[Federal Register Volume 65, Number 168 (Tuesday, August 29, 2000)]
[Notices]
[Pages 52419-52423]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-22000]



[[Page 52419]]

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DEPARTMENT OF ENERGY

Western Area Power Administration


Final Power Allocation Procedures of the Post-2004 Resource Pool-
Loveland Area Projects

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of final procedures.

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SUMMARY: Western Area Power Administration (Western), a Federal power 
marketing agency of the Department of Energy, announces its Post-2004 
Resource Pool Allocation Procedures developed under the requirements of 
Subpart C--Power Marketing Initiative of the Energy Planning and 
Management Program (Program) Final Rule, 10 CFR part 905. Subpart C of 
the Program provides for establishing project-specific resource pools 
and allocating power from these pools to new preference customers. 
These procedures, in conjunction with the Loveland Area Projects Final 
Post-1989 Marketing Plan (Post-1989 Marketing Plan), establish the 
framework for allocating power from the resource pool to be established 
for the Loveland Area Projects (LAP).

DATES: The Post-2004 Resource Pool Allocation Procedures become 
effective September 28, 2000, and will remain in effect until September 
30, 2024.

ADDRESSES: Information about the Post-2004 Resource Pool Allocation 
Procedures, including comments, letters, and other supporting documents 
made or kept by Western for the purpose of developing the final 
procedures, is available for public inspection and copying at the Rocky 
Mountain Customer Service Region office, Western Area Power 
Administration, 5555 East Crossroads Boulevard, Loveland, Colorado 
80538-8986.

SUPPLEMENTARY INFORMATION: Western published a notice of proposed 
procedures on March 10, 2000, to implement Subpart C--Power Marketing 
Initiative of the Program's Final Rule, 10 CFR part 905, published at 
60 FR 54151 in the Federal Register. The Program, which was developed 
in part to implement section 114 of the Energy Policy Act of 1992, 
became effective on November 20, 1995. The goal of the Program is to 
require planning and efficient electric energy use by Western's long-
term firm power customers and to extend Western's firm power resource 
commitments. One aspect of the Program is to establish project-specific 
power resource pools when existing resource commitments expire and 
allocate power from these pools to new preference customers. Existing 
resource commitments for LAP expire on September 30, 2004. Under the 
Program, 96 percent of the firm power resources available in 2004 was 
extended to existing customers. The remaining 4 percent will make up a 
resource pool from which power allocations to new customers will be 
made following these final procedures and the Post-1989 Marketing Plan. 
The final Post-2004 Resource Pool Allocation Procedures for LAP address 
(1) eligibility criteria; (2) how Western plans to allocate the pool 
resources to new customers as provided for in the Program; and (3) the 
terms and conditions under which Western will contractually allocate 
the power pool.
    Western held public information and comment forums on the proposed 
procedures on March 14, 21, and 23, 2000, to accept oral and written 
comments on the proposed procedures and call for applications. The 
formal comment period ended June 8, 2000. Western's response to public 
comments received about the proposed procedures are included in this 
notice.
    The Post-2004 Resource Pool Allocation Procedures detailed in this 
Federal Register notice explain how Western intends to implement 
Subpart C of the Power Marketing Initiative of the Program's Final Rule 
for the LAP. Response to Public Comments Regarding Post-2004 Resource 
Pool Allocation Procedures

I. Amount of Pool Resources

    Western proposes to allocate up to 4 percent of the LAP long-term 
firm hydroelectric resource available as of October 1, 2004, as firm 
power.
    Western did not receive comments pertaining to the amount of the 
pool resources.

