modeling 
because of the inclusion of the three good spawning years in the 
hydrology. Except for the peer review of the model noted above, we are 
not aware of any review of the Cui-ui Recovery Plan by the National 
Academy of Science.
    The reduced diversions of Truckee River water under Adjusted OCAP 
do increase inflow to Pyramid Lake and, if the next 95 years match the 
hydrology of the last 95 years (as the model operates), Pyramid Lake 
could rise as much as 37 feet. This would inundate some existing 
recreational facilities and possibly some roads, all of which would 
have to be relocated. However, this only brings the elevation of 
Pyramid Lake to approximately 3,840 feet, which is still lower than 
Marble Bluff Dam and well below the Lake level when the Newlands 
Project began.
    7. Impacts on Recreation: Lahontan Reservoir is one of Nevada's 
most important recreational lakes. It is operated as a State park 
recreation area through an agreement with the BOR. A number of comments 
were received citing the effects of lower storage targets in Lahontan 
Reservoir on use of the lake for boating, fishing, swimming, and 
camping. Nine commenters expressed concerns for recreation.
    Several commenters cited Nevada's investment of $6.5 million in 
facilities at Lahontan Reservoir, and view the Adjusted OCAP as a 
breach of trust of the recreation agreement between the State and the 
BOR, and further, as a conflict with the Reclamation Recreation 
Management Act of 1992 section 2802 findings.
    Most impacts are related to the lower water levels in Lahontan 
during summer holidays. One commenter says the times the July target of 
150,000 acre-feet won't

[[Page 66464]]

be met increases from 38 years to 54 years out of 94 years. Another 
commenter cites a 41 percent reduction in storage. There is also a 
concern that these impacts occur at a time of rapid growth in Nevada. 
One commenter says the impact of losing 50,000 acre-feet to Pyramid 
Lake is minimal compared with the virtual destruction of recreation at 
Lahontan by these changes. One commenter suggested that the State of 
Nevada should purchase and dedicate water rights for recreation at 
Lahontan.
    Response: Lahontan Reservoir was constructed for the purpose of 
storing water to serve the Newlands Project. The Reservoir itself does 
not enjoy an adjudicated or quantified water right. The United States 
Court of Appeals for the Ninth Circuit has opined that ``The Lahontan 
Reservoir, as a Project built under the federal Reclamation Act, was 
intended for the primary benefit of the farmers who would use its 
waters for irrigation, and any beneficial use of the reservoir by way 
of recreation could only be incidental to that purpose.'' Further, the 
United States has an affirmative duty pursuant to its trust obligations 
to the PLPT not to divert any more water from the Truckee River than is 
needed to meet Project water rights.
    Not surprisingly, the water level in Lahontan fluctuates during the 
irrigation season and from year to year, and is not always favorable to 
recreational uses. Modeling results for the proposed Adjusted OCAP 
indicate lower levels in Lahontan Reservoir during the recreation 
season than are experienced under the 1988 OCAP. In response to 
comments, but taking the Secretary's trust responsibility into account, 
the storage targets in Adjusted OCAP have been modified from the 
proposed rule as shown in Table A, lines 33 through 40. This change in 
the final rule provides a slight increase in recreation levels in 
Lahontan during the summer season.
    Water levels in Lahontan Reservoir under the Adjusted OCAP will not 
cause any damage to the existing recreation facilities developed and 
constructed by the State of Nevada. The concern is that lower water 
levels will ``virtually destroy'' the Reservoir as an important 
recreation resource. The main obstacle to Lahontan recreation from 
lower water levels is the boating access to the Reservoir via paved 
boat ramps. The boat ramps are currently useable down to a storage 
level of 120,000 acre-feet. As a mitigation measure to ensure continued 
boating access to Lahontan Reservoir, the DOI proposes to extend the 
boat ramps so that there is safe access down to a storage level of 
90,000 acre-feet. With the extended boat ramps, modeling results for 
Final Adjusted OCAP shown on Table D indicate that there should be 
boating access through the Labor Day holiday about 75 percent of the 
time.
    Regarding the suggestion that the State of Nevada should purchase 
and dedicate water rights for Lahontan Reservoir, this is beyond the 
scope of this rule and beyond DOI jurisdiction. However, the State has 
had discussions with the DOI on doing exactly this in conjunction with 
acquiring water rights upstream of Lahontan Reservoir for recreational 
and wetlands use.
    8. Impacts on Wetlands: Eight commenters were concerned that 
Adjusted OCAP would adversely affect the efforts of the FWS and the 
State of Nevada to restore 25,000 acres of wetlands in Lahontan Valley 
because of reduced flows to the wetlands. Flows to wetlands might be 
reduced in three ways. First, agricultural water rights acquired by the 
FWS or the State and transferred to wetlands are subject to all OCAP 
requirements and effects on the water supply. Any increase in water 
shortages for farmers is an increase in shortages for wetlands. Second, 
the lower Lahontan Reservoir storage targets will reduce the frequency 
and quantity of spills and precautionary draw-downs from the Reservoir, 
a portion of which flows to wetlands. Third, any reduction in the water 
applied to farm lands reduces the return flows to agricultural drains, 
some of which carry water to the wetlands.
    Several commenters felt that Adjusted OCAP conflicts with or 
invalidates the assumptions in the Water Rights Acquisition EIS 
recently published by the FWS, because they will need to acquire more 
agricultural water rights. They did not believe it was the role of the 
State or Federal water rights acquisition programs to mitigate for 
effects from Adjusted OCAP. One also questioned if needing to mitigate 
for effects on wetlands was contrary to the 1988 OCAP preamble.
    Finally, one commenter asked how the OCAP would account for any 
wetland water rights acquired above Lahontan Reservoir.
    Response: Adjusted OCAP will not cause a net loss in wetlands, 
however, it will have a minor effect on how quickly the FWS can obtain 
all the water it needs for wetlands, and will require the FWS to obtain 
additional water rights. Modeling results show that the long-term 
effect of Adjusted OCAP will reduce slightly the yield from acquired 
water rights for wetlands, reduce drainflows, and reduce water reaching 
the wetlands from spills. The effect of Adjusted OCAP may be a 
reduction in headgate deliveries and drainflows by about 1,100 acre-
feet. The average reduction in spilled water may be 4,000 acre-feet. 
Neither of these effects are necessarily additive because the average 
spill reduction does not occur in the same year as droughts which would 
cause delivery and drainflow reductions. However, the Project and the 
wetlands are expected to receive a full supply of water in 9 out of 10 
years. In full water years or in years with spills, there would be no 
effect on headgate deliveries and drain flows.
    The precise amount of additional water that may need to be acquired 
cannot be determined at this time because the modeled effects described 
above do not occur simultaneously, and there has not been enough time 
to precisely assess the long-term average acreage produced by a given 
water supply. The wetlands acreage will naturally vary because of wet 
years and dry years. The TCID policy of basing a water right owner's 
share of water in a drought year on both active and inactive water 
rights will slightly augment the amount of water the FWS might 
otherwise receive for wetlands. This is because a portion of the water 
rights acquired by the FWS are inactive, and because they are not 
transferring the full water duty. Also, the amount of water reaching 
wetlands during a spill or precautionary release is variable. Most of 
the water released does not reach the wetlands because of limitations 
in the system to deliver water to the wetlands. The FWS is considering 
improvements in the Project delivery capacity to the wetlands which 
will help get more water to wetlands during spills. Under a separate 
action, new criteria for the management of excess water from 
precautionary releases and spills from Lahontan Reservoir are being 
developed by the BOR. These criteria will help ensure that deliveries 
of excess water to wetlands are given a high priority.
    The effects of Adjusted OCAP were considered in the FWS Water 
Rights Acquisition Final EIS (pages 4-145 to 4-147) and in its Record 
of Decision on the water acquisition alternative. The FWS acknowledged 
that it might have to acquire additional water rights to make up for 
any reductions. It is expected to take the FWS some 10 to 20 years and 
perhaps longer to acquire water needed to create, on average, 25,000 
acres of wetlands. Over that time, in managing water to have an average 
amount of wetlands, it will be very difficult to determine how much 
additional water had to be acquired because of Adjusted OCAP. In its 
Record of Decision, the FWS said it would periodically reassess

[[Page 66465]]

its water needs and its ability to obtain water from all the sources 
under consideration.
    The State of Nevada would experience similar effects on wetlands 
water, proportional to the amount of water rights they own, however, 
the FWS must acquire the necessary water rights to achieve the full 
25,000 acres of wetlands.
    The Adjusted OCAP does not address how to account for wetlands 
water rights acquired above Lahontan Reservoir. This may be managed on 
a case-by-case basis by the DOI.
    9. Impacts on Groundwater: The Newlands Project is the principal 
source of water for recharge to the shallow aquifers in the Lahontan 
Valley and Fernley areas. Both Fallon and Fernley have municipal water 
supplies that rely on groundwater. Elsewhere in the Lahontan Valley, 
individual wells and community wells provide a domestic water supply.
    Fourteen commenters have expressed concerns about the effects of 
the Adjusted OCAP on groundwater. The source of concern is that 
Adjusted OCAP will reduce the amount of water that moves through the 
Truckee Canal and that is available for use in the Lahontan Valley. A 
number of commenters said there would be significant reductions in the 
recharge to the shallow aquifer resulting in reduced water for domestic 
wells, for municipal and industrial use, and adverse effects on water 
quality.
    Several commenters were concerned about recharge to the basalt 
aquifer from which the City of Fallon draws its municipal water supply, 
and the secondary effects this might have on future water supplies and 
economic development in the area. One commenter said the effects of 
reduced drain flows posed qualitative risks for humans and the 
environment and might have legal implications for the Carson River 
above Lahontan Reservoir and in California.
    Several commenters also were concerned about reduced Truckee Canal 
flow affecting recharge to the aquifers in the Fernley area, and thus 
affecting municipal water quantity and quality, and having socio-
economic and environmental impacts.
    Response: The recharge of groundwater from irrigation in the 
Newlands Project is incidental and there is no water right to require 
recharge. Using data from the U.S. Geological Survey 1 
(USGS), the FWS, in their water rights acquisition EIS,2 
estimates the current average recharge in the Lahontan Valley from 
irrigated agriculture to be about 123,300 acre-feet a year. At 
completion of their water rights acquisitions, the FWS estimates that 
recharge to groundwater will be about 93,000 acre-feet per year.
---------------------------------------------------------------------------

