[Federal Register Volume 74, Number 92 (Thursday, May 14, 2009)]
[Notices]
[Pages 22732-22738]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-11299]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Transmission Infrastructure Program

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of Program.

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SUMMARY: The Western Area Power Administration (Western) hereby 
announces its Transmission Infrastructure Program (Program). The 
Program implements section 402 of the American Recovery and 
Reinvestment Act of 2009 (Recovery Act) for the purpose of 
constructing, financing, facilitating, planning, operating, 
maintaining, or studying construction of new or upgraded electric power 
transmission lines and related facilities with at least one terminus 
within the area served by Western, and for delivering or facilitating 
the delivery of power generated by renewable energy resources 
constructed or reasonably expected to be constructed after the date 
this section was enacted. The Program will use authority granted under 
this section to borrow funds from the U.S. Treasury Department to 
accomplish these purposes.

DATES: The Program is effective upon May 14, 2009.

FOR FURTHER INFORMATION CONTACT: Please contact Transmission 
Infrastructure Program, Western Area Power Administration, P.O. Box 
281213, Lakewood, CO 80228-8213, e-mail [email protected]. The Program 
is also available on Western's Web site at http://www.wapa.gov/recovery.

SUPPLEMENTARY INFORMATION: 

Background

    Western markets and transmits wholesale hydroelectric power 
generated at Federal dams across the western United States. This power 
is sold to customers in accordance with Federal law. Western's 
transmission system was developed to deliver the Federal hydro-power to 
those customers. Western owns and operates an integrated 17,000 
circuit-mile, high-voltage transmission system and markets power across 
15 western states and a 1.3 million square-mile service area. Western's 
service area encompasses all of the following states: Arizona, 
California, Colorado, Nebraska, Nevada, New Mexico, North Dakota, South 
Dakota, Utah, and Wyoming; as well as parts of Iowa, Kansas, Montana, 
Minnesota, and Texas. Today, Western makes capacity on its transmission 
system excess to that needed to serve its preference customers 
available through the policies and procedures outlined in its Open 
Access Transmission Tariff (OATT). Western offers nondiscriminatory 
access to its transmission system, including requests to interconnect 
new generating resources to that transmission system under its OATT on 
file with the Federal Energy Regulatory Commission (FERC).
    Western sought public comment on the proposed principles, policies 
and practices it will use to implement its new Recovery Act authority 
in a 30-day consultation and comment period as announced in a March 4, 
2009, Federal Register notice (74 FR 9391). A formal public comment 
forum was held in Lakewood, Colorado, on March 23, 2009, and a 
transcript and meeting video were made available through Western's 
external Web site at http://www.wapa.gov/recovery. Western received 
comments from 40 customers and other stakeholders. All comments were 
reviewed and, where appropriate, incorporated into the Program. The 
Discussion of Comments section provides Western's response to the 
comments. Where possible, comments and related responses were 
consolidated. In defining the proposed Program, Western identified a 
series of principles to provide overarching guidance. Western further 
identified a series of policies and practices it will follow in 
implementing the Program. Those principles, policies and practices are 
set forth in this notice.
    With this notice, Western is making its Program effective upon 
publication in the Federal Register. The procedures and statements of 
policies set forth in Western's Program are consistent with the 
Recovery Act and other statutes, and the Program does not include 
additional substantive requirements. Therefore, Western's program is 
not subject to the Administrative Procedure Act's delayed effective 
date provision (5 U.S.C. 553(d)).

Discussion of Comments

    Western received 40 submittals related to its proposed Program. To

[[Page 22733]]

facilitate presentation and discussion of the comments, Western 
categorized the comments into four general categories: (1) Comments on 
set-up, operation, and management of the Program; (2) comments on 
project identification, evaluation, selection, and certification 
criteria; (3) comments on project funding, financing, and repayment 
criteria; and (4) other comments.

