[Federal Register Volume 68, Number 231 (Tuesday, December 2, 2003)]
[Notices]
[Pages 67414-67417]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-29986]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Post-2005 Resource Pool, Pick-Sloan Missouri Basin Program--
Eastern Division

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of final procedures.

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SUMMARY: The Western Area Power Administration (Western), Upper Great 
Plains Customer Service Region, a Federal power marketing agency of the 
Department of Energy (DOE), hereby announces its Post-2005 Resource 
Pool Allocation Procedures. The Energy Planning and Management Program 
(Program) provides for project-specific resource pools and power 
allocations from these pools to new preference customers and/or other 
appropriate purposes as determined by Western. Western, under the 
Program, is finalizing procedures to administer a Federal power 
resource pool increment of up to 1 percent (approximately 20 megawatts) 
of the long-term marketable resource of the Pick-Sloan Missouri Basin 
Program--Eastern Division (P-SMBP--ED) that will become available 
January 1, 2006. Western proposed procedures in the Federal Register on 
March 4, 2003, and responses to public comments received pertaining to 
the proposed procedures are included in this notice. Western will 
publish a notice of proposed allocations in the Federal Register after 
the effective date of this notice.

DATES: The Post-2005 Resource Pool Allocation Procedures will become 
effective January 2, 2004.

ADDRESSES: Information regarding the Post-2005 Resource Pool Allocation 
Procedures, including comments, letters, and other supporting documents 
made or kept by Western for the purpose of developing the final 
procedures, are available for public inspection and copying at the 
Upper Great Plains Customer Service Region, Western Area Power 
Administration, located at 2900 4th Avenue North, P.O. Box 35800, 
Billings, MT 59107-5800. Public comments are available for viewing at 
http://www.wapa.gov/ugp/contracts/post2005/comments.htm.

SUPPLEMENTARY INFORMATION: On October 20, 1995, Western published the 
Final Program Rule (Final Rule) that became effective on November 20, 
1995. As described in 10 CFR 905, subpart C of the Final Rule provides 
for project-specific resource pools and power allocations from these 
pools to eligible new customers and/or for other

[[Page 67415]]

appropriate purposes as determined by Western. Under the Final Rule, 
resource pool increments shall be established by pro rata withdrawals, 
on 2 years' notice, from then-existing customers. Specifically, 10 CFR 
905.32 (b) provides:

    At two 5-year intervals after the effective date of the 
extension to existing customers, Western shall create a project-
specific resource pool increment of up to * * * 1 percent of the 
long-term marketable resource under contract at the time. The size 
of the additional resource pool increment shall be determined by 
Western based on consideration of the actual fair-share needs of 
eligible new customers and other appropriate purposes.

    Western held public information and comment forums on April 8-10, 
2003, to accept oral and written comments on the proposed procedures 
and call for applications. The formal comment period ended June 2, 
2003. The Post-2005 Resource Pool Allocation Procedures in this Federal 
Register notice explain in detail how Western intends to implement 
Subpart C-Power Marketing Initiative of the Energy Planning and 
Management Program Final Rule in the P-SMBP--ED.