    \1\ Mauer, D.K., A.K. Johnson, and A.H. Welch. 1994. ``Hydrology 
and potential effects of changes in water use, Carson Desert 
agricultural area, Churchill County, Nevada.'' U.S. Geological 
Survey Open File Report 93-463.
    \2\ U.S. Fish and Wildlife Service. 1996. ``Final environmental 
impact statement: Water rights acquisition for Lahontan Valley 
wetlands, Churchill County, Nevada.'' Portland, Oregon.
---------------------------------------------------------------------------

    The modeled change in the quantity of water from the Truckee River 
reaching Lahontan Reservoir from the Current Condition to the Final 
Adjusted OCAP in Table A is 20,200 acre-feet (line 10). This difference 
in inflow is offset because the lower targets result in 5,700 acre-feet 
of less reservoir loss (line 12) from evaporation and seepage. The 
exact amount of loss that might go to seepage is unclear, however, 
seepage is thought to contribute only minor amounts of water to 
groundwater recharge in Lahontan Valley (Mauer, et. al.). Of the 
remaining reduction, part is accounted for by a difference of about 
12,200 acre-feet per year in reduced spills (line 14), much of which is 
surface flow that goes directly to wetlands and the Carson Sink and 
does not recharge groundwater. The remaining portion of the reduction 
is 2,550 acre-feet from water applied to irrigated lands (line 17). The 
combination of spills and reduction to irrigation is 14,750 acre-feet 
per year, resulting in a net annual recharge of about 108,550 acre-feet 
at current rates, and about 78,250 acre-feet after wetland water 
acquisitions. This recharge rate far exceeds the current water 
consumption of about 13,000 acre-feet in the Lahontan Valley from 
municipal and domestic well sources.
    Adjusted OCAP will increase shortages during drought years as shown 
in Table B. However, well monitoring in the Lahontan Valley by the USGS 
during and following the last drought period shows that water levels in 
the shallow aquifer drop during droughts but returned to pre-drought 
levels during full water years.3 The Adjusted OCAP is 
modeled to provide full water years in 9 out of 10 years. Generally, 
any effect the Adjusted OCAP might have on groundwater levels in the 
shallow aquifer during droughts would be eliminated by subsequent full 
water years.
---------------------------------------------------------------------------

    \3\ Personal communication: USGS, Water Resources Division, 
Carson City, NV. 1997.
---------------------------------------------------------------------------

    The basalt aquifer is already being mined by the municipal water 
withdrawals for the City of Fallon, Naval Air Station, and Fallon 
Tribe. The degree to which the basalt aquifer is recharged by the 
shallow and intermediate aquifers is uncertain, but is the subject of a 
study by the USGS being funded by the Navy and DOI. The study will help 
define how the basalt aquifer is recharged and its potential for 
recharge from surface water supplies. If the shallow aquifer is an 
important recharge pathway for the basalt aquifer, then in 9 out of 10 
years the Adjusted OCAP would have no effect on recharge to the basalt 
aquifer. Even in drought years and with any additional water shortage 
related to the Adjusted OCAP, the effect on groundwater levels in the 
shallow aquifer is unknown and the degree to which this affects the 
basalt aquifer likewise unknown, but is not expected to be large.
    Lahontan Valley, formed under ancient Lake Lahontan and then from 
the sediments borne by the meandering Carson River, has numerous 
discontinuous, unconsolidated deposits of sands, silts, and clays that 
caused great variability in local use and quality of groundwater. The 
local variability and the small reduction in groundwater recharge 
compared with natural events like droughts makes it impossible to 
identify any effects on groundwater quality or drain water quality.
    Reducing the total flow of water through the Truckee Canal to 
Lahontan Reservoir will likely reduce seepage into groundwater in the 
Fernley, Hazen, and Swingle Bench areas. The modeled change in canal 
loss from the current condition to Adjusted OCAP is about 1,900 acre-
feet per year out of a current canal and irrigation recharge of more 
than 41,000 acre-feet per year of recharge from Project irrigation. The 
percent reduction in recharge that may affect a particular community 
along the Truckee Canal is not known.
    10. Effects on the Fallon Paiute-Shoshone Tribes: The Fallon 
Paiute-Shoshone Tribe Reservation is located within the Project and has 
Project water rights. One commenter asked why the protection of the 
Tribe's trust interests had been dropped from the guiding principles in 
Adjusted OCAP. Another commenter was concerned with effects of Adjusted 
OCAP on the domestic water supply of the Tribe. Two commenters objected 
to the Tribe receiving a full supply of water down to a 56 percent 
water year and wanted to know why this didn't apply to other water 
users in the Project.
    Response: The reference to fulfilling Federal trust 
responsibilities to the Fallon Tribe was inadvertently deleted from the 
list of guiding principles that appeared in the proposed rule. The

[[Page 66466]]

Fallon Tribe is added to this principle in the preamble to this 
Adjusted OCAP rule.
    The domestic water supply on the Fallon Indian Reservation comes 
from wells in the basalt aquifer. The discussion on the basalt aquifer 
in 9. above applies here as well.
    Regarding the allocation of water to the Tribe in a water short 
year, the Tribe is treated by TCID exactly as everyone else is in the 
Project. In water short years, TCID bases water allocations on each 
water users total water right including active and inactive water 
rights. The Fallon Tribe has 19,041.05 acre-feet of water rights 
appurtenant to their Reservation. However, Pub. L. 101-618 limited the 
Tribe to using only 10,587.5 acre-feet or approximately 56 percent of 
that water right per year as part of a settlement with the Tribe. 
Though the remaining 8,453.55 acre-feet of water rights are not active 
because the Tribe cannot call for this water, the DOI pays operations 
and maintenance fees to TCID on the full 19,041.05 acre-foot water 
right. Therefore, in a 56 percent water year (or better), the Tribe 
gets 56 percent of 19,041.05 acre-feet of water which equals their use 
cap of 10,587.5 acre-feet.

III. Technical Issues

    1. Rock Dam Ditch: The proposed Adjusted OCAP rule would have 
changed how certain diversions to Rock Dam Ditch are counted. Rock Dam 
Ditch may receive water directly from releases at Lahontan Reservoir, 
or may get water directly from the Truckee Canal via a siphon pipe 
under the stilling basin below Lahontan Dam. In the proposed rule, 
diversions directly from the Truckee Canal would have counted against 
the Truckee Division. Two commenters noted that this is incorrect and 
all diversion to Rock Dam Ditch should be counted in the Carson 
Division.
    Response: The commenters are correct, as the water that reaches 
Rock Dam Ditch would, in all cases, come from water in Lahontan 
Reservoir or destined to arrive in Lahontan Reservoir. The language at 
section 418.23 has been revised.
    2. Credit and Debit Procedures: Three commenters object to how the 
credit and debit incentive provisions preserved from the 1988 OCAP 
provide for a full debit but a credit of only two-thirds of the actual 
savings. They suggest the credit should be a full credit.
    Response: These credit and debit provisions are in the 1988 OCAP as 
a way to encourage the Project to meet or exceed the efficiency 
targets. The debit is based fully on the excess water that was used in 
the season. Using that excess water leaves Lahontan Reservoir with less 
winter carryover storage, and allows for larger amounts of Truckee 
River water to be diverted to make up for the ``hole'' that was left in 
the Reservoir.
    The credit provision allows the Project to take advantage of the 
unused water any time it exceeds the efficiency targets. By definition, 
this unused water is water that was not needed to serve Project water 
rights. The Gesell decision in Tribe v. Morton specifies that only the 
water needed to serve Project water rights can be diverted to the 
Project from the Truckee River. Therefore, the Project earns a credit 
for the portion of the Carson River water saved through greater 
efficiency, presumed to be about two-thirds because about two-thirds of 
the Project water comes from the Carson River. The remaining third 
stays in Lahontan Reservoir to help reduce future diversions of Truckee 
River water as a way of returning the Truckee River water that was not 
needed when the credit was earned.
    3. Forecasting: One commenter wanted clarification of how the 
deliberative forecasting process will work and wanted to know if this 
would avoid what happened in the 1993-1994 season when a full water 
year was initially forecast and it turned out to be one of the driest 
years on record.
    Response: The 1988 OCAP required the BOR to rely solely on the NRCS 
runoff forecasts for the Carson River. However, there are runoff 
forecasts prepared by other Federal and State agencies that can be used 
along with the NRCS forecast. The consultation process also allows the 
BOR to take advantage of the years of experience available from local 
authorities. This change was proposed in the Adjusted OCAP in response 
to the situation that occurred in 1993-1994.
    4. Water Rights Maps: Two commenters object to using the TCID's 
water maps to determine eligible land irrigated with transferred water 
rights, saying that the maps were never intended to be in OCAP. They 
suggest that eligible lands should follow what is defined in contracts, 
decrees, and State law.
    Response: The BOR relies on the TCID to maintain and keep up-to-
date these water rights maps as the basis for determining which lands 
are eligible to be irrigated. The land definitions in contracts and 
decrees do not indicate whether a particular parcel has been irrigated 
and is deemed to have a valid water right. Issues of eligible land and 
valid transfers are before the Nevada State Engineer at this time.
    5. Floods: One commenter said that before completing the rulemaking 
a study needs to be done of whether OCAP contribute to flooding.
    Response: The flooding on the Carson and Truckee Rivers in 1997 was 
an excellent example of how OCAP do not affect flooding. Thanks to 
Lahontan Dam and Reservoir, the communities below the dam were the only 
areas that were not flooded in January 1997. The irrigation system 
below the Dam, including the Carson River, can handle releases of about 
2,000 cubic feet per second (cfs) without causing flooding. During the 
flood, the inflow to Lahontan Reservoir was higher than 10,000 cfs at 
times. That flow would have caused widespread flooding in the Lahontan 
Valley if not for the storage available in the Reservoir. Without any 
OCAP, much less space would have been available to capture and regulate 
the flood waters because, prior to OCAP, the Project diverted water 
from the Truckee River year-round. The Adjusted OCAP will further help 
reduce flooding risks.
    6. 1967 OCAP Language: One commenter suggested leaving in place the 
Statement of Considerations and some objectives from the 1967 OCAP that 
is currently in the Code of Federal Regulations at 43 CFR Part 418 and 
is to be replaced by this rule. The commenter says the information is 
important to understanding the need for OCAP.
    Response: Much of the information contained in the 1967 OCAP 
Statement of Considerations has been incorporated in the preamble to 
this rulemaking and prior OCAPs. The 1967 OCAP is being replaced in its 
entirety.

