[Federal Register Volume 63, Number 70 (Monday, April 13, 1998)]
[Notices]
[Pages 18005-18008]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-9658]


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DEPARTMENT OF ENERGY

Western Area Power Administration


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

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of proposed procedures.

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SUMMARY: The Western Area Power Administration (Western) is proposing 
revised procedures for the assessment and collection of restoration 
fund payments from the Central Valley Project (CVP) power contractors 
as required by the CVP Improvement Act of 1992 (Act). Under the 
existing procedures, which became effective May 9, 1994, Western 
reviews the existing procedures every 5 years, or if: (1) There is a 
significant change to, or suspension of, the legislation; (2) a 
material issue arises; or (3) an apparent inequity in the assessment 
method is discovered. Western reviewed the existing procedures and 
found that revised procedures are needed due to an apparent inequity in 
the existing procedures. The proposed procedures will supersede the 
existing procedures. This Federal Register notice initiates the formal 
process for the proposed procedures.

DATES: The consultation and comment period will begin on the date of 
publication of this Federal Register notice and will end May 13, 1998. 
A public information forum at which Western will present a detailed 
explanation of the proposed procedures is scheduled for April 29, 1998, 
beginning at 10 a.m. PDT, and will be followed by a public comment 
forum at which Western will accept oral and written comments, beginning 
at 1 p.m. PDT. The forums will be held at the Sierra Nevada Regional 
Office, Western Area Power Administration, 114 Parkshore Drive, Folsom, 
CA. Western should receive written comments by the end of the 
consultation and comment period to be assured consideration.

ADDRESSES: Written comments are to be sent to: Mr. Jerry W. Toenyes, 
Regional Manager, Sierra Nevada Region, Western Area Power 
Administration, 114 Parkshore Drive, Folsom, CA 95630-4710.

FOR FURTHER INFORMATION CONTACT: Ms. Debbie Dietz, Rates Manager, 
Sierra Nevada Region, Western Area Power Administration, 114 Parkshore 
Drive, Folsom, CA, 95630-4710, (916) 353-4453.

SUPPLEMENTARY INFORMATION: Section 3407 of the Act (Pub. L. 102-575, 
Stat. 4706, 4726) establishes in the Treasury of the United States the 
CVP Restoration Fund (Restoration Fund) to carry out the habitat 
restoration, improvement, and acquisition provisions of the Act. The 
Act further requires the Secretary of the Interior to assess and 
collect annual mitigation and restoration payments from CVP water and 
power contractors (Restoration Payments). The Secretary of the 
Interior, through the Bureau of Reclamation (Reclamation), is 
responsible for determining and collecting the CVP water and power 
contractors' shares of the annual Total Restoration Payment Obligation.
    Western is responsible for the marketing and transmission of CVP 
power. Western has agreed to administer the assessment and collection 
of the Restoration Payments from CVP power contractors. Western has 
executed a letter of agreement with Reclamation to establish procedures 
for depositing the collections from CVP power contractors into the 
Restoration Fund.
    The annual Power Restoration Payment Obligation, determined by 
Reclamation, will be assessed to CVP power contractors. Every month 
each CVP power contractor will receive a bill reflecting the amount to 
be paid into the Restoration Fund. The CVP power contractor will pay 
that amount to Western, who will transfer all amounts collected from 
CVP power contractors to Reclamation for deposit into the Restoration 
Fund.
    The Administrator of Western approved the existing procedures for 
the assessment and collection of the Restoration Payments from CVP 
power contractors on March 30, 1994. At a minimum, Western reviews the 
existing procedures every 5 years or if: (1) There is a significant 
change to, or suspension of, the legislation; (2) a material issue 
arises; or (3) an apparent inequity in the assessment method is 
discovered. Western has reviewed the existing procedures and has 
determined that revised procedures are needed due to an apparent 
inequity in the existing procedures.
    Under the existing procedures, Western may adjust the capacity and 
energy multipliers that are applied to each CVP power contractor's 
actual capacity and energy amounts delivered by or scheduled with 
Western at midyear (on or about April 1) based on Reclamation's midyear 
adjustment to the annual Power Restoration Payment Obligation. Western 
applies the adjusted multipliers to each CVP power contractor's 
capacity and energy purchases for the remaining months of the subject 
assessment year. The apparent inequity occurs during this midyear 
adjustment process when the adjusted multipliers are applied to CVP 
power contractors with higher capacity and energy purchases from 
Western during the remaining months. This process could adversely 
impact these CVP power contractors. If the midyear adjustment is 
distributed over the capacity and energy purchases during the entire 
assessment year, then this apparent inequity would not occur.
    The proposed procedures will incorporate the existing procedures, 
with the exception of the following:
    1. During each assessment year's midyear adjustment period, any 
adjustments to the capacity and energy multipliers will be based on 
Western's total capacity and energy sales to all CVP power contractors 
during the entire assessment year. Under the existing procedures, any 
adjusted multipliers resulting from the midyear adjustment process are 
based on Western's total capacity and energy sales from the prior year.
    2. An alternative method for assessing the annual Power Restoration 
Payment Obligation will be offered by Western. If requested by the CVP 
power contractor, Western will determine the CVP power contractor's 
equal monthly Restoration Payment amounts for the assessment year. 
Under the existing procedures, the monthly Restoration Payments are 
variable amounts depending upon the CVP power contractor's actual 
monthly capacity and energy purchases from Western.
    3. Revised provisions for late payment charges assessed to 
delinquent Restoration Payments are described in detail in the Proposed 
Procedures section.
    The existing procedures will be superseded by the proposed 
procedures. The final procedures are to become effective not less than 
30 days after publication of notice of final procedures in the Federal 
Register, or August 1, 1998, whichever occurs later.