1. Comments on Set-Up, Operation, and Management of the Program

a. Time and Information Comments
    Summary Comment: Western received numerous comments regarding 
extending the comment period, sequencing of the Request for Information 
and the Program comment periods, and overall need to spend more time 
developing Program procedures and criteria.
    Response: The comment period will not be extended. The purpose of 
the Recovery Act, which authorized this Program, is to stimulate job 
creation in the near term.
    The Program also supports the Obama Administration's goal of rapid 
development of infrastructure to deliver renewable resources. 
Therefore, Western is moving expeditiously, while following the intent 
and purpose of the law and balancing the need of stakeholders for 
substantive and procedural input. Western will implement the Program as 
defined in this notice. However, Western is committed to continually 
evaluating the Program and is open to the possibility of making further 
changes as appropriate through open and transparent public processes.
b. Process Comments
    Summary Comment: Western received numerous comments on the need for 
an open, transparent, fair, and meaningful process to allow 
stakeholders to assist Western in identifying, prioritizing, selecting, 
and funding projects, either for further study or for implementation, 
and to determine these projects' repayment methodology. Several 
commenters asked for more public meetings. Commenters also expressed 
interest in serving on an advisory board to assist Western in managing 
the Program.
    Response: Western has a long history of partnering with other 
entities in developing new additions to the transmission system, and 
will continue this business model in implementing the Program. In fact, 
Western is adopting a principle of ensuring the Program provides an 
opportunity, where appropriate, for the participation of other entities 
in constructing, financing, owning, facilitating, planning, operating, 
maintaining, or studying construction of new or upgraded electric power 
transmission lines. The Federal Register notices titled ``Notice of 
Availability of Request for Interest'' and ``Notice of Proposed Program 
and Request for Public Comments'' published on March 4, 2009, provided 
interested parties opportunities to suggest projects for Western's 
consideration and to comment on the practices and policies of the 
Program. Where appropriate, Western intends to open projects to 
additional participation so other entities can contribute meaningfully.
    Public meetings, and opportunities for public comment, will be 
scheduled for specific project proposals during each project's National 
Environmental Policy Act compliance process. Commenters' interest in 
serving on a Program advisory board is noted; however, Western believes 
its long history of ad hoc collaborative engagement with stakeholders 
will adequately meet the needs of the Program.
c. Laws/Rules Comments
    Summary Comment: Numerous comments were received asking for the 
Program to not impact the statutory obligations of Western. Additional 
comments requested that the Program comply with all applicable Federal 
laws, regulations, policies, and state laws.
    Response: It is Western's intention to fully comply with all of its 
statutory obligations, including its Reclamation Law obligations and 
those contained in the new Recovery Act statute. In particular, 
Western's Program activities will be implemented to assure compliance 
with all applicable National Environmental Policy Act requirements.
    Summary Comment: Several commenters asked that all transmission 
capacity excess to Western's needs be posted and made available on a 
non-discriminatory basis.
    Response: Available transfer capability surplus to Western's needs 
will continue to be made available in a nondiscriminatory manner 
consistent with FERC open access transmission rules, Federal statute, 
and Western policies.
    Summary Comment: Some commenters recommended that Western should 
give priority to projects already in its interconnection and/or 
transmission queues when conflicts exist between the Program's projects 
and projects in the queues. Other commenters suggested that the 
Program's projects be handled separately from projects in Western's 
queues.
    Response: Where possible, Western will pursue projects that 
simultaneously satisfy queue requests and meet the requirements of the 
Program. However, where that is not possible, Western will give 
priority to projects developed under section 402 of the Recovery Act.

2. Comments on Project Identification, Evaluation, Selection, and 
Certification Criteria.

a. Renewable Comments
    Summary Comment: Western received comments indicating that the 
Program should assist in bringing renewable energy sources on line and 
delivering those resources to market, and that encouraged Western to 
consider a diverse range of renewable generation resources.
    Response: Western agrees with these comments. As the statute 
indicates, transmission projects that Western participates in under the 
Program will facilitate the development of renewable energy resources, 
and the delivery of those resources to market. Western is not focused 
on any particular source of renewable energy, and will consider 
transmission projects that meet the Program's criteria from all sources 
of renewable energy generation. By statute, these renewable energy 
resources must be constructed or reasonably expected to be constructed 
after the statute's enactment date.
    Summary Comment: Some commenters asked that Western remain flexible 
and willing to consider the development of new products and services to 
assist the integration of renewables into the existing transmission 
system.
    Response: Western will remain open to the development of new 
products and services that assist in integrating renewables into the 
existing transmission system that do not conflict with statutory 
requirements.
b. Public Interest Comments
    Summary Comment: Western received comments indicating that the 
Program, and the projects selected by the Program, should serve the 
public interest, and asked for clarification on how Western will 
determine what is in the public interest.
    Response: Western agrees the Program and the projects selected 
under the Program should serve the public interest. Although the 
Recovery Act specifically does not define what constitutes ``public 
interest'', when selecting projects, Western believes that it has 
discretion to balance the merits of

