[Federal Register Volume 82, Number 156 (Tuesday, August 15, 2017)]
[Notices]
[Pages 38675-38685]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-17210]


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DEPARTMENT OF ENERGY

Western Area Power Administration


2025 Power Marketing Plan

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of final plan.

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SUMMARY: The Department of Energy (DOE), Western Area Power 
Administration (WAPA), announces its final 2025 Power Marketing Plan 
(Marketing Plan) for the Sierra Nevada Region (SNR). On December 31, 
2024, all of SNR's long-term power sales contracts will expire. This 
notice responds to comments received on the Proposed 2025 Power 
Marketing Plan (Proposed Plan) and sets forth the Marketing Plan. The 
Marketing Plan specifies the terms and conditions under which WAPA will 
market power from the Central Valley Project (CVP) and the Washoe 
Project beginning January 1, 2025. This Marketing Plan supersedes all 
previous marketing plans for these projects. WAPA will offer new 
contracts for the sale of power to existing customers as more fully 
described in the Marketing Plan. Entities who wish to apply for a new 
allocation of power from WAPA, and who meet the criteria defined in the 
Marketing Plan, should submit formal applications. Application 
procedures will be set forth in the Call for 2025 Resource Pool 
Applications in a separate Federal Register notice to be published 
after the Marketing Plan is applicable.

DATES: The Marketing Plan will become applicable September 14, 2017 in 
order to make power allocations and complete the other processes 
necessary to begin providing services on January 1, 2025.

FOR FURTHER INFORMATION CONTACT: Ms. Sonja Anderson, Vice President of 
Power Marketing, Sierra Nevada Customer Service Region, Western Area 
Power Administration, 114 Parkshore Drive, Folsom, CA, 95630-4710, by 
email at [email protected], or by telephone (916) 353-4421. Information 
on development of the Marketing Plan can be found at https://www.wapa.gov/regions/SN/PowerMarketing/Pages/2025-Program.aspx.

SUPPLEMENTARY INFORMATION: 

Development of the 2025 Power Marketing Plan

    WAPA currently markets power from the CVP and the Washoe Project 
under long-term contracts to approximately 80 preference customers in 
northern and central California and Nevada. On December 31, 2024, all 
of SNR's long-

[[Page 38676]]

term power sales contracts will expire. This notice sets forth WAPA's 
Marketing Plan and responds to comments received on the Proposed Plan. 
The Marketing Plan specifies the terms and conditions under which WAPA 
will market power from CVP and the Washoe Project beginning January 1, 
2025. This Marketing Plan supersedes all previous marketing plans for 
these projects.
    CVP power facilities include 11 powerplants with a maximum 
operating capability of about 2,113 megawatts (MW) and an estimated 
average annual generation of 4.6 million megawatthours (MWh). The 
Washoe Project, Stampede Powerplant has a maximum operating capability 
of 3.65 MW with an estimated annual generation of 10,000 MWh.
    To deliver CVP power, WAPA owns the 94 circuit-mile Malin-Round 
Mountain 500-kilovolt (kV) transmission line (an integral part of the 
Pacific AC Intertie (PACI)), the 84 circuit-mile Los Banos-Gates No. 3 
500-kV transmission line, 803 circuit miles of 230-kV transmission 
line, 7 circuit miles of 115-kV transmission line, and approximately 63 
circuit miles of 69-kV and below transmission line. WAPA also has 
partial ownership in the 342-mile California-Oregon Transmission 
Project (COTP) 500-kV transmission line. Many of WAPA's existing 
customers have no direct access to WAPA's transmission lines and 
receive service over transmission lines owned by other utilities. The 
Washoe Project is not directly connected to the CVP. Sierra Pacific 
Power Company (SPPC) owns and operates the only transmission system 
available for access to the Washoe Project.
    The following table lists a range of estimated CVP and Washoe 
Project power resources and adjustments. This table is for 
informational purposes only and does not imply the power resources and 
adjustments shown will be the actual amounts available or adjustments 
applied.

------------------------------------------------------------------------
 Estimated CVP power resources and adjustments prior to first preference
               entitlements and base resource allocations
-------------------------------------------------------------------------
         Power resources/adjustment                  Range/value
------------------------------------------------------------------------
Annual energy generation...................  2,400,000-8,600,000 MWh.
Monthly energy generation..................  87,000-1,100,000 MWh.
Monthly capacity...........................  360-1,900 MW.
Annual project use.........................  334,000 MWh-1,670,000 MWh.
Monthly project use........................  10,000-180,000 MWh.
Monthly project use (on peak)..............  30-360 MW.
Monthly maintenance........................  0-300 MW.
Reserves--hydro............................  minimum 5% of monthly
                                              capacity.
CVP transmission and transformation losses   1.6%.
 from the generator bus to a 230-kV load
 bus.
------------------------------------------------------------------------

    WAPA began developing the Marketing Plan with a series of three 
informal public information meetings. These meetings helped WAPA 
identify pertinent issues, including contract provisions and 
methodologies for creating resource pools.
    WAPA subsequently published its Proposed Plan (81 FR 27433, dated 
May 6, 2016). WAPA held a public information forum on June 1, 2016, to 
present the Proposed Plan and answer questions. On July 12, 2016, WAPA 
held a public comment forum to accept verbal comments, and accepted 
written comments from the public through August 4, 2016. WAPA 
considered the comments received in developing the Marketing Plan.

Responses to Comments Received on the Notice of Proposed Plan

    During the public consultation and comment period, WAPA received 13 
letters commenting on the Proposed Plan. In addition, six customers and 
interested stakeholder representatives commented during the July 12, 
2016, public comment forum. In preparing the Marketing Plan, WAPA 
reviewed and considered all comments received during the public 
consultation and comment period.
    The following is a summary of the comments received during the 
consultation and comment period, and WAPA's responses to those 
comments. Comments are grouped by subject and paraphrased for brevity. 
Specific comments are used for clarification where necessary.

I. Marketing Plan Term

    Comment: All commenters supported the 30-year term; however, 
several stated without some additional balancing of the termination 
provisions and/or the rate procedures, the additional term could result 
in cost or risk exposure that negatively impacts Base Resource 
customers. Additionally, Base Resource customers will be exposed to 
increased risks due to the take-or-pay nature of the power contracts 
unless WAPA includes reduction and early termination provisions.
    Response: Please see WAPA's response under Termination and 
Reduction Provisions for a response to the reduction and early 
termination portion of these comments.