[[Page 18006]]

Acronyms and Definitions

    As used herein, the following acronyms and definitions apply:
    Administrator: The Administrator of the Western Area Power 
Administration.
    Assessment Month: The service month, which is 1 month prior to the 
Billing Month.
    Assessment Year: The period that uses the service months from 
August 1 through July 31 for which CVP Power Contractors will be billed 
Restoration Payments.
    Billing Month: The month CVP Power Contractors will be billed for 
the Restoration Payments.
    Central Valley Project (CVP): A multipurpose Federal water 
development project extending from the Cascade Range in northern 
California to the plains along the Kern River south of the city of 
Bakersfield.
    CVP Improvement Act of 1992 (Act): Title 34 of Public Law 102-575, 
106 Stat. 4706 et seq. A legislative act, which was enacted on October 
30, 1992, and defines provisions for habitat restoration, improvement 
and acquisition, and other fish and wildlife restoration activities in 
the CVP area of California.
    DOE: United States Department of Energy.
    Fiscal Year (FY): The fiscal year, which begins October 1 and ends 
September 30.
    Interior: United States Department of the Interior.
    kW: Kilowatt, the electrical unit of capacity that equals 1000 
watts.
    kWh: Kilowatt-hour, the electrical unit of energy that equals the 
generation of 1000 watts over 1 hour.
    Letter of Agreement: Letter of Agreement No. 93-SAO-10156, a 
written agreement between Reclamation and Western that established 
procedures to deposit the Restoration Payments collected from CVP Power 
Contractors into the Restoration Fund.
    Load Adjustment(s): The adjustment(s) to CVP Power Contractors' 
forecasted monthly capacity and energy purchases from Western as 
determined by Western based on CVP Power Contractors' actual capacity 
and energy amounts delivered by or scheduled with Western.
    Midyear Adjustment: The adjustment to the annual Power Restoration 
Payment Obligation determined by Reclamation on or about April 1 of the 
Assessment Year.
    Power: Capacity and energy.
    Power Contractor: An entity purchasing firm capacity and/or energy 
from Western for a period in excess of 1 year.
    Power Restoration Payment Obligation: The portion of the Total 
Restoration Payment Obligation calculated and assigned annually to CVP 
Power Contractors by Reclamation.
    Reclamation: United States Department of Interior, Bureau of 
Reclamation.
    Restoration Fund: The CVP Restoration Fund, established by Section 
3407 of the Act, into which revenues provided by the Act are deposited, 
and from which funds are appropriated by the Secretary to carry out the 
habitat restoration, improvement and acquisition provisions of the Act.
    Restoration Fund Bill(s): The instrument prepared and issued 
monthly by Western as a mechanism for collecting the Restoration 
Payments from CVP Power Contractors.
    Restoration Payment(s): The amount(s) recorded as payable on CVP 
Power Contractors' Restoration Fund Bills.
    Secretary: Secretary of DOE.
    Total Restoration Payment Obligation: The total amount of payments 
to be collected from the CVP water and power contractors, calculated 
annually by Reclamation.
    Western: United States Department of Energy, Western Area Power 
Administration.

