[Federal Register Volume 76, Number 221 (Wednesday, November 16, 2011)]
[Notices]
[Pages 71015-71018]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-29601]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Pick-Sloan Missouri Basin Program--Eastern Division--2021 Power 
Marketing Initiative

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of Final 2021 Power Marketing Initiative.

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SUMMARY: Western Area Power Administration (Western), Upper Great 
Plains Region, a Federal power marketing agency of the Department of 
Energy (DOE), announces the 2021 Power Marketing Initiative (2021 PMI). 
The 2021 PMI provides the basis for marketing the long-term firm 
hydroelectric resources of the Pick-Sloan Missouri Basin Program--
Eastern Division (P-SMBP--ED) beyond December 31, 2020, when Western's 
Firm Electric Service (FES) contracts associated with the current 
Marketing Plan expire. The 2021 PMI extends the current Marketing Plan, 
with amendments to key marketing plan principles. Western's proposed 
2021 PMI was published in the Federal Register on March 4, 2011. 
Responses to public comments are included in this notice. This Federal 
Register is published to announce Western's decisions for the 2021 PMI.

DATES: The 2021 PMI will become effective December 16, 2011.

ADDRESSES: Information regarding the 2021 PMI, including comments, 
letters, and other supporting documents made or retained by Western for 
the purpose of developing this Final 2021 PMI, are available for public 
inspection and copying at the Upper Great Plains Region, Western Area 
Power Administration, 2900 4th Avenue North, Billings, MT 59101-1266.

FOR FURTHER INFORMATION CONTACT: John A. Pankratz, Public Utilities 
Specialist, Upper Great Plains Region, Western Area Power 
Administration, 2900 4th Avenue North, Billings, MT 59101-1266, 
telephone (406) 255-2932, email [email protected].

SUPPLEMENTARY INFORMATION:

Current Marketing Plan Background

    The 1985 P-SMBP--ED Marketing Plan (1985 Plan) was published in the 
Federal Register (45 FR 71860, October 30, 1980) and provided the 
marketing plan principles used to market P-SMBP--ED firm hydropower 
resources. The FES contracts associated with the 1985 Plan were 
initially set to expire December 31, 2000. Subpart C of the Energy 
Planning and Management Program (EPAMP) final rule, also published in 
the Federal Register (60 FR 54151, October 20, 1995), extended and 
amended the 1985 Plan. EPAMP extended the FES contracts associated with 
the 1985 Plan through December 31, 2020, and established the Post-2000, 
Post-2005, and Post-2010 Power Marketing Initiatives. The current 
Marketing Plan is inclusive of the 1985 Plan as extended and amended by 
EPAMP and the Post-2000, Post-2005, and Post-2010 Power Marketing 
Initiatives.

2021 PMI

    Western initiated 2021 PMI discussions with P-SMBP--ED firm power 
customers in November 2010 by hosting meetings throughout the Upper 
Great Plains Region. In addition, Western hosted Native American-
focused meetings throughout the Upper Great Plains Region to initiate 
government-to-government consultation with tribal firm power customers. 
The meetings provided customers the opportunity to review current 
Marketing Plan principles and provide informal input to Western for 
consideration in the 2021 PMI proposal. Key Marketing Plan principles 
discussed with firm power customers included: Contract Term, Resource 
Pools, Marketable Resource, Marketing Area, Load Factor Limit and 
Withdrawal Provisions, and Marketing Future Resources.
    Western requested informal input from firm power customers for 
consideration in the 2021 PMI proposal. Customer input for the 2021 PMI 
supported Western extending the current Marketing Plan with amendments 
to the Contract Term and Resource Pools principles.
    Western published its proposed 2021 PMI in the Federal Register (76 
FR 12104, March 4, 2011) and initiated a 60-day public comment period. 
Public information and comment forums on the proposed 2021 PMI were 
held on April 13, 14, and 20, 2011. Western received 5 oral comments 
during the public comment forums and 51 comment letters during the 
public comment period, which closed on May 4, 2011. Western received a 
comment on May 4, 2011, requesting additional time to supplement 
comments on the proposed 2021 PMI. Western published a notice in the 
Federal Register (76 FR 47180, August 4, 2011) that re-opened the 
written comment period for the proposed 2021 PMI through September 6, 
2011. Western received 5 new comment letters during the re-opened 
comment period. In total, Western received 5 oral comments and 56 
comment letters from March 4, 2011,