II. Marketable Resource--Base Resource

    Comment: Two commenters stated WAPA should explicitly define the 
Base Resource and list all applicable attributes including energy, 
capacity, ancillary services, reserves, transmission and environmental 
attributes.
    Response: WAPA has modified the definition of Base Resource in the 
Marketing Plan to clarify that power includes capacity and energy. 
Transmission is not an attribute of the Base Resource. It is the 
customers' responsibility to secure any necessary transmission service; 
however, WAPA will provide transmission service to deliver the Base 
Resource on the CVP system. The definition continues to include 
ancillary services reserves, and environmental attributes.
    Comment: A commenter stated it understands that Project Use, First 
Preference, maintenance, reserves, and system and transmission losses 
are subtracted from the CVP generation prior to determining the Base 
Resource available. The commenter asked if there were any other 
existing or new obligations on the CVP resource that should be 
explicitly identified in the Marketing Plan.
    Response: At this time, there are no additional obligations on CVP 
power resources other than those listed.
    Comment: A commenter stated WAPA should determine the amount of 
Base Resource available in an equitable manner, and not by which 
balancing authority area the customers are located. WAPA can improve 
the equity by considering all aspects of its CVP portfolio of assets, 
including generation,

[[Page 38677]]

capacity, ancillaries, and transmission assets.
    Response: The Marketing Plan defines Base Resource and allocates 
Base Resource to each preference customer based on the preference 
customer's percentage. WAPA does not consider a customer's balancing 
authority area when determining the amount of Base Resource available.
    Comment: A commenter encouraged greater efforts by WAPA and the 
U.S. Department of the Interior, Bureau of Reclamation (Reclamation) to 
consider measures to increase the value and flexibility of the Base 
Resource.
    Response: WAPA will continue to work with Reclamation to maximize 
the value of the Base Resource.

III. Marketable Resource--Custom Products

    Comment: Several commenters supported offering Custom Products. The 
commenters stated that WAPA's commitment to explore requested Custom 
Products provides needed certainty and possible additional 
opportunities for customers to explore new uses for the Base Resource 
and transmission assets. The commenters further stated that WAPA's 
process for establishing Custom Products involves appropriate customer 
input, and ensures that WAPA's other customers may even benefit 
indirectly from the offering of Custom Products. The commenters also 
stated that Custom Products improve the value of the Base Resource to 
all customers. The customers support all costs incurred being paid by 
those customers contracting for such Custom Products.
    Response: WAPA will continue to offer Custom Products with all 
costs incurred paid by those customers contracting for those products 
and/or services.
    Comment: A commenter encouraged WAPA to identify the Custom 
Products being offered to customers, including the product terms and 
cost, and to increase the visibility and availability of the price and 
terms and conditions of Custom Products. The commenter suggested that 
WAPA provide periodic reports on the Custom Products used by preference 
customers, including data on prices, terms, and conditions for all 
products.
    Response: WAPA anticipates it will continue to offer Full Load, 
Variable Resource, and Scheduling Coordinator Services. WAPA is open to 
assisting customers with their electric service needs under a Custom 
Product contract if WAPA is able to do so. Custom Products will 
initially be offered for 5-year terms. The cost for such products and 
services will be on a pass-through basis. WAPA will not know what other 
products or services it may provide until those services are requested, 
nor will WAPA know the cost of any Custom Products until those services 
are determined, along with the number of customers participating in 
those services, and other relevant parameters. At such time as the 
pricing, terms and conditions related to Custom Products is no longer 
considered proprietary and/or market sensitive, WAPA may provide it 
upon request.
    Comment: A commenter asked WAPA to clarify how it will carry out 
the collaborative process to ensure all stakeholder perspectives are 
considered.
    Response: Custom Products are any product or service requested by 
an individual customer or group of customers. These products or 
services will be mutually negotiated between a specific customer or a 
specific group of customers and WAPA.
    Comment: A commenter stated that, to the extent the Custom Products 
offered reduce the value of the Base Resource to other preference 
customers by reducing the availability of electricity, capacity, 
reserves, ancillary services, transmission and/or environmental 
attributes, the beneficiary should pay for the value of the displaced 
Base Resource. WAPA should modify the Marketing Plan to clearly define 
the Custom Products that could reduce power and transmission available 
for Base Resource generation before all customers are asked to execute 
a contract in 2020.
    Response: Custom Products do not include the Base Resource or CVP 
generation. Custom Products are meant to enhance the Base Resource for 
those customers that may need additional services from WAPA to maximize 
the benefit from the Base Resource. WAPA provides transmission with the 
Base Resource; therefore, Custom Products do not affect the 
availability of transmission for Base Resource delivery.
    Comment: If WAPA is providing a service or facility for voltage 
support or some similar benefit to a specific entity, according to 
WAPA's Open Access Transmission Tariff (OATT), the costs for such a 
project must be paid by that individual entity. If WAPA does not follow 
its own OATT and allocates these costs to other entities, these other 
entities must be authorized an off-ramp.
    Response: All costs associated with providing Custom Products are 
passed to those customers requesting Custom Products. If a Custom 
Product involves services under WAPA's OATT, the customer will take and 
pay for those services under the OATT.

IV. Exchange Program

    Comment: A commenter supported the hourly and seasonal exchange 
programs provided that they are administered and implemented fairly 
whereby all who can share in the benefits of Base Resource can do so 
without taking on additional burdens.
    Response: WAPA intends to develop the exchange program with input 
from the customers and the public to maximize the benefits and lessen 
any burdens associated with exchange program participation. The 
exchange program is an optional program.

V. Extension of the Resource

    Comment: Several commenters support extending 98 percent of the 
Base Resource to existing customers.
    Response: WAPA will extend 98 percent of the Base Resource to 
existing customers as specified in the Marketing Plan.
    Comment: A commenter stated WAPA should allow existing customers to 
take less than 98 percent of their current Base Resource percentage.
    Response: WAPA will allow an existing customer to reduce its base 
resource percentage allocation under this Marketing Plan with at least 
six months' written notice to WAPA prior to January 1, 2025.
    Comment: A commenter supported limiting allocations to no more than 
100 percent of load, but suggested using consistent data to determine 
load between existing and new customers.
    Response: A customer should not have an allocation larger than its 
load. Reviewing a 5-year period of energy consumption for existing 
customers is appropriate so an existing customer is not unduly harmed 
due to unusual factors (drought, environmental impacts, etc.) that may 
affect their load for just one year.

VI. Resource Pools

    Comment: Several commenters support creating the resource pools; 
the calculation methodology to create the resource pools; and the 2 and 
1 percent resource pools in 2025 and 2040, respectively, which are 
sufficient to broaden the preference customer base without overly 
penalizing existing customers.
    Response: WAPA acknowledges the comment.
    Comment: Two commenters stated the Marketing Plan should have a 
provision to address how WAPA will manage returned allocations from 
customers that either do not opt for new power contracts or exercise 
early termination. A commenter recommends that

[[Page 38678]]

surrendered or excess allocations (where load exceeds allocations) be 
offered to existing customers on a pro rata basis. Another commenter 
supports returning all surrendered allocations to existing customers, 
even if that amount is beyond 2 percent.
    Response: The Marketing Plan states that surrendered allocations 
will be returned to existing customers on a pro rata basis, up to 100 
percent of each existing customer's pre-2025 allocations. WAPA will not 
allocate Base Resource above an existing customer's pre-2025 allocation 
unless that existing customer applies for an additional allocation 
because some existing customers may neither need nor want more Base 
Resource. Any Base Resource available after returning existing 
customers to 100 percent of their pre-2025 allocations will be included 
in the resource pool. Any Base Resource available from excess 
allocations, which WAPA believes will be minimal, will also be included 
in the resource pool. Existing customers interested in receiving 
additional Base Resource are encouraged to apply for a resource pool 
allocation. This same process will be used for the 2040 resource pool.