Proposed Procedures

Determination of the Power Restoration Payment Obligation

    Reclamation is responsible for determining the annual Power 
Restoration Payment Obligation for CVP Power Contractors. Prior to each 
Assessment Year, on or about July 1, Reclamation will, by letter, 
provide to Western's Regional Manager of the Sierra Nevada Region the 
amount determined to be the Power Restoration Payment Obligation and a 
detailed explanation of the computation of the amount for the upcoming 
Assessment Year. Upon receiving this letter from Reclamation, Western's 
Sierra Nevada Region will notify each CVP Power Contractor of the 
annual Power Restoration Payment Obligation, the capacity and energy 
multipliers for the Assessment Year, and for CVP Power Contractors 
choosing the alternative method for assessing the annual Power 
Restoration Payment Obligation, the resulting monthly Restoration 
Payment amount. Any adjustments to the annual Power Restoration Payment 
Obligation will be accomplished through the Midyear Adjustment 
determined by Reclamation.

Assessing the Power Restoration Payment Obligation

    For each Assessment Year, Western will prorate the annual Power 
Restoration Payment Obligation to actual capacity and energy amounts 
delivered by or scheduled with Western for each CVP Power Contractor. 
Western will assess 50 percent of the annual Power Restoration Payment 
Obligation to capacity and 50 percent to energy. Western will determine 
a capacity multiplier and an energy multiplier using projected Power 
sales based on CVP Power Contractors' forecasts and/or prior FY total 
capacity and energy amounts delivered or scheduled to all CVP Power 
Contractors. Prior to July 1, when Western receives Reclamation's 
letter for the annual Power Restoration Payment Obligation, Western 
will request each CVP Power Contractor to submit to Western its 
forecasted monthly capacity and energy purchases from Western. The CVP 
Power Contractor's forecast will be for August 1 through July 31 of the 
subject Assessment Year. If the CVP Power Contractor does not submit a 
forecast of monthly capacity and energy purchases, Western will use the 
CVP Power Contractor's prior year's (August 1 through July 31) actual 
capacity and energy amounts delivered or scheduled, with adjustments 
Western may deem appropriate, as the projected Power sales used for the 
subject Assessment Year.
    The annual Power Restoration Payment Obligation for the subject 
Assessment Year to be prorated to capacity will be divided by Western's 
projected capacity sales to determine the capacity multiplier. The same 
process will be repeated using the annual Power Restoration Payment 
Obligation prorated to energy divided by Western's projected energy 
sales to determine the energy multiplier. During each Assessment Month 
of the subject Assessment Year, these capacity and energy multipliers 
will be applied to each CVP Power Contractor's actual capacity and 
energy amounts delivered by or scheduled with Western to determine the 
CVP Power Contractor's Restoration Payment, unless the alternative 
method for assessing the Power Restoration Payment Obligation is used. 
For each Billing Month of the subject Assessment Year, each CVP Power 
Contractor will be billed for its individual monthly Restoration 
Payment.

