[Federal Register Volume 81, Number 229 (Tuesday, November 29, 2016)]
[Notices]
[Pages 85946-85950]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-28690]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Final 2025 Salt Lake City Area Integrated Projects Power 
Marketing Plan

AGENCY: Western Area Power Administration, Department of Energy (DOE).

ACTION: Notice of the Final 2025 Power Marketing Plan for the Salt Lake 
City Area Integrated Projects.

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SUMMARY: Western Area Power Administration (WAPA), Colorado River 
Storage Project Management Center (CRSP MC), a Federal power marketing 
agency of the Department of Energy, announces the Final 2025 Power 
Marketing Plan (2025 Marketing Plan) for the Salt Lake City Area 
Integrated Projects (SLCA/IP). The Post-1989 General Power Marketing 
and Allocation Criteria (Post-1989 Plan), February 7, 1986, as extended 
June 25, 1999, will expire on September 30, 2024. After consideration 
of the public comments received, WAPA has decided to implement the 
Proposed 2025 Marketing Plan with the exception that WAPA will not 
create a new, 2-percent resource pool for potential new customers. This 
Federal Register notice is published to announce WAPA's decision for 
the Final 2025 Marketing Plan, respond to the comments received on the 
Proposed 2025 Marketing Plan, and specify the terms and conditions 
under which WAPA will market SLCA/IP firm hydroelectric resources 
beginning October 1, 2024.

DATES: The 2025 Marketing Plan will become effective December 29, 2016.

FOR FURTHER INFORMATION CONTACT: Mr. Parker Wicks, Public Utilities 
Specialist, or Mr. Steve Mullen, Public Utilities Specialist, Western 
Area Power Administration, CRSP Management Center, 150 East Social Hall 
Avenue, Suite 300, Salt Lake City, UT 84111-1580, telephone (801) 524-
5493, or email to [email protected]. Information can also be found 
at https://www.wapa.gov/regions/CRSP/PowerMarketing/Pages/power-marketing.aspx.

SUPPLEMENTARY INFORMATION: 
    Brief descriptions of the projects included in the SLCA/IP are 
provided below:

Colorado River Storage Project (CRSP)

    Authorized by Congress in 1956, the CRSP and participating projects 
initiated the comprehensive development and use of water resources of 
the Upper Colorado River. The CRSP is comprised of the Glen Canyon, 
Flaming Gorge, Blue Mesa, Crystal, and Morrow Point dams and 
powerplants. CRSP storage units stabilize the erratic flows of the 
Colorado River and its tributaries so annual water delivery commitments 
to the Lower Colorado River Basin, as well as to farmers, 
municipalities, and industries in the Upper Basin, can be met. Delivery 
of this water to consumers is accomplished, in part, through the 
participating projects discussed below, and additional project 
development may occur in future years. Initial hydroelectric generation 
began at the CRSP facilities in 1963. The maximum operating capacity of 
the five original CRSP powerplants is currently approximately 1,760 MW. 
The average annual generation from 1994 through 2014 was approximately 
5,208,238 MWh.

Participating Projects

    Seedskadee Project (Fontenelle Powerplant): The Seedskadee Project 
is in the Upper Green River Basin in southwestern Wyoming. The 
Fontenelle Dam, powerplant, and reservoir are the principal features of 
the Seedskadee Project. The powerplant commenced operation in May 1968. 
The maximum operating capacity of Fontenelle Powerplant is 10 MW. The 
average annual generation from 1994-2014 was 53,477 MWh.
    Dolores Project (McPhee Dam and Towaoc Canal Powerplants): The 
Dolores Project was authorized by the Colorado River Basin Act of 
September 30, 1968, as a participating project under the CRSP Act. The 
maximum operating capacity of the two powerplants is 12.8 MW, and the 
combined average annual output of McPhee Dam and Towaoc Canal 
powerplants from 1994-2014 was 18,161 MWh.