[[Page 71016]]

through September 6, 2011. Responses to public comments are included in 
this notice. After consideration of public comments, Western has 
decided to finalize the proposed 2021 PMI as published in the Federal 
Register (76 FR 12104, March 4, 2011).

Response to Comments Regarding the Proposed 2021 PMI

    The public comments below regarding the proposed 2021 PMI are 
paraphrased for brevity when not affecting the meaning of the 
statement(s).

2021 PMI General Comment

    Comment: The majority of comments Western received strongly 
supported the proposed 2021 PMI principles.
    Response: Western appreciates the support received for the 2021 PMI 
proposal published in the Federal Register (76 FR 12104, March 4, 
2011).
    Amended Marketing Plan Principles and Comments:
    Proposed Contract Term: A 30-year contract term would be used for 
FES contracts. The FES contract term would begin January 1, 2021, and 
expire December 31, 2050.
    Comment: Western received many comments supporting the proposed 30-
year contract term. Commenters stated that a 30-year contract term 
would provide more resource certainty for customers than the current 
20-year contract term and help Western and customers plan for short-
term and long-term needs, rate structure, and financial stability. 
Western also received many comments requesting Western to consider a 
40-year contract term to provide greater resource certainty to 
customers and further support customers' long-term power supply. 
Commenters also stated that Western has built-in flexibility and tools 
in place to address future conditions or changes and a 40-year contract 
term seems reasonable. Western also received comments that a 40-year 
contract term would provide assurance that customers contributing funds 
to Pick-Sloan investments would receive the benefits of those 
contributions and commitments.
    Response: Western proposed a 30-year contract term and, based on 
comments, also considered a 40-year contract term for the 2021 PMI. 
Many customers supported the proposed 30-year contract term because it 
provides customers greater resource certainty and cost control when 
compared to the current 20-year contract term. Western will use a 30-
year contract term for all P-SMBP--ED FES contracts for several 
reasons. Western believes a 30-year contract term strikes a balance 
between customers' need for stability in resource planning and cost 
control and Western's need for flexibility.
    Western also recognizes and appreciates the unique customer funding 
relationship in support of the Federal power program.
    Proposed Resource Pools: The 2021 PMI would provide for resource 
pools of up to 1 percent of the marketable resource under contract at 
the time for eligible new preference entities at the beginning of the 
contract term (January 1, 2021) and again every 10 years (January 1, 
2031, and January 1, 2041).
    Comment: Western received many comments supporting the proposed 
resource pools. Commenters stated that limiting the resource pools to 
up to 1 percent every 10 years helps provide for better utilization of 
resources with existing preference customers. Commenters also supported 
the structure and timing of the resource pools. Western received a 
comment stating that providing a resource pool every 10 years, as 
compared to EPAMP's three resource pools that were each 5 years apart, 
is a better use of Western's time and resources. Another comment 
received by Western stated that limiting resource pools to new entities 
might be too restrictive.
    Response: Western appreciates the support for the proposed resource 