VII. Allocation Criteria

    Comment: A commenter stated the Northern California Power Agency 
members with small allocations due to prior withdrawals should receive 
at least equal consideration with Native American tribes.
    Response: WAPA will consider all applications received in response 
to the Calls for Applications. It is WAPA's policy to provide 
assistance to Native American tribes consistent with 25 U.S.C. 3505.
    Comment: A commenter stated that under the Proposed Plan, a new 
customer could potentially receive up to 2 percent of the Base Resource 
in 2025 if additional customers are not available to split the resource 
pool. The commenter stated that if there are not enough new customers 
to fully subscribe to the 2 percent offering, the remaining share of 
the Base Resource product that is not allocated to a new customer can 
then be distributed to existing customers. The commenter also stated 
that existing customers could still potentially receive less than 1 
percent of the Base Resource if several existing customers sign up to 
receive a share of unsubscribed Base Resource in the resource pool for 
new customers.
    Response: WAPA has not determined how much Base Resource will be 
allocated to any allottee or group of allottees, which would include 
new allottees or increases in existing customers' allocations. Existing 
customers may apply for additional Base Resource.
    Comment: A commenter said the allocation methodology states the 
allocation of Base Resource ``will be based on applicant's load during 
the calendar year prior to the Call for Applications or the amount 
requested, whichever is less.'' The commenter advocated establishing 
this load ratio share benchmark to determine which existing customers' 
Base Resource allocations exceed their load ratio share and subjecting 
only those excess allocations to the 2 percent reduction to establish 
the resource pool. Those existing customers whose Base Resource 
allocations fall below the benchmark would not be subject to the 2 
percent reduction and would also be eligible for participation in the 
resource pool.
    Response: WAPA considered several different methodologies to create 
the Resource Pools, including reducing only a subset of existing 
customers' allocations. After reviewing the comments received during 
informal stakeholder meetings, WAPA determined it would treat all 
customers equally by reducing the existing customers' allocation by 2 
percent and 1 percent to create the 2025 and 2040 Resource Pools, 
respectively.
    Comment: A commenter strongly encouraged development of minimum 
threshold criteria to ensure that the existing customers are not 
disadvantaged by the resource pool and that the resource value is not 
weakened or jeopardized by new customers. The commenter encouraged 
setting standards or carefully monitoring the resource pool process to 
ensure the resource is being used consistent with the project purposes.
    Response: The Marketing Plan sets forth the eligibility criteria 
necessary to be met to qualify for an allocation of Federal power. The 
criteria apply to both existing and new customers. All new and existing 
customers will execute the same electric service contract and are bound 
by the same terms and conditions.
    Comment: A commenter was concerned by the proposal to allow only 
those customers who have a load ratio share below 25 percent to receive 
additional allocations under the resource pool. The commenter 
understands the intent to avoid allocating additional Base Resource to 
entities who already have large allocations; however, the commenter 
stated the 25 percent threshold is somewhat arbitrary and that a set 
threshold neglects consideration of customers' socio-economic 
conditions or technical issues.
    Response: In an informal public information meeting, WAPA proposed 
only existing customers whose allocation meets less than 25 percent of 
their load could apply for an additional allocation of Base Resource. 
Several stakeholders stated concerns with that proposal. Based on those 
concerns, the Marketing Plan does not contain a threshold. Any existing 
customer can apply for a resource pool allocation.

VIII. General Criteria and Contract Principles

    Comment: Section V.B. states that ``Allocation percentages are 
subject to adjustment.'' A commenter stated the circumstances of such 
an adjustment need to be specified so customers have an understanding 
of the nature of their commitment to an allocation. WAPA should clarify 
that Base Resource percentage adjustments will only be made in very 
limited circumstances, such as by customer termination or reduction, or 
when a customer no longer exists.
    Response: WAPA agrees there are limited circumstances when Base 
Resource percentages may be adjusted as defined by the Marketing Plan. 
For instance, existing customers' Base Resource percentages may be 
increased if one or more existing customers reduce their Base Resource 
percentage or terminate their contracts prior to 2025. All customers' 
Base Resource percentages will be reduced for the 2040 Resource Pool. 
If it is determined that a customer has too large of an allocation, or 
is using the Base Resource for purposes other than serving its own 
load, that customer's Base Resource percentage may be reduced or 
withdrawn. An assignment, or withdrawal of an assignment, also would 
cause an adjustment in a customer's Base Resource percentage.
    Comment: Section V.I. states ``Contracts will include clauses 
specifying criteria that customers must meet on a continuous basis to 
be eligible to receive electric service from WAPA.'' Two commenters 
stated if WAPA intends to include criteria in the contracts that differ 
from the criteria for eligibility for an allocation, then the nature of 
the intended ongoing criteria should be explained. WAPA should clarify 
the criteria a customer must continue to meet to remain a customer.
    Response: The eligibility criteria listed in the Marketing Plan 
will remain during the term of the Marketing Plan. However, other 
criteria may be required during the 30-year term to maintain 
flexibility and adapt to changes. Criteria

[[Page 38679]]

that a customer may need to meet will be included in contracts which 
can be modified as necessary to correspond with changes in the electric 
utility industry.
    Comment: A commenter asked what version of the General Power 
Contract Provisions (GPCP) will be attached to the new contracts.
    Response: The GPCP in effect at the time of the contract offer will 
be attached to the contracts for electric service.