Integrated Projects

    WAPA consolidated and operationally integrated the Collbran and Rio 
Grande projects with CRSP beginning on October 1, 1987. These 
integrated projects have retained their separate financial obligations 
for repayment; however, the SLCA/IP rate is set to recover revenues to 
meet the repayment requirements of all projects. The maximum operating 
capacity of the eleven SLCA/IP powerplants is 1,818.6 MW, and the 
average annual generation from 1994-2014 was about 5,635,057 MWh. The 
SLCA/IP resources are currently marketed to approximately 135 long-term 
customers, and many more electric service providers benefit from this 
power indirectly through parent organizations that are direct customers 
of the SLCA/IP. Existing SLCA/IP contracts will terminate at the end of 
the September 2024 billing period.
    Collbran Project (Upper Molina and Lower Molina Powerplants): The 
Colbran Project was authorized in 1952 and has been in service since 
1962. The maximum operating capacity of the two powerplants is 
presently 13.5 MW. The average annual generation from 1994-2014 was 
41,915 MWh.

[[Page 85947]]

    Rio Grande Project (Elephant Butte Powerplant): The Rio Grande 
Project was authorized in 1905, and the powerplant went into service in 
1940. The maximum operating capacity of the Elephant Butte Powerplant 
is 27.0 MW. The average annual generation was 66,743 MWh from 1994-
2014.

Background Information

    The Post-1989 Plan provided the power marketing principles used to 
market what is now referred to as the SLCA/IP firm hydropower 
resources. The Firm Electric Service (FES) contracts associated with 
the Post-1989 Plan were initially set to expire October 1, 2004, and 
were extended to September 30, 2024.
    WAPA published its Proposed 2025 Marketing Plan, 80 FR 78222 
(December 16, 2015), and held a Public Information Forum on January 14, 
2016, in Salt Lake City, Utah, and a Public Comment Forum on February 
17, 2016, in Salt Lake City, Utah, to provide the public an opportunity 
to submit comments. During these meetings, the CRSP MC announced it 
would complete and post a preliminary determination of the 2025 SLCA/IP 
Marketable Resource, which would help determine if WAPA would offer a 
2-percent New Customer Power Pool, as proposed. WAPA extended the 
comment period, 81 FR 17163 (March 28, 2016), to May 31, 2016, to allow 
customers the opportunity to comment on the analysis and to make 
additional comments about the Proposed 2025 Marketing Plan. On May 10, 
2016, the CRSP MC posted notice on its Web site that, based on its 
Analysis of Potential Marketable Resource, insufficient sustainable 
hydro power (SHP) energy existed to offer a New Customer Power Pool.
    WAPA received oral comments at the public comment forum as well as 
18 written comment letters during the comment period. WAPA's responses 
to the comments received are included in this notice.

Response to Comments Received on the Proposed 2025 Marketing Plan

Right to Re-Evaluate Allocations and Contract Term

    Comment: Commenters supported a 40-year contract term for FES 
contracts. Several commenters did not support the concept of a 
reopener, or re-evaluation, at a 20-year interval during the contract 
period. Several commenters supported a 20-year contract term with an 
automatic right of renewal for an additional 20 years, without resource 
reduction considerations, if favorable hydrology exists.
    Response: In 2017, WAPA will begin the process of offering new FES 
contracts with a 40-year length of contract. However, depending on when 
contracts are actually negotiated and offered for signature, the period 
of performance may be less than 40 years. For example, a new contract 
executed in January 2017 would be let for 40 years and terminate in 
January 2057, while the period of performance and delivery of firm 
electric service would be approximately 33 years--as the existing 
contract remains in effect until September 30, 2024. This is due 
entirely to the 40-year limit to both length of contract and period of 
performance established by the Reclamation Project Act of 1939. 
Moreover, WAPA agrees with commenters and will not offer allocations 
for the first 20 years and then require a re-evaluation of the 
allocations later. WAPA will work with its customers to ensure that the 
FES contracts provide sufficient flexibility to address issues of 
changing hydrology or resource availability.