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each proposed project on a case-by-case basis and on the circumstances 
of each situation.
    Summary Comment: Some commenters stated that adding transmission 
lines does not serve the public interest.
    Response: Section 402 of the Recovery Act clearly indicates that 
Congress desires Western to build transmission projects to facilitate 
the delivery of renewable energy. Western intends to carry out its 
Program to fulfill this Congressional direction.
c. System Impact Comments
    Summary Comment: Western received numerous comments that it should 
develop evaluation criteria so that projects selected for 
implementation will not result in the creation of any negative 
reliability, operational, or financial impacts to neighboring 
transmission systems, but also protect against the diminution of any 
rights and obligations of existing transmission users.
    Response: Additions, modifications, and/or upgrades to the nation's 
electric transmission infrastructure will be coordinated so that the 
interests of the affected parties are represented. As proposed projects 
are considered for possible implementation under the Program, Western 
intends to seek input from the appropriate stakeholders, including 
regional planning forums and/or processes on a case-by-case basis, to 
ensure that the relevant interests and issues are identified, 
represented, and appropriately considered.
    Summary Comment: Western received a comment that it should select 
projects for implementation that enhance reliability.
    Response: Western will not limit itself to just projects that 
enhance reliability. The Recovery Act allows Western to build projects 
as long as they will not adversely impact system reliability or 
operations. Whenever additions, modifications, and/or upgrades to the 
nation's electric transmission infrastructure are undertaken, they are 
coordinated through regional planning forums and/or processes where all 
stakeholders have the opportunity to have their issues and concerns 
raised and discussed. Western intends to seek input from the 
appropriate stakeholders, including regional planning forums and/or 
processes on a case-by-case basis, to ensure that the relevant interest 
and issues are identified, represented, and appropriately considered as 
projects are considered for possible implementation.
d. Project Priority Comments
    Summary Comment: Western received several comments indicating that, 
when considering projects for implementation, Western should give a 
higher priority to those projects that upgrade and modernize the 
existing transmission infrastructure to increase its capacity for 
integrating more renewables into the grid; promote more public/private 
partnerships; are further along in their developmental prerequisites; 
confront less financial, technological, and regulatory hurdles; or can 
be quickly constructed.
    Response: Western always appreciates suggestions from stakeholders 
which enhance the effective and efficient management of its programs. 
The Program anticipates a combination of new transmission construction 
and upgrades to existing infrastructure, and will use public/private 
partnerships to the extent practicable in order to meet the objectives 
of the Recovery Act to create jobs in the near term and rapidly develop 
infrastructure to deliver renewable resources.
e. Criteria Comments
    Summary Comments: Western received numerous comments regarding 
project evaluation criteria. Suggestions included the development of a 
comprehensive list to include consideration of the creditworthiness of 
any potential partner; not funding projects that are fundamentally 
unsound; job creation and the long-term economic benefits of any 
project; and other project eligibility criteria.
    Response: Western's expectation is that unsound projects will be 
screened out through a rigorous evaluation process. Prior to committing 
borrowed funds to any selected project, as mandated, the Administrator 
must certify that the project is in the public interest; it will not 
adversely impact system reliability or operations, or other statutory 
obligations; and it is reasonable to expect that revenue from the 
project will be adequate to repay the project loan, expenses for 
ancillary services and the ongoing operation and maintenance costs of 
the project. In addition to these criteria, Western will also assess 
the technical merits and feasibility of a project; its ability to 
deliver power generated by renewable resources; the financial stability 
and capability of all potential project partners; project readiness 
(e.g., permitting, local, state and/or regional approvals); and the 
economic developmental benefits of the project. The Program's project 
evaluation criteria will be applied to provide the basis for the 
Administrator's certification.
    Summary Comment: Western received several comments requesting that 
it allow participation in transmission projects through long-term 
contracts, including an open season period, e.g., Bonneville Power 
Administration's (BPA) open season.
    Response: Western is open to considering the concept of allowing 
participation in transmission projects through long-term contracts, 
including the use of an open season period to select counterparties to 
those contracts, similar to that used by BPA.
    Summary Comment: Western received a comment that it should not 
consider refinancing as a part of the original feasibility analyses of 
the new projects.
    Response: The Recovery Act authorizes Western to refinance loans 
taken pursuant to section 402. Refinancing would not be part of the 
original feasibility analyses of new projects, but will be considered 
during the useful life of projects and will be used when it makes good 
business sense.
f. Coordination Comments
    Summary Comment: Western received numerous comments advising it to 
take advantage of studies and work (previous, current, future) on 
potential transmission projects, coordinate the Program's projects 
through regional planning forums and processes, possibly lead regional 
planning efforts, and consider coordination of regional grid operations 
to integrate renewable resources.
    Response: Western is involved in many regional and subregional 
transmission planning groups, collaborating with transmission entities 
on proposed transmission additions to coordinate and efficiently plan 
for transmission line development. For example, Western is a member of 
the WestConnect transmission planning group, which provides an annual 
10-year regional transmission plan, coordinating all transmission plans 
across the WestConnect planning area. Western also participates in the 
Mid-Continent Area Power Pool (MAPP) Regional Plan that integrates the 
transmission plans developed by individual MAPP members through the 
MAPP's Transmission Planning Subcommittee and by sub-regional planning 
groups, in order to meet the transmission needs in the MAPP Region of 
Members and interested parties. Western will continue to be involved in 
these and other transmission planning groups to coordinate projects, 
and will