[[Page 18007]]

Alternative Method for Assessing the Power Restoration Payment 
Obligation

    As an alternative method to the assessment method described above 
and if requested by the CVP Power Contractor, Western will determine 
the CVP Power Contractor's monthly Restoration Payments as equal 
monthly payment amounts, as adjusted, for the subject Assessment Year. 
The monthly Restoration Payment amounts will be based on the CVP Power 
Contractor's forecasted or prior year's actual capacity and energy 
amounts delivered by or scheduled with Western.
    Under this alternative method, for each Assessment Year, Western 
will prorate the annual Power Restoration Payment Obligation based on 
the CVP Power Contractor's forecasted or prior year's monthly capacity 
and energy purchases from Western. Western will determine the CVP Power 
Contractor's monthly Restoration Payment amount by multiplying the CVP 
Power Contractor's total forecasted or prior year's capacity purchases 
by the capacity multiplier determined by Western, and repeating the 
calculation for energy using the energy multiplier. Western will sum 
the resulting capacity and energy calculations and then divide by 12 to 
determine the monthly Restoration Payment amount. For each Billing 
Month of the subject Assessment Year, the CVP Power Contractor will be 
billed for its individual monthly Restoration Payment.
    CVP Power Contractors who prefer this alternative method for 
assessing the annual Power Restoration Payment Obligation must notify 
Western in writing prior to August 1, 1998. Once the CVP Power 
Contractor elects this alternative method, the method will remain in 
effect unless otherwise mutually agreed by Western and the CVP Power 
Contractor.

Collection of CVP Power Contractors' Restoration Fund Bills

    Each CVP Power Contractor will receive a Restoration Fund Bill on 
or about the twenty-fifth (25th), but no later than the last day of the 
month for each month designating the amount payable. The Restoration 
Fund billing cycle, for each Assessment Year, will begin at least 30 
days after August 1, or the date written notification of the annual 
Power Restoration Payment Obligation is received from Reclamation, 
whichever occurs later.
    If the Restoration Fund billing is suspended for a time, Western's 
Sierra Nevada Region will notify all CVP Power Contractors as soon as 
possible. Suspension of billing may occur to avoid overpayment on the 
annual Power Restoration Payment Obligation.

Payment Due Date

    All CVP Power Contractors' Restoration Payments are due and payable 
by CVP Power Contractors before the close of business on the twentieth 
(20th) calendar day after the date of the issuance of each Restoration 
Fund Bill or the next business day thereafter if said day is a 
Saturday, Sunday, or Federal holiday.

Late Payment Charges Assessed to Delinquent Restoration Payments

    Restoration Fund Bills not paid in full by the CVP Power 
Contractor(s) by the due date as specified above will be assessed a 
late payment charge of five hundredths percent (0.05%) of the principal 
amount unpaid for each day payment is delinquent, to be added until the 
amount due is paid in full. Payments received will be first applied to 
the charges for the late payment assessed on the principal and then to 
the payment of the principal.

Deposit of CVP Power Contractors' Restoration Payments Into the 
Restoration Fund

    On or about the twenty-first (21st) calendar day of the month 
following each Billing Month, Western will transfer all of the 
Restoration Payments received from CVP Power Contractors, including 
late payment charges, to Reclamation for deposit into the Restoration 
Fund.