II. General Eligibility Criteria

    Western proposes to apply general eligibility criteria to 
applicants seeking an allocation of firm power under the proposed Post-
2004 Resource Pool Allocation Procedures.
    Comment: The City of Fountain believes that Western's proposed 
criteria states that an eligible applicant must not be receiving 
benefits from a current LAP firm power allocation is inconsistent with 
EPAMP Final Rule, which at 60 FR 54173 states that Western will 
allocate a fair share of power to eligible to new preference entities 
who do not have a contract with Western or are not a member of a parent 
entity that has a contract with Western.
    Response: Western acknowledges that the supplemental explanation, 
published at 60 FR 54173, of the Program's rule contained in 10 CFR 
part 905 supports the argument that the City of Fountain may be 
eligible for a firm power allocation. In these final procedures, 
Western will change the general eligibility criteria to be consistent 
with the EPAMP Final Rule. Western will evaluate applicant profile data 
to determine eligibility under the final criteria and procedures.

III. General Allocation Criteria

    Western proposes to apply general allocation criteria to applicants 
seeking an allocation of firm power under the proposed Post-2004 
Resource Pool Allocation Procedures.
    Comment: Several comments stated that the Native American 
allocations should be capped at 65 percent of the actual load served in 
1998-1999 to be consistent with the criteria used by other Regions. 
Furthermore, the share of allocations to Native American tribes should 
be the total Federal power to include the share of the load currently 
served by a Federal allocation to the current tribal service provider. 
Other comments stated that the Department of Energy has established a 
target of at least serving 65 percent of the Native American load with 
power allocations from the LAP and Salt Lake City Area Integrated 
Projects (SLCA/IP). Crediting any power received indirectly by the 
tribes via their current service provider is not satisfactory. If the 
tribe forms a utility during the term of the firm electric service 
contract, the tribe would not be able to take advantage of the portion 
of the allocation held by the service provider. The full 65-percent 
allocation should be determined without considering the benefit derived 
from the serving utility.
    Response: Western has not established targets for serving Native 
American load with power allocations from LAP. The Pick-Sloan Missouri 
Basin Program, Eastern Division's Post-2000 Resource allocation process 
resulted in approximately 62 percent benefit in the summer season and 
55 percent benefit in the winter season to Native American tribes. The 
SLCA/IP Post-2004 Resource allocation process has used a 65 percent 
benefit to Native American tribes as an anticipated goal. Applicant 
profile data will be evaluated to determine the benefit that will go to 
each applicant. Western will take into account benefits of Federal 
power resources received by Native American tribes through the existing 
supplier when determining allocations. Native American tribal 
allocations from the LAP resource pool will be set forth in

[[Page 52420]]

