[Federal Register Volume 67, Number 209 (Tuesday, October 29, 2002)]
[Notices]
[Pages 65974-65977]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-27442]


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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 Central Valley Project Improvement Act of 1992 
(CVPIA). These proposed procedures take a different approach toward 
assessing Power Contractors' collections that more closely reflects 
Western's 2004 Power Marketing Plan. Existing procedures are linked to 
an older and soon to be obsolete Power Marketing Plan. The existing 
procedures became effective on September 3, 1998, and will remain in 
effect until superseded by this process.

DATES: The consultation and comment period will begin on the date of 
publication of this Federal Register notice and will end December 30, 
2002. Western will present a detailed explanation of the proposed 
procedures at a public information forum on November 20, 2002, at 10 
a.m., PST. It will receive oral and written comments at a public 
comment forum beginning at 1 p.m., PST, on this same date. Western

[[Page 65975]]

must receive all comments by the end of the comment period to ensure 
they are considered.

ADDRESSES: Western will hold the public information and comment forums 
at the Sierra Nevada Region Office, Western Area Power Administration, 
114 Parkshore Drive, Folsom, CA 95630-4710. Send comments to: Mr. 
Thomas R. Boyko, Power Marketing Manager, Sierra Nevada Customer 
Service Region, Western Area Power Administration, 114 Parkshore Drive, 
Folsom, CA 95630-4710, e-mail [email protected].

FOR FURTHER INFORMATION CONTACT: Ms. Melinda C. Grow, Public Utilities 
Specialist, Rates Division, Sierra Nevada Customer Service Region, 
Western Area Power Administration, 114 Parkshore Drive, Folsom, CA 
95630-4710, telephone (916) 353-4443, e-mail [email protected].

SUPPLEMENTARY INFORMATION: Section 3407 of the CVPIA (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 CVPIA. The 
CVPIA 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' share of the annual Total Power Restoration Fund Payment 
Obligation.
    Because Western markets and transmits CVP power and maintains all 
CVP power contracts, Western agreed to administer the assessment and 
collection of the Restoration Payments from CVP Power Contractors. 
Western executed a letter of agreement with Reclamation to establish 
procedures for depositing collections from CVP Power Contractors into 
the Restoration Fund.
    Through an open and public process, the existing procedures became 
effective on September 3, 1998, and remain in effect until superseded 
(63 FR 41561, August 4, 1998). Western indicated that it would review 
the procedures associated with 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; (3) if 
an apparent inequity in the procedures is discovered; or (4) if any 
significant change occurs that affects the procedures.
    Western published a new Marketing Plan (2004 Power Marketing Plan) 
in the Federal Register on June 25, 1999, that specifies the terms and 
conditions under which Western will market power from CVP and the 
Washoe Project beginning January 1, 2005 (64 FR 34417). Since the 
current methodology for the assessment and collection of Restoration 
Fund payments from the CVP Power Contractors is tied to the 1994 
Marketing Plan (57 FR 45782, October 5, 1992) and long-term firm CVP 
power contracts will expire on December 31, 2004, it is necessary to 
change the assessment and collection of Restoration Payments from CVP 
Power Contractors.
    Western will prorate and assess to CVP Power Contractors the annual 
Power Restoration Payment Obligation (PRPO), as determined by 
Reclamation. Western will issue each CVP Power Contractor a monthly 
Restoration Fund Bill reflecting its share of the PRPO. The CVP Power 
Contractors will pay that amount to Western. Western will transfer all 
amounts collected from CVP Power Contractors to Reclamation for deposit 
into the Restoration Fund.
    The following table provides a summary comparison of the existing 
procedures and proposed procedures.