Adjustment to the Power Restoration Payment Obligation

    There are two types of adjustments that can be made relative to 
each Assessment Year's annual Power Restoration Payment Obligation, a 
Midyear Adjustment determined by Reclamation and Load Adjustments 
determined by Western. Reclamation will notify Western, in writing, of 
the Midyear Adjustment. Upon receiving Reclamation's written 
notification, Western will notify each CVP Power Contractor of the 
Midyear Adjustment to the annual Power Restoration Payment Obligation 
and any adjustments to capacity and energy multipliers for the 
remaining months of the subject Assessment Year. Any adjustments made 
will be based on Western's Power sales to all CVP Power Contractors for 
the entire Assessment Year.
    The Midyear Adjustment is determined by Reclamation and occurs on 
or about April 1, of the subject Assessment Year, following 
Reclamation's annual determination of available CVP water supply for 
the year. This adjustment applies to the annual Power Restoration 
Payment Obligation and is based on hydrological conditions and 
Reclamation's most recently available forecast of CVP water deliveries 
to the CVP water contractors applicable to the subject Assessment Year. 
Upon receiving Reclamation's notification, Western may adjust the 
capacity and energy multipliers as appropriate to coincide with the 
adjusted annual Power Restoration Payment Obligation.
    During the Midyear Adjustment period, Western will also review the 
Restoration Payments from the CVP Power Contractors received thus far 
for the subject Assessment Year. If the actual payment amounts are 25 
percent greater or less than projected, Western may adjust the capacity 
and energy multipliers for the remaining months of the subject 
Assessment Year. Beginning May 1, and continuing throughout the 
remaining months of the subject Assessment Year, the adjusted 
multipliers will be applied to each CVP Power Contractor's actual 
capacity and energy amounts delivered by or scheduled with Western.
    For the alternative method for assessing the Power Restoration 
Payment Obligation, Load Adjustment(s), determined by Western, will be 
evaluated quarterly during the subject Assessment Year for each CVP 
Power Contractor. Western will compare the CVP Power Contractor's 
forecasted or prior year's capacity and energy amounts to the actual 
capacity and energy amounts delivered by or scheduled with Western 
during the subject Assessment Year. If, in Western's judgment, the 
difference would significantly impact other CVP Power Contractors, 
Western will adjust the CVP Power Contractor's forecasted or prior 
year's capacity and energy amounts to align with actual load data. This 
adjustment will result in a change to the CVP Power Contractor's 
monthly Restoration Payment amount. Western will notify the CVP Power 
Contractor(s) of any Load Adjustment(s) and the resulting change(s) to 
the monthly Restoration Payment amount prior to any adjustments.
    To the extent practicable, Western will also make Load 
Adjustment(s) during the last quarter of the subject Assessment Year to 
ensure that the CVP Power Contractor's total annual Restoration Payment 
amount is equal to the amount the CVP Power Contractor would have paid 
if billing would have been based on actual capacity and energy amounts 
delivered by or scheduled with Western. Any balances remaining on the 
CVP Power

[[Page 18008]]

Contractor's Restoration Fund Bill(s) must be paid in full by the 
thirtieth (30th) of September for each Assessment Year.
    All other deviations, in the amounts collected or assessed relative 
to the annual Power Restoration Payment Obligation, will be rolled into 
the following Assessment Year. The rolled over amount will be added or 
subtracted from the Power Restoration Payment Obligation amount to be 
assessed in that year.

Review Process

    Western will review the procedures for the assessment and 
collection of the Restoration Payments from CVP Power Contractors every 
5 years, or if one of the following occurs: (1) If there is a 
significant change to or suspension of the legislation; (2) if a 
material issue arises; or (3) if an apparent inequity in the procedures 
is discovered.

Availability of Information

    All brochures, studies, comments, letters, memoranda, or other 
documents made or kept by Western for developing the proposed 
procedures, are and will be made available for inspection and copying 
at the Sierra Nevada Regional Office, located at 114 Parkshore Drive, 
Folsom, California.

Regulatory Flexibility Analysis

    The Regulatory Flexibility Act of 1980 (5 U.S.C. 601, et seq.) 
requires Federal agencies to perform a regulatory flexibility analysis 
if a proposed rule is likely to have a significant economic impact on a 
substantial number of small entities. Western has determined that this 
action relates to rates or services offered by Western and, therefore, 
is not a rule within the purview of the Act.

Environmental Compliance

    Western will conduct an environmental evaluation and develop the 
appropriate level of environmental documentation pursuant to the 
National Environmental Policy Act (NEPA) of 1969 (42 U.S.C. 4321, et 
seq.); the Council on Environmental Quality Regulations for 
implementing NEPA (40 CFR parts 1500 through 1508); and the DOE NEPA 
Implementing Procedures and Guidelines (10 CFR part 1021).

Review Under Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1980 (44 U.S.C. 
3501, et seq.), Western has received approval from the Office of 
Management and Budget for the collection of customer information in 
this rule, under control number 1910-0100.

Determination Under Executive Order 12866

    Western has an exemption from centralized regulatory review under 
Executive Order 12866; accordingly, no clearance of this notice by 
Office of Management and Budget is required.

    Dated: April 1, 1998.
Michael S. Hacskaylo,
Acting Administrator.
[FR Doc. 98-9658 Filed 4-10-98; 8:45 am]
BILLING CODE 6450-01-P