[Federal Register Volume 74, Number 164 (Wednesday, August 26, 2009)]
[Notices]
[Pages 43153-43155]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-20652]


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DEPARTMENT OF THE INTERIOR

Bureau of Reclamation


Notice of Intent To Contract for Hydroelectric Power Development 
on the South Canal, Uncompahgre Project, Colorado

AGENCY: Bureau of Reclamation, Interior.

ACTION: notice of intent to accept proposals, select lessee, and 
contract for hydroelectric power development on the South Canal, 
Uncompahgre Project, Colorado.

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SUMMARY: Current Federal policy allows non-Federal development of 
electrical power resource potential on Federal water resource projects. 
The Bureau of Reclamation (Reclamation) will consider proposals for 
non-Federal development of hydroelectric power on the South Canal of 
the Uncompahgre Project. Reclamation is considering such hydroelectric 
power development under a lease of power privilege. No Federal funds 
will be available for such hydroelectric power development. The 
Uncompahgre Project is a Federal Reclamation project. This Notice 
presents background information, proposal content guidelines, and 
information concerning selection of a non-Federal entity to develop 
hydroelectric power on the South Canal.

DATES: A written proposal and seven copies must be submitted on or 
before 5 p.m. (Mountain Standard Time) on Monday, February 1, 2010. A 
proposal will be considered timely only if it is received in the office 
of the Area Manager on or before 5 p.m. on the above-designated date. 
Interested entities are cautioned that delayed delivery to the Area 
Manager's office due to failures or misunderstandings of the entity 
and/or of mail, overnight, or courier services will not excuse lateness 
and, accordingly, are advised to provide sufficient time for delivery. 
Late proposals will not be considered.

ADDRESSES: Send written proposal and seven copies to Ms. Carol 
DeAngelis, Area Manager, Bureau of Reclamation, Western Colorado Area 
Office, 2764 Compass Drive, Suite 106, Grand Junction, Colorado 81506; 
telephone (970) 248-0600.

FOR FURTHER INFORMATION CONTACT: Technical data may be obtained from 
Mr. Dan Crabtree, Bureau of Reclamation, Western Colorado Area Office, 
2764 Compass Drive, Suite 106, Grand Junction, Colorado 81506; 
telephone (970) 248-0652. Reclamation will be available to meet with 
interested entities only upon written request to Mr. Dan Crabtree at 
the above-cited address. Upon request, Reclamation will provide an 
opportunity for a site visit. Reclamation reserves the right to 
schedule a single meeting and/or visit to address the questions of all 
entities that have submitted questions or requested site visits.
    Information related to operation and maintenance of the South Canal 
may be obtained from Mr. Marc Catlin, Uncompahgre Valley Water Users 
Association, P.O. Box 69, Montrose, Colorado 81402; telephone (970) 
249-3813.

SUPPLEMENTARY INFORMATION: The Uncompahgre Project, located in west-
central Colorado along the Uncompahgre River in the Colorado River 
Basin, was authorized by the Secretary of the Interior on March 14, 
1903, under provisions of the Reclamation Act of 1902. After the 
passage of the Reclamation Act of 1902, the Uncompahgre Project was 
selected for development and the United States began construction in 
1904. The Act of June 22, 1938, 52 Stat. 941, authorized the Secretary 
of the Interior to develop or sell surplus power from the Uncompahgre 
Project. The Uncompahgre Valley Water Users Association, under its 
contracts with the United States, has certain operation, maintenance, 
and replacement responsibilities and obligations concerning the South 
Canal and Uncompahgre Project.
    Reclamation is considering hydroelectric power development on the 
South Canal under a lease of power privilege. A lease of power 
privilege is an alternative to Federal hydroelectric power development. 
A lease of power privilege is a contractual right given to a non-
Federal entity to use a Reclamation facility for electric power 
generation consistent with Reclamation project purposes. Leases of 
power privilege have terms not to exceed 40 years. The general 
authority for lease of power privilege under Reclamation law includes, 
among others, the Town Sites and Power Development Act of 1906 (43 
U.S.C. Sec. 522) and the Reclamation Project Act of 1939 (43 U.S.C. 
485h(c)) (1939 Act).
    Reclamation will be the lead Federal agency for ensuring compliance 
with the National Environmental Policy Act (NEPA) of any lease of power 
privilege

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considered in response to this Notice. Leases of power privilege may be 
issued only when Reclamation has completed NEPA and related 
environmental compliance. Any lease of power privilege on the South 
Canal must accommodate existing contractual commitments related to 
operation and maintenance of the South Canal and other Uncompahgre 
Project facilities. The lessee (i.e., successful proposing entity) 
would be required to enter into a contract with the Uncompahgre Valley 
Water Users Association to coordinate operation and maintenance of any 
proposed hydropower developments with existing Federal features.
    All costs incurred by the United States related to development and 
operation and maintenance under a lease of power privilege, including 
NEPA compliance and development of the lease of power privilege, would 
be at the expense of the lessee. In addition, the lessee would be 
required to make annual payments to the United States for the use of a 
government facility in the amount of at least 3 mills per kilowatt-hour 
of generation. Under the lease of power privilege, provisions will be 
included for inflation of the annual payment with time. Such annual 
payments to the United States would be deposited as a credit to the 
Reclamation Fund.