IX. Termination/Reduction

    Comment: Several commenters expressed interest in contract 
termination/Base Resource reduction. Commenters stated that to achieve 
balance for a 30-year take-or-pay obligation, the contract should 
include a reasonable termination or reduction provision. Commenters 
asserted that precedent for contract termination provisions within 
contracts has been set by Federal Energy Regulatory Commission (FERC)-
approved transmission contracts. Due to the vague language in the GPCP, 
commenters stated that the Marketing Plan should clearly articulate 
customers' ability to terminate or reduce their Base Resource 
percentages when rates are extended. Commenters asserted that the 
Marketing Plan should clarify a customer's ability to terminate its 
contract under the GPCP. While the current GPCP provide for any 
customer, during a 90-day notification window, to terminate a contract 
following a rate change or formula rate extension, commenters 
recommended that a clear termination or allocation reduction provision 
be included in the body of the new agreement. Commenters asserted that 
there is clear precedent in major WAPA agreements for a reasonable 
termination notice provision. Commenters stated that specific language 
should be included in the body of the power contracts to allow a 
customer to reduce or terminate its allocation upon notice to WAPA, 
because GPCP termination triggered by rate change action is not 
sufficient risk protection for customers.
    Response: WAPA acknowledges a 30-year term for a contract is a 
significant commitment and understands the concern regarding the 
ability to terminate the contract. WAPA's GPCP provide for customers to 
terminate service in the event of a change of rates. However, to 
address the commenters' concerns, WAPA will exclude Section 11 of the 
GPCP and, in collaboration with the customers, will clarify Section 11 
and insert it directly into the contract.
    Comment: Several commenters also stated the contracts should 
provide an exit clause at 5-year intervals during the term, after a 
change in the rates or terms of service, or after a significant 
regulatory change. According to the commenters, such a provision would 
provide protection for customers' ratepayers. Without an undisputable 
termination provision, commenters asserted that a 30-year take-or-pay 
contract will be a difficult commitment to make in the current 
environment of low cost renewable resources relative to the highly 
uncertain resource availability and allocated costs associated with the 
Base Resource. Commenters stated that sufficient notice periods would 
give WAPA time to explore alternative means for marketing power. The 
commenters strongly recommended consideration of a process that allows 
customers to terminate or reduce their Base Resource percentages under 
prescribed conditions. Such conditions could include a requirement that 
customers attempt to reassign the Base Resource percentage; longer 
notice provisions; or other criteria that would provide a balance for 
all parties. Some of these commenters advocated an opportunity for 
customers, upon reasonable notice, to terminate or modify their Base 
Resource allocation, for any reason, every five years throughout the 
term of the contract.
    Response: As discussed above, WAPA will allow for termination as a 
result of a rate adjustment. WAPA anticipates electric utility industry 
changes and has provided for the ability to modify contracts in 
collaboration with customers in this Marketing Plan; therefore, WAPA 
does not believe an exit clause will be necessary in response to 
changes in the electric utility industry. Additionally, WAPA will use 
best efforts to assist customers that wish to reassign an allocation to 
the extent there are customers interested in additional allocations.
    Comment: A commenter advocated a process whereby those customers 
intending to terminate their Base Resource contracts make an offering 
to other remaining Base Resource customers prior to filing a notice to 
terminate the contract. This would allow the remaining Base Resource 
customers to elect the level of additional Base Resource product that 
they would want to take and provide an overall balance of certainty for 
the entire program.
    Response: If an existing customer surrenders some or all of its 
Base Resource percentage during a resource pool process, WAPA will 
first use that surrendered Base Resource percentage to return all 
existing customers up to their full Base Resource percentage prior to 
the resource pool reduction. Any remaining Base Resource percentage 
after all customers are returned to their full Base Resource percentage 
will be included in the resource pool. Outside of a resource pool 
period, if a customer were to surrender any or all of its Base Resource 
percentage, WAPA, at its discretion, will reallocate that Base Resource 
percentage.

X. First Preference Entitlement and Allocation

    Comment: A commenter stated the Final Plan should state that any 
and all preference entities located within Calaveras County are 
eligible to join a joint powers authority (JPA) as members and receive 
power through such JPA, irrespective if any of those entities receive a 
Base Resource allocation.
    Response: Increasing Calaveras County's first preference allocation 
to serve additional loads of other preference customers would 
circumvent the allocation process. Additionally, it would lower the 
amount of Base Resource available for all preference customers.

XI. Transmission

    Comment: A commenter supported continued use of the CVP 
transmission for Base Resource deliveries.
    Response: Western acknowledges the comment.
    Comment: A commenter stated WAPA should work with customers to 
ensure transmission arrangements are completed to provide for delivery 
of power made available by the Marketing Plan.
    Response: WAPA will use best efforts to assist customers with their 
transmission arrangements. However, because WAPA does not own all the 
transmission and distribution necessary to serve all customers' loads, 
obtaining the transmission and distribution service necessary for 
delivery of WAPA power is ultimately the customers' responsibility.
    Comment: Several commenters support consideration of the PACI to 
aid and benefit the CVP. Commenters stated that WAPA's transmission 
assets can be used to improve the economic benefit of the CVP to 
preference customers. Commenters also stated that WAPA should carefully 
manage and use all of its transmission assets to maximize and enhance 
economic and operational benefits to allow CVP costs to be minimized 
and benefits to be shared with preference customers. Commenters 
supported WAPA's commitment to

[[Page 38680]]

make surplus transmission available to aid and benefit the CVP. 
Commenters encouraged WAPA to explore the best use of its surplus 
transmission, including the Path 15 transmission line, to minimize 
costs for the CVP while honoring its existing commitments.
    Response: Under WAPA's OATT, WAPA is required to charge all 
customers the same rate it charges itself, unless there is a statutory 
exemption. The PACI legislation (16 U.S.C. 837g) provides that WAPA 
should sell the excess capacity at equitable rates. Operational control 
of Path 15 has been turned over to the California Independent System 
Operator (CAISO). WAPA will continue to examine ways to utilize the 
PACI to aid and benefit the CVP.

XII. Changes in the Electric Utility Industry

    Comment: Numerous commenters support WAPA incorporating specific 
provisions to negotiate changes to contracts should changes in the 
electric industry/markets be significant enough that CVP transactions 
would need to be managed differently than might be articulated in the 
contracts. Commenters stated that this may be important in light of the 
significant changes that continue to impact the electric utility 
industry. Commenters further stated that the Marketing Plan needs to 
remain flexible due to the evolving power system, and that WAPA may 
need to re-evaluate the products and services it offers to continue to 
provide power at the lowest possible rates consistent with sound 
business principles. Commenters requested that WAPA clarify that any 
changes will be done with mutual agreement by WAPA and the customers.
    Response: WAPA may need to re-evaluate the manner in which it 
markets the resource due to changes in the electric market. Any 
contractual changes will be made via mutual consent through an 
amendment executed by both parties to the contract.