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use existing and future studies and analyses to enhance its decision 
process.
g. Ancillary Services Comments
    Summary Comment: Western received several comments related to the 
provision of ancillary services. Some commenters felt Western should 
use Federal hydro-power resources to provide ancillary services to the 
Program projects; others were equally opposed. Other commenters 
suggested that any customers using the Program projects should be fully 
responsible for any ancillary services required in conjunction with 
that transmission service. Also, some commenters were unsure of what 
Principle 5 meant when Western stated that each Program project ``[h]as 
the necessary capabilities to provide generation related ancillary 
services.'' (Emphasis added.)
    Response: Nothing in the provisions of the Recovery Act ``confers 
on the Administrator any additional authority or obligation to provide 
ancillary services to users of transmission facilities developed under 
this section.'' Under normal industry operation procedures, it is the 
responsibility of the recipient of the transmission service to 
undertake the necessary arrangements to secure the provisioning of the 
required ancillary services. Under the Recovery Act, and as part of the 
Administrator's certification responsibilities, the Administrator must 
also ensure a proposed new Program project does not conflict with his 
responsibilities to existing transmission and preference power 
customers of the Federal power system.
    In order to clarify any misunderstanding that stakeholders may 
have, Western has changed Principle 5 to use the words ``obtain and 
deliver'' rather than ``provide'' to clarify that a Program project 
must have the ability to obtain and deliver ancillary services.

3. Comments on Project Funding, Financing, and Repayment Criteria

a. Use of Funds Comments
    Summary Comment: Several commenters requested that Western be 
flexible and open to alternative financing options to leverage its 
borrowing authority to gain the most benefit.
    Response: Western is open to considering alternative financing 
options on a case-by-case basis in order to maximize utilization of its 
new borrowing authority.
    Summary Comment: Western received several comments regarding the 
funding of studies and environmental analyses, including setting the 
criteria for the repayment of those costs when a project does not get 
completed.
    Response: Western welcomes proposals from any entity who may seek 
funding through Western to undertake the necessary planning and 
environmental studies to determine the feasibility of a project. 
However, in order to assure the public that its funds are being used 
prudently, Western will evaluate the probability of each proposal 
leading to a successful outcome on a case-by-case basis before making 
any commitment to advance funds. Funds expended to study projects that 
are not constructed shall be handled in accordance with provisions of 
the Recovery Act.
    Summary Comment: Western received some comments regarding the need 
to set the terms and conditions of funds borrowed in conjunction with 
the selection of the projects to be able to fully analyze the repayment 
ability of the project.
    Response: Western has executed a Memorandum of Understanding with 
the U.S. Treasury Department that establishes the terms and conditions 
under which Western can borrow funds. Thus, Western will have access to 
adequate financing information when analyzing the repayment terms of 
each Program project.
b. Recovery of Costs Comments
    Summary Comment: Western received numerous comments that selected 
projects must generate sufficient revenues to assure repayment of its 
costs, as required by the Recovery Act, including the suggestion of a 
policy that project beneficiaries pay for all project costs.
    Response: Western plans to develop a repayment program that 
complies with the Recovery Act. Western's Administrator stated in his 
testimony before the Subcommittee on Water and Power, Committee on 
Natural Resources, and U.S. House of Representatives, on March 10, 
2009, that ``Western will * * * use revenues from project beneficiaries 
as the only source of repayment of all associated project costs, and * 
* * All selected projects, including upgrades to Western's existing 
transmission lines, must meet the requirement that there is a 
reasonable likelihood that it will generate enough transmission service 
revenue to repay the principal investment, all operating costs and the 
accrued interest.'' Pursuant to the Recovery Act, Western will evaluate 
each project and, if selected, the Administrator will certify that it 
is reasonable to expect that the proceeds from the project shall be 
adequate to repay the loan. In addition, Western will modify its 
Program-related Principles to ensure that project beneficiaries repay 
project costs.
    Summary Comment: Western received some comments that selected 
projects use generally accepted accounting principles for financial 
accounting and reporting so beneficiaries know their repayment 
obligations.
    Response: To elaborate on a statement in the Federal Register 
notice, published on March 4, 2009, in Section III.C.1., Program 
Funding--Policies and Practices, Western will use current business 
practices and accounting policies (based on generally accepted 
accounting principles) to record and track all expenses and revenues 
and other financial transactions for each project selected.
    Summary Comment: Western received numerous comments that rates for 
selected projects are kept separate and not financially integrated for 
the purposes of repayment with any existing or potential future 
transmission system so that there is no impact to existing users.
    Response: To comply with the Recovery Act, and as stated in the 
Principles section of the Federal Register notice published on March 4, 
2009, Western will isolate the accounting transactions of the new 
projects in Western's existing financial management system. In response 
to a question submitted for the record of the hearing before the 
Subcommittee on Water & Power, Committee on Natural Resources, U.S. 
House of Representatives, on March 10, 2009, Western stated, ``Section 
402 of the Recovery Act clearly requires, for repayment purposes, 
Western to treat each project funded with Treasury borrowings as 
separate and distinct from all other Western transmission facilities * 
* *''
    Summary Comment: Western received comments that it needs to have a 
strategy for interconnection-wide cost-sharing for projects designed to 
achieve national renewable energy goals.
    Response: Interconnection-wide cost-sharing is not a requirement of 
the Recovery Act or the Program. Western may consider interconnection-
wide cost-sharing, as well as other cost-sharing concepts, if 
appropriate, as it evaluates project proposals on a case-by-case basis. 
If national renewable energy goals are established and changes to 
Program processes and procedures are required, they will be modified as 
appropriate.