Administrative Matters

     This rule has been made effective on publication to stop 
ongoing diversions of water from the Truckee River to Lahontan 
Reservoir. Under the current 1988 OCAP storage target provisions, 
approximately 500 acre-feet per day are being diverted. The diversion 
will continue to divert until the Adjusted OCAP and a new set of 
Lahontan Reservoir storage targets go into effect. This water is not 
needed to serve water rights in the Newlands Project at this time and 
in accordance with the requirements of Tribe v. Morton is water that 
must flow to Pyramid Lake.
     This rule is not a significant rule under Executive Order 
(E.O.) 12866 and does not require review by the OMB.
     As required by the Regulatory Flexibility Act, it is 
hereby certified that this rule will not have a significant impact on 
small business entities.

[[Page 66467]]

     This rule does not include any collections of information 
requiring approval under the Paperwork Reduction Act.
     The DOI has determined that the proposed rule is not a 
major Federal action having significant effects on the human and 
natural environment. An environmental assessment (EA) has been prepared 
on the effects of the proposed rule.
     The proposed rule has no substantial effects on Federalism 
under the requirements of E.O. 12612.
     The proposed rule does not have a significant impact on 
family formulation, maintenance, and general well-being under the 
requirements of E.O. 12606.
     The proposed rule does not represent a government action 
that would interfere with constitutionally protected property rights 
and does not require a Takings Implications Assessment under E.O. 
12630.
     The proposed rule meets the applicable standards of civil 
justice reform in accordance with E.O. 12988.
     The proposed rule will not result in aggregate annual 
expenditures in excess of $100 million by state, local, and tribal 
governments, or the private sector and is, therefore, not subject to 
the requirements of Section 202 of the Unfunded Mandates Reform Act of 
1995 (Pub. L. 104-4).
    The author of this rule is Jeffrey Zippin of the Department of the 
Interior, Truckee-Carson Coordination Office.
    The rule replaces the 1967 OCAP regulations at 43 CFR 418. That 
regulation was superseded by subsequent U.S. District Court-approved 
OCAP, including the 1988 OCAP, which are the basis for this rule.

List of Subjects in 43 CFR Part 418

    Irrigation, Water supply, Newlands Irrigation Project; Operating 
criteria and procedures.

    Dated: December 11, 1997.
Patricia J. Beneke,
Assistant Secretary--Water and Science.

    For the reasons set forth in the preamble, 43 CFR part 418 is 
revised to read as follows:

PART 418--OPERATING CRITERIA AND PROCEDURES FOR THE NEWLANDS 
RECLAMATION PROJECT, NEVADA

General Provisions

Sec.
418.1 Definitions.
418.2 How Project water may be used.
418.3 Effect of these regulations on water rights.
418.4 Prohibited deliveries.
418.5 Responsibility for violations.
418.6 Fallon Paiute-Shoshone Indian Reservation.

Conditions of Water Delivery

418.7 Who may receive irrigation deliveries.
418.8 Types of eligible land.
418.9 Reporting changes in eligible land.
418.10 Determining the amount of water duty to be paid.
418.11 Valid headgate deliveries.
418.12 Project efficiency.
418.13 Maximum allowable limits.

Monitoring Diversions

418.14 Recordkeeping requirements.
418.15 Operations monitoring.

Operations and Management

418.16 Using water for power generation.
418.17 Truckee and Carson River water use.
418.18  Diversions at Derby Dam.
418.19  Diversions from the Truckee River to the Truckee Division.
418.20  Diversions from the Truckee River to Lahontan Reservoir, 
January through June.
418.21  Diversion of Truckee River water to Lahontan Reservoir, July 
through December
418.22  Future adjustments to Lahontan Reservoir storage targets.
418.23  Diversion of Rock Dam Ditch water.
418.24  Precautionary draw down and spills from Lahontan Reservoir.
418.25  Water use for other than Newlands Project.
418.26  Charges for water use.
418.27  Distribution system operation.

Enforcement

418.28  Conditions of delivery.
418.29  Project management.
418.30  Provisions required in future contracts.

Water Management and Conservation

418.31  Conservation measures.
418.32  Cooperative programs.

Implementation

418.33  Purpose of the implementation strategy.
418.34  Valid headgate deliveries.
418.35  Efficiencies.
418.36  Incentives for additional long term conservation.
418.37  Disincentives for lower efficiency.
418.38  Maximum allowable diversion (MAD).
Appendix A to Part 418--Expected Project Conveyance Efficiency

    Authority: 43 U.S.C. 391, et seq.; 43 U.S.C. 373; 43 U.S.C. 614, 
et seq.; 104 Stat. 3289, Pub. L. 101-618.

General Provisions


Sec. 418.1  Definitions.

    Bureau means the Bureau of Reclamation.
    Decrees means the Alpine decree (United States v. Alpine Land and 
Reservoir Co., 503 F. Supp. 877 (D. Nev. 1980)) and the Orr Ditch 
decree (United States v. Orr Water Ditch Co., Equity No. A-3 (D. Nev.))
    District means the Truckee-Carson Irrigation District or any other 
approved Newlands Project operator.
    Eligible land means Project land which at the time of delivery has 
a valid water right and either:
    (1) Is classified as irrigable under Bureau land classification 
standards (Reclamation Instruction Series 510); or
    (2) Has a paid out Project water right.
    Full reservoir means 295,500 acre-feet in Lahontan Reservoir using 
Truckee River diversions. The Reservoir can fill above 295,500 acre-
feet to 316,500 acre-feet with Carson River inflow and the use of flash 
boards. Intentional storage on the flash boards will occur only after 
the peak runoff.
    Project means the Newlands Irrigation Project in western Nevada.


Sec. 418.2  How Project water may be used.

    Project water may be delivered only to serve valid water rights 
used for:
    (a) Maintenance of wetlands and fish and wildlife including 
endangered and threatened species;
    (b) Recreation;
    (c) Irrigation of eligible land; and
    (d) Domestic and other uses of Project water as defined by the 
decrees.


Sec. 418.3  Effect of these regulations on water rights.

    This part governs water uses within existing rights. This part does 
not in any way change, amend, modify, abandon, diminish, or extend 
existing rights. Water rights transfers will be determined by the 
Nevada State Engineer under the provisions of the Alpine decree.


Sec. 418.4  Prohibited deliveries.

    The District must not deliver Project water or permit its use 
except as provided in this part. No Project water will be released in 
excess of the maximum allowable diversion or delivered to ineligible 
lands. Delivery of water to land in excess of established water duties 
is prohibited.


Sec. 418.5  Responsibility for violations.

    Violations of the terms and provisions of this part must be 
reported immediately to the Bureau. The District or individual water 
users will be responsible for any shortages to water users occasioned 
by waste or excess delivery or delivery of water to ineligible land as 
provided in this part.


Sec. 418.6  Fallon Paiute-Shoshone Indian Reservation.

    Nothing in this part affects:
    (a) The authority of the Fallon Paiute-Shoshone Tribe to use water 
on the

[[Page 66468]]

Tribe's reservation which was delivered to the Reservation in 
accordance with this part; or
    (b) The Secretary's trust responsibility with respect to the Fallon 
Paiute-Shoshone Tribe.

Conditions of Water Delivery


Sec. 418.7  Who may receive irrigation deliveries.

    Project irrigation water deliveries may be made only to eligible 
land to be irrigated. The District must maintain records for each 
individual water right holder indicating the number of eligible acres 
irrigated and the amount of water ordered and delivered.


Sec. 418.8  Types of eligible land.

    (a) Eligible land actually irrigated. During each year, the 
District, in cooperation with the Bureau, must identify and report to 
the Bureau the location and number of acres of eligible land irrigated 
in the Project. Possible irrigation of ineligible land will also be 
identified. The Bureau will review data to ensure compliance with this 
part. The District, in cooperation with the Bureau, will be responsible 
for field checking potential violations and immediately stopping 
delivery of Project water to any ineligible land. The Bureau may also 
audit as appropriate.
    (b) Eligible land with transferred water rights. The District water 
rights maps dated August 1981 through January 1983 will be used as the 
basis for determining which lands have a valid water right. The 
original maps will be maintained by the District. The District must 
provide copies of the maps to the Bureau. The District will alter the 
maps and the copies to account for water right transfers as the 
transfers are approved by the Nevada State Engineer.
    (c) Other eligible land. The Bureau will also identify eligible 
land that was not irrigated during the prior irrigation season.


Sec. 418.9  Reporting changes in eligible land.