Response to Comments Regarding Post-2005 Resource Pool Allocation 
Procedures

I. Comments and Responses

    Comment: Western received many comments supporting the general 
eligibility and allocation criteria, indicating that Western properly 
scoped the best use of the resource pool, and that allocations should 
be made to new preference entities and new Native American tribes.
    Response: Western appreciates the response with respect to the 
proposed general eligibility and allocation criteria, proposed use of 
the resource pool, and intent to make allocations available to new 
preference entities and new Native American tribes.
    Comment: Western received many comments that it should not allocate 
power for other appropriate purposes. Western also received a comment 
that any renewable resource program should be supported by Western's 
customers and that Western should not mandate a specific program for 
other appropriate purposes. One comment was specifically against 
allocating power to support renewable energy resources. Western 
received a comment that the preference entities purchasing Pick-Sloan 
power are in the best position to determine the best use of Pick-Sloan 
power in combination with their supplemental power supplier. Western 
received one comment that the consumer-owned electric utilities are 
best able to determine the needs and economics of developing renewable 
energy resources.
    Response: Western believes renewable resources can best be 
supported by allowing existing customers to retain the power that may 
be available after allocating to new customers. This will allow all 
preference entities across the marketing area to leverage this power 
and use existing allocations to support renewable resources. Several 
customers are already demonstrating support of renewable resources 
through their investments in various wind projects across the P-SMBP--
ED.
    Comment: Western received many comments that all new customers 
should be subject to the same contractual provisions as existing 
Western customers. Specifically, all contracts should contain the 
provision which prohibits the resale of Federal power. Western also 
received comments that all new customers should be subject to future 
withdrawal provisions in the same manner as existing customers.
    Response: Western agrees with this comment. All contracts with new 
customers will contain Western's existing general contract principles 
and will be subject to future resource pool withdrawals.
    Comment: Western received many comments suggesting that power 
allocations should not be used for developing ``cash registers'' to 
generate profits, which may or may not flow back to retail customers in 
the region.
    Response: Western agrees with this comment. It is contrary to 
Western's policy and undermines Reclamation Law to allow a customer to 
resell power at a profit to third parties.
    Comment: Western received many comments that the same procedures 
should be followed that were used in the Post-2000 Resource Pool for 
new Native American tribes.
    Response: Western agrees with this comment. Western intends to 
follow the framework of Post-2000 Resource Pool procedures for new 
Native American tribes as further clarified in this Federal Register 
notice.
    Comment: Western received many comments that the resource pool 
should not be used for existing beneficiaries, directly or indirectly. 
Western also received many comments that all Federal power benefits 
should be considered when determining new allocations.
    Response: The Proposed Post-2005 Allocation Procedures published in 
the Federal Register at 68 FR 10233 provide, in part, that ``Qualified 
applicants must not be currently receiving benefits, directly or 
indirectly, from a current P-SMBP--ED firm power allocation.'' Western 
agrees with this comment that all Federal benefits received by an 
entity in the Upper Great Plains Region (UGPR) should be considered 
when making new allocations. The intent of the new resource pool was to 
allocate to new customers who are not currently receiving the benefit 
of Federal power unless otherwise provided for in the general 
eligibility criteria listed below. In the past, other regions of 
Western have allowed preference entities to receive power from more 
than one project when marketing areas overlap. Given the new customer 
load that exists in portions of the UGPR service territory, and 
consistent with the intent of the Program, the UGPR is not willing to 
establish this practice. An existing customer will not be eligible to 
receive power from a resource pool unless Western provides otherwise on 
a project-specific basis. In these final procedures, Western will 
change the general eligibility criteria to state: ``Qualified 
applicants must not be currently receiving benefits, directly or 
indirectly, from a current P-SMBP--ED allocation or other firm Federal 
power commitment. Qualified Native American applicants, who did not 
receive an allocation from the Post-2000 Resource Pool, are not subject 
to this requirement.''
    Comment: Western received comment that allocations should be used 
for end users. Western also received one comment suggesting that full 
requirements should be offered to new preference entities, if 
available.
    Response: Western plans to make allocations from the up to 1 
percent resource pool to qualified applicants based upon the Post-1985 
Marketing Plan Criteria and the Program Criteria, which do not allow 
for Western to allocate to customers for full requirements.
    Comment: Western received comments that anything unallocated should 
go back to the existing customers following the contract provisions on 
a pro rata share.
    Response: Western agrees with this comment. 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 by applying the 
extension formula in the contract. In these final procedures, Western 
will clarify the general allocation criteria to state: ``The resource 
pool will be dissolved subsequent to the closing date of the last