New Resource Pool

    Comment: Several commenters opposed the creation of a 2-percent 
resource pool for new customers. Several commenters supported the 
creation of a new resource pool only if power is available without 
reduction to existing Post-1989 Plan customers and only for the benefit 
of tribal customers not already receiving SLCA/IP power.
    Response: Modeling of SLCA/IP resources by the CRSP MC indicates 
there is no additional marketable capacity and energy available. WAPA 
will not offer a new customer resource pool under the 2025 Marketing 
Plan.

Hydropower Allocation to Tribe Served by SLCA/IP Customer

    Comment: A Native American tribe stated that it did not receive an 
allocation during WAPA's prior remarketing, but instead receives the 
benefits of the hydropower allocation through its local electric 
cooperative. The tribe stated that Indian self-determination must be 
furthered and WAPA should recognize that the benefits of receiving 
Federal preference power may potentially be greater for smaller tribes. 
The tribe requested WAPA consider allocating directly to the tribe.
    Response: WAPA does not have additional marketable capacity and 
energy to create an allocation for new customers. However, WAPA will 
work directly with the tribe to ensure Indian self-determination is 
furthered at all levels through whatever means WAPA has available--such 
as discussing arrangements made with the tribe's servicing utility.

Request for Additional Resources

    Comment: A commenter requested an increase in the amount of energy 
it receives to meet its growing loads and also stated that additional 
energy should be provided to correct for load factor issues.
    Response: WAPA is unable to provide additional energy because 
modeling of SLCA/IP resources indicate there is no additional 
marketable capacity and energy available. WAPA will extend the seasonal 
firm capacity allocations, referenced in the FES contracts as the 
Contract Rate of Delivery (CROD), along with the associated seasonal 
energy allocations, to the existing SLCA/IP firm power customers.

Priority of Preference in Proposed 2025 Marketing Plan

    Comment: Request for clarification on priority consideration for 
entities satisfying the marketing criteria.
    Response: WAPA will not offer a new customer resource pool under 
the 2025 Marketing Plan; but to reiterate the clarification given 
during the comment period, priority consideration for the 2-percent 
resource pool for potential new customers under the Proposed Marketing 
Plan would have been provided in the following order: (A) Federally 
recognized Native American tribes; (B) Municipal corporations and 
political subdivisions, including irrigation or other districts, 
municipalities, and other governmental organizations, electric 
cooperatives and public utilities, other than electric utilities, that 
are recognized as utilities by their applicable legal authorities, are 
nonprofit in nature, have electrical facilities, and are independently 
governed and financed; (C) Other eligible applicants.

Distribution of Additional Resources

    Comment: Should an increase in SLCA/IP resources ever occur, 
several commenters supported a pro-rata distribution of any additional 
resources to existing customers while several other commenters 
supported prioritizing new tribal customers over new non-tribal 
customers.
    Response: If additional marketable resources become available, WAPA 
will determine, through appropriate procedures and in consultation with 
its customers, how to allocate those additional resources. Moreover, 
WAPA will work with its customers to ensure that the FES contracts 
provide sufficient flexibility to address issues with

[[Page 85948]]

changing hydrology or resource availability.

Marketing Area

    Comment: Several commenters supported the Post-1989 Plan marketing 
area and requested WAPA make no changes to the Northern and Southern 
Division areas.
    Response: WAPA concurs and will preserve the Post-1989 Plan 
marketing area. No changes will be made to the Northern and Southern 
Division areas in the 2025 Marketing Plan.

Adjustment of Contract Rate of Delivery

    Comment: Several commenters do not support an overall reduction in 
the contracted customer shares, at any time. Several commenters support 
WAPA having the right to adjust the CROD and associated energy on 5 
years written notice, provided WAPA collaborates and meets with 
Preference Customers prior to giving any such notice.
    Response: WAPA will reserve the right to adjust, through 
appropriate procedures and in consultation with its customers, the CROD 
on 5 years advance written notice in response to changes in hydrology 
and river operations.