    (a) Eligible land anticipated to be irrigated. (1) Anticipated 
changes in irrigated eligible land from the prior year will be reported 
to the Bureau's Lahontan Area Office by the District by March 1 of each 
year. The District will adjust the acreage of the eligible land 
anticipated to be irrigated to correct for inaccuracies, water right 
transfers that have been finally approved by the Nevada State Engineer, 
and any other action that affects the number of eligible acres, acres 
anticipated to be irrigated, or water deliveries.
    (2) As the adjustments are made, the District will provide updated 
information to the Bureau for review and approval. The District must 
adjust anticipated water allocations to individual water users 
accordingly. The allocations will at all times be based on a maximum 
annual entitlement of 3.5 acre-feet (AF) per acre of bottom land, 4.5 
AF per acre of bench land, and 1.5 AF per acre of pasture land that is 
anticipated to be irrigated and not on the number of water-righted 
acres.
    (3) The District will provide the individual water users with the 
approved data regarding the anticipated acreage to be irrigated and 
water allocations for each water user that year.
    (i) Any adjustments based on changes in lands anticipated to be 
irrigated during the irrigation season must be reported by the 
individual water user to the District.
    (ii) The District will, in turn, notify the Bureau of any changes 
in irrigated acreage which must be accounted for.
    (iii) Each landowner's anticipated acreage must be less than or 
equal to the landowner's eligible acreage.
    (4) Should a landowner believe that the number of acres of eligible 
land he or she is entitled to irrigate is different from the number of 
acres as approved by the Bureau, the landowner must notify the District 
and present appropriate documentation regarding the subject acreage. 
The District must record the information and present the claim to the 
Bureau for further consideration.
    (i) If the Bureau determines there is sufficient support for the 
landowner's claim, then adjustments will be made to accommodate the 
changes requested by the landowner.
    (ii) If the Bureau disallows the landowner's claim, the Bureau must 
notify the District in writing. The District will, in turn, inform the 
landowner of the disposition of the claim and the reasons therefore, 
and will further instruct the landowner that he or she may seek 
judicial review of the Bureau's determination under the decrees. If the 
dispute affects the current year, then the Bureau and the District will 
seek to expedite any court proceeding.
    (b) Changes in domestic and other uses. By March 1 of each year, 
the District must report to the Bureau all anticipated domestic and 
other water uses. This notification must include a detailed explanation 
of the criteria used in allowing the use and sufficient documentation 
on the type and amount of use by each water user to demonstrate to the 
satisfaction of the Bureau that each water user is in compliance with 
the criteria. With adequate documentation, the District may notify the 
Bureau of any changes in domestic water requirements at any time during 
the year.


Sec. 418.10  Determining the amount of water duty to be delivered.

    (a) Eligible land may receive no more than the amount of water in 
acre-feet per year established as maximum farm headgate delivery 
allowances by the decrees. All water use is limited to that amount 
reasonably necessary for economical and beneficial use under the 
decrees.
    (b) The annual water duty as assigned by the decrees is a maximum 
of 4.5 AF per acre for bench lands and a maximum of 3.5 AF per acre for 
bottom lands. The water duty for fields with a mixture of bench and 
bottom lands must be the water duty of the majority acreage. Bench and 
bottom land designations as finally approved by the United States 
District Court for the District of Nevada will be used in determining 
the maximum water duty for any parcel of eligible land. The annual 
water duty for pasture land established by contract is 1.5 AF per acre.


Sec. 418.11  Valid headgate deliveries.

    The valid water deliveries at the headgate are set by the product 
of eligible land actually irrigated multiplied by the appropriate water 
duty in accordance with Secs. 418.8 and 418.10. The District will 
regularly monitor all water deliveries and report in accordance with 
Sec. 418.9. No amount of water will be delivered in excess of the 
individual water user's headgate entitlement. In the event excess 
deliveries should occur, such amount will be automatically reflected in 
the efficiency deficit adjustment to the Lahontan storage. Water 
delivered in excess of entitlements must not be considered valid for 
purposes of computing project efficiency.


Sec. 418.12  Project efficiency.

    (a) The principal feature of this part is to obtain a reasonable 
level of efficiency in supplying water to the headgate by the District. 
The efficiency targets established by this part are the cornerstone of 
the enforcement and the incentive provisions and when implemented will 
aid other competing uses.
    (b) The efficiency is readily calculable at the year's end, readily 
applicable to water appropriate to that year, able to be compared to 
other irrigation systems even though there may be many dissimilarities, 
appropriate for long term averaging, adjustable to any headgate 
delivery level including droughts or allocations, automatically adjusts 
to

[[Page 66469]]

changes during the year and accurately accounts for misappropriated 
water. Efficiency also can be achieved through any number of measures 
from operations to changes in the facilities and can be measured as an 
end product without regard to the approach. Thus it is flexible enough 
to allow local decision making and yet is fact based to minimize 
disputes.
    (c) Assuming the headgate deliveries are valid and enforceable, 
conveyance efficiency is the only remaining variable in determining the 
quantity of water needed to be supplied to the District. Conveyance 
efficiency is a measure of how much water is released into the 
irrigation system relative to actual headgate deliveries. Differences 
in efficiency, therefore, are directly convertible to acre-feet. The 
differences in efficiency, expressed as a quantity in acre-feet, may be 
added to or subtracted from the actual Lahontan Reservoir storage level 
before it is compared to the monthly storage objective. Thus, the 
diversions from the Truckee River, operation of other facilities (e.g., 
Stampede Reservoir) and decisions related to Lahontan Reservoir are 
made after the efficiency storage adjustments have been made. Operating 
decisions are made as if the adjusted storage reflected actual 
conditions.
    (1) Efficiency incentive credits. In any year that the District's 
actual efficiency exceeds the target efficiency for the actual headgate 
delivery, two-thirds of the resultant savings, in water, will be 
credited to the District as storage in Lahontan. This storage amount 
will remain in Lahontan Reservoir as water available to the District to 
use at its discretion consistent with Nevada and Federal law. Such uses 
may include wetlands (directly or incidentally), power production, 
recreation, a hedge against future shortages or whatever else the 
District determines. The storage is credited at the end of the 
irrigation season from which it was earned. This storage ``floats'' on 
top of the reservoir so that if it is unused it will be spilled first 
if the reservoir spills. The District may use all capacity of Lahontan 
Reservoir not needed for project purposes to store credits.
    (2) Efficiency disincentive debits. In any year that the District's 
actual efficiency falls short of the target appropriate to the actual 
headgate deliveries, then the resultant excess water that was used is 
considered borrowed from the future. Thus it becomes a storage debit 
adjustment to the actual Lahontan Reservoir storage level for 
determining all operational decisions. The debit may accumulate but may 
not exceed a maximum as defined in Sec. 418.13(b). The debit must be 
offset by an existing incentive credit or, if none is available, by a 
subsequent incentive at a full credit (not a 2/3 credit), or finally by 
a restriction of actual headgate deliveries by the District. This would 
only be done prospectively (a subsequent year) so the District and the 
water users can prepare accordingly. Since the debit does not 
immediately affect other competing uses or the District (except in a 
real drought), it allows for future planning and averaging over time.
    (3) Efficiency targets. To determine the efficiency target, the 
system delivery losses were divided into categories such as seepage, 
evaporation and operational losses. The ``reasonable'' level of savings 
for each category was then determined by starting with current 
operating experience and applying the added knowledge from several 
measures. Means of achieving the efficiency targets, including the 
specific conservation measures and amounts, are identified in the table 
Possible Water Conservation Measures for the Newlands Project. 
Applicable target efficiencies will be determined each year as 
described in Sec. 418.13 (a)(4).
    (4) Available conservation measures. The water conservation 
measures referred to in paragraph (c)(3) of this section and others 
currently available to the District are listed in the following table. 
The table has been revised based upon the Bureau of Reclamation's Final 
Report to Congress of the Newlands Project Efficiency Study, 1994.

                          Possible Water Conservation Measures for the Newlands Project                         
----------------------------------------------------------------------------------------------------------------
                                  Expected savings in acre-feet (AF)                                            
   Conservation measures \1\                 per year \2\                                Notes                  
----------------------------------------------------------------------------------------------------------------
1. Water ordering                1,000                                Require 48-hour advance notice.           
2. Adjust Lahontan Dam releases  ++ \3\                               Match releases to demand with daily       
 frequently                                                            adjustments.                             
3. Increase accuracy of          12,000                               Account for deliveries to nearest cfs and 
 delivery records and                                                  to nearest minute.                       
 measurement devices                                                                                            
4. Change operation of           ?? \4\                               Eliminate use of all or parts of          
 regulating reservoirs                                                 regulating reservoirs; drain at end of   
                                                                       season.                                  
5. Shorten irrigation season     4,000                                Reduce by 2 weeks.                        
6. Control delivery system       ++                                   Eliminate spills, better scheduling,      
                                                                       grouping deliveries.                     
7. System improvements           ??                                   O&M activity: repair leaky gates, reshape 
                                                                       canals, improve measuring devices.       
8. Dike off 2/3 S-Line           2,720                                500 ft. dike; (5' evaporation, 0.75'      
 Reservoir                                                             seepage).                                
9. Dike off south half of        2,130                                5,000 ft. dike; large savings considering 
 Harmon Reservoir                                                      canal losses (5' evap., 1.8' seepage).   
10. Dike off west half of        2,400                                6,000 ft. dike.                           
 Sheckler Reservoir                                                                                             
11. Eliminate use of Sheckler    4,000                                Use for Lahontan spill capture only;      
 Reservoir                                                             restore 200 ft. of E-Canal; A-Canal is   
                                                                       OK.                                      
12. Line 20 miles of Truckee     20,000                               Reduces O&M.                              
 Canal \5\                                                                                                      
13. Line large canals            26,100-31,000                        Line large net losers first.              
14. Line regulatory reservoirs   2.3 AF/acre                                                                    
15. Reuse drain water for        7,100                                Assuming blended water quality would be   
 irrigation                                                            adequate                                 
16. Ditch rider training each    ??                                                                             
 year                                                                                                           
17. Canal automation             ??                                   Reduced canal fluctuations.               
18. Community rotation system    ??                                   Grouping deliveries by area.              
19. Reclamation Reform Act       ??                                   District implementation of water          
 water conservation plan:                                              conservation plan.                       
    a. Weed and phreatophyte                                                                                    
     control                                                                                                    

[[Page 66470]]

                                                                                                                
    b. Fix gate leaks                                                                                           
    c. Water measurement                                                                                        
    d. Automation                                                                                               
    e. Communication                                                                                            
20. Pumps and wells for small    400                                                                            
 diverters                                                                                                      
21. Water pricing by amount      ++                                   Incurs administrative costs to implement. 
 used                                                                                                           
22. Incentive programs           ??                                   For District personnel and/or water users.
23. Drain canals                 1,065                                At the end of each irrigation season.     
24. Acquire parcels with         22,280                               Acquire and retire water rights from      
 inefficient delivery\6\                                               irrigated acreage with particularly      
                                                                       inefficient delivery. Lesser savings from
                                                                       transferring water rights to lands with  
                                                                       more efficient delivery.                 
----------------------------------------------------------------------------------------------------------------
\1\ The first seven measures were considered in developing the water budget in Table 1 for the 1988 OCAP.       
  Additional measures could be implemented by the District to help achieve efficiency requirements.             
\2\ Water savings have been updated in accordance with Bureau of Reclamation's Report to Congress on Newlands   
  Project Efficiency, April 1994.                                                                               
\3\ ++ indicates a positive number for savings but not quantifiable at this time.                               
\4\ ?? indicates uncertainty as to savings.                                                                     
\5\ This measure was included in the 1988 OCAP and effects overall Project efficiency; it is recognized that    
  savings from this measure are not accounted for in the OCAP.                                                  
\6\ Identified in the 1994 BOR Efficiency Study: 31 Corporation, below Sagouspe Dam, and N Canal.               

