[Federal Register Volume 69, Number 98 (Thursday, May 20, 2004)]
[Notices]
[Pages 29135-29136]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-11413]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Salt Lake City Area Integrated Projects

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of Determination of the Post-2004 Marketable Resources.

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SUMMARY: The Western Area Power Administration (Western), a Federal 
power marketing agency of the Department of Energy (DOE), announces its 
determination of the Post-2004 Marketable Resources (which consists of 
both capacity and energy) from the Salt Lake City Area Integrated 
Projects (SLCA/IP) developed under the requirements of Subpart C--Power 
Marketing Initiative of the Energy Planning and Management Program 
(Program) Final Rule. Western has evaluated hydrologic studies that 
indicate, most importantly, the need to reduce the energy component of 
the Marketable Resources for the 20 years of the contract period. In 
fiscal year (FY) 2005 (beginning October 1, 2004), the energy component 
of the Marketable Resources begins at its lowest level and then 
gradually increases over the next 5 years. It reaches a level in the 
fifth year that remains constant through the remainder of the 
contracting period, subject to change only under the terms of the 
contract. Firm electric service contracts (Contracts) between Western 
and its existing and new customers will permit delivery to begin with 
the October 2004 billing period and continue through the September 2024 
billing period (Contract Period).

DATES: The Determination of Marketable Resources will become effective 
June 21, 2004 and will be available for contracting October 1, 2004.

ADDRESSES: All documents developed or retained by Western in developing 
its determination of Marketable Resources are available for inspection 
and copying at the Colorado River Storage Project Management Center, 
150 East Social Hall Avenue, Suite 300, Salt Lake City, UT 84111.

SUPPLEMENTARY INFORMATION: Western published its Final Post-2004 
Resource Pool Allocation Procedures (Procedures) in the Federal 
Register (64 FR 48825, September 8, 1999) to implement Subpart C--Power 
Marketing Initiative of the Program's Final Rule (10 CFR 905), 
published in the Federal Register (60 FR 54151, October 20, 1995). The 
Program, developed in part to implement section 114 of the Energy 
Policy Act of 1992, became effective 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.
    Following publication of the Procedures, Western executed 
amendments to all Contracts with existing firm electric service 
customers. These amendments specified that each existing customer would 
be provided its proportional share of 93 percent of the Marketable 
Resources for the Contract Period. The amendments also provided that 
prior to October 1, 2004, Western would solely determine the quantities 
of Marketable Resources (both capacity and energy), which would be 
available for the Contract Period. Western is announcing its 
determination of this marketable capacity and energy with this notice.
    The remaining 7 percent of the Marketable Resources available for 
the Contracting Period, not extended on a proportional share basis to 
Western's existing customers, was used in accordance with the 
Procedures to establish a project-specific power resource pool that 
allocated power to new eligible customers.
    The deadline for applications from new eligible customers was June 
8, 2000, and Western received 66 applications. Following evaluation, 
proposed allocations for new customers were published in the Federal 
Register (66 FR 31910, June 13, 2001), and final allocations were 
published in the Federal Register (67 FR 5113, February 4, 2002). 
Adjusted final allocations were published in the Federal Register (67 
FR 49019, July 29, 2002) due to minor inconsistencies in the treatment 
of the allocations for three applicants.
    To the extent this Notice of Determination of Marketable Resources 
establishes the quantities of marketable capacity and energy available 
to all SLCA/IP customers as of October 1, 2004, the determination will 
also impact the 7 percent of capacity and energy to be proportionally 
allocated to the new customers.
    In making its Determination of Marketable Resources, Western has 
consulted with its existing and new customers in an extensive process 
through meetings and in presentations to individual customers and 
customer groups. Western solicited comments about the proposal by 
providing each existing and new customer with written draft proposals. 
After Western carefully considered the comments received, a final 
proposal was developed and provided to the new and existing customers 
prior to the publication of this Federal Register notice. Western has 
also consulted with the Bureau of Reclamation (Reclamation) in making 
this determination.

Determination of Marketable Resources

A. Marketable Energy

    Western has made the determination to reduce the amount of SLCA/IP 
marketable energy that will be available beginning October 1, 2004. 
Western believes this decision minimizes the financial impacts of 
drought conditions and will sustain the financial health of the SLCA/
IP.
    The reason for lowering the amount of marketable energy is the 
significant reduction in forecasted electrical generation from the 
SLCA/IP during the 20-year contract period. Drought conditions in the 
Upper Colorado River Basin during the last 5 years have significantly 
lowered reservoir storage levels and reduced water releases through the 
SLCA/IP power plants. These dry conditions resulted in

[[Page 29136]]

Western purchasing extraordinary quantities of energy to firm its 
contractual energy commitments. Western developed forecasts of SLCA/IP 
generation for the 20-year contract period based on projections of 
water releases through the SLCA/IP facilities. Because of the lowered 
reservoir levels, the near-term forecasts indicate the most severe 
reductions, and lower generation amounts are also forecasted for the 
entire 20-year contract period.
    Western's determination of the marketable energy is calculated from 
Reclamation's hydrological projections. The table shows the SLCA/IP 
marketable energy available in each fiscal year. Beginning in FY 2005, 
the amount of marketable energy available will increase each year until 
the marketable energy level plateaus in FY 2009.