pools of up to 1 percent every 10 years, beginning January 1, 2021. The 
resource pools allow Western to market allocations of firm power to 
eligible new preference entities in such a manner as to promote the 
most widespread use, in accordance with Federal Reclamation Law.
    Comment: Western received a comment stating that all Indian Tribes 
should be exempt from allocation reductions due to resource pools, as 
any reduction in allocations would impede badly-needed economic 
development on reservations.
    Response: Western acknowledges this customer's concern over the 
impacts that a firm power allocation reduction would have on tribal 
firm power customers. All firm power customers are impacted by firm 
power reductions. Western will continue to provide consistent treatment 
to all firm power customers, including tribal firm power customers, and 
establish 2021 PMI resource pools by pro rata withdrawals on 2 years' 
notice, from then existing firm power customers, in accordance with 
EPAMP, 10 CFR 905.32(d).
    Extended Marketing Plan Principles and Comments:
    Proposed Marketable Resource: Based on adverse condition modeling 
to determine future marketable resource capability and median annual 
energy forecasting to determine future annual energy, the proposed 2021 
PMI supports extending the existing contract rates of delivery 
commitments, with associated energy, to existing long-term firm power 
customers reduced by up to 1 percent for each new resource pool in 
2021, 2031, and 2041.
    Comment: Western received many comments specifically supporting the 
proposed marketable resource principle as it would extend similar 
contract rates of delivery to current customers.
    Response: Western appreciates the support received for extending 
existing contract rates of delivery commitments, with associated 
energy, to existing long-term firm power customers reduced by up to 1 
percent for each new resource pool in 2021, 2031, and 2041.
    Comment: Western received a comment suggesting that newer or 
updated data should be used for marketable resource modeling.
    Response: Western used the latest available data to model the 2021 
PMI marketable resource.
    Comment: Western received a comment expressing concern about the 
current drought debt repayment and its impact on Western's rates. The 
commenter stated it is critical that the 2021 PMI better address the 
risk involved in drought conditions and the resulting replacement 
purchased power generated debt.
    Response: Drought debt repayment and rates are a function of 
Western's rate setting policies and are outside the scope of this 2021 
PMI process.
    Western considered risk in terms of the 2021 PMI marketable 
capability through adverse condition modeling. Basing marketable 
capability on an adverse condition mitigates risk due to the variable 
and unpredictable nature of hydropower resources.
    Comment: Western received a comment stating that Western must 
recognize the Pick-Sloan's severe and disproportionate impact in the 
taking of Indian land along the Missouri River and comply with the 
Executive Order (EO) on Federal Actions to Address Environmental 
Justice in Minority Populations and Low-Income Populations, (59 FR 
7629, February 16, 1994, correct citation EO 12898), by increasing 
Western's allocations to the Tribes along the Missouri River.
    Response: Western's 2021 PMI action does not cause any population 
group to suffer a disproportionate share of adverse human health or 
environmental impacts. Western's 2021 PMI is the decision-making 
process of how to market long-term firm hydroelectric resources beyond 
2020. The 2021 PMI