a subsequent Federal Register notice and will be available for comment 
then.
    Comment: Before allocating power to new non-tribal customers with 
utility status, available power resources should be allocated on a 
priority basis to satisfy at least 65 percent of Native American load.
    Response: Reclamation Law provides that public entities be given 
preference over private entities in marketing power from Federal 
reclamation projects. Western has always considered Native American 
tribes to be preference customers. In response to comments received 
during the Program's public process, Western has changed its policy of 
requiring that Native American tribes achieve utility status prior to 
receiving an allocation. An appropriate share of LAP resources will be 
allocated to applicants based on the final procedures.
    Comment: The Iowa Tribe of Kansas and Nebraska is partly in 
Nebraska, which is outside of the LAP marketing area. The Tribe should 
be allowed to count all loads that are on the reservation, including 
the portion in Nebraska.
    Response: The firm power allocated under the general allocation 
criteria will be available only to new eligible applicants in LAP's 
existing marketing area. Western considers the broader scope of this 
statement to mean that only load within the LAP marketing area will be 
considered in determining an allocation. Even though benefits of 
Western's power would potentially be for all tribal members, no load 
outside the established marketing area is eligible for consideration.
    Comment: Allocations should be limited to use by Native American 
tribes and their members on reservations. Allocations should not be 
made to Native Americans living beyond the reservation's boundaries or 
to tribal land holdings beyond the reservation boundaries. Limiting 
allocations to tribal organizations on reservation property recognizes 
the unique nature of these reserved lands and will provide immediate 
economic benefit to Native Americans where this benefit is needed most. 
Definition of load should be clarified to state that load area is 
limited to the actual loads currently on tribal lands. Calculation of 
load for Native Americans should exclude non-Native American loads 
served on the Native American lands. The tribes face the issue of 
whether load of non-Indians on the reservation can be counted. If a 
tribal utility were formed, the total load served by that utility would 
be eligible. Allocation of power to tribes should therefore be based on 
the total reservation load.
    Response: The Program, published at 60 FR 54151, states that 
Western expects to make allocations to Native American tribes for use 
on the reservation and potentially off the reservation under certain 
circumstances as determined by Western. Western wants the flexibility 
to tailor allocations from the LAP Post-2004 resource pool to meet 
specific tribal circumstances. Applicant profile data submitted by 
Native American tribes should be based on usage by tribal members and 
tribal entities on the tribe's reservation. However, the tribes should 
submit any data or estimates that may potentially be considered during 
the allocation process. Western will seek clarification when reviewing 
applications and adjust inconsistent data and estimates before making 
proposed allocations. The proposed allocations developed from Native 
American tribe load data and estimates will be published in a 
subsequent Federal Register notice. Western cannot dictate the universe 
of customers that a Native American tribal utility could serve. If a 
Native American tribe submits an application as a utility applicant, 
Western would evaluate the application under utility applicant 
criteria. As a utility applicant, if non-tribal load were served, then 
that load would be valid to include for consideration of an allocation. 
When submitting Native American load data as a non-utility, only load 
of tribal entities and their members will be considered for an 
allocation.
    Comment: One comment stated that load basis should be consistent 
for all applicants and based on the actual 1998-99 winter season and 
1999 summer season loads of the applicant. In reference to Native 
American loads, it is assumed that estimate refers only to the 
inaccuracy that might occur in separating that load from load of the 
current supplier and does not refer to the inclusion of any future load 
that may be anticipated. Another comment stated that tribal economic 
development projects that show a reasonable likelihood of being 
completed by 2004 should be considered as tribal load.
    Response: Allocations made to qualified utility and non-utility 
applicants will be based on the 1998-99 winter season and 1999 summer 
season loads. Allocations to Native American tribes will be based on 
the 1998-99 winter season and 1999 summer season load data if 
available. Western will accept 1998 summer season and 1998-99 winter 
season load data, if available, from the Eastern Shoshone and Northern 
Arapaho on the Wind River Reservation since that data was requested for 
the SLCA/IP Post-2004 Resource Pool. Western will also accept load 
estimates developed by the Native American tribes. During the public 
information forums, Western said that limited projected load estimates 
would be considered. However, any projected load estimates considered 
by Western would be limited to load anticipated to exist prior to 
September 30, 2004. Western will evaluate and adjust inconsistent data 
and estimates. The proposed allocations developed from Native American 
tribe load data and estimates will be published in a subsequent Federal 
Register notice.
    Comment: Many comments stated that if any of the resource pool 
remains unallocated or cannot be delivered after the Post-2004 
allocation, it should be returned to the existing customers on a pro 
rata basis. Several other comments stated that firm power not under 
contract after the closing date for executing firm power contracts 
should be made available exclusively for the benefit of contracting 
Native American tribes.
    Response: The Program states: ``If power is reserved for new 
customers but not allocated, or resources are offered but not placed 
under contract, this power will be offered on a pro rata basis to 
customers that contributed to the resource pool through application of 
the extension formula in the Program.'' In these final procedures, 
Western will change the general allocation criteria to comply with the 
regulations in 10 CFR part 905, published at 60 FR 54151.
    Comment: Several comments stated that the maximum allocation for 
tribes will be no more than, and could be less than, 5,000 kilowatts 
(kW). Other comments stated that an exception should be granted to the 
maximum allocation of 5,000 kW for any Native American tribe that 65 
percent of their load exceeds the 5,000 kW limit.
    Response: The Post-1989 Marketing Plan criteria established the 
5,000 kW limitation referenced in the allocation criteria. The 5,000 kW 
limit was placed in the Post-1989 Marketing Plan to ensure that the 
sale of LAP power would benefit a wide class of users, which is 
consistent with Federal Reclamation Law. The 5,000 kW limitation will 
not apply to Native American tribe applicants requesting a LAP 
allocation. Western will change the proposed general allocation 
criteria to clarify the maximum allocation.
    Comment: Western should clarify what economic benefits it may be 
able to provide for the tribes. Western should allow various options to 
deliver power benefits to the tribes.