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    Summary Comment: Western received a comment that it should adopt 
rate setting methodologies consistent with Department of Energy (DOE) 
Order RA6120.2 (RA6120.2).
    Response: RA6120.2 establishes financial reporting requirements for 
Power Marketing Administrations. RA6120.2 was developed primarily for 
financial reporting of hydroelectric power projects using Federal 
appropriations. This Program is for transmission projects funded using 
treasury borrowing and transmission service revenue. Even though these 
differences exist, they tend to be minor and Western believes that it 
can comply with the applicable portions of RA6120.2.
    Summary Comment: Western received a comment that the specific 
provisions of the Recovery Act related to ``participation'' do not 
provide how a third-party participant will recover its costs.
    Response: Rates and repayment for projects funded through the 
Program will be determined on a case-by-case basis. Western anticipates 
that its rates and repayment methods will apply only to those portions 
of a project that are under Western's operational control. For projects 
that are not under Western's operational control, Western will use 
contract provisions with the third-party participant to require that 
rates be established to assure a sufficient revenue stream to repay 
project costs. In addition, one of Westerns objectives is to encourage 
nonfederal participation to leverage Westerns borrowing authority. 
Depending upon the roles and responsibilities agreed to by the parties, 
the transmission rates charged by another entity may be subject to FERC 
rate jurisdiction, or that of a public utility commission or other rate 
setting body.
    Summary Comment: Western received several comments regarding the 
acceptability of the pancaking of transmission rates. Conversely, 
several commenters were opposed to pancaking of transmission rates.
    Response: Western has noted these comments. The Program's policies 
and procedures are flexible and may provide for either ``pancaking'' or 
``non-pancaking'' of rates as the situation requires. Rate design for 
transmission capacity that Western markets will be determined using 
Western's appropriate rate setting processes.
    Summary Comment: Western received a comment that after Federal loan 
obligations are paid off, right holders can migrate to a common tariff 
charge as a part of a larger network.
    Response: Western has noted this comment. Nothing in the Recovery 
Act or the Program policies and procedures precludes migration to a 
common tariff charge as a part of a larger network.
    Summary Comment: Some commenters requested that Western clarify 
when the forgiveness of loan balances will be used and that firm power 
customers will not be liable for any unforgiven loan balance.
    Response: The Recovery Act clearly states that balances owed to 
Treasury at the end of the useful life of a project, or funds expended 
to study projects that are not constructed, shall be forgiven. It 
further states that revenue from the use of the project shall be the 
only source of funds for repayment of project loans and payment of 
ancillary services and operation and maintenance costs.
    Summary Comment: Western received a comment that before projects 
are implemented, Western should ensure that contracts with customers 
for renewables are executed.
    Response: Western acknowledges this comment and will endeavor to 
ensure, where appropriate, that renewable energy generators have 
executed the necessary contracts with their customers.