Service Seasons

    Comment: Several commenters support using the SLCA/IP definition 
currently implemented for the Winter Season (October-March) and Summer 
Season (April-September). One commenter supports the flexibility to 
determine monthly energy patterns within its seasonal allocation.
    Response: WAPA will continue the use of existing summer and winter 
seasons and work with its customers to determine if monthly energy 
allocation patterns could be adjusted within a season to better match 
customer needs and hydropower availability.

Replacement Power

    Comment: Several commenters indicated support for the capacity 
replacements programs currently in place through Customer Displacement 
Power (CDP) and Western Replacement Power (WRP) programs.
    Response: WAPA appreciates the commenters' support for the CDP and 
WRP programs. The 2025 Marketing Plan FES contracts will continue to 
include CDP and WRP programs.

Transmission Availability for Replacement Power

    Comment: Several commenters support the sale of unused firm 
transmission on a non-firm basis when that capacity is not used to 
deliver customer allocations or customer CDP/WRP so long as any revenue 
generated from such sales is applied in order to reduce the rate for 
CRSP customers.
    Response: WAPA will continue to include all projected revenues 
during the rate calculation process. Unused transmission will be made 
available per the Open Access Transmission Tariff (OATT) when that 
capacity is not needed for delivery of WRP, CDP, or the customers' 
allocations.

Use of Renewables

    Comment: Has WAPA considered the use of renewable energy to make up 
for the loss of hydropower to Post-2025 customers?
    Response: WAPA has considered the use of renewable energy as 
firming resources in the past and will in the future. If WAPA 
experiences a projected decrease in marketable hydropower resources, it 
will consider firming purchases from available resources, including 
renewables, in accordance with its power marketing authority. However, 
no such decrease is currently projected. WAPA has a long-term purchase 
power policy, as set forth in 10 CFR part 905--subpart E, whereby WAPA 
will develop criteria to consider long-term power purchases, which can 
include renewable resources, to meet long-term resource needs. Any 
long-term resource acquisition would be made in close consultation with 
the customers.

Renewable Energy Credits

    Comment: CRSP customers should receive Renewable Energy Credits 
(REC) in manner consistent with the Loveland Area Projects (LAP) REC 
program.
    Response: Consistent with WAPA's REC policy, the SLCA/IP generating 
units are registered with Western Renewable Energy Generation 
Information System (WREGIS), and the CRSP MC uploads monthly generation 
data. The monthly generation loaded into the WREGIS system creates one 
REC for every megawatthour of energy produced. Based on the amount 
generated from SLCA/IP hydropower facilities during the preceding 
calendar year, REC are dispersed annually to each customer 
proportionally based on its SLCA/IP allocation. Unlike the LAP, there 
is no special consideration for the smaller hydro facilities versus the 
large facilities. However, future changes to the REC distribution 
policy can be discussed with the customers for possible implementation.

Extension of Existing Contracts

    Comment: Several commenters support the extension of the customers' 
existing CROD allocations for the contract term. Several commenters 
suggested customers should be offered amended and restated contracts, 
developed with appropriate diligence and expedience, to extend the 
existing contracts at the existing CROD and associated energy 
commitments.
    Response: WAPA will offer new contracts that maintain the CROD 
allocations, with associated energy, to the existing SLCA/IP FES 
customers. WAPA will not offer amended and restated contracts, but will 
work with existing FES customers to develop a new contract.

Contract Development and Implementation

    Comment: Draft contracts should be developed with appropriate 
diligence and expedience and with minimal changes from the existing 
contract terms and conditions. Customer meetings to discuss the draft 
contracts should be limited and follow a formal process that includes 
notice and comment periods of reasonable duration and additional 
agency/customer/applicant dialogue on an individualized basis unless 
such topics advance to affect broader customer interests.
    Response: WAPA will collaborate with the FES customers on contract 
development while not impacting timely contract implementation. WAPA 
will provide timely notice and allow for reasonable periods of informal 
review and comments in order to facilitate customer participation.

General Power Contract Provisions

    Comment: Several commenters support the continued use of the 
current General Power Contract Provisions (GPCP), dated September 1, 
2007, for the proposed contract.
    Response: While specific contract provisions are outside of the 
2025 Marketing Plan, WAPA intends to use the GPCP dated September 1, 
2007.