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    Response: Western will retain the right to provide the economic 
benefits of its resources directly to tribes if unanticipated obstacles 
to delivering hydropower to Native American tribes arise. Unanticipated 
obstacles pertain to the denial of delivery contracts and will not 
include fiscal issues where costs of accessing the power negate the 
hydropower benefits. Western does not anticipate obstacles will exist 
and views alternative methods of delivering benefits a last resort in 
lieu of delivering Western power and energy. Western does not want to 
exclude alternatives that may be required to provide the benefits of 
Federal hydropower to the tribes.

IV. General Contract Principles

    Western proposes to apply general contract principles to all 
applicants receiving an allocation of firm power under the proposed 
Post-2004 Resource Pool Allocation Procedures.
    Comment: Western should adopt a priority policy for any adjustments 
to the Contract Rate of Delivery (CROD) in response to changes in 
hydrology and river operations so that allocations to other customers 
are reduced prior to reduction of Tribal allocations.
    Response: Treating all customers alike in adjusting CRODs due to 
changes in hydrology and river operations is consistent with the 
Program.
    Comment: Assistance provided by Western should be paid for by the 
entity requesting assistance and should not be provided free of charge 
by Western.
    Response: Western, as a Federal entity, has an obligation to assist 
all applicants to the greatest extent possible. General assistance, 
such as negotiating contract extensions with existing customers, was 
not charged on an individual basis. If Western is requested to provide 
assistance outside of what Western would consider normal contracting 
activities to execute firm electric service contracts, compensation for 
those services may need to be evaluated.
    Comment: Certain changes to the standard contract format and 
General Power Contract Provisions should be made to reflect Native 
American tribal sovereignty. The use of reserve contracts for tribes in 
Western's Upper Great Plains Region was a good approach.
    Response: All new customers, utility, non-utility, and Native 
American tribes will have contracts that are substantially identical to 
the current firm electric service contracts held by Western's present 
customers. To the extent possible, Western will recognize tribal 
sovereignty in these contracts.
    Responses to Comments on Other Issues
    Comment: LAP should create a program of internships for tribal 
personnel or scholarships to Western's training center for selected 
high school graduates.
    Response: This comment is outside the scope of this process. 
However, Western has participated in Native American summer internship 
programs in the past.
    Comment: A proposal discussed at the Topeka, Kansas, information 
meeting was that for Western to serve Native American loads, retail 
wheeling would be required. Kansas does not have retail wheeling 
presently and the Kansas Legislature has not supported it in recent 
sessions.
    Response: Western is not imposing retail wheeling on rural electric 
cooperatives under the Program. Retail wheeling is an option only in 
those states that have adopted it. Cooperatives in Kansas have been 
supportive of delivering the benefits of power allocations to tribes, 
and support a bill crediting approach to accomplish Western's goals in 
a manner that avoids the need for a separate transmission service 
agreement.
    Comment: Western should extend the comment period for a sufficient 
period to allow comment on significant changes resulting from the 
initial comments on the proposed procedures. Western should extend the 
comment period in order to allow adequate opportunity to examine and 
comment on the proposed contract terms and conditions.
    Response: The public comment period for this part of the allocation 
process ended June 8, 2000. Comments received will be used to determine 
the final procedures for determining applicant eligibility and 
allocation criteria. A similar public process will take place to allow 
comment on the proposed allocations derived from these procedures. 
Contractual terms and conditions will be addressed with each applicant 
that receives an allocation after the allocations are final.
    Comment: Federal Agencies have a trust responsibility when working 
with Native American tribes and are required to respect the government-
to-government relationship and improve Federal consultation with tribal 
governments.
    Response: Western supports the Department of Energy's American 
Indian policy that stresses the need for a government-to-government, 
trust based relationship. Western intends to continue its practice of 
consultation with tribal governments so that tribal rights and concerns 
are considered prior to any actions being taken that affect tribes.
    Comment: If a tribe receives an allocation of power under this 
process and then forms a tribal utility, the tribe should be eligible 
to receive an additional allocation in 2009 and 2014 as a utility. A 
tribe receiving a 2004 allocation of power should also be eligible to 
receive an additional allocation in 2009 and 2014 if the tribe has not 
formed a utility. Tribes propose that resource allocations during the 
2009 and 2014 allocation be first made available to satisfy the unmet 
load of tribes in LAP.
    Response: Two future 1 percent resource pools were identified as 
part of the Program and allocations from these future resource pools 
will be dealt with in future public processes.
    Comment: Both the Eastern Shoshone and Northern Arapaho tribes 
should receive their full allocation in fair proportion to the Kansas 
tribes from the LAP and allow the SLCA/IP to stand on its own.
    Response: Western will apply LAP's final Post-2004 procedures and 
criteria during the evaluation of applicant profile data from each 
applicant in the LAP marketing area. The method for determining 
allocations will be published with the proposed allocations in a 
subsequent Federal Register notice. Western's final allocations will be 
published after considering all comments related to the proposed 
allocations. Western will consider the benefits of the SLCA/IP power to 
tribes in determining LAP allocations.
    Final Post-2004 Resource Pool Allocation Procedures