[[Page 67416]]

qualified applicant to execute their respective firm power contract. 
Firm power not under contract will be used in accordance with the 
Program.''
    Comment: Western received a comment that did not support the up to 
1 percent withdrawal.
    Response: Western will withdraw up to 1 percent as determined in 
Subpart C, Power Marketing Initiative, 10 CFR 905.32(e)(1).
    Comment: Western received a comment supporting increasing 
allocations awarded to the Lower Brule Sioux and Flandreau Santee Sioux 
tribes in the Post-2000 Resource Pool Allocation Process due to 
omissions in applications for power.
    Response: If Western were to entertain requests for increases or 
adjustments to allocations, all customers would need to be afforded the 
opportunity to submit new applications. It is likely Western would 
receive significant modification requests. These would be extremely 
difficult to substantiate and likely not be supportable with the 
limited amount of power available from this resource pool. Therefore, 
Western will not support additional allocations for the Lower Brule 
Sioux and Flandreau Santee Sioux tribes.
    Comment: Western received one comment that existing statutory 
obligations were not followed and that Western violated its trust 
responsibilities and refused to consider securing additional power for 
the Lower Brule Sioux and Flandreau Santee Sioux tribes.
    Response: Under its statutory obligations, Western will allocate 
power to new customers that meet preference status. Western has 
discretion as defined by Reclamation Law to determine the eligibility 
of Indian tribes and other entities entitled to preference in 
allocating Federal power.
    Comment: Western received one comment that suggests Western has no 
intention to follow criteria established in the sale of Federal 
hydropower.
    Response: Within its statutory guidelines, Western has wide 
discretion as to whom and on what terms it will contract for the sale 
of Federal power. Power must be sold to preference entities in such a 
manner as to encourage the most widespread use thereof at the lowest 
possible rates consistent with sound business principles. Western will 
market this resource pool consistent with Reclamation Law and the 
procedures outlined in this Federal Register notice.
    Comment: Western received one comment that suggested it is unlawful 
to adjust allocation guidelines for discrimination purposes. The 
statement ``Native American tribes are not subject to this 
requirement'' is discriminatory.
    Response: Western will make Federal power available to preference 
entities that are public bodies and nonprofit entities entitled to 
priority in the purchase of Federal power under Reclamation Law. The 
Program changed Western's policy such that the Program allowed Western 
to allocate to Native American tribes. Western's change in policy is in 
keeping with the spirit of DOE's Indian policy and recognizes the 
special and unique relationship between the United States and the 
tribal governments.
    Comment: Western received a comment that to maximize the political 
benefits they would like to see as many new retail customers as 
possible.
    Response: It is not Western's intent to try to gain political 
benefits with this resource pool. It is Western's policy to promote 
widespread use of its hydropower resources. Western will market 
hydroelectric power on a wholesale basis to preference entities who 
qualify under the Post-2005 Resource Pool Allocation Process.

Final Post-2005 Resource Pool Allocation Procedures

I. Amount of Pool Resources

    Western will allocate up to 1 percent (approximately 20 megawatts) 
of the P-SMBP--ED long-term firm hydroelectric resource available as of 
January 1, 2006, as firm power to eligible new preference customers. 
Firm power means capacity and associated energy allocated by Western 
and subject to the terms and conditions specified in the Western 
electric service contract.

II. General Eligibility Criteria

    Western will apply the following general eligibility criteria to 
applicants seeking an allocation of firm power under the Post-2005 
Resource Pool Allocation Procedures.
    A. All qualified applicants must be preference entities as defined 
by section 9(c) of the Reclamation Project Act of 1939, 43 U.S.C. 
485h(c), as amended and supplemented.
    B. All qualified applicants must be located within the currently 
established P-SMBP--ED marketing area.
    C. All qualified applicants must not be currently receiving 
benefits, directly or indirectly, from a current P-SMBP--ED allocation 
or other firm Federal power commitment. Qualified Native American 
applicants, who did not receive an allocation from the Post-2000 
Resource Pool, are not subject to this requirement.
    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 utility applicants that desire to purchase power from 
Western for resale to consumers, including cooperatives, 
municipalities, public utility districts, and public power districts 
must have met utility status by January 1, 2003. Utility status means 
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 a Native American 
tribe 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-2005 
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 
upon executing an electric service contract between Western and the 
allottee, and satisfying all conditions in that contract.
    C. Firm power allocated under these procedures will be available 
only to new preference customers in the existing P-SMBP--ED marketing 
area. The marketing area of the P-SMBP--ED is Montana east of the 
Continental Divide, all of North Dakota and South Dakota, Nebraska east 
of the 101 [deg] meridian, Iowa west of the 94\1/2\ [deg] meridian, and 
Minnesota west of a line on the 94\1/2\ [deg] meridian from the 
southern boundary of the state to the 46[deg] parallel and then 
northwesterly to the northern boundary of the state at the 96\1/2\ 
[deg] meridian.
    D. Allocations made to Native American tribes will be based on the 
actual load experienced in calendar year 2002. Western has the right to 
use estimated load values for calendar year 2002 should actual load 
data not be available. Western will adjust inconsistent estimates 
during the allocation process.
    E. Allocations made to qualified utility and non-utility applicants 
will be based on actual loads in calendar year 2002. Western will apply 
the Post-1985 Marketing Plan and the Program criteria to these loads. 
Western will carry forward key principles and criteria established in 
the Post-2000 Resource Pool, except as modified here.