Proposal Content Guidelines

    Interested parties should submit proposals explaining in as precise 
detail as is practicable how the hydropower potential would be 
developed. Factors which a proposal should consider and address 
include, but are not limited to, the following:
    (a) Provide all information relevant to the qualifications of the 
proposing entity to plan and implement such a project, including, but 
not limited to, information about preference status, type of 
organization, length of time in business, experience in funding, design 
and construction of similar projects, industry rating(s) that indicate 
financial soundness and/or technical and managerial capability, 
experience of key management personnel, history of any reorganizations 
or mergers with other companies, and any other information that 
demonstrates the interested entity's organizational, technical, and 
financial ability to perform all aspects of the work. Include a 
discussion of past experience in operating and maintaining similar 
facilities and provide references as appropriate. The term ``preference 
entity,'' as applied to a lease of power privilege, means an entity 
qualifying for preference under Section 9(c) of the 1939 Act as a 
municipality, public corporation or agency, or cooperative or other 
nonprofit organization financed in whole or in part by loans made 
pursuant to the Rural Electrification Act of 1936, as amended.
    (b) Provide geographical locations and describe principal 
structures and other important features of the proposed development 
including roads and transmission lines. Estimate and describe installed 
capacity and the capacity of the power facilities. Also describe 
seasonal or annual generation patterns. Include estimates of the 
average amount of electrical energy that would be produced from the 
facility for each month of average, dry, or wet water years. If 
capacity and energy can be delivered to another location, either by the 
proposing entity or by potential wheeling agents, specify where 
capacity and energy can be delivered. Include concepts for power sales 
and contractual arrangements, involved parties, and the proposed 
approach to wheeling, if required.
    (c) Indicate plans for acquiring title to or the right to occupy 
and use lands necessary for the proposed development, including such 
additional lands as may be required during construction.
    (d) Identify water rights applicable to the operation of the 
proposed development(s), the holder of such rights, and how these 
rights would be used, acquired, or perfected.
    (e) Discuss any studies necessary to adequately define impacts of 
the development on the Uncompahgre Project and the environment. 
Describe any significant environmental issues associated with the 
development and the proposing entity's approach for gathering relevant 
data and resolving or mitigating such issues to protect and enhance the 
quality of the environment. Explain any proposed use of the hydropower 
development for conservation and utilization of the available water 
resources in the public interest.
    (f) Describe anticipated contractual arrangements with the 
Uncompahgre Valley Water Users Association which has operation and 
maintenance responsibility for the Uncompahgre Project feature(s) that 
are proposed for utilization in the hydropower development under 
consideration. Define how the hydropower development would operate in 
harmony with the Uncompahgre Project and existing applicable contracts 
related to operation and maintenance of Uncompahgre Project feature(s) 
being considered for modification.
    (g) Describe plans for assuming liability for damage to the 
operational and structural integrity of the Uncompahgre Project caused 
by construction, operation, and/or maintenance of the hydropower 
development.
    (h) Identify the organizational structure planned for the long-term 
operation and maintenance of any proposed hydropower development.
    (i) Provide a management plan to accomplish such activities as 
planning, NEPA compliance, lease of power privilege development, 
design, construction, facility testing, and start of hydropower 
production. Prepare schedules of these activities as applicable. 
Describe what studies are necessary to accomplish the hydroelectric 
power development and how the studies would be implemented.
    (j) Estimate development cost. This cost should include all 
investment costs such as the cost of studies to determine feasibility, 
NEPA compliance, design, construction, and financing as well as the 
amortized annual cost of the investment. Also, the annual operation, 
maintenance, and replacement expense for the hydropower development; 
annual payments to the United States; expenses that may be associated 
with the Uncompahgre Project; and the anticipated return on investment 
should be included. If there are additional transmission or wheeling 
expenses associated with the hydropower development, these should also 
be included. Identify proposed methods of financing the hydropower 
development. An economic analysis should be presented that compares the 
present worth of all benefits and the costs of the hydropower 
development.

Selection of Lessee

    Reclamation will evaluate proposals received in response to this 
published Notice. Reclamation will give more favorable consideration to 
proposals that (1) are well adapted to developing, conserving, and 
utilizing the water and protecting natural resources; (2) clearly 
demonstrate that the offeror is qualified to develop the hydropower 
facility and provide for long-term operation and maintenance; and (3) 
best share the economic benefits of the hydropower development among 
parties to the lease of power privilege. A proposal will be deemed 
unacceptable if it is inconsistent with Uncompahgre Project purposes, 
as determined by Reclamation.
    Reclamation will give preference to those entities that qualify as 
preference entities (as defined under Proposal Content Guidelines, item 
(a), of this Notice) provided that their proposal is at least as well 
adapted to developing,

[[Page 43155]]

conserving, and utilizing the water and natural resources as other 
submitted proposals and that the preference entity is well qualified. 
Preference entities would be allowed 90 days to improve their 
proposals, if necessary, to be made at least equal to a proposal(s) 
that may have been submitted by a non-preference entity.

Power Purchasing and/or Marketing Considerations

    The lessee would be responsible for transmission and marketing of 
the power generated by the proposed project.

Notice and Time Period To Enter Into Lease of Power Privilege

    Reclamation will notify, in writing, all entities submitting 
proposals of Reclamation's decision regarding selection of the 
potential lessee. The selected potential lessee will have two years 
from the date of such notification to accomplish NEPA compliance and 
enter into a lease of power privilege for the proposed development of 
hydropower at South Canal. The lessee will then have up to two years 
from the date of execution of the lease to complete the designs and 
specifications and an additional year to begin construction. Such 
timeframes may be adjusted for just cause resulting from actions and/or 
circumstances that are beyond the control of the lessee.

    Dated: July 24, 2009.
Larry Walkoviak,
Regional Director--UC Region.
[FR Doc. E9-20652 Filed 8-25-09; 8:45 am]
BILLING CODE 4310-MN-P