4. Other Comments Received

    Summary Comment: Western received a number of other miscellaneous 
comments which requested clarification on a number of items as well as 
providing suggestions on the overall management and operation of the 
Program.
    Response: Western always appreciates suggestions from stakeholders 
which enhance the effective and efficient management of its programs. 
Western will consider each of the comments provided under this section 
and as appropriate, integrate them into its management and operation of 
the Program. In addition, should there be any changes that require 
further notification of stakeholders, Western will communicate those 
changes in a timely manner.
    Summary Comment: Western received a comment that access to all 
information submitted for project information should be available 
without using the Freedom of Information Act (FOIA).
    Response: Formal FOIA procedures need not necessarily be followed 
in order to request project information. A functional request can be 
submitted that does not invoke FOIA. However, Western does not 
generally have the ability, nor does the Recovery Act specifically 
grant Western ability, to waive protections afforded to parties under 
``Exemption 4'' of FOIA. Exemption 4 provides protections for trade 
secrets or commercial or financial information submitted on a 
privileged or confidential basis. In this regard, Western has also 
received comments asking for greater confidentiality protections for 
project information. FOIA and Exemption 4 provide an adequate 
framework, and balancing of interests, by which Western will treat 
requests for both disclosure and nondisclosure.
    Summary Comment: Western received several comments that it needs to 
provide more detail to ensure how confidential information will be 
protected.
    Response: In protecting confidential information, Western will look 
to the law related to FOIA, and in particular to Exemption 4.
    Summary Comment: Western received some comments that all potential 
conflicts of interest of project participants shall be disclosed and 
reported to Western.
    Response: Western appreciates the fact that if it contracts for 
support in evaluating projects that these contractors may have worked 
for one or more project proponents in the past. Western is also 
concerned with conflicts of interest, and therefore will use its 
current acquisition practices to retain contractors based on specific 
requirements in the Federal Acquisition Regulations (FAR) to address 
any organizational conflicts of interest or ``OCIs.''
    Summary Comment: Western received a comment that the term 
``entity'' is too narrowly defined and may exclude public power.
    Response: Western includes public power in its definition of 
``entity.''

Summary of Changes From Proposed Program

    Western has revised the proposed Program in response to public 
comments to the Federal Register notice (FRN) published on March 4, 
2009. The more significant changes made to the Program include:
    All references to the ``proposed'' Program were deleted, and now 
refer to the ``Program.'' The Definition section was revised to refine 
the definition of entity as ``any individual or organization that seeks 
to participate with Western under the Program's authority.'' The 
section was expanded to include a definition of ``beneficiary'' as any 
individual or organization that receives an economic, financial, 
operational, or physical benefit from the construction and/or operation 
of a project funded by the Program.

[[Page 22737]]

    The Program elements of Project Development and Project Operations 
and Maintenance were combined. In addition, Western added a Principles 
section as part of the Program to evaluate potential projects. 
Specifically, Principles are categorized as being either project- or 
Program-related.
    Initially, nine Principles (six project-related, three Program-
related) were previously identified in the Background section of the 
FRN. Principles were expanded to ten. A fourth Program principle was 
added and reads: ``Ensures that project beneficiaries re-pay project 
costs.'' The inclusion of this project Principle and related definition 
will clarify repayment responsibility for individual Program project 
costs. In addition, the fifth project Principle was revised as follows: 
``Has the necessary capabilities to obtain and deliver generation-
related ancillary services.'' The Principle as previously worded 
required the project provide generation-related ancillary services. All 
references in the Program criteria to ``provide . . . ancillary 
services'' were subsequently changed to ``obtain and deliver . . . 
ancillary services.'' The Project Funding section was changed to 
reflect revision of the definition of Applicability as follows: ``All 
projects selected for funding under this authority will be governed by 
the principles, policies, and practices outlined in this notice.'' 
Also, the Criteria element was deleted.
    The Project Funding Policies and Practices element was expanded to 
incorporate a third component to read: ``Western will look for public-
private partnerships to maximize the leveraging of funds.''
    Under Project Evaluation, Applicability was changed to read: ``All 
Projects to be considered for funding under this authority will be 
evaluated against minimum criteria outlined below.'' Criteria were 
changed significantly, expanded to include six additional criteria and 
the revision of two. Policies and Practices was changed to include 
narrative on Western's adherence to the Federal Acquisition Regulation 
in addressing potential organizational conflicts of interest when 
contracting for outside expertise to assist in evaluating proposed 
projects seeking funding under the Program.
    The Project Development and Operations and Maintenance, Policies 
and Practices was revised. Specifically, Western will give priority to 
projects that satisfy OATT or related requests. This has been moved to 
Project Evaluation criteria. In addition, narrative referencing 
applicable Federal laws, regulations and policies was expanded to 
include: ``* * * the National Environmental Policy Act, the FAR, and 
other applicable provisions of the Recovery Act.''
    The Project Rates and Repayment, Policies and Practices section now 
contains an expanded definition of Program project costs to include 
overhead. In addition, the development of Program project transmission 
rates for transmission capacity was changed from Western owns and 
controls to simply controls. Western will adopt applicable requirements 
contained in DOE Order RA6120.2 as part of its repayment and reporting 
processes.