XIII. Additional Comments

    Comment: A commenter stated that, in the Proposed 2025 Schedule, 
the one-time termination milestone should be removed and replaced with 
the opportunity to terminate or reduce the Base Resource percentage 
prior to contract start date.
    Response: WAPA has determined that a minimum of 6 months is needed 
to allow time to reallocate any returned allocations. Customers may 
reduce or return their allocations no later than July 1, 2024.
    Comment: A commenter asked what credit provisions will be applied 
to all customers.
    Response: WAPA's standard credit provisions in effect at the time 
of contract execution will be applied to all customers.
    Comment: Numerous commenters stated the Marketing Plan should 
include a limiter that would cap power customers' payments when power 
customers' combined CVP power and Restoration Fund payments exceed the 
annual average of the North of Path 15 market rate. A commenter 
strongly requested the Marketing Plan include a cap on costs that can 
be allocated to power customers under certain conditions to ensure the 
contract remains financially sustainable for customers and provides for 
a more proportionate allocation of costs between water and power 
customers. The commenters also stated that contracts should include a 
cap on power customers' payments when CVP power, Restoration Fund 
payments, Twin Tunnel payment and all other fees in total exceed the 
annual average market price. Commenters further stated that Restoration 
Fund costs are more than a third of the total cost of the Base 
Resource. While customers indicated that they understand that WAPA's 
cost recovery mechanisms for the CVP are based on the foundation of 
recovery for direct project costs through the power revenue 
requirement, they asked that WAPA explore further the Central Valley 
Project Improvement Act (CVPIA) costs that are being passed through by 
Reclamation before Plan implementation. Commenters stated that cost 
containment and cost certainty must be part of the equation so that 
Base Resource customers are able to better plan on power expenses and 
better justify budget impacts. If no significant benefits to power 
customers are associated with certain cost types, commenters argued 
that sound cost causation principles would suggest that those costs 
should not be passed on to power customers. Customers recommended that 
WAPA agree to suspend the collection of non-essential costs and 
projects when CVP generation levels are reduced, allowing Federal power 
to be assessed at rates equal or near alternative power costs. In the 
customers' view, the GPCP alone would not give customers protection 
from the CVP cost impacts occurring because of continually increasing 
CVPIA Restoration Fund costs. Because WAPA rate actions establish total 
revenue requirements, and not per unit costs, customers believe that 
the GPCP do not protect customers from increasing per unit costs due to 
declining CVP power production. Lastly, customers argued that because 
WAPA rate actions establish total revenue requirements, and do not 
consider the value of CVP power generated, the GPCP do not protect 
customers from declining value of CVP production due to water 
management shifts to periods when power is less valuable.
    Response: WAPA will sell the Base Resource at a cost-based rate. 
WAPA is required to recover costs within a statutorily defined period. 
The public ratemaking process is separate from the development of, and 
allocation of power under, the Marketing Plan. WAPA encourages the 
public to participate in WAPA's rate processes. Costs and availability 
will be more clearly identified by the time commitments are required 
for the Base Resource. Reclamation develops and implements the programs 
under the CVPIA, and determines the costs associated with its programs. 
WAPA is the billing agent for the Restoration Fund charges to the power 
customers and has no control over those costs; however, WAPA minimizes 
WAPA components of power costs to provide the best possible service at 
the lowest possible rates consistent with sound business principles. 
WAPA will continue to work with Reclamation and the customers on the 
CVPIA costs Reclamation is passing on to WAPA's customers.

Summary of Revisions to the Proposed Plan

    WAPA revised the Proposed Plan as a result of the comments received 
during the comment period and public forums. Additionally, changes have 
been made to more clearly define the intent, but not to alter the 
substance, of the original proposal. The revisions are summarized as 
follows:
    WAPA will exclude GPCP Section 11 from the electric service 
contract and, instead, will include language in the electric service 
contract developed in collaboration with customers that clearly defines 
the customers' ability to terminate their contracts after certain rate 
processes.
    The definition of Base Resource is modified to clarify that power 
includes both capacity and energy. Additionally, the word ``forfeit'' 
is being replaced with ``surrender'' to more accurately refer to a 
voluntary return of an allocation.
    In response to comments regarding the Custom Product, the 
definition of Custom Product is modified to clarify it does not include 
Base Resource and may not necessarily be supplemental power.

[[Page 38681]]

2025 Power Marketing Plan

    The Marketing Plan addresses: (1) The power to be marketed after 
December 31, 2024, which is the termination date for all existing SNR 
electric service contracts; (2) the general terms and conditions under 
which the power will be marketed January 1, 2025, through December 31, 
2054; and (3) the criteria to determine who will be eligible to receive 
allocations from the resource pools.
    WAPA will continue a collaborative process in implementing the 
terms set forth in this Marketing Plan.
    Within broad statutory guidelines, WAPA has discretion as to whom 
and under what terms it will contract for the sale of Federal power, as 
long as preference is accorded to statutorily-defined public bodies. 
WAPA markets power in a manner that will encourage the most widespread 
use at the lowest possible rates consistent with sound business 
principles. All products and services provided under this Marketing 
Plan will be subject to the operational requirements and constraints of 
the CVP and the Washoe Project, transmission availability, purchase 
power limitations, and Federal authorities.

I. Acronyms and Definitions

    As used herein, the following acronyms and terms, whether singular 
or plural, capitalized or not capitalized, shall have the following 
meanings:

Allocation An offer from WAPA to sell Federal power for a certain 
period of time, which will convert to a right to purchase after 
execution of a contract.
Allocation Criteria Criteria used to determine the amount of energy 
allocated to allottees.
Allottee A preference entity receiving an allocation percentage.
Ancillary Services Those services necessary to support the transfer of 
electricity while maintaining reliable operation of the transmission 
provider's transmission system in accordance with good utility 
practice. Ancillary services are generally defined by the North 
American Electric Reliability Corporation.
Base Resource CVP and Washoe Project power (capacity and energy) output 
determined by WAPA to be available for marketing, including the 
environmental attributes, after meeting the requirements of project use 
and first preference customers, and any adjustments for maintenance, 
reserves, system losses, and certain ancillary services.
Bill Crediting Contractual provisions whereby payments due to WAPA by a 
customer shall be paid by a customer to a third party when so directed 
by WAPA.
Capacity The electrical capability of a generator, transformer, 
transmission circuit or other equipment.
Central Valley Project (CVP) A multipurpose Federal water development 
project extending from the Cascade Range in northern California to the 
plains along the Kern River, south of the City of Bakersfield.
Contract Principles Provisions of the electric service contracts, 
including WAPA's General Power Contract Provisions.
Custom Product A combination of products and services which may be made 
available by WAPA per customer request.
Customer An entity with a contract and receiving electric service from 
WAPA's Sierra Nevada Region.
Eligibility Criteria Conditions that must be met to qualify for an 
allocation.
Energy Measured in terms of the work it is capable of doing over a 
period of time; electric energy is usually measured in kilowatthours or 
megawatthours.
Firm A type of product and/or service that is available to a customer 
at the times it is required.
First Preference Customer/Entity A preference customer and/or a 
preference entity (an entity qualified to use, but not using, 
preference power) within a county of origin (Trinity, Calaveras, and 
Tuolumne) as specified under the Trinity River Division Act (69 Stat. 
719) and the New Melones Project provisions of the Flood Control Act of 
1962 (76 Stat. 1173, 1191-1192).
General Power Contract Provisions (GPCP) Standard terms and conditions 
included in WAPA's electric service contracts.
Integrated Resource Plan (IRP) A process and framework within which the 
costs and benefits of both demand and supply-side resources are 
evaluated to develop the least total cost mix of utility resource 
options.
Kilowatt (kW) A unit measuring the rate of production of electricity; 
one kilowatt equals one thousand watts.
Marketing Plan WAPA's final 2025 Power Marketing Plan for the Sierra 
Nevada Region.
Megawatt (MW) A unit measuring the rate of production of electricity; 
one megawatt equals one million watts.
Net Billing Payments due to WAPA by a customer may be offset against 
payments due to that customer by WAPA.
Power Capacity and energy.
Preference The requirements of Reclamation Law that provide for 
preference in the sale of Federal power be given to certain entities, 
such as governments (state, Federal and Native American), 
municipalities and other public corporations or agencies, and 
cooperatives and other nonprofit organizations financed in whole or in 
part by loans made pursuant to the Rural Electrification Act of 1936 
(See, e.g., Reclamation Project Act of 1939, Section 9(c), 43 USC 
485h(c)).
Primary Marketing Area The area generally encompassing northern and 
central California extending from the Cascade Range to the Tehachapi 
Mountains and west-central Nevada.
Project Use Power as defined by Reclamation Law and/or used to operate 
CVP and Washoe Project facilities.
Reclamation Law Refers to a series of Federal laws with a lineage 
dating back to the late 1800s. Viewed as a whole, those laws create the 
framework under which WAPA markets power.
Reimbursable Financing WAPA may purchase power or provide other 
services using reimbursable authority pursuant to the Economy Act, 31 
USC 1535. This is a funding mechanism used by Federal customers.
Sierra Nevada Region (SNR) The Sierra Nevada Region of the Western Area 
Power Administration.
Unbundled Electric service that is separated into its components and 
offered for sale with separate rates for each component.
WAPA Western Area Power Administration, United States Department of 
Energy, a Federal power marketing administration responsible for 
marketing and transmitting Federal power pursuant to Reclamation Law 
and the DOE Organization Act (42 USC 7101, et seq.).
Washoe Project A Federal water project located in the Lahontan Basin in 
west-central Nevada and east-central California.