Creditworthiness Procedures

    Comment: The inclusion of ``creditworthiness'' provisions in new 
FES contracts was not supported by commenters since the existing 
customers have a demonstrated history of paying WAPA timely, and no 
basis exists for WAPA to justify insertion of this type of provision.
    Response: Specific contractual provisions such as creditworthiness 
provisions are beyond the scope of the 2025 Marketing Plan. However, 
existing WAPA policy requires creditworthiness provisions in FES 
contracts and it is the intent of CRSP to include them in its FES 
contracts.

[[Page 85949]]

Customer Profile Data

    Comment: Only new customers should submit customer profile data; 
existing customers should not be required to submit customer profile 
data or applications for power.
    Response: WAPA concurs and no customer load profile data or 
applications will be required from existing customers. Furthermore, 
there will be no new customers because modeling of SLCA/IP resources 
indicate there is no additional marketable capacity and energy 
available.

Methods Report

    Comment: Commenters questioned some of the methodologies and 
assumptions WAPA made in determining the availability of future 
hydropower generation, as explained in the Methodology for SLCA/IP 
Resource Analysis for Consideration in the Development of the 2025 
Marketing Plan (Methods Report). These commenters questioned the use of 
certain hydrologic traces, particular assumptions about weekend versus 
weekday load patterns, and requested that only the current operating 
criteria be used for modeling purposes.
    Response: WAPA appreciates the interest and review of its Methods 
Report. After reviewing the comments, WAPA does not believe the items 
questioned would affect its decision to use the existing power and 
energy commitments in the 2025 Marketing Plan because these would 
result in only minimal changes to the modeling results.

Hydropower Production Scenarios

    Comment: Several commenters support WAPA proposing a variety of 
Marketing Plan approaches that address differing hydroelectric power 
production scenarios. Several commenters noted WAPA's reliance on a 
specific Department of the Interior (DOI) proposed Environmental Impact 
Statement (EIS) methodology in WAPA's resource analysis and urged WAPA 
to avoid reliance on any specific environmental-mitigation proposal in 
advance of any final DOI decision on that matter.
    Response: There are various impacts to hydropower availability such 
as drought, maintenance issues, transmission availability, and water 
delivery requirements in addition to operational changes made to 
mitigate potential environmental impacts. WAPA will continue to work 
with its customers to ensure that the FES contracts provide sufficient 
flexibility to address issues with changing hydrology and resource 
availability. For the Long-term Experimental and Management Plan 
(LTEMP) EIS, DOI has identified a preferred alternative, and WAPA is 
using this alternative for planning purposes only. If DOI implements a 
Glen Canyon Dam operation that significantly differs from the preferred 
alternative, WAPA will consider a change to its 2025 Marketing Plan.

Modeling of Marketable Resources

    Comment: Several commenters requested information describing the 
fundamental differences among GTMax, GTMax Lite, and GTMax Superlite v1 
software platforms WAPA used to model hydropower.
    Response: The GTMax model uses an older platform and architecture, 
which can only model 1 year at a time--under a single hydrological 
condition. GTMax Lite performs the same functions as GTMax but only 
simulates hydropower operations at Glen Canyon Dam rather than all of 
the CRSP facilities. This allows for various operational scenarios at 
Glen Canyon Dam to be modeled quickly. The GTMax Superlite model used 
by WAPA to model hydropower availability has all of the features and 
capabilities of the full GTMax model. The advantage of using GTMax 
Superlite for the 2025 Marketing Plan study is that it allows 
simulation and optimization of decades of operations, under numerous 
hydrological conditions, in a relatively short amount of time.