  Table 1.--Highlights of Changes for Assessing the Annual PRPO to CVP
                            Power Contractors
------------------------------------------------------------------------
     Methodology element       Existing procedures   Proposed procedures
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Effective Date..............  September 3, 1998...  January 1, 2005.
Assessment of Prorated        Based on actual       Based on assigned
 Charges.                      capacity and energy   Base Resource
                               amounts delivered     Percentage as
                               by or scheduled by    articulated in the
                               Western.              2004 Power
                                                     Marketing Plan.
Method of Calculation.......  Capacity and energy   Each Power
                               multipliers           Contractor's Base
                               multiplied by         Resource Percentage
                               actual capacity and   is multiplied by
                               energy amounts. The   the PRPO to
                               multipliers are       determine their
                               calculated using      annual PRPO
                               prior year power      obligation.
                               sales to recover
                               the PRPO.
Assessment Year.............  June 1 through May    None.
                               31.
Billing Year................  September through     No change.
                               August.
Exclusion of First            Three First           All First Preference
 Preference Customers.         Preference            Customers.
                               Customers.
Annual Reconciliation.......  None required.......  Required due to
                                                     Exchange Program
                                                     and posted on Power
                                                     Contractor's August
                                                     bill.
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Acronyms and Definitions

    As used throughout the remainder of this notice, the following 
acronyms and definitions when used with initial capitalization, whether 
singular or plural, will have the following meanings:
    2004 Power Marketing Plan: The final marketing program for the 
Sierra Nevada Region power after 2004 established through a public 
process and published in the June 25, 1999, Federal Register (64 FR 
34417).
    Administrator: The Administrator of the Western Area Power 
Administration.
    Assessment Month: The service month, which is 3 months prior to the 
Billing Month. This term is used in the August 4, 1998, Federal 
Register (63 FR 41561) procedures and will become obsolete assuming 
this proposed procedure is finalized and approved.
    Assessment Year: The period that uses the service months from June 
1 through May 31 for billing CVP Power Contractors for Restoration 
Payments. This term is used in the August 4, 1998, Federal Register (63 
FR 41561) procedures and will become obsolete assuming this proposed 
procedure is finalized and approved.
    Base Resource: CVP and Washoe Project power output and existing 
power purchase contracts extending beyond 2004, determined by Western 
to be available for marketing, after meeting the requirements of 
Project Use and First Preference Customers, and any adjustments for 
maintenance, reserves,

[[Page 65976]]

transformation losses, and certain ancillary services.
    Billing Month: The month CVP Power Contractors will be billed for 
the Restoration Payments.
    Billing Year: The period, September through August, that represents 
the annual Restoration Fund billing cycle.
    Central Valley Project (CVP): The multipurpose Federal water and 
power 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 (CVPIA): Title 34 of Public Law 102-
575, 106 Stat. 4706, et seq. A legislative act, enacted on October 30, 
1992, that 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.
    Exchange Program: Established in the Federal Register for the 2004 
Power Marketing Plan and intended to allow customers to fully and 
efficiently use their power allocations.
    First Preference Customer: A customer wholly located in Trinity, 
Calaveras, or Tuolumne counties, California, as specified under the 
Trinity River Division Act (69 Stat. 719) and the New Melones 
provisions of the Flood Control Act of 1962 (76 Stat. 1173, 1191-1192).
    Fiscal Year (FY): The 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 1,000 
watts.
    kWh: Kilowatthour, the electrical unit of energy that equals the 
generation of 1,000 watts over 1 hour.
    Letter of Agreement: Letter of Agreement No. 93-SAO-10156, a 
written agreement between Reclamation and Western that establishes 
procedures to deposit the Restoration Payments collected from CVP Power 
Contractors into the Restoration Fund.
    Midyear Adjustment: The adjustment to the annual PRPO as determined 
by Reclamation on or about April 1 of each year.
    Power: Capacity and energy.
    Power Contractor: An entity purchasing power from Western for a 
period in excess of 1 year.
    Power Restoration Payment Obligation (PRPO): The portion of the 
Total Restoration Payment Obligation calculated and assigned annually 
to CVP Power Contractors by Reclamation.
    Project Use: The power used to operate CVP or Washoe Project 
facilities in accordance with authorized purposes and pursuant to 
Reclamation law.
    Reclamation: United States Department of Interior, Bureau of 
Reclamation.
    Restoration Fund: The CVP Restoration Fund, established by Section 
3407 of the CVPIA, into which revenues provided by the CVPIA are 
deposited, and from which funds are appropriated by the Secretary to 
carry out the habitat restoration, improvement, and acquisition 
provisions of the CVPIA.
    Restoration Fund Bill(s): The instrument prepared and issued 
monthly 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 Power Restoration Fund Payment Obligation: The total amount 
of payments collected from the CVP Water and Power Contractors 
calculated annually by Reclamation.
    Washoe Project: The Federal water project located in the Lahontan 
Basin in west-central Nevada and east-central California, as described 
in Western's final 2004 Power Marketing Plan for the Sierra Nevada 
Region.
    Western: United States Department of Energy, Western Area Power 
Administration.