II. Base Resource

    The Base Resource, as defined in Section I., will include CVP and 
Washoe Project power. CVP generation will vary hourly, daily, monthly, 
and annually because it is subject to hydrological conditions and other 
constraints that may govern CVP operations. CVP generation must be 
adjusted for project use, first preference, maintenance, reserves, 
system losses, and certain ancillary services before the Base Resource 
is available for marketing. The Base Resource will be further adjusted

[[Page 38682]]

for transmission losses to the point of delivery.
    The U.S. Department of the Interior, Fish and Wildlife Service 
(F&WS), Lahontan National Fish Hatchery and Marble Bluff Fish Facility 
are project use loads of the Washoe Project and have first priority to 
those power resources. WAPA will continue to make every effort to 
provide the Washoe Project power resource to F&WS. The generation 
available after serving the F&WS needs will be marketed with the CVP 
power resources. The Washoe Project is subject to the same variability 
and constraints as the CVP.

III. Products and Services

    WAPA will market its Base Resource alone or in combination with a 
Custom Product, which could include purchasing some level of firming 
power on behalf of all customers, a group of customers, or individual 
customers. All costs incurred by WAPA in providing additional services 
to customers will be paid by those customers using the services. The 
degree to which WAPA continues to purchase power will depend on 
customer requests and Federal authorities.
    Each allottee will be allocated a percentage of the Base Resource. 
All allottees will be required to commit to the Base Resource within 6 
months of a contract offer.
    Upon request, WAPA may develop a Custom Product for any customer. A 
Custom Product may include any products or services mutually negotiated 
between WAPA and a customer. This may include firming and/or renewable 
power purchases, ancillary services, reserves, portfolio management 
services, scheduling coordinator services, etc. Commitments to purchase 
a Custom Product must be made by January 1, 2023, for a period of no 
less than 5 years of service, beginning January 1, 2025. Thereafter, 
the Custom Product will be offered for periods as determined by WAPA. 
All costs incurred by WAPA in providing Custom Product services to 
customers will be paid by those customers using the services.
    WAPA may, at its discretion, extend the commitment dates for the 
Base Resource and/or Custom Products.
    WAPA will manage an exchange program to allow all customers to 
fully and efficiently use their power allocations. Any power allocated 
by WAPA to a customer that cannot be used on a real-time basis due to 
that customer's load profile will be offered under this program to 
other customers. The exchange program will be developed in 
collaboration with the customers.
    Any unused resources may be marketed for periods of time as 
determined by WAPA, and may be marketed outside the primary marketing 
area. Such sales may be to any entity (preference or non-preference), 
under any terms, conditions, rates, or charges determined solely by 
WAPA.

IV. Resource Extensions and Resource Pool Allocations

    WAPA will initially provide 98 percent of its available power 
resources to existing customers and establish a resource pool with the 
remaining power resources for new allocations. Starting on January 1, 
2040, WAPA will reduce the then-existing customers' allocations by 1 
percent to develop the 2040 resource pool.
A. Extension for Existing Customers
    Starting January 1, 2025, existing customers will have a right to 
purchase 98 percent of their current Base Resource percentage amount; 
except as provided below:
    1. In the event that an existing customer(s) surrenders some or all 
of its allocation prior to 2025, that percentage, up to 2 percent of 
the total Base Resource, will be returned to the existing customers on 
a pro rata basis.
    2. In January 2024, WAPA will compare all existing customers' 
allocations to their loads. WAPA will use the average Base Resource MWh 
annual generation and the customers' previous 5 years energy 
consumption to compare allocations to loads. No customer should have an 
allocation greater than its load. If, after the comparison, WAPA 
believes a customer(s) has an allocation greater than its load, WAPA 
will consult with the customer(s) to determine if the allocation is, in 
fact, larger than its load. If WAPA determines the allocation is too 
large, WAPA will reduce that customer(s) allocation to 98 percent of 
its load.
    3. Starting on January 1, 2040, WAPA will reduce all customers' 
allocations, including 2025 Resource Pool customers, by an additional 1 
percent to create the 2040 Resource Pool. WAPA will follow the steps 
listed in IV.A.1. and IV.A.2. in January 2039 when creating the 2040 
Resource Pool.
B. Resource Pool Allocations
    WAPA will establish a resource pool by reserving a portion of the 
power available after 2024 for allocation to eligible preference 
entities and existing customers. A second resource pool will be 
established for service starting on January 1, 2040. Allocations from 
the resource pools will be determined through a separate public process 
at a later date.
1. Resource Pool Amount
    The 2025 Resource Pool will initially consist of 2 percent of the 
power resources available after 2024, and the 2040 Resource Pool will 
initially consist of 1 percent of the power resources available after 
2039. Should any Base Resource become available because of Sections 
IV.A.1., IV.A.2., or IV.A.3., above, WAPA will include the additional 
Base Resource in the appropriate resource pool. WAPA will, at its 
discretion, allocate a percentage of the resource pools to applicants 
that meet the Eligibility and Allocation Criteria.
2. Eligibility Criteria
    WAPA will apply the following Eligibility Criteria to all 
applicants seeking a resource pool allocation under the Marketing Plan:
    a. Applicants must meet the preference requirements under Section 
9(c) of the Reclamation Project Act of 1939 (43 U.S.C. 485h(c)(1)), as 
amended and supplemented.
    b. Applicants should be located within SNR's primary marketing area 
(map of marketing area available upon request). If SNR's power 
resources are not fully subscribed, WAPA may market its resource 
outside the primary marketing area.
    c. Applicants that require power for their own use must be ready, 
willing, and able to receive and use Federal power.
    d. Applicants that provide retail electric service must be ready, 
willing, and able to receive and use the Federal power to provide 
electric service to their customers, not for resale to others.
    e. Applicants must submit an application in response to the Call 
for Resource Pool Applications issued by WAPA in a separate Federal 
Register notice. The notice will include the deadline for receipt of 
those applications.
    f. Native American applicants must be a Native American tribe as 
defined in the Indian Self Determination Act of 1975 (25 U.S.C. 5304).
    g. WAPA generally will not allocate power to applicants with loads 
of less than 1 MW; however, allocations to applicants with loads which 
are at least 500 kilowatts may be considered, provided the loads can be 
aggregated with other allottees' loads to schedule and deliver to a 
minimum load of 1 MW.