    (5) The measures in paragraph (c)(4) of this section are 
discretionary choices for the District. The range of measures available 
to the District provides a level of assurance that the target 
efficiency is reasonably achievable. The resultant efficiency targets 
were also compared to the range of efficiencies actually experienced by 
other irrigation systems that were considered comparable in order to 
provide a further check on ``reasonable.'' Most of the delivery losses 
are relatively constant regardless of the amount of deliveries. The 
efficiency will necessarily vary with the amount of headgate 
deliveries.
    (6) The target efficiency for any annual valid headgate delivery 
can be derived from the table in Appendix A to this part.


Sec. 418.13  Maximum allowable limits.

    (a) Maximum allowable diversions. (1) A provisional water budget in 
the Newlands Project Water Budget table must be recalculated for each 
irrigation season to reflect anticipated water-righted acres to be 
irrigated. At the start of the irrigation season, the maximum allowable 
diversion (MAD) for each year must be determined by revising the first 
10 lines of the Newlands Project Water Budget table based on acres of 
eligible land anticipated to actually be irrigated in that year 
(Sec. 418.9(a)) and the water duties for those lands (Sec. 418.10 ). At 
the end of the irrigation season, the required target efficiency must 
be recalculated for the irrigation season based on the actual irrigated 
acres and percent use of headgate entitlements.

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    (2) The MAD will be calculated annually to ensure an adequate water 
supply for all water right holders whose water use complies with their 
decreed entitlement and this part. The MAD is the maximum amount of 
water permitted to be diverted for irrigation use on the Project in 
that year. It is calculated to ensure full entitlements can be 
provided, but is expected to significantly exceed Project requirements. 
The MAD will be established by the Bureau at least 2 weeks before the 
start of each irrigation season. All releases of water from Lahontan 
Reservoir and diversions from the Truckee Canal (including any 
diversions from the Truckee Canal to Rock Dam Ditch) must be charged to 
the MAD except as provided in Secs. 418.23 and 418.35 of this part.
    (3) On the basis of the methodology adopted in this part (i.e., 
actual irrigated acres multiplied by appropriate water duties divided 
by established project efficiency) an example of the MAD calculated for 
the projected irrigated acreage as shown in the Newlands Project Water 
Budget table would be 308,319 acre-feet for the 1995 Example. The 
sample MAD corresponds to a system efficiency for full deliveries at 
66.9 percent for 1995 actual acres. Target efficiencies must be based 
on the percentage of maximum headgate entitlement delivered and not on 
the percent of water supply available.
    (4) The table Expected Project Distribution System Efficiency shows 
the target efficiencies which will be used over the range of irrigated 
acreage and percent use of entitlement expected in the future. At the 
beginning of the irrigation season, the target efficiencies from the 
Expected Project Distribution System Efficiency table used to calculate 
the MAD will be based on the expected irrigated acreage and expected 
percent use of entitlement. At the end of the irrigation season, the 
actual acreage irrigated and actual percent use of entitlement will be 
used to determine the required efficiency from the Expected Project 
Distribution System Efficiency. The target efficiencies are read 
directly from the table if the acreage and use of entitlement values 
are shown, otherwise the target efficiency must be extrapolated from 
the table or calculated using the Efficiency Equation. Appendix A of 
this part shows the calculations used to derive the Efficiency Equation 
and the efficiency targets.

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    (5) Adjustments in the MAD must be made by the Bureau each year 
based on changes in irrigated eligible land from the prior year and 
subsequent decisions concerning transfers of Project water rights, 
using the methodology established in this section.
    (6) If the MAD for a given year will not meet the water delivery 
requirements for the eligible land to be irrigated due to weather 
conditions, canal breaks, or some other unusual or unforeseen 
condition, the District must ask the Bureau for additional water.
    (i) The District's request must include a written statement 
containing a detailed explanation of the reasons for the request.
    (ii) The Bureau must promptly review the request and after 
consultation with the Federal Water Master and other interested 
parties, will determine if the request or any portion of it should be 
approved. The Bureau will make reasonable adjustments for unforeseen 
causes or events but will not make adjustments to accommodate waste or 
Project inefficiency or other uses of water not in accordance with this 
part or with State and Federal law.
    (iii) The Bureau will then notify the District of its 
determination. If the District does not agree with the Bureau's 
decision, it may seek judicial review. The Bureau and the District will 
seek to expedite the court proceeding in order to minimize any 
potential adverse effects.
    (b) Maximum allowable efficiency debits (MED). The debits in 
Lahontan Reservoir storage from the District's actual conveyance 
efficiency not achieving the target efficiency can accumulate over 
time. If these amounts of borrowed storage get too large they may not 
be offset later by increased efficiencies and may severely affect the 
District's water users by imposing an added ``drought'' on top of a 
real one. Therefore, the maximum efficiency debit cushion is set at 
26,000 acre-feet. However, unlike the MAD, it only applies to the 
subsequent year's operation. The MED is approximately 9 percent of the 
headgate entitlements.

Monitoring Diversions


Sec. 418.14  Recordkeeping requirements.

    (a) By the end of each month, the District must submit to the 
Bureau's Lahontan Area Office reports for the previous month which 
document monthly inflow and outflow in acre-feet from the Truckee and 
Carson divisions of the Project for that month. Reports must include 
any data the Bureau may reasonably require to monitor compliance with 
this part.
    (b) Accounting for farm headgate deliveries must be based on the 
amount of water actually delivered to the water user. Project 
operations must provide for the amount of water ordered and the 
distribution system losses.
    (c) The District must keep records of all domestic and other water 
uses showing the purpose and amount of water usage for each entity. The 
District must make the records available for review by the Bureau upon 
request. The Bureau may audit all records kept by the District.


Sec. 418.15  Operations monitoring.

    (a) The Bureau will work with the District to monitor Project 
operations and will perform field inspections of water distribution 
during the irrigation season.
    (1) Staff members of the Bureau's Lahontan Area Office and the 
District will meet as often as necessary during the irrigation season 
after each water distribution report has been prepared to examine the 
amounts of water used to that point in the season.
    (2) On the basis of the information obtained from field 
observations, water use records, and consultations with District staff, 
the Bureau will determine at monthly intervals whether the rate of 
diversion is consistent with this part for that year.
    (3) The District will be informed in writing of suggested 
adjustments that may be made in management of diversions and releases 
as necessary to achieve target efficiencies and stay within the MAD.
    (b) Project operations will be monitored in part by measuring flows 
at key locations. Specifically, Project diversions (used in the 
calculations under Sec. 418.18 below) will be determined by:
    (1) Adding flows measured at:
    (i) Truckee Canal near Wadsworth--U.S. Geological Survey (USGS) 
gauge number 10351300;
    (ii) Carson River below Lahontan Dam--USGS gauge number 10312150;
    (iii) Rock Dam Ditch near the end of the concrete lining; and
    (2) Subtracting:
    (i) Flows measured at the Truckee Canal near Hazen--USGS gauge 
number 10351400;
    (ii) The Carson River at Tarzyn Road near Fallon (below Sagouspe 
Dam) for satisfying water rights outside of the Project boundaries as 
described in Sec. 418.25, USGS gauge number 10312275;
    (iii) Estimated losses in the Truckee Canal; and
    (iv) Spills, precautionary drawdown, and incentive water released 
at Lahontan Dam under Secs. 418.24 and 418.36.

Operations and Management


Sec. 418.16  Using water for power generation.

    All use of Project water for power generation must be incidental to 
releases charged against Project diversions, precautionary drawdown, 
incentive water (Sec. 418.35 ), or spills.


Sec. 418.17  Truckee and Carson River water use.

    Project water must be managed to make maximum use of Carson River 
water and to minimize diversions of Truckee River water through the 
Truckee Canal. This will make available as much Truckee River water as 
possible for use in the lower Truckee River and Pyramid Lake.


Sec. 418.18  Diversions at Derby Dam.

    (a) Diversions of Truckee River water at Derby Dam must be managed 
to maintain minimum terminal flow to Lahontan Reservoir or the Carson 
River except where this part specifically permits diversions.
    (b) Diversions to the Truckee Canal must be managed to achieve an 
average terminal flow of 20 cfs or less during times when diversions to 
Lahontan Reservoir are not allowed (the flows must be averaged over the 
total time diversions are not allowed in that calendar year; i.e., if 
flows are not allowed in July and August and then are allowed in 
September then not allowed in October and November, the average flow 
will be averaged over the four months of July, August, October, and 
November).
    (c) The Bureau will work cooperatively with the District on 
monitoring the flows at the USGS gage on the Truckee Canal near Hazen 
to determine if and when flows are in excess of those needed in accord 
with this part and bringing the flows back into compliance when 
excessive.
    (d) Increases in canal diversions which would reduce Truckee River 
flows below Derby Dam by more than 20 percent in a 24-hour period will 
not be allowed when Truckee River flow, as measured by the gauge below 
Derby Dam, is less than or equal to 100 cfs.
    (e) Diversions to the Truckee Canal will be coordinated with 
releases from Stampede Reservoir and other reservoirs, in cooperation 
with the Federal Water Master, to minimize fluctuations in the Truckee 
River below Derby Dam in order to meet annual flow regimes established 
by the United States Fish and Wildlife Service for listed species in 
the lower Truckee River.

[[Page 66475]]

Sec. 418.19  Diversions from the Truckee River to the Truckee Division.

    Sufficient water, if available, will be diverted from the Truckee 
River through the Truckee Canal to meet the direct irrigation, domestic 
and other entitlements of the Truckee Division.