Proposed Procedures

Determination of the Total Power Restoration Fund Payment Obligation

    Reclamation is responsible for assigning the PRPO for the CVP Power 
Contractors. On or about July 1 of each year, Reclamation will provide 
a letter to Western's Regional Manager of the Sierra Nevada Region with 
the determined PRPO amount and a detailed explanation of the 
computation for the upcoming FY. Upon receiving the letter from 
Reclamation, Western will notify each CVP Power Contractor of the Total 
Power Restoration Fund Payment Obligation and the monthly amounts to be 
collected from CVP Power Contractors.

Allocating the Power Restoration Payment Obligation (PRPO)

    Western will allocate the PRPO among CVP Power Contractors each FY. 
After notification by Reclamation, Western will calculate the annual 
obligation for each CVP Power Contractor. Western will base its 
calculation on the assigned Base Resource percentage for each CVP Power 
Contractor as detailed in the 2004 Power Marketing Plan. This annual 
obligation will be divided by the number of months in the FY; i.e., 
twelve, or in the case of FY 2005, the number of months remaining in 
the FY; i.e., nine, to determine the monthly obligation.
    Since the 2004 Power Marketing Plan does not begin until January 1, 
2005, and Restoration Fund collections for FY 2005 (October 1, 2004, 
through September 30, 2005) begin prior to this, FY 2005 will be a 
transition year for Restoration Fund collections from Power 
Contractors.
    Western will base Restoration Fund collections from Power 
Contractors for October through December 2004 upon the existing 
collection methodology articulated in the August 4, 1998, Federal 
Register. Western intends to begin collection under these new proposed 
procedures beginning with January 2005 collections. As a point of 
clarification, Western will bill the Power Contractors for the October 
2004 collection in their September 2004 bills based upon energy and 
capacity amounts for their June 2004 service month. A similar process 
will continue through the December 2004 collection.
    In December 2004, Western will total the Restoration Fund 
collections made by the Power Contractors from October and November 
2004, and the amounts payable for December 2004, and subtract this 
amount from the annual PRPO to calculate the balance to collect for the 
remaining 9 months (January through September) of the FY. Western will 
multiply this total by each Power Contractor's Base Resource 
percentage. This amount will then be divided by nine to determine each 
Power Contractor's monthly obligation.

Year-End Reconciliation Process

    Implementation of the Exchange Program may result in some Power 
Contractors receiving small amounts of energy in excess of their Base 
Resource in some months. Although recipients of this exchange energy 
will pay for this power, Restoration Fund obligations are based on the 
Power Contractors' percentage of the Base Resource excluding exchange 
energy. Alternatively, some Power Contractors that are not able to use 
all of their Base Resource and return it as exchange energy could be 
overpaying their Restoration Fund obligations since their actual power 
usage might be less than their Base Resource percentage.
    In an effort to rectify underpayment made by recipients of exchange 
energy and overpayments by other Power Contractors, Western will 
conduct a

[[Page 65977]]

reconciliation process, otherwise known as an annual true up, before 
preparing August Restoration Fund Bills. This reconciliation will 
require Western to identify energy amounts exchanged among individual 
Power Contractors on a monthly basis through July. This information 
will provide the basis for determining the amount of energy exchanged 
during the billing year.
    Western will add an additional charge or a balloon payment to the 
August Restoration Fund Bills for each Power Contractor who received 
exchange energy during the past year. Conversely, Western will also 
post an offsetting credit for those Power Contractors that provided 
exchange energy on their August bill.