[[Page 38683]]

3. Allocation Criteria
    The following Allocation Criteria will apply to all applicants 
receiving a resource pool allocation under the Marketing Plan:
    a. Allocations will be made in amounts as determined solely by WAPA 
in the exercise of its discretion under Reclamation Law and considered 
to be in the best interest of the U.S. Government.
    b. Allocations will be based on the applicant's load during the 
calendar year prior to the Call for Applications or the amount 
requested, whichever is less.
    c. An allottee will have the right to purchase power from WAPA only 
upon the execution of an electric service contract between WAPA and the 
allottee, and satisfaction of all conditions in that contract.
    d. All customers, including those receiving an allocation from the 
2025 Resource Pool, will be subject to the 2040 Resource Pool 
adjustment.
    e. Eligible Native American applicants will receive greater 
consideration for an allocation of up to 65 percent of their total 
energy load in the calendar year prior to the Call for Applications, as 
authorized by 25 U.S.C. 3505.

V. General Criteria and Contract Principles

    The following criteria and contract principles apply to all 
contracts executed under the Marketing Plan, except that certain 
criteria may not apply to contracts for first preference customers (see 
Section VI.):
    A. Electric service contracts shall be executed within 6 months of 
a contract offer, unless otherwise agreed to in writing by WAPA.
    B. Allocation percentages shall be subject to adjustment.
    C. All power supplied by WAPA will be delivered pursuant to a 
scheduling arrangement.
    D. Customers will be required to pay for their percentage of the 
Base Resource, regardless of whether they can actually use the power.
    E. Customers must pay for all charges associated with the products 
and services provided, including charges associated with ancillary 
services, Custom Products, and transmission. Those charges will be 
passed on to the customer(s) contracting for the product or service.
    F. WAPA will develop rate schedules for services provided under the 
Marketing Plan. Such rates will be developed through a separate public 
process.
    G. Customers must pay all applicable rates and charges in the 
manner and within the time prescribed in the contract.
    H. A written commitment to the Custom Product will be required on 
or before January 1, 2023. WAPA may extend the final commitment dates 
for the Custom Product.
    I. Contracts will include clauses specifying criteria that 
customers must meet on a continuous basis to be eligible to receive 
electric service from WAPA.
    J. Upon request, WAPA may provide, or assist each new and existing 
customer in obtaining, transmission arrangements for delivery of power 
marketed under the Marketing Plan; nonetheless, each entity is 
ultimately responsible for obtaining its own delivery arrangements for 
its load. Transmission service over the CVP system will be provided in 
accordance with Section VII. of this Marketing Plan.
    K. Contracts shall provide for WAPA to furnish electric service 
beginning either January 1, 2025, or January 1, 2040, and continuing 
through December 31, 2054.
    L. Specific products and services may be provided for periods of 
time as agreed to in the electric service contract.
    M. Contracts shall incorporate WAPA's standard provisions, policies 
and procedures for electric service contracts, integrated resource 
plans, and GPCP, as determined by WAPA. WAPA will exclude Section 11 of 
the GPCP from the electric service contracts and, instead, will include 
language developed in collaboration with the customers that clearly 
defines the customers' ability to terminate their electric service 
contracts after certain rate processes.
    N. Contracts will include a clause that allows WAPA to reduce or 
rescind a customer's allocation percentage, upon 90 days' notice, if 
WAPA determines that (1) the customer is not using this power to serve 
its own loads, except as otherwise specified in Section III.; or (2) 
the allocation amounts are consistently greater than the customer's 
maximum load.
    O. Any power not under contract may be allocated at any time, at 
WAPA's sole discretion, or sold as deemed appropriate by WAPA, 
consistent with Federal law.
    P. Contracts will include a clause providing for WAPA to adjust the 
customers' allocation percentage for the 2040 Resource Pool.
    Q. Contracts may include a clause providing for alternative funding 
arrangements, including Net Billing, Bill Crediting, Reimbursable 
Financing, and advance payment.

VI. First Preference Entitlement and Allocation

    The Trinity River Division Act and the New Melones Project 
provisions of the Flood Control Act of 1962 (Acts) specify that 
contracts for the sale and delivery of the additional electric energy, 
available from the CVP power system as a result of the construction of 
the plants authorized by these Acts and their integration into the CVP 
system, shall be made in accordance with preferences expressed in 
Reclamation Laws. These Acts also provide that a first preference of up 
to 25 percent of the additional energy shall be given, under 
Reclamation Law, to preference customers in the counties of origin 
(Trinity, Tuolumne, and Calaveras), for use in those counties, who are 
ready, willing, and able to enter into contracts for the energy.
    WAPA will calculate and allocate the Maximum Entitlements of First 
Preference Customers (MEFPC), which is the maximum amount of energy 
available to first preference customers/entities, in accordance with 
the following:
    A. The MEFPC will be calculated separately for the New Melones 
Project, Calaveras and Tuolumne Counties, and the Trinity River 
Division (TRD), Trinity County (first preference projects). To 
determine the 25 percent of additional energy made available to the CVP 
as a result of the construction of each of these projects, WAPA will 
use the average of the previous 20 years of historical annual 
generation. The TRD MEFPC includes generation from Trinity, Carr, and 
Spring Creek Powerplants and a portion of the Keswick Powerplant 
generation. Based on the most current information available, this 
calculation results in an estimated MEFPC of 122,800 MWh available from 
the New Melones Project, and an estimated MEFPC of 361,500 MWh 
available from the TRD. WAPA will calculate the MEFPC on June 1, 2024, 
to be applicable January 1, 2025. WAPA will recalculate the MEFPC every 
5 years thereafter.
    B. Upon recalculation, if the MEFPC from a first preference project 
is 10 percent above or below the currently applicable MEFPC from that 
first preference project, the MEFPC will be adjusted to reflect that 
increase or decrease. WAPA will notify affected first preference 
customers at least 6 months before making an adjustment to the MEFPC. 
If recalculation reduces the MEFPC to an amount less than the load 
previously served, WAPA may, upon request and at its discretion, make 
purchases necessary to replace that