[[Page 71017]]

action proposed and adopted by Western maintains allocations of the 
finite hydropower resources at existing allocation levels (reduced by 
up to 1 percent for each new resource pool in 2021, 2031, and 2041) for 
all firm power customers, including tribal firm power customers along 
the Missouri River.
    Western follows DOE's strategy for EO 12898, available upon request 
(see FOR FURTHER INFORMATION CONTACT section), when developing policies 
and programs that substantially affect human health or the environment, 
so that no population group will suffer a disproportionate share of 
adverse environmental impacts.
    Comment: Western received a comment stating that P-SMBP--ED 
customers have contributed funds directly to Western and other Federal 
power program agencies for component replacement of hydropower 
generation units and related equipment. As such, Western should adjust 
hydropower resources, due to generation increases from refurbished 
Federal hydropower generation units, under the terms and conditions of 
the 2021 PMI.
    Response: If additional resources become available to Western, as 
stated in the proposed 2021 PMI, Western will use those resources in 
accordance with the EPAMP, 10 CFR 905.32(e).
    Proposed 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.
    Comment: Western received many comments supporting the proposed 
marketing area.
    Response: Western appreciates the support for continuing the 
current P-SMBP--ED marketing area.
    Proposed Load Factor Limit and Withdrawal Provisions:
    Load Factor Limit: Western would market firm power at its 
customers' monthly system load factor for as long as possible. Western 
would reserve the right to limit monthly load factors to 70 percent if 
necessary during the 2021 PMI contract term. A 3-year notice would be 
given prior to requiring such limitation.
    Project Use Withdrawal Provision: Western would reserve the right 
to reduce a customer's summer season contract rate of delivery by up to 
5 percent for new project use requirements, by giving a minimum of 5 
years' written notice in advance of such action.
    Hydrology and River Operations Withdrawal Provision: Western, at 
its discretion and sole determination, would reserve 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 would only take place after a public process by Western.
    Comment: Western received comments supporting the project use 
withdrawal provision.
    Response: Western appreciates the support for continuing the 
project use withdrawal provision established in the 1985 Marketing Plan 
(45 FRN 71860, October 30, 1980).
    Comment: Western received many comments supporting the proposed 
hydrology and river operations withdrawal provision.
    Response: Western appreciates the support for continuing the 
hydrology and river operations withdrawal provision as established in 
the EPAMP (60 FRN 54151, October 20, 1995).
    Proposed Marketing Future Resources: Additional power resources may 
become available for various reasons. Any additional available 
resources would be used in accordance with EPAMP as specified in 10 CFR 
905.32(e).
    Comment: Western received many comments regarding marketing future 
resources. Commenters suggested Western consider offering additional 
available resources to existing customers who contributed to resource 
pools before making the offer to new customers or use the additional 
resources to support existing contract rates of deliveries to existing 
preference customers. Western also received comments supporting the 
proposed marketing future resources principle as currently stated in 
EPAMP. Western received a comment stating that if any additional power 
resources become available, those resources should be used to offset 
any possible reduction to the customers' contract rates of delivery due 
to resource pools or other withdrawal provisions.
    Response: EPAMP provides Western flexibility in dealing with 
additional resources if they become available. If additional resources 
become available, Western will review the available marketable 
resources and Western's commitments at that time. Based on the outcome 
of the review, Western will use additional resources in accordance with 
EPAMP, 10 CFR 905.32(e).

Additional 2021 PMI Comments

    Comment: Western received a comment seeking verification that 
Western's 2021 PMI is not proposing material changes to the firm 
peaking power service.
    Response: Western did not propose any changes to the firm peaking 
power in the 2021 PMI.
    Comment: Western received a comment from an existing preference 
customer requesting an increase to their allocation to at least 100 
kilowatts (kW), which is the minimum amount of power allocated to new 
preference customers.
    Response: Western's P-SMBP--ED allocations have been based on the 
marketing criteria in effect when each allocation was granted. This 
preference customer started receiving Federal power and energy in 1969, 
prior to the establishment of the 100-kW minimum allocation criterion. 
Increasing the current contract rates of delivery (CROD) for one 
customer would require Western to reallocate its existing marketable 
resource among all existing P-SMBP--ED firm power customers. Western's 
proposed 2021 PMI did not include reallocation among existing 
customers, but rather proposed extending all customers' existing CROD 
with reductions, if needed, for new resource pools. With the exception 
of this customer's comment, all comments received on the proposed 2021 
PMI marketable resource principle supported Western's proposal; 
therefore, Western does not support increasing this customer's 
allocation.
    Comment: Western received a comment from a Native American Tribe 
requesting further government-to-government consultation on the 2021 
PMI, information on other Western programs, and additional time to 
provide supplemental comments on the proposed 2021 PMI.
    Response: Western met with this Native American Tribe on June 29, 
2011, to continue ongoing government-to-government consultation on the 
2021 PMI and provide information on other Western programs. Western 
also re-opened the comment period for the proposed 2021 PMI as 
published in the Federal Register (76 FR 47180, August 4, 2011). Re-
opening the comment period provided additional time for ongoing 
government-to-government consultation and additional time for all 
entities to submit new and/or supplemental comments. Comments were 
accepted on this Federal Register notice until September 6, 2011.
    Comment: Western received a comment requesting that Western explore 
alternatives to the tribal bill

