[Federal Register Volume 83, Number 172 (Wednesday, September 5, 2018)]
[Notices]
[Pages 45121-45124]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-19211]
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DEPARTMENT OF ENERGY
Western Area Power Administration
Final Allocation of Olmsted Powerplant Replacement Project
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of final allocation of Olmsted Powerplant Replacement
Project.
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SUMMARY: Western Area Power Administration (WAPA) Colorado River
Storage Project (CRSP) Management Center, a Federal power marketing
administration within the Department of Energy, announces its Olmsted
Powerplant Replacement Project (Olmsted) Final Allocation of Energy.
The Final 2018 Olmsted Power Marketing Plan and Call for Applications
was published on October 11, 2017, and set forth that an application
for an allocation of energy from Olmsted was due by December 11, 2017.
WAPA reviewed and considered the applications received and published
the Proposed Allocations in the Federal Register on June 13, 2018.
There was a 30-day comment period for the proposed allocations. WAPA
has considered the comments received, and
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this Federal Register notice establishes the final allocations.
DATES: The final allocations will be effective on October 5, 2018.
ADDRESSES: Information regarding the Final Allocation of Olmsted Power
Replacement Project, including comments, letters, and other supporting
documents, is available for public inspection and copying at the CRSP
Management Center, Western Area Power Administration, 299 South Main
Street, Suite 200, Salt Lake City, Utah. Public comments and related
information may be accessed at https://www.wapa.gov/regions/CRSP/PowerMarketing/Pages/Proposed-Allocations.aspx.
FOR FURTHER INFORMATION CONTACT: Mr. Brent Osiek, Vice President of
Power Marketing for CRSP, (801) 524-5495; or Mr. Lyle Johnson, Public
Utilities Specialist, (801) 524-5585. Written requests for information
should be sent to Western Area Power Administration, CRSP Management
Center, 299 South Main Street, Suite 200, Salt Lake City, UT 84111;
faxed to (801) 524-5017; or emailed to: [email protected].
SUPPLEMENTARY INFORMATION: The United States acquired the Olmsted
Powerplant in 1990 through condemnation proceedings in order to secure
the water rights associated with the Olmsted Powerplant deemed
essential to the Central Utah Project (CUP). The CUP is a participating
project of the Colorado River Storage Project. As part of the
condemnation proceedings, PacifiCorp continued Olmsted operations until
2015; after that time, the operation of the facility became the
responsibility of the Department of the Interior.
The existing Olmsted Powerplant greatly exceeded its operational
life, and a replacement facility was needed for the generation of power
and the preservation of associated non-consumptive water rights. On
February 4, 2015, the Implementation Agreement (Agreement) for Olmsted
was signed by Central Utah Water Conservancy District (District); the
Department of the Interior, Bureau of Reclamation; and WAPA
(Participants). The Agreement sets forth the responsibilities of the
Participants and identifies funding of Olmsted. The District will
construct, operate, maintain, and replace the Olmsted Powerplant and
incidental facilities in connection with CUP operations including power
generation.
WAPA is responsible for marketing the Olmsted energy, which is
anticipated to be available in the late summer or early fall of 2018.
Power production will be incidental to the delivery of water and will
only be available when water is present. Therefore, only energy,
without capacity, will be available for marketing. It is expected that
the annual energy production from Olmsted will average around
27,000,000 kilowatthours per year. The Final 2018 Olmsted Power
Marketing Plan and Call for Applications was published in the Federal
Register on October 11, 2017 (82 FR 47201), and set forth that an
application for an allocation of energy from Olmsted was due by
December 11, 2017. After review of the applications, the Proposed
Allocation of Olmsted Powerplant Replacement Project was published in
the Federal Register on June 13, 2018 (83 FR 27599). The 30-day comment
period closed on July 13, 2018. After considering the comments
received, WAPA is now publishing the Final Allocations.
Response to Comments on Olmsted Final Allocation of Energy
WAPA received numerous comments about its Olmsted final allocation
of energy during the comment period. WAPA reviewed and considered all
comments received, and this section summarizes and responds to those
comments. For brevity, when it was possible to do so without affecting
the meaning of the statements, the public comments below were
paraphrased.
Comment: Several commenters supported the proposed allocation of
Olmsted energy.
Response: WAPA acknowledges the comments in support of the proposed
allocations.