[[Page 38684]]

amount of power no longer available. The costs for all such purchases 
made on behalf of a first preference customer will be passed on to that 
first preference customer.
    C. An allocation made to a first preference customer/entity under 
the Marketing Plan will be based on the power requirements of that 
first preference customer/entity. The sum of allocations of first 
preference power, including losses, shall not exceed the MEFPC from 
each first preference project, or a county of origin's share of the 
MEFPC, except as allowed under Section VI.G. below.
    D. WAPA will provide full requirements service as described below 
to first preference customers. The first preference customer will be 
responsible for transformation and transmission losses to the first 
preference customer delivery point. Transmission losses shall include 
losses for CVP transmission and third-party transmission.
    WAPA will provide the first preference customer with its full power 
requirements (capacity and energy) up to its right to the MEFPC at the 
Base Resource rate. If there is more than one first preference customer 
in a county of origin, or a first preference entity in that county 
makes a request for power, WAPA reserves the right to establish a 
maximum amount of power available to each first preference customer 
from the MEFPC. Payment for full requirements service will be based on 
usage.
    E. A first preference entity may exercise its right to use a 
portion of the MEFPC by providing written notice to WAPA at least 18 
months prior to the anniversary date of the first preference project 
located in its county. The anniversary date is the successive fifth 
year anniversary of the date the Secretary of the Interior declared the 
availability of power from the powerplants in the counties of origin. 
New applications for service to begin on January 1, 2025, must be 
received 18 months prior to January 1, 2022 (i.e., July 1, 2020), for 
Trinity County and 18 months prior to April 5, 2022 (i.e., October 5, 
2020), for Calaveras and Tuolumne Counties. Other anniversary years 
applicable to this Marketing Plan are 2027, 2032, 2037, 2042, 2047, and 
2052.
    F. If the request of a first preference customer/entity for power, 
including adjustment for losses, is greater than the remaining MEFPC 
from that county's first preference project, then WAPA will allocate 
the remaining MEFPC to the first preference customer/entity first 
making a request for a power allocation or a justified increase in its 
allocation percentage.
    G. Power allocated to first preference customers/entities in 
Tuolumne and Calaveras Counties will be subject to the following 
additional conditions:
    1. Tuolumne and Calaveras Counties shall each be entitled to one-
half of the New Melones Project MEFPC.
    2. If first preference customers in either Tuolumne County or 
Calaveras County are not using their county's full one-half share, and 
a first preference customer/entity in the other county requests power 
in an amount exceeding that county's one-half share, then WAPA will 
allocate the unused power, on a withdrawable basis, to the requesting 
first preference customer/entity. Such power may be withdrawn for use 
by a first preference customer/entity in the county not using its full 
one-half share upon 6 months' written notice from WAPA.
    H. Trinity Public Utilities District is currently the sole 
recipient of the TRD's first preference rights.
    I. Transmission service will be provided in accordance with 
applicable laws and Section VII. of this Marketing Plan.
    J. For planning purposes, first preference customers may be 
required to provide forecasts and other information required by WAPA as 
set forth in the electric service contract.
    K. The general criteria and contract principles set forth in 
Sections V.A., C. through I., K., M., and O. of this Marketing Plan 
will apply to first preference customers.

VII. Transmission Service

    Allottees and customers must secure necessary transmission service 
to deliver Federal power. WAPA will provide transmission service to 
deliver the Base Resource over the CVP transmission system. WAPA will 
work with allottees and customers to secure bundled or unbundled 
transmission services as appropriate beyond its CVP transmission system 
in conjunction with its power sales in a manner consistent with FERC 
orders, legislated mandates, or CAISO agreements. While WAPA will work 
with allottees and customers, it is the allottees' and customers' 
obligations to secure all necessary transmission service.
    Generally, WAPA will market surplus transmission capacity on the 
CVP and COTP available under WAPA's OATT. The legislation authorizing 
the PACI (16 U.S.C. 837g) provides for the Secretary of Energy to 
market surplus available transmission capacity on the PACI at equitable 
rates to aid and benefit the CVP. WAPA will determine the use of its 
transmission resources concurrently with further development of the 
products and services under this Marketing Plan. Specific terms and 
conditions for surplus transmission sales will be provided for in 
future service agreements. WAPA will develop transmission rates under a 
separate proceeding.

VIII. Changes in the Electric Utility Industry

    WAPA recognizes that there have been, and continue to be, 
significant changes in the electric utility industry. To address this 
concern, WAPA, in collaboration with its customers, will include the 
ability to make changes in how the Federal resource is marketed if 
there is deemed a benefit to WAPA and its customers. Any changes 
implemented would be done through negotiation and revision to 
individual customer contracts.

Authorities

    WAPA developed this Marketing Plan in accordance with its power 
marketing authorities pursuant to the Department of Energy Organization 
Act (42 U.S.C. 7101, et seq.); the Reclamation Act of June 17, 1902 
(ch. 1093, 32 Stat. 388), as amended and supplemented by subsequent 
enactments, particularly Section 9(c) of the Reclamation Project Act of 
1939 (43 U.S.C. 485h(c)); and other acts specifically applicable to the 
projects involved.

Regulatory Procedure Requirements

Review Under the Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1980 (44 U.S.C. 
3501, et seq.), WAPA has received approval from the Office of 
Management and Budget for the collection of customer information in 
this rule, under control number 1910-5136, which expires on September 
30, 2017.

Regulatory Flexibility Analysis

    The Regulatory Flexibility Act of 1980 (5 U.S.C. 601, et seq.) 
requires preparation of an initial regulatory flexibility analysis 
whenever an agency is required by 5 U.S.C. 553, or any other law, to 
publish general notice of proposed rulemaking for any proposed rule. A 
final regulatory flexibility analysis is required whenever the agency 
promulgates a final rule under 5 U.S.C. 553, after being required by 
that section or any other law to publish a general notice of proposed 
rulemaking. WAPA has determined that the analytical requirements of the 
Regulatory Flexibility Act do not apply to this rulemaking because it 
is a

[[Page 38685]]

rulemaking involving services applicable to public property.

Environmental Compliance

    In compliance with the National Environmental Policy Act (NEPA) (42 
U.S.C. 4321-4370), Council on Environmental Quality NEPA implementing 
regulations (40 CFR parts 1500-1508), and DOE NEPA implementing 
regulations (10 CFR part 1021), WAPA completed a Categorical Exclusion 
(CX). Since WAPA is reallocating its existing resources and is not 
planning to increase its generation or transmission under this 
Marketing Plan, a CX is the appropriate level of environmental review.

Determination Under Executive Order 12866

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

    Dated: July 6, 2017.
Mark A. Gabriel,
Administrator.
[FR Doc. 2017-17210 Filed 8-14-17; 8:45 am]
 BILLING CODE 6450-01-P