Final 2025 Power Marketing Plan and Marketing Criteria

    WAPA's 2025 Marketing Plan will provide the existing CROD 
commitments with associated energy to current SLCA/IP FES customers as 
set forth in the existing FES contracts, which implemented the Post-
1989 General Power Marketing Criteria and Post-2004 PMI. The 2025 
Marketing Plan principles are as follows:

Final 2025 Marketing Plan Principles

    1. Contract Term: The maximum 40-year contract term, as provided 
for in the Reclamation Project Act of 1939, will be used for FES 
contracts.
    2. Existing Marketable Resource: WAPA will extend the CROD 
commitments with associated energy to the existing SLCA/IP FES 
customers as set forth in the existing FES contracts, which implemented 
the Post-1989 General Power Marketing Criteria and Post-2004 PMI.
    3. New Resource Pool: Modeling of SLCA/IP resources by WAPA 
indicates there is no additional marketable capacity and energy 
available. WAPA will not establish a new customer resource pool under 
the 2025 Marketing Plan.
    4. Firm Electric Service Contract Provisions: Existing SLCA/IP FES 
contracts will serve as the basis for new FES contracts. CDP and WRP 
contract provisions will be included in the new FES contracts.
    5. Benefit Crediting Contracts: For those Native American tribes 
that do not operate their own electric utilities, Benefit Crediting 
Contracts will be available to deliver the benefit of the Federal 
hydropower allocation to those tribes.
    6. Marketing Area: The SLCA/IP marketing area remains unchanged, 
which is divided into Northern and Southern Divisions.
    A. The Northern Division consists of the states of Colorado, New 
Mexico, Utah, and Wyoming; the City of Page, Arizona; a portion of the 
area in Arizona which lies in the drainage area of the Upper Colorado 
River Basin to be served by the Navajo Tribal Utility Authority; and 
White Pine County and portions of Elko and Eureka counties in Nevada.
    B. The Southern Division consists of the remaining portion of the 
state of Arizona and that part of the state of Nevada in Clark, 
Lincoln, and Nye counties that comprise the southern portion of the 
state.
    7. Hydrology and River Operations Withdrawal Provision: WAPA will 
continue to reserve the right to adjust, at its discretion and sole 
determination, the CROD on 5 years advance written notice in response 
to changes in hydrology and river operations. Any such adjustments 
would occur after an appropriate public process.
    8. Service Seasons: Summer and winter seasons remain unchanged.
    A. Summer Season: The 6-month period from the first day of the 
April billing period through the last day of the September billing 
period in any calendar year.
    B. Winter Season: The 6-month period from the first day of the 
October billing period of any calendar year through the last day of the 
March billing period of the next succeeding calendar year.

Availability of Information

    Documents developed or retained by WAPA during this public process 
will be available by appointment for inspection and copying at the CRSP 
MC, located at 150 East Social Hall Avenue, Suite 300, Salt Lake City, 
Utah. WAPA will post information concerning the Final 2025 Marketing 
Plan on its Web site at: https://www.wapa.gov/regions/CRSP/PowerMarketing/Pages/power-marketing.aspx.

[[Page 85950]]

Procedural Requirements

Environmental Compliance

    In compliance with 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 parts 1500 through 1508, and 
the Integrated DOE NEPA Implementing Procedures, 10 CFR part 1021, WAPA 
has determined this action is categorically excluded from the 
preparation of an environmental assessment or an EIS.

Determination Under Executive Order 12866

    WAPA 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.

Regulatory Flexibility Analysis

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601, et 
seq., requires a Federal agency to perform a regulatory flexibility 
analysis whenever the agency is required by law to publish a general 
notice of proposed rulemaking for any proposed rule, unless the agency 
can certify that the rule will not have a significant economic impact 
on a substantial number of small entities. In defining the term 
``rule,'' the RFA specifies that a ``rule'' does not include ``a rule 
of particular applicability relating to rates [and] services . . . or 
to valuations, costs or accounting, or practices relating to such rates 
[and] services . . . .'' 5 U.S.C. 601. WAPA has determined that this 
action relates to rates or services offered by WAPA and, therefore, is 
not a rule within the purview of the RFA.

    Dated: November 18, 2016.
Mark A. Gabriel,
Administrator.
[FR Doc. 2016-28690 Filed 11-28-16; 8:45 am]
 BILLING CODE 6450-01-P