Sec. 418.20  Diversions from the Truckee River to Lahontan Reservoir, 
January through June.

    (a) Truckee River diversions through the Truckee Canal will be made 
to meet Lahontan Reservoir end-of-month storage objectives for the 
months of January through June. The current month storage objective 
will be based, in part, on the monthly Natural Resources Conservation 
Service (NRCS) April through July runoff forecast for the Carson River 
near Fort Churchill. The forecast will be used to determine the target 
storage for Lahontan Reservoir and anticipated diversion requirements 
for the Carson Division. The Bureau, in consultation with the District, 
Federal Water Master, Fish and Wildlife Service, the Pyramid Lake 
Paiute Tribe, and other affected parties, will determine the exceedance 
levels and predicted Carson River inflows based on the reliability of 
the NRCS forecast and other available information such as river 
forecasts from other sources. The end-of-month storage objectives may 
be adjusted any time during the month as new forecasts or other 
information become available.
    (b) The January through June storage objective will be calculated 
using the following formula:
LSOCM=TSM/J-(C1* AJ)+L+(C2* CDT)

Where:

(1) LSOCM=current end-of-month storage objectives for Lahontan 
Reservoir.
(2) TSM/J=current end-of-month May/June Lahontan Reservoir target 
storage.
(3) C1* AJ=forecasted Carson River inflow for the period from the end 
of the current month through May or June, with AJ being the Bureau's 
April through July runoff forecast for the Carson River at Fort 
Churchill and C1 being an adjustment coefficient.
(4) L=an average Lahontan Reservoir seepage and evaporation loss from 
the end of the current month through May or June.
(5) C2 * CDT=projected Carson Division demand from the end of the 
current month through May or June, with CDT being the total Carson 
Division diversion requirement (based on eligible acres anticipated to 
be irrigated times the appropriate duty times a 95 percent usage rate), 
and C2 being the estimate of the portion of the total diversion 
requirement to be delivered during this period.
(6) Values for TSM/J will vary with the Carson Division water demand as 
shown in Sec. 418.22 and the Adjustments to Lahontan Reservoir Storage 
Targets table. Values C1, L and C2 are defined in the following table 
along with an example of TSM/J for Carson River water demand of 271,000 
acre-feet.

                                Monthly Values for Lahontan Storage Computations                                
----------------------------------------------------------------------------------------------------------------
                                             January    February      March       April        May        June  
----------------------------------------------------------------------------------------------------------------
TSM/J....................................     174.0       174.0       174.0       174.0       174.0        190.0
C1/MAY...................................       0.863       0.734       0.591       0.394                       
C1/JUNE..................................       1.190       1.061       0.918       0.721       0.327           
L/MAY....................................      13.9        12.5         9.9         7.1                         
L/JUNE...................................      18.2        16.8        14.2        11.4         4.3             
C2/MAY...................................       0.30        0.30        0.28        0.18                        
C2/JUNE..................................       0.47        0.47        0.45        0.35        0.17            
----------------------------------------------------------------------------------------------------------------

    (c) The Lahontan Reservoir storage objective for each month is 
contained in the following table.

                  Lahontan Reservoir Storage Objectives                 
------------------------------------------------------------------------
            Period                     Monthly storage objective        
------------------------------------------------------------------------
January through April........  Lowest of the May calculation, the June  
                                calculation, or full reservoir.         
May..........................  Lower of the June calculation or full    
                                reservoir.                              
June.........................  June storage target.                     
------------------------------------------------------------------------

    (d) Once the monthly Lahontan Reservoir storage objective has been 
determined, the monthly diversion to the Project from the Truckee River 
will be based upon water availability and Project demand as expressed 
in the following relationship:

TRD=TDD+ TCL+CDD+LRL+ LSOCM-ALRS-CRI

Where:

(1) TRD=current month Truckee River diversion in acre-feet to the 
Project.
(2) TDD=current month Truckee Division demand.
(3) TCL = current month Truckee Canal conveyance loss.
(4) CDD = current month Carson Division demand.
(5) LRL = current month Lahontan Reservoir seepage and evaporation 
losses.
(6) LSOCM = current month end-of-month storage objective for Lahontan 
Reservoir.
(7) ALRS = current month beginning-of-month storage in Lahontan 
Reservoir. (Includes accumulated Stampede credit described below and 
further adjusted for the net efficiency penalty or efficiency credit 
described in Secs. 418.12, 418.36, and 418.37).
(8) CRI = current month anticipated Carson River inflow to Lahontan 
Reservoir (as determined by Reclamation in consultation with other 
interested parties).

    (e) The following procedure is intended to ensure that monthly 
storage objectives are not exceeded. It may be implemented only if the 
following conditions are met:
    (1) Diversions from the Truckee River are required to achieve the 
current

[[Page 66476]]

month Lahontan Reservoir storage objective (LSOCM);
    (2) Truckee River runoff above Derby Dam is available for diversion 
to Lahontan Reservoir;
    (3) Sufficient Stampede Reservoir storage capacity is available.
    (f) The Bureau, in consultation with the Federal Water Master, the 
District, Fish and Wildlife Service, the Bureau of Indian Affairs, and 
the Pyramid Lake Paiute Tribe will determine whether the calculated 
current month Truckee River diversion to Lahontan Reservoir (TRD-TDD-
TCL) may be reduced during that month and the amount of reduction 
credit stored in Stampede Reservoir.
    (1) Reductions in diversions may begin in November and continue 
until the end of June.
    (2) Reductions in diversions to Lahontan Reservoir with credit 
storage in Stampede Reservoir may be implemented to the extent that:
    (i) The reduction is in lieu of a scheduled release from Stampede 
Reservoir for the purpose of supplementing flows to Pyramid Lake; and/
or
    (ii) Water is captured in Stampede Reservoir that is scheduled to 
be passed through and diverted to the Truckee Canal.
    (3) The Fish and Wildlife Service must approve any proposal to 
reduce diversions to Lahontan Reservoir for Newlands Project credit 
purposes without a comparable reduction in release from Stampede 
Reservoir or any conversion of Stampede Reservoir project water to 
Newlands Project credit water.
    (4) The diversion to Lahontan Reservoir may be adjusted any time 
during the month as revised runoff forecasts become available. The 
accumulated credit will be added to current Lahontan Reservoir storage 
(ALRS) in calculating TRD. If the sum of accumulated credit and 
Lahontan Reservoir storage exceeds 295,000 acre-feet, credit will be 
reduced by the amount in excess of 295,000 acre-feet. Credit will also 
be reduced by the amount of precautionary drawdown or spills in that 
month. If the end-of-month storage in Lahontan Reservoir plus the 
accumulated credit in Stampede Reservoir at the end of June exceeds the 
end-of-month storage objective for Lahontan, the credit will be reduced 
by the amount exceeding the end-of-month storage objective.
    (5) Following consultation with the District, the Federal Water 
Master, and other interested parties as appropriate, the Bureau will 
release credit water as needed for Project purposes from July 1 through 
the end of the irrigation season in which the credit accrues with 
timing priority given to meeting current year Project irrigation 
demands.
    (6) Conveyance of credit water in the Truckee Canal must be in 
addition to regularly scheduled diversions for the Project and will be 
measured at the USGS gauge number 10351300 near Wadsworth.
    (7) Newlands credit water in Stampede Reservoir storage will be 
subject to spill and will not carry over to subsequent years. Newlands 
credit water in Stampede can be exchanged to other reservoirs and 
retain its priority. The credit must be reduced to the extent that 
Lahontan Reservoir storage plus accumulated credit at the end of the 
previous month exceeds the storage objectives for that month. If 
Newlands credit water is spilled, it may be diverted to Lahontan 
Reservoir subject to applicable storage targets.
    (i) The Bureau, in consultation with the District, the Federal 
Water Master, and other interested parties, may release Newlands 
Project credit water before July 1.
    (ii) If any Newlands credit water remains in Stampede Reservoir 
storage after the end of the current irrigation season in which it 
accumulated, it will convert to water for cui-ui recovery and will no 
longer be available for Newlands credit water.
    (iii) Newlands credit water stored in Stampede Reservoir will be 
available for use only on the Carson Division of the Newlands Project.
    (g) Subject to the provisions of Sec. 418.20 (b), LSOCM may be 
adjusted as frequently as necessary when new information indicates the 
need and diversions from the Truckee River to the Truckee Canal must be 
adjusted daily or otherwise as frequently as necessary to meet the 
monthly storage objective.


Sec. 418.21  Diversion of Truckee River water to Lahontan Reservoir, 
July through December.

    Truckee River diversions through the Truckee Canal to Lahontan 
Reservoir from July through December must be made only in accordance 
with the Adjustments to Lahontan Reservoir Storage Targets table and 
Sec. 418.22. Diversions shall be started to achieve the end-of-month 
storage targets listed in the table in Sec. 418.22 and will be 
discontinued when storage is forecast to meet or exceed the end-of-
month storage targets at the end of the month. Diversions may be 
adjusted any time during the month as conditions warrant (i.e., new 
forecasts, information from other forecasts becoming available, or any 
other new information that may impact stream forecasts).


Sec. 418.22  Future adjustments to Lahontan Reservoir storage targets.