I. Amount of Pool Resources

    Western will allocate up to 4 percent of the LAP long-term firm 
hydroelectric resource available as of October 1, 2004, as firm power 
(firm power). Current hydrologic studies indicate that about 28 
megawatts (MW) will be available for the summer season and about 24 MW 
will be available for the winter season. Firm power means firm capacity 
and associated energy allocated by Western and subject to the terms and 
conditions specified in Western's long-term firm power electric service 
contracts.

II. General Eligibility Criteria

    Western will apply the following general eligibility criteria to 
applicants seeking an allocation of firm power under the proposed Post-
2004 Resource Pool Allocation Procedures.
    A. Qualified applicants must be preference entities as defined by 
section 9c of the Reclamation Project Act of

[[Page 52422]]

1939, 43 U.S.C. 485h(c), as amended and supplemented.
    B. Qualified applicants must be located within the currently 
established LAP marketing area.
    C. Qualified applicants must not have a current firm electric 
service contract nor be a member of a parent entity that has a firm 
electric service contract with Western. Eligible Native American 
applicants are not subject to this requirement for the Post-2004 
resource pool.
    D. Qualified utility and non-utility applicants must be able to use 
the firm power directly or be able to sell it directly to retail 
customers.
    E. Qualified applicants that are municipalities, cooperatives, 
public utility districts, and public power districts, must have utility 
status by September 30, 2000. Utility status means that the entity has 
responsibility to meet load growth, has a distribution system, and is 
ready, willing, and able to purchase Federal power from Western on a 
wholesale basis.
    F. Qualified Native American applicants must be Native American 
Tribes as defined in the Indian Self Determination Act of 1975, 25 
U.S.C. 450b, as amended.