Comment: Several commenters suggested specific changes that should
occur in the next marketing plan.
Response: Issues concerning future marketing plan criteria or
suggested changes to the geographic marketing areas are more
appropriately addressed during the public process for future marketing
plans for the Olmsted Powerplant and are beyond the scope of the
proposed allocation comment process. Commenters will have the
opportunity to express their suggestions during the public process for
future Olmsted marketing plans.
Comment: One commenter requested an additional allocation of
Olmsted energy, citing their future electrical resource needs and the
limited amounts of Federal power they currently receive.
Response: WAPA does not have the authority to develop resources to
meet customers' future electrical resource needs and load growth. WAPA
is limited to marketing only the resources authorized by Congress as
part of Federal water development projects.
Comment: One commenter asked how the allocations were developed,
especially for the entities with small percentages of load served by
Federal power.
Response: The percentage of applicants' load served by Federal
power was determined by comparing current loads, as submitted in the
Applicant Profile Data, to that applicant's current allocation(s) of
Federal power. Pursuant to the Final Power Marketing Criteria,
allocations of energy from Olmsted were made based on a percentage of
annual generation rather than fixed quantities of energy. WAPA received
applications from four entities representing a total of 14 eligible
applicants. Due to its role in the construction, operation,
maintenance, and replacement of Olmsted, WAPA awarded the District 30
percent of the annual generation at Olmsted. As explained more
thoroughly below, WAPA also awarded Utah Municipal Power Agency (UMPA)
with 30 percent, largely based on UMPA's facilitating exchange and
interchange accounting services. WAPA determined it would use the
remaining energy to increase allocations to those applicants with the
least amount of existing Federal allocations. Four of the applicants
receive less than 10 percent of their energy resources from Federal
power while all other applicants receive more than 20 percent.
Therefore, WAPA evenly divided the remaining 40 percent of the annual
generation at Olmsted among those four applicants.
Comment: One commenter asked how the costs and fees associated with
interconnecting with Provo, Utah, compare to interconnecting with
PacifiCorp.
Response: The cost of interconnecting to the Provo system was
estimated to be much less than connecting to the facilities of
PacifiCorp. WAPA requested multiple interconnection studies from
PacifiCorp to determine potential costs and infrastructure
requirements. PacifiCorp's costs for interconnecting at its congested
Hale Substation were significantly higher than interconnecting with
Provo at the same voltage and at essentially the same location; the
overall savings was about $1.4 million. Additionally, interconnecting
with Provo allowed further reduction in costs to customers by allowing
WAPA to enter into a Scheduling and Interchange Agreement with the
UMPA, which serves as a scheduling and resource agent for Provo. This
allowed Olmsted energy to be delivered to customers under current
transmission arrangements rather than
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requesting new agreements with PacifiCorp.
Comment: One commenter asked about the scheduling and displacement
agreement that was developed with UMPA and inquired if a similar
agreement was pursued with any other entities.
Response: Only Provo and PacifiCorp have facilities in the vicinity
of the Olmsted Powerplant to directly receive the power to facilitate a
scheduling and displacement agreement. Interconnecting to any other
entities would require construction of extensive transmission
facilities in an urban area and would have been cost prohibitive.
Comment: One commenter asked if UMPA received any type of priority
in receiving an allocation and why UMPA received a 30 percent
allocation since it already has a relatively large Federal allocation
of hydropower.
Response: UMPA did not receive priority over the other applicants.
UMPA was awarded 30 percent in consideration for providing scheduling
and interchange services.
Comment: One commenter asked why UMPA received an allocation,
rather than its individual member cities, since some members of UMPA
are outside of the marketing area.
Response: UMPA applied for an allocation of power on behalf of its
specific members located in the marketing area.
Comment: One commenter asked why UMPA received an allocation rather
than payment for scheduling and interchange services.
Response: The 30 percent allocation is in consideration of the
overall savings that the arrangement with UMPA provides to all
recipients of Olmsted energy as well as facilitating exchange and
interchange accounting services. Without its current arrangement with
UMPA, WAPA would need to enter into a separate transmission agreement
with PacifiCorp to deliver the energy, which would likely result in
cost-prohibitive transmission and ancillary expenses. Based on the
published firm transmission rates of PacifiCorp, WAPA would need to pay
approximately $208,000 under PacifiCorp's Open Access Transmission
Tariff firm rate schedules, not including ancillary service charges. A
yearly charge for scheduling services would be, based on WAPA's
experience, around $25,000/year. Assuming an average year and a cost of
$30 per megawatthour, the services WAPA receives from UMPA would be
worth approximately $243,000/year for Olmsted power. Therefore, WAPA
believes that an allocation to UMPA of 30 percent approximates the
value of the displacement and exchange agreement.