Exclusion of First Preference Customers From the Power Restoration 
Payment Obligation

    Western has discretion how the PRPO is assessed to CVP Power 
Contractors. As a consequence, Western previously reviewed the CVPIA 
regarding the assessment of the Restoration Fund's costs, and similar 
costs under other related legislation affecting CVP Power Contractors. 
Western also reviewed Trinity County's contribution toward the 
restoration programs compared to contributions made by other CVP Power 
Contractors. Western concluded from this review that Trinity County 
may, at times, pay a greater share of the costs toward the restoration 
programs. As a means of mitigating the effects of these restoration 
programs on Trinity County, coupled with the socioeconomic effects the 
construction of the Trinity Dam has had on the community, Western 
intends to exclude Trinity County indefinitely from the PRPO.
    Similar consideration was given to the remaining three First 
Preference Customers: Tuolumne Public Power Agency (TPPA), Calaveras 
Public Power Agency (CPPA), and Sierra Conservation Center (SCC). 
Construction of the New Melones Dam on the Stanislaus River has 
contributed to improved fishery habitat and water quality in the 
Stanislaus and San Joaquin rivers, as well as the South Delta. Given 
these circumstances, Western intends to exclude TPPA, CPPA, and SCC 
indefinitely from the PRPO.

Collection of CVP Power Contractors Restoration Fund Payment

    Each CVP Power Contractor will receive a Restoration Fund Bill each 
month on or about the twenty-fifth (25th), but no later than the last 
day of the month. The Restoration Fund billing cycle for each FY will 
begin within 30 days following August 1 or the date written 
notification of the annual PRPO is received from Reclamation, whichever 
occurs later.

Payment Due Date

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

Late Payment Charges Assessed to Delinquent Restoration Payments

    Western will add a late payment charge of five hundredths percent 
(0.05%) of the principal amount unpaid for each day the Restoration 
Fund Bill payment is delinquent. Western will apply any payments 
received to the charges for the late payment assessed on the principal 
first and then to the payment of the principal.

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

    On or about the twenty-seventh (27th) calendar day of the month 
following each Billing Month, Western will transfer all of the 
Restoration Payments received, including late payment charges, to 
Reclamation for deposit into the Restoration Fund. The thirtieth (30th) 
of September of each FY is the last day Western will transfer 
Restoration Payments, including late payment charges, to Reclamation 
for that FY.

Adjustment to the PRPO

    Each FY's annual PRPO is subject to a Midyear Adjustment determined 
by Reclamation. The Midyear Adjustment occurs on or about April 1 of 
each FY, following Reclamation's annual determination of available CVP 
water supply for the year. Reclamation notifies Western, in writing, of 
the Midyear Adjustment. Upon receiving Reclamation's notification, 
Western will factor the Midyear Adjustment amount into the calculation 
for the remaining PRPO for the year. Western will then notify each CVP 
Power Contractor of the Midyear Adjustment to the annual PRPO.

Instruction for Mailing Public Comments

    The comment period will begin with the publication of this notice 
in the Federal Register and will end 60 days after publication. Western 
must receive all comments by the end of the comment period to assure 
consideration. Written comments can be mailed, faxed, or e-mailed to 
Mr. Thomas R. Boyko, Power Marketing Manager, Sierra Nevada Region, 
Western Area Power Administration, 114 Parkshore Drive, Folsom, CA 
95630-4710, fax (916) 985-1931, e-mail [email protected].

Availability of Information

    All studies, comments, letters, memorandums, or other documents 
made or kept by Western for developing the final procedures, will be 
made available for inspection and copying at Western's Sierra Nevada 
Regional Office, located at 114 Parkshore Drive, Folsom, CA 95630-4710.

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 final 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

    In compliance with 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 Integrated DOE NEPA Implementing Procedures (10 CFR part 1021), 
Western has determined that this action is categorically excluded from 
the preparation of an environmental assessment or an environmental 
impact statement.

Determination Under Executive Order 12866

    Western has an exemption from centralized regulatory review under 
Executive Order 12866. This notice is not required to be cleared by the 
Office of Management and Budget.

    Dated: October 9, 2002.
Michael S. Hacskaylo,
Administrator.
[FR Doc. 02-27442 Filed 10-28-02; 8:45 am]
BILLING CODE 6450-01-P