[[Page 67417]]

    F. Energy provided with firm power will be based upon the 
customer's monthly system load pattern.
    G. Any electric service contract offered to a new customer will be 
executed by the customer within 6 months of a contract offer by 
Western, unless otherwise agreed to in writing by Western.
    H. The resource pool will be dissolved subsequent to the closing 
date of the last qualified applicant to execute their respective firm 
power contract. Firm power not under contract will be used in 
accordance with the Program.
    I. The minimum allocation will be 100 kilowatts (kW).
    J. The maximum allocation for qualified utility and non-utility 
applicants will be 5,000 kW.
    K. Contract rates of delivery will be subject to adjustment in the 
future as provided for in the Program.
    L. If unanticipated obstacles arise to delivering hydropower 
benefits to Native American tribes, Western retains the right to 
provide the economic benefits of its resources directly to these 
tribes.

IV. General Contract Principles

    Western will apply the following general contract principles to all 
applicants receiving an allocation of firm power under the Post-2005 
Resource Pool Allocation Procedures.
    A. Western will reserve the right to reduce a customer's summer 
season contract rate of delivery by up to 5 percent for new project 
pumping requirements, by giving a minimum of 5 years' written notice in 
advance of such action.
    B. Western, at its discretion and sole determination, reserves the 
right to adjust the contract rate of delivery on 5 years' written 
notice in response to changes in hydrology and river operations. Any 
such adjustments will only take place after a public process by 
Western.
    C. Each allottee is ultimately responsible for obtaining its own 
third-party delivery arrangements, if necessary. Western may assist 
allottees in obtaining third-party transmission arrangements for 
delivering firm power allocated under these procedures to new 
customers.
    D. Contracts entered into under the Post-2005 Resource Pool 
Allocation Procedures provide for Western to furnish firm electric 
service effective from January 1, 2006, through December 31, 2020.
    E. Contracts entered into as a result of these procedures will 
incorporate Western's standard provisions for power sales contracts, 
integrated resource planning and the general power contract provisions.
    F. Contracts entered into will include provisions for a reduction 
of up to 1 percent of the current contracted rate of delivery effective 
January 1, 2011, in accordance with the Program.

V. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act, 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 and there is a legal requirement 
to issue a general notice of proposed rulemaking. Western has 
determined this action does not require a regulatory flexibility 
analysis since it is a rulemaking about rates or services for public 
property.

VI. Small Business Regulatory Enforcement Fairness Act

    Western determined this rule is exempt from congressional 
notification requirements under 5 U.S.C. 801 because the action is a 
rulemaking of particular applicability relating to rates or services 
and involves matters of procedure.

VII. Determination Under Executive Order 12866

    DOE has determined 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 Order 12866; so, this notice requires no clearance by 
the Office of Management and Budget.

    Dated: November 17, 2003.
Michael S. Hacskaylo,
Administrator.
[FR Doc. 03-29986 Filed 12-1-03; 8:45 am]
BILLING CODE 6450-01-P