III. General Allocation Criteria

    Western will apply the following general allocation criteria to 
applicants seeking an allocation of firm power under the Post-2004 
Resource Pool Allocation Procedures.
    A. Allocations of firm power will be made in amounts as determined 
solely by Western in exercising its discretion under Reclamation Law.
    B. An allottee will have the right to purchase such firm power only 
after executing an electric service contract between Western and the 
allottee.
    C. Firm power allocated under these procedures will be available 
only to new eligible applicants in LAP's existing marketing area. This 
marketing area includes parts of Colorado, Kansas, Nebraska, and 
Wyoming. LAP's marketing area is specifically defined as the portion of 
Colorado east of the Continental Divide, Mountain Parks Rural Electric 
Association's service territory in Colorado west of the Continental 
Divide, the portion of Kansas located in the Missouri River Basin, and 
the portion of Kansas west of the eastern borders of the counties 
intersected by the 100th Meridian, the portion of Nebraska west of the 
101st Meridian, and Wyoming east of the Continental Divide.
    D. Allocations made to Native American Tribes will be based on 
actual and estimated load developed by the Native American Tribes. 
Western will evaluate and adjust inconsistent estimates during the 
allocation process. Western is willing to assist tribes in developing 
load estimating methods assuring consistent Native American Tribe load 
estimates across the region.
    E. Allocations made to qualified utility and non-utility applicants 
will be based on 1998-99 winter season and 1999 summer season loads. 
Western will apply the Post-1989 Marketing Plan criteria to these 
loads.
    F. Firm capacity and energy will be based upon the applicant's 
seasonal system load factor.
    G. Any electric service contract offered by Western to an applicant 
shall be executed by the applicant within 6 months from the date of a 
final offer.
    H. The initial resource pool will be dissolved subsequent to the 
closing date for executing firm power contracts. Firm power not under 
contract will be offered on a pro rata basis to customers that 
contributed to the resource pool through application of the Program's 
extension formula.
    I. The minimum allocation shall be 100 kW.
    J. The maximum allocation for qualified utility and non-utility 
applicants shall be 5,000 kW. Eligible Native American applicants are 
not subject to this requirement.
    K. Contract rates of delivery shall be subject to adjustment in the 
future as provided for in the Program and contract.
    L. Western retains the right to provide the economic benefits of 
its resources directly to tribes if unanticipated obstacles to 
delivering hydropower benefits to Native American Tribes arise.

IV. General Contract Principles

    Western will apply the following general contract principles to all 
applicants receiving an allocation of firm power under the Post-2004 
Resource Pool Allocation Procedures.
    A. Western, at its discretion and sole determination, reserves the 
right to adjust the contract rate of delivery on 5 years' notice in 
response to changes in hydrology and river operations. Any such 
adjustments shall only take place after a public process.
    B. Western shall assist allottees to obtain third-party 
transmission arrangements to deliver firm power allocated under these 
procedures; nonetheless, each allottee is ultimately responsible for 
obtaining its own delivery arrangements.
    C. Contracts entered into under the Post-2004 Resource Pool 
Allocation Procedures shall provide for Western to furnish firm 
electric service effective from the October 2004 billing period, 
through the September 2024 billing period.
    D. Contracts entered into as a result of these procedures shall 
incorporate Western's standard provisions for power sales contracts, 
integrated resource planning, and general power contract provisions.

V. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act, 5 U.S.C. 601, et seq. (Act), 
requires Federal agencies to perform a regulatory flexibility analysis 
if a proposed regulation is likely to have a significant economic 
impact on a substantial number of small entities. Western has 
determined that (1) this rulemaking relates to services offered by 
Western, and, therefore, is not a rule within the purview of the Act, 
and (2) the impacts of an allocation from Western would not cause an 
adverse economic impact on a substantial number of such entities. The 
requirements of this Act can be waived if the head of the agency 
certifies that the rule will not, if promulgated, have a significant 
economic impact on a substantial number of small entities. By the 
execution of this Federal Register notice, Western's Administrator 
certifies that no significant economic impact on a substantial number 
of small entities will occur.

VI. Review Under the Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1980, 44 U.S.C. 
3501-3520, Western has received approval from the Office of Management 
and Budget (OMB) to collect customer information in this rule, under 
control number 1910-1200.

VII. Review Under the National Environmental Policy Act

    Western has completed an environmental impact statement on the 
Program, pursuant to the National Environmental Policy Act of 1969 
(NEPA). The Record of Decision was published in the Federal Register on 
October 12, 1995 (60 FR 53181). Western's NEPA review assured all 
environmental effects related to these procedures have been analyzed.

VIII. Determination Under Executive Order 12866

    DOE has determined that this is not a significant regulatory action 
because it does not meet the criteria of Executive Order 12866, 58 FR 
51735. Western has an exemption from centralized regulatory review 
under Executive

[[Page 52423]]

Order 12866; accordingly, no clearance of this notice by OMB is 
required.

    Dated: August 8, 2000.
Michael S. Hacskaylo,
Administrator.
[FR Doc. 00-22000 Filed 8-28-00; 8:45 am]
BILLING CODE 6450-01-P