    (a) The Lahontan Reservoir storage targets must be adjusted to 
accommodate changes in water demand in the Carson Division. Using the 
information reported by the District by March 1 of each year on 
eligible land expected to be irrigated and end-of-year data on eligible 
land actually irrigated (Sec. 418.9(b)), the Bureau will determine if 
the Lahontan Reservoir storage targets need to be changed. If no change 
is needed, the storage targets currently in effect will remain in 
effect.
    (1) Only the actual water demand reported for full water years (100 
percent water supply) will be considered. Targets will not be changed 
based on water demand reported for less than full water years.
    (2) All changes in storage targets must start on October 1 of any 
year. If information provided by March 1 and other available 
information indicates that the Lahontan Reservoir storage targets must 
be changed, the new set of storage targets must be applied starting 
October 1 of the same year and remain in effect until changed according 
to this section.
    (b) All changes to storage targets will be made according to the 
table in this section. The table of storage targets has been developed 
to provide a consistent Project water supply over a range of demands.
    (1) A storage target adjustment must be made in increments of 
thousands of acre-feet for the change as indicated in the column 
listing Carson Division Demand and the complete set of monthly targets 
must be applied.
    (2) If the change in reported water demand is above or below the 
values in the table of storage targets, the adjustment to the storage 
targets can be calculated. The calculated adjustment is the number that 
would appear in the column Target Adjustment in the table. The 
calculated Target Adjustment is then added or subtracted to the base 
storage target for each month. Target Adjustments must be made in whole 
increments of 1,000 acre-feet and calculated values will be rounded to 
the nearest 1,000 acre-feet.
    (i) For demands greater than those set forth on the table, the 
formula for the Target Adjustment is: Target Adjustment = 0.00208 
(Demand in acre-feet--271,000 acre-feet). For example, if water demand 
increased to 292,635 acre-feet per year, the Target Adjustment 
calculation would be = 0.00208 x (292,535-271,000). The result would be 
a Target Adjustment of 45 or 45,000 acre-feet. This would be added to 
the base monthly storage target values

[[Page 66477]]

so, the January-May target would be 219,000 acre-feet, June would be 
235,000 acre-feet, and so on.
    (ii) For demands less than those set forth on the table, the 
formula for the Target Adjustment is: Target Adjustment = 0.00174 
(Demand in acre-feet--271,000 acre-feet). For example, if water demand 
decreased to 248,011 acre-feet per year, the Target Adjustment 
calculation would be = 0.00174 x (248,011-271,000). The result would be 
a Target Adjustment of -40 or -40,000 acre-feet. This would be 
subtracted from the base monthly storage target values so, the January-
May target would be 134,000 acre-feet, June would be 150,000 acre-feet, 
and so on.

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Sec. 418.23  Diversion of Rock Dam Ditch water.

    Project water may be diverted directly to Rock Dam Ditch from the 
Truckee Canal only when diversions cannot be made from the outlet works 
of Lahontan Reservoir. Such diversions will require the prior written 
approval of the Bureau and be used in calculating Project diversions.


Sec. 418.24  Precautionary drawdown and spills from Lahontan Reservoir.

    (a) Even though flood control is not a specifically authorized 
purpose of the Project, at the request of the District and in 
consultation with other interested parties and the approval of the 
Bureau, precautionary drawdown of Lahontan Reservoir may be made to 
limit potential flood damage along the Carson River. The Bureau will 
develop criteria for precautionary drawdown in consultation with the 
District and other interested parties.
    (1) The drawdown must be scheduled sufficiently in advance and at 
such a rate of flow in order to divert as much water as possible into 
the Project irrigation system for delivery to eligible land or storage 
in reregulating reservoirs for later use on eligible land.
    (2) During periods of precautionary drawdown, or when water is 
spilled from Lahontan Reservoir, Project diversions will be determined 
by comparison with other years' data and normalized by comparison of 
differences in climatological data. The Bureau will estimate the 
normalization in consultation with the District and other interested 
parties.
    (3) Spills from Lahontan Reservoir and precautionary drawdown of 
the reservoir to create space for storing flood waters from the Carson 
River Basin that are in excess of the normalized diversions will not be 
used in calculating Project diversions.
    (4) Water captured in Project facilities as a result of a 
precautionary drawdown or spill will not be counted as storage in 
Lahontan Reservoir for the purpose of calculating Truckee River 
Diversions. Such water will not be counted as diversions to the Project 
unless such water is beneficially applied as described in (a)(5) of 
this section.
    (5) Water from precautionary drawdowns or spills that is captured 
in Project facilities must be used to the maximum extent possible, and 
counted as deliveries to eligible lands in the year of the drawdown. If 
all the drawdown water captured in Project facilities cannot be used in 
the year of capture for delivery to eligible lands, then that water 
must be delivered to eligible lands in subsequent years to the maximum 
extent possible and counted against the water users' annual allocation.
    (b) If a precautionary drawdown in one month results in a failure 
to meet the Lahontan Reservoir storage objective for that month, the 
storage objective in subsequent months will be reduced by one-half of 
the difference between that month's storage objective and actual end-
of-month storage. The Bureau is not liable for any damage or water 
shortage resulting from a precautionary drawdown.


Sec. 418.25  Water use for other than Newlands Project purposes.

    The District will release sufficient water to meet the vested water 
rights below Sagouspe Dam as specified in the Alpine decree. These 
water rights are usually met by return flows. Releases for these water 
rights will in no case exceed the portion of 1,300 acre-feet per year 
not supplied by return flows. This water must be accounted for at the 
USGS gauge number 10312275 (the Carson River at Tarzyn Road near 
Fallon). Releases for this purpose will not be considered in 
determining Project diversions since the lands to which the water is 
being delivered are not part of the Project. (See 
Sec. 418.15(b)(2)(ii).) Any flow past this gage in excess of the amount 
specified in this part will be absorbed by the District as an 
efficiency loss.


Sec. 418.26  Charges for water use.

    The District must maintain a financing and accounting system which 
produces revenue sufficient to repay its operation and maintenance 
costs and to discharge any debt to the United States. The District 
should give consideration to adopting a system which provides 
reasonable financial incentives for the economical and efficient use of 
water.


Sec. 418.27  Distribution system operation.

    (a) The District must permit only its authorized employees or 
agents to open and close individual turnouts and operate the 
distribution system facilities. After obtaining Bureau approval, the 
District may appoint agents to operate individual headgates on a 
specific lateral if it can be shown that the water introduced to the 
lateral by a District employee is completely scheduled and can be fully 
accounted for with a reasonable allowance for seepage and evaporation 
losses.
    (b) If agents need to adjust the scheduled delivery of water to the 
lateral to accommodate variable field conditions, weather, etc., they 
must immediately notify the District so proper adjustments can be made 
in the distribution system. Each agent must keep an accurate record of 
start and stop times for each delivery and the flow during delivery. 
This record will be given to the District for proper accounting of 
water delivered.
    (c) The program of using agents to operate individual headgates 
will be reviewed on a regular basis by the District and the Bureau. If 
it is found that problems such as higher than normal losses, water not 
accounted for, etc., have developed on an individual lateral, the 
program will be suspended and the system operated by District employees 
until the problems are resolved.

Enforcement


Sec. 418.28  Conditions of delivery.

    There are four basic elements for enforcement with all necessary 
quantities and review determined in accordance with the relevant 
sections of this part.
    (a) Valid headgate deliveries. If water is delivered to ineligible 
land or in excess of the appropriate water duty then:
    (1) The District will stop the illegal delivery immediately;
    (2) The District will notify the Bureau of the particulars 
including the known or estimated location and amounts;
    (3) The amount will not be included as a valid headgate delivery 
for purposes of computing the Project efficiency and resultant 
incentive credit or debit to Lahontan storage; and
    (4) If the amount applies to a prior year, then the amount will be 
treated directly as a debit to Lahontan storage in the same manner as 
an efficiency debit.
    (b) District efficiency. To the extent that the actual District 
efficiency determined for an irrigation season is greater or less than 
the established target efficiency, as determined for the corresponding 
actual valid headgate deliveries, then the difference in efficiency, 
expressed as a quantity in acre-feet, may be added to or subtracted 
from the actual Lahontan Reservoir storage level before it is compared 
to the monthly storage objective as follows:
    (1) Greater efficiency--Credited to the District as storage in 
Lahontan or subtracted from any accumulated debit, or two-thirds as 
storage in Lahontan for their discretionary use in accordance with 
state law.
    (2) Less efficient--Debited or added to Lahontan storage as an 
adjustment to the actual storage level.
    (c) Maximum Allowable Diversion (MAD). The MAD must be computed 
each year to determine the amount of water required to enable the 
delivery of

[[Page 66481]]

full entitlements at established Project efficiencies. Project 
diversions must not exceed the MAD. Within the operating year, the 
Bureau will notify the District in writing of any expected imminent 
violations of the MAD. The District will take prompt action to avoid 
such violations. The Bureau will exercise reasonable latitude from 
month to month to accommodate the District's efforts to avoid exceeding 
the MAD.
    (d) Maximum Efficiency Debit (MED). If the MED exceeds 26,000 AF at 
the end of any given year, the District must prepare and submit to the 
Bureau for review and approval, a plan detailing the actions the 
District will take to either earn adequate incentive credits or to 
restrict deliveries to reduce the MED to less than 26,000 AF by the end 
of the next year. The plan must be submitted to the Bureau in writing 
before the date of March 1 immediately subsequent to the exceeding of 
the MED. If the District fails to submit an approvable plan, Project 
allocations will be reduced by an amount equal to the MED in excess of 
26,000 plus 13,000 (one-half the allowable MED). Nominally this will 
mean a forced reduction of approximately five percent of entitlements. 
The Bureau will notify the District in writing of the specific 
allocation and method of derivation in sufficient time for the District 
to implement the allocation. Liabilities arising from shortages 
occasioned by operation of this provision must be the responsibility of 
the District or individual water users.


Sec. 418.29  Project management.

    In addition to the provisions of Sec. 418.28, if the District is 
found to be operating Project facilities or any part thereof in 
substantial violation of this part, then, upon the determination by the 
Bureau, the Bureau may take over from the District the care, operation, 
maintenance, and management of the diversion and outlet works (Derby 
Dam and Lahontan Dam/Reservoir) or any or all of the transferred works 
by giving written notice to the District of the determination and its 
effective date. Following written notification from the Bureau, the 
care, operation, and maintenance of the works may be retransferred to 
the District.


Sec. 418.30  Provisions required in future contracts.

    The Bureau must provide in new, amended, or replacement contracts 
for the operation and maintenance of Project works, for the reservation 
by the Secretary of rights and options to enforce this part.

Water Management and Conservation


Sec. 418.31  Conservation measures.

    (a) Specific conservation actions will be needed for the District 
and its members to achieve a reasonable efficiency of operation as 
required by this part. The District is best able to determine the 
particular conservation measures that meet the needs of its water 
users. This ensures that the measures reflect the priorities and 
collective judgment of the water users; and will be practical, 
understandable and supported. The District also has the discretion to 
make changes in the measures they adopt as conditions or results 
dictate.
    (b) The District will keep the Bureau informed of the measures they 
expect to utilize during each year. This will enable the Bureau to stay 
apprised of any helpful information that may, in turn, help the Bureau 
assist other irrigation districts. The Bureau will work cooperatively 
in support of the District's selection of measures and methods of 
implementation.