Western's Transmission Infrastructure Program

    Western's Transmission Infrastructure Program will implement the 
Program authorized in section 402 of the Recovery Act. The Program will 
identify, prioritize and participate in the study, facilitation, 
financing, planning, operating, maintaining, and construction of new or 
upgraded transmission facilities and additions that will help bring 
renewable energy resources to market across the West. One objective is 
to encourage non-Federal participation so as to leverage Western's 
borrowing authority. The Program consists of several major components: 
Program Principles; Project Funding, Project Evaluation, Project 
Development and Operation and Maintenance, and Project Rates and 
Repayment.

Table of Contents

I. Definitions
II. Principles
    A. Project-Related Principles
    B. Program-Related Principles
III. Project Funding
    A. Applicability
    B. Policies and Practices
IV. Project Evaluation
    A. Applicability
    B. Criteria
    C. Policies and Practices
V. Project Development and Operations and Maintenance
    A. Applicability
    B. Policies and Practices
VI. Project Rates and Repayment
    A. Applicability
    B. Criteria
    C. Policies and Practices

I. Definitions

    A. The term ``Administrator'' means the Administrator of Western.
    B. The term ``entity'' means any individual or organization that 
seeks to participate with Western under the Program's authority.
    C. The term ``beneficiary'' means any individual or organization 
that receives an economic, financial, operational, or physical benefit 
from the construction and/or operation of a project funded by the 
Program.

II. Principles

    In implementing the authority granted to Western in section 402, 
Western will use the following principles which provide overarching 
guidance:
    A. Project-Related Principles:
    Western will ensure each project approved for funding using 
Treasury borrowing authority:
    1. Is in the public interest.
    2. Will not adversely impact system reliability or operations, or 
other statutory obligations.
    3. Offers a reasonable expectation that the proceeds from such 
project shall be adequate to meet Western's financial repayment 
obligations.
    4. Uses a public process when Western sets the rates for any 
transmission capacity resulting from new facilities developed from 
Western's participation in such projects.
    5. Has the necessary capability to obtain and deliver generation-
related ancillary services.
    6. Uses the proceeds from the sale of the transmission capacity 
from such project for the repayment of the principal and interest of 
the loan from the Treasury attributable to that project, after 
reserving such funds as Western determines are necessary,
    a. to pay for the ancillary services that are obtained and 
delivered; and
    b. to meet the costs of operating and maintaining the new project.
    B. Program-Related Principles:
    Western will ensure the Program:
    1. Provides an opportunity, where appropriate, for participation by 
other entities in constructing, financing, owning, facilitating, 
planning, operating, maintaining, or studying construction of new or 
upgraded electric power transmission lines under this authority.
    2. Uses revenues from projects developed under this authority as 
the only source of revenue for,
    a. repayment of the associated loan for the project;
    b. payment of expenses for ancillary services, and operation and 
maintenance; and
    c. payments for ancillary services that will be credited to the 
existing power system providing these services, when the existing 
Federal power system is the source of the ancillary services.
    3. Maintains appropriate controls to ensure, for accounting and 
repayment purposes, each transmission line and related facility project 
in which Western participates under this authority is treated as 
separate and distinct from,
    a. each other such project; and

[[Page 22738]]

    b. all other Western power and transmission facilities.
    4. Ensures that project beneficiaries repay project costs.