                    SLCA/IP Marketable Energy Levels
             [Excludes Reclamation Project Use Reservations]
------------------------------------------------------------------------
                                                              Marketable
                                                                annual
                        Fiscal year                             energy
                                                                (GWh)
------------------------------------------------------------------------
FY 2005 (10/1/04-9/30/05)..................................      4,557.5
FY 2006 (10/1/05-9/30/06)..................................      4,655.3
FY 2007 (10/1/06-9/30/07)..................................      4,753.1
FY 2008 (10/1/07-9/30/08)..................................      4,851.0
FY 2009-FY 2024 (10/1/08-9/30/24)..........................      4,948.8
------------------------------------------------------------------------

    Western will support these yearly energy levels with any necessary 
firming purchases and establishing an appropriate firm power rate. Any 
future changes, if necessary, in levels of marketable energy will be 
made following the contract notification provisions.
    Western recognizes the reduction in the amount of marketable energy 
may pose hardships for some customers. Western believes the reduction 
in marketable resources can be improved from time to time by providing 
Available Hydro Power (AHP) under the contract. Should hydrologic 
projections periodically improve to the extent energy is available from 
the SLCA/IP power plants in excess of marketable energy, Western will 
make AHP energy available to its customers.

B. Marketable Capacity

    Western has decided to maintain SLCA/IP marketable capacity at 
present levels for the entire Contract Period. As previously published 
in the Federal Register, existing customers will be extended 93 percent 
of their current capacity allocations. New customers will receive the 
capacity allocations as published in the July 29, 2002, Federal 
Register (67 FR 49019).

Effect on Power Allocations

    As detailed above, the determination of Marketable Resources will 
result in a reduction of previously published energy allocations to 
both existing and new customers. The determination will not result in a 
reduction of previously published capacity allocations. Allocations for 
existing customers were published April 2, 1987 (52 FR 10620), and 
revised August 24, 1989 (54 FR 35234). Some allocations may now differ 
due to contractual changes that have occured since the original 
publication. Allocations for new customers were published on July 29, 
2002 (67 FR 49019). The new, reduced energy levels will be distributed 
to all firm electric service customers on a proportional basis and will 
be reflected in a new, revised Exhibit A for each customer. Western 
will be submitting a new, revised Exhibit A to each customer after the 
effective date of this notice.

Regulatory Procedure Requirements

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 and if there is a legal 
requirement to issue a general notice of proposed rulemaking. This 
action does not require a regulatory flexibility analysis since it is a 
rulemaking of particular applicability involving rates or services 
applicable to public property.

Environmental Compliance

    Western completed an ``Energy Planning and Management Program 
Environmental Impact Statement'' (EIS) on the Program in 1995, 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 1500-1508); and the DOE NEPA Implementing 
Procedures and Guidelines (10 CFR 1021). The Record of Decision was 
published in the Federal Register (60 FR 53181, October 12, 1995). 
Western's NEPA review assured all environmental effects related to 
these procedures had been analyzed. The application of the Program's 
Power Marketing Initiative to the SLCA/IP was specifically addressed in 
another EIS, the ``Salt Lake City Area Integrated Projects Electric 
Power Marketing Final Environmental Impact Statement,'' published in 
January 1996. The Record of Decision for this EIS was published in the 
Federal Register on November 1, 1996 (61 FR 56534). The Power Marketing 
Initiative was applied under the provisions of the approved Program, 
and public notice of the specific terms was published in the Federal 
Register on June 25, 1999 (64 FR 34414). Final allocations from the 
SLCA/IP resource pool were also published in the Federal Register (67 
FR 49019, July 29, 2002). The two referenced EISs and associated 
Records of Decision provide adequate NEPA review for the determination 
of SLCA/IP marketable resources addressed in this notice.

Determination Under Executive Order 12866

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

Small Business Regulatory Enforcement Fairness Act

    Western has determined that 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.

    Dated: May 10, 2004.
Michael S. Hacskaylo,
Administrator.
[FR Doc. 04-11413 Filed 5-19-04; 8:45 am]
BILLING CODE 6450-01-P