Sec. 418.32  Cooperative programs.

    (a) The Bureau and the District will work cooperatively to develop 
a water management and conservation program to promote efficient 
management of water in the Project. The program will emphasize 
developing methods, including computerization and automation, to 
improve the District's operations and procedures for greater water 
delivery conservation.
    (b) The Bureau will provide technical assistance to the District 
and cooperatively assist the District in their obligations and efforts 
to:
    (1) Document and evaluate existing water delivery and measurement 
practices:
    (2) Implement improvements to these practices; and
    (3) Evaluate and, where practical, implement physical changes to 
Project facilities.

Implementation


Sec. 418.33  Purpose of the implementation strategy.

    The intent of the implementation strategy for this part is to 
ensure that the District delivers water within entitlements at a 
reasonable level of efficiency as a long term average.
    (a) The incentives and disincentives provided in this part are 
designed to encourage local officials with responsibilities for Project 
operations to select and implement through their discretionary actions, 
operating strategies which achieve the principles of this part.
    (b) The specified efficiencies in the Expected Project Distribution 
System Efficiency table (Sec. 418.13 (a)(4)) were developed considering 
implementation of reasonable conservation measures, historic project 
operations, economics, and environmental effects.
    (c) The efficiency target will be used as a performance standard to 
establish at the end of each year on the basis of actual operations, 
whether the District is entitled to a performance bonus in the form of 
incentive water or a reduction in storage for the amount borrowed 
ahead.


Sec. 418.34  Valid headgate deliveries.

    Project water may be delivered to headgates only as provided in 
Secs. 418.8 and 418.10. Water delivered to lands that are not entitled 
to be irrigated or not in accord with decreed water duties is difficult 
to quantify at best because it is not typically measured. Since it is 
not likely to be a part of the total actual headgate deliveries, yet is 
a part of the total deliveries to the Project, it will manifest itself 
directly as a lower efficiency. Thus, it will either reduce the 
District's incentive credit or increase the storage debit by the amount 
improperly diverted. All other users outside the Project are thereby 
held harmless but the District incurs the consequence. This approach 
should eliminate any potential disputes between the District and the 
Bureau regarding the quantity of water misappropriated.


Sec. 418.35  Efficiencies.

    The established target efficiencies under this part are shown in 
the Expected Project Distribution System Efficiency table (Sec. 418.13 
(a)(4)). The efficiency of the Project will vary with the amount of 
entitlement water actually delivered at the headgates. Since most of 
the distribution system losses such as evaporation and seepage do not 
change significantly with the amount of water delivered (i.e., these 
losses are principally a function of water surface area and the wetted 
perimeter of the canals), the Project efficiency requirement is higher 
as the percent of entitlement water actually delivered at the headgates 
increases. The actual efficiency is calculated each year after the 
close of the irrigation season based on actual measured amounts. The 
application of any adjustments to Lahontan Reservoir storage or Truckee 
River diversions resulting from the efficiency is always prospective.

[[Page 66482]]

Sec. 418.36  Incentives for additional long term conservation.

    (a) As an incentive for the District to increase the efficiency of 
the delivery system beyond the expected efficiency of 65.7 percent 
(66.9 percent with full delivery) as shown in the Newlands Project 
Water Budget table, 1995 Example, the District will be allowed to store 
and use the Carson River portion of the saved water at its discretion, 
in accordance with Nevada State Law and this part.
    (1) If the District is able to exceed its expected efficiency, the 
District may store in Lahontan Reservoir two-thirds (2/3) of the 
additional water saved. (The remaining one-third (1/3) of the water 
saved will remain in the Truckee River through reduced diversions to 
Lahontan Reservoir). This water will be considered incentive water 
saved from the Carson River and will not be counted as storage in 
determining diversions from the Truckee River or computing the target 
storage levels for Lahontan Reservoir under this part.
    (2) For purposes of this part, incentive water is no longer 
considered Project water. The District may use the water for any 
purpose (e.g., wetlands, storage for recreation, power generation, 
shortage reduction) that is consistent with Nevada State Law and 
Federal Law. The water will be managed under the District's discretion 
and may be stored in Lahontan Reservoir until needed subject to the 
limitations in (a)(3) of this section.
    (3) The amount of incentive water stored in Lahontan Reservoir will 
be reduced under the following conditions:
    (i) There is a deficit created and remaining in Lahontan Reservoir 
from operations penalties in a prior year;
    (ii) The District releases the water from the reservoir for its 
designated use;
    (iii) During a spill of the reservoir, the amount of incentive 
water must be reduced by the amount of spill; and
    (iv) At the discretion of the District, incentive water may be used 
to offset the precautionary drawdown adjustment to the Lahontan storage 
objective.
    (v) At the end of each year, the amount of incentive water will be 
reduced by the incremental amount of evaporation which occurs as a 
result of the increased surface area of the reservoir due to the 
additional storage. The evaporation rate used will be either the net 
evaporation measured or the net historical average after precipitation 
is taken into account. The method of calculation will be agreed to by 
the District and the Bureau in advance of any storage credit.
    (b) An example of this concept is:
    Example: Incentive Operation--

    (1) At the end of the 1996 irrigation season, the Bureau and the 
District audit the District's water records for 1996. The District's 
water delivery records show that 194,703 acre-feet of water were 
delivered to farm headgates. On the basis of their irrigated acreage 
that year (59,075) the farm headgate entitlement would have been 
216,337 acre-feet. On the basis of 90 percent deliveries for 59,075 
acres (194,203 divided by 216,337 = 0.90) the established Project 
efficiency requirement was 65.1 percent.
    (2) On the basis of the established Project efficiency (66.1 
percent), the Project diversion required to make the headgate 
deliveries would be expected to be 291,909 acre-feet (194,703 
divided by 0.651 = 291,909). An examination of Project records 
reveals that the District only diverted 286,328 acre-feet which 
demonstrated actual Project efficiency was 68 percent and exceeded 
requirements of this part.
    (3) The 5,581 acre-feet of savings (291,909-286,328 = 5,581) 
constitutes the savings achieved through efficiency improvements and 
the District would then be credited two-thirds (3,721 acre-feet = 
5,581 x 2/3) of this water (deemed to be Carson River water savings) 
as incentive water.

[[Page 66483]]

    (4) This incentive water may be stored in Lahontan Reservoir or 
otherwise used by the District in its discretion consistent with 
State and Federal Law (e.g., power generation, recreation storage, 
wildlife, drought protection, etc.).


Sec. 418.37  Disincentives for lower efficiency.

    (a) If the District fails to meet the efficiencies established by 
this part, then, in effect, the District has borrowed from a subsequent 
year. The amount borrowed will be accounted for in the form of a 
deficit in Lahontan Reservoir storage. This deficit amount will be 
added to the actual Lahontan Reservoir storage quantity for the purpose 
of determining the Truckee River diversions to meet storage objectives 
as well as all other operating decisions.
    (b) The amount of the deficit will be cumulative from year to year 
but will not be allowed to exceed 26,000 acre-feet (the expected 
variance between the MAD and actual water use). This limit is expected 
to avoid increasing the severity of drought and yet still allow for 
variations in efficiency over time due to weather and other factors. 
This approach should allow the District to plan its operation to 
correct for any deficiencies.
    (c) The deficit can be reduced by crediting incentive water earned 
by the District or reducing the percentage of headgate entitlement 
delivered either through a natural drought or by the District and its 
water users administratively limiting deliveries while maintaining an 
efficiency greater than or equal to the target efficiency.
    (d) If there is a natural drought and the shortage to the headgates 
is equal to or greater than the deficit, then the deficit is reduced to 
zero. If the shortage to headgates is less than the deficit then the 
deficit is reduced by an amount equal to the headgate shortage. During 
a natural drought, if the percentage of maximum headgate entitlement 
delivered is 75 percent or more then the District will be subject to 
the target efficiencies and resultant deficits or credits.
    (e) If the District has a deficit in Lahontan Reservoir and earns 
incentive water, the incentive water must be used to eliminate the 
deficit before it can be used for any other purpose. The deficit must 
be credited on a 1 to 1 basis (i.e., actual efficiency savings rather 
than \1/3\-\2/3\ for incentive water).
    (f) An example of the penalty concept is:
    Example: Penalty--

    In 1996 the District delivers 90 percent of the maximum headgate 
entitlement or 194,703 acre-feet 216,337 x .90) but actually diverts 
308,000 acre-feet. The efficiency of the Project is 63.2 percent 
(194,703 divided by 308,000). Since the established efficiency of 
65.1 percent would have required a diversion of only 299,083 acre-
feet (194,703 divided by .651) the District has operated the system 
with 8,917 acre-feet of excess losses. Therefore, 8,917 acre-feet 
was borrowed and must be added to the actual storage quantities of 
Lahontan Reservoir for calculating target storage levels and Truckee 
River diversions.


Sec. 418.38  Maximum allowable diversion.

    (a) The MAD established in this part is based on the premise that 
the Project should be operated to ensure that it is capable of 
delivering to the headgate of each water right holder the full water 
entitlement for irrigable eligible acres and includes distribution 
system losses. The MAD will be established (and is likely to vary) each 
year. The annual MAD will be calculated each year based on the actual 
acreage to be irrigated that year.
    (b) Historically, actual deliveries at farm headgates have been 
approximately 90 percent of entitlements. This practice is expected to 
continue but the percentage is expected to change. This variance 
between headgate deliveries and headgate entitlements will be 
calculated annually under this part and is allowed to be diverted if 
needed and thereby provides an assurance that full headgate deliveries 
can be made. The expected diversion and associated efficiency target 
for the examples shown in the Newlands Project Water Budget table would 
be: 285,243 AF and 65.1 percent in 1996 and beyond. These are well 
below the MAD limits; however, the District may divert up to the MAD if 
it is needed to meet valid headgate entitlements.

Appendix A to Part 418-Calculation of Efficiency Equation

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[FR Doc. 97-32795 Filed 12-15-97; 3:23 pm]
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