[[Page 71018]]

crediting program to enhance the economic benefit of the tribal power 
allocation.
    Response: Alternative methods of delivery to provide the benefits 
of a Federal hydropower allocation to tribal firm power customers are 
outside the scope of the 2021 PMI process.
    Comment: Western received a comment stating that Western needs to 
respect tribal sovereignty in the 2021 PMI. Western also received a 
request for Western's consultation policy for Tribal Nations.
    Response: Western recognizes the special and unique relationship 
between the United States and the tribal governments. Western supports 
the DOE's American Indian Policy, available upon request (see FOR 
FURTHER INFORMATION CONTACT section), which stresses the need for a 
government-to-government, trust-based relationship.
    Comment: Western received comments encouraging Western to conclude 
this 2021 PMI process and move forward to contracting in a timely and 
deliberate manner.
    Response: Western agrees with this comment. Western intends to 
begin development of firm electric service contracts with customers 
after completion of this process.

Final 2021 PMI

    Western will extend the current Marketing Plan with amendments to 
the Contract Term and Resource Pools principles. The Marketing Plan 
principles that are amended as well as the Marketing Plan principles 
that are extended are as follows:
    Amended Marketing Plan Principles:
    1. Contract Term: A 30-year contract term will be used for FES 
contracts. The FES contract term will begin January 1, 2021, and expire 
December 31, 2050.
    2. Resource Pools: The 2021 PMI will provide for resource pools of 
up to 1 percent of the marketable resource under contract at the time 
for eligible new preference entities at the beginning of the contract 
term (January 1, 2021) and again every 10 years (January 1, 2031, and 
January 1, 2041).
    Extended Marketing Plan Principles:
    Extension of the current Marketing Plan includes all provisions and 
principles not specifically addressed in the preceding section (Amended 
Marketing Plan Principles). The following key principles of the current 
Marketing Plan were discussed with firm power customers during the 
informal customer input phase and the formal information forums of this 
process and are included below for reference purposes.
    1. Marketable Resource: Based on adverse condition modeling to 
determine future marketable resource capability and median annual 
energy forecasting to determine future annual energy, the 2021 PMI 
supports extending the existing contract rates of delivery commitments, 
with associated energy, to existing long-term firm power customers 
reduced by up to 1 percent for each new resource pool in 2021, 2031, 
and 2041.
    2. 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.
    3. Load Factor Limit and Withdrawal Provisions:
    a. Load Factor Limit: Western will market firm power at its 
customers' monthly system load factor for as long as possible. Western 
will reserve the right to limit monthly load factors to 70 percent if 
necessary during the 2021 PMI contract term. A 3-year notice will be 
given prior to requiring such limitation.
    b. Project Use Withdrawal Provision: Western will reserve the right 
to reduce a customer's summer season contract rate of delivery by up to 
5 percent for new project use requirements, by giving a minimum of 5 
years' written notice in advance of such action.
    c. Hydrology and River Operations Withdrawal Provision: Western, at 
its discretion and sole determination, shall reserve 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 would only take place after a public process by Western.
    4. Marketing Future Resources: Additional power resources may 
become available for various reasons. Any additional available 
resources will be used in accordance with EPAMP as specified in 10 CFR 
905.32(e).

2021 PMI Procedures Requirements

Environmental Compliance

    In compliance with the National Environmental Policy Act (NEPA) of 
1969 (42 U.S.C. 4321-4347 (2007)); the Council on Environmental Quality 
Regulations for implementing NEPA (40 CFR parts 1500-1508); and DOE 
NEPA Implementing Procedures and Guidelines (10 CFR part 1021), Western 
has determined that this action is categorically excluded from further 
NEPA review.

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.

    Dated: November 8, 2011.
Timothy J. Meeks,
Administrator.
[FR Doc. 2011-29601 Filed 11-15-11; 8:45 am]
BILLING CODE 6450-01-P