III. Project Funding

    A. Applicability: All projects selected for funding under this 
authority will be governed by the principles, policies, and practices 
outlined in this notice.
    B. Policies and Practices:
    1. Western will use generally accepted accounting principles and 
practices in recording and tracking all expenses and revenue 
transactions for each project selected.
    2. Western will isolate these financial accounting transactions in 
its existing financial management system.
    3. Western will look for public-private partnerships to maximize 
the leveraging of funds.

IV. Project Evaluation

    A. Applicability: All projects to be considered for funding under 
this authority will be evaluated against the minimum criteria outlined 
below.
    B. Criteria: Project evaluation includes feasibility of developing 
a project that meets the following minimum criteria:
    1. Facilitates the delivery to market of power generated by 
renewable resources constructed or reasonably expected to be 
constructed;
    2. is in the public interest;
    3. will not adversely impact system reliability or operations, or 
other statutory obligations;
    4. establishes the reasonable expectation that the project will 
generate enough transmission service revenue to repay the principal 
investment; all operating costs, including overhead; and the accrued 
interest by the end of the project's service life;
    5. has at least one terminus located within Western's service 
territory;
    6. describes the economic developmental benefits of the project, 
including an estimate of how many and the type, how fast, and where in 
the country jobs are created;
    7. gives priority to projects that satisfy Western's Open Access 
Transmission Tariff or related requests;
    8. addresses the technical merits and feasibility of a project;
    9. demonstrates the financial stability and capability of all 
potential project partners;
    10. describes project readiness (e.g., permitting, local, state 
and/or regional approval); and
    11. describes all project partners' participation in a region-wide 
interconnection-wide planning group or forum.
    C. Policies and Practices:
    1. Western will establish additional criteria to evaluate proposed 
projects as necessary.
    2. Western may, at its discretion, use outside expertise to assist 
in evaluating proposed projects seeking funding under this authority. 
Western will use its current acquisition practices to retain any 
contractors to assist in project evaluation and will use the specific 
regulations in the FAR to address any organizational conflicts of 
interest.
    3. Western will treat data submitted by project participants 
related to this authority, including project descriptions, 
participation and financing arrangements by other parties, as available 
to the public through the FOIA. However, participants may request 
confidential treatment of all or part of a submitted document under 
FOIA's exemption for ``Confidential Business Information.'' Materials 
so designated and which meet the criteria stipulated in the FOIA will 
be treated as exempt from FOIA inquiries.

V. Project Development and Operations and Maintenance

    A. Applicability: All projects funded under this authority.
    B. Policies and Practices:
    1. For study, facility development, construction and any other 
related purposes, where applicable, Western will consider projects that 
are constructed pursuant to its authority under section 402 of the 
Recovery Act separately from procedures and requirements for arranging 
for transmission service or interconnection under its OATT, or related 
interconnection agreements. Western will use the appropriate project 
management methods to initiate, plan, execute, monitor, control and 
close all transmission projects approved for funding under this 
authority.
    2. Available transfer capability surplus to Western's need will be 
made available in a nondiscriminatory manner consistent with FERC open 
access transmission rules, Federal statute, and Western policies.
    3. Western will comply with all other applicable Federal laws, 
regulations and policies, including the National Environmental Policy 
Act, the FAR, and other applicable provisions of the Recovery Act.

VI. Project Rates and Repayment

    A. Applicability: All projects funded under this authority.
    B. Criteria: The repayment requirements and applicable transmission 
rates will be designed so that proceeds from the project meet the 
repayment obligation.
    C. Policies and Practices:
    1. Before project development, Western will confirm the reasonable 
likelihood that the project will generate enough transmission service 
revenue to meet Western's financial repayment obligations including 
principal investment, operating costs including overhead, accrued 
interest, and other appropriate costs.
    2. Transmission rates for transmission capacity Western controls 
will be developed in a public process following the applicable 
requirements outlined in 10 CFR part 903 and RA6120.2, and set by the 
Administrator as specified in relevant DOE orders.

Environmental Compliance

    In compliance with the National Environmental Policy Act of 1969 
(NEPA) (42 U.S.C. 4321, et seq.), the Council on Environmental Quality 
Regulations for implementing NEPA (40 CFR parts 1500-1508) and the DOE 
NEPA Implementing Procedures and Guidelines (10 CFR part 1021).
    Western has determined that this action is categorically excluded 
from further NEPA analysis. Future actions under this authority will 
undergo appropriate NEPA analysis.

    Dated: April 21, 2009.
Timothy J. Meeks,
Administrator.
 [FR Doc. E9-11299 Filed 5-13-09; 8:45 am]
BILLING CODE 6450-01-P