Comment: One commenter stated that its Salt Lake City Area
Integrated Projects (SLCA/IP) contract rate of delivery (CROD) is in
conflict with the Olmsted historical generation profile and asked how
its SLCA/IP allocation will be handled and if an energy interchange
account will be required.
Response: WAPA is aware that the customer has an SLCA/IP capacity
allocation, or CROD, during the summer season and not during the winter
season. Olmsted is an energy-only product and will be delivered under
the customer's SLCA/IP CROD. The Olmsted Powerplant will generate
energy in both the summer and winter seasons. WAPA will work with the
customer and its scheduling agent to develop procedures that ensure
that the customer will receive all of its allocated Olmsted energy.
Olmsted Final Allocation of Energy
Pursuant to the Final Power Marketing Criteria, allocations of
energy from Olmsted were made based on a percentage of annual
generation rather than fixed quantities of energy. Olmsted is a ``take
all, pay all'' project; the annual revenue requirement does not depend
on the amount of energy available each year. Customers with an
allocation will receive a share of the energy and will annually pay a
proportional share of the operation, maintenance, and replacement
expenses in 12 monthly installments.
Applications were received from four entities representing a total
of 14 eligible applicants. In considering the Power Marketing Criteria,
priority was given to the District due to its role in the construction,
operation, maintenance, and replacement of Olmsted. The District will
receive 30 percent of Olmsted's annual generation.
Olmsted will be electrically interconnected to Provo's distribution
and transmission facilities. Provo is a participant of UMPA, a joint-
action agency responsible for supplying the wholesale power needs to
Provo and other municipal electric utilities in the area. UMPA, a long-
term power customer of WAPA, has agreed to accept all Olmsted energy as
it is generated and, under a scheduling and displacement agreement with
WAPA, provide Olmsted customers with their respective Olmsted
allocation amounts from a portion of UMPA's allocation of SLCA/IP
resources, which is also marketed by WAPA. This arrangement will allow
the Olmsted recipients more flexibility since it will be easier to
schedule this SLCA/IP resource, which is essentially exchanged for
Olmsted generation and it allows the use of existing scheduling and
transmission wheeling arrangements. In consideration for providing
these arrangements and the overall savings it is anticipated to
generate, UMPA will receive a 30 percent allocation of Olmsted
generation.
After consideration of the allocations to the District and UMPA,
WAPA determined it would use the remaining Olmsted energy to increase
the allocations of those applicants that have the lowest percentages of
their current loads served by Federal power. Four of the applicants
receive less than 10 percent of their energy resources from Federal
power. All of the other applicants currently receive over 20 percent of
their energy requirements from Federal allocations. Therefore, WAPA
awarded 10 percent of the Olmsted generation to the four applicants
receiving less than 10 percent of their energy from Federal sources.
The following table shows the final allocation percentages of the
annual energy production of Olmsted:
------------------------------------------------------------------------
Applicant Percentage
------------------------------------------------------------------------
Central Utah Water Conservancy District.................... 30
Utah Municipal Power Agency................................ 30
Lehi City, Utah............................................ 10
Kaysville City, Utah....................................... 10
Weber Basin Water Conservancy District..................... 10
Springville City, Utah..................................... 10
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With the exception of UMPA, all of the recipients receive
scheduling and delivery services for their allocations of Federal power
from Utah Associated Municipal Power Systems (UAMPS) under SLCA/IP
Contract No. 87-SLC-0037. Since Olmsted energy will be delivered by
means of transmission and scheduling arrangements existing for Contract
No. 87-SLC-0037 with UAMPS, the allocations to these recipients may be
handled in a similar manner. WAPA plans to enter into contracts with
customers after publication of this Federal Register notice.
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 Management Center, 299 South Main Street, Suite 200, Salt Lake
City, Utah. The comments received during the 30-day comment period have
been posted to WAPA's website at the following address: https://
www.wapa.gov/regions/
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CRSP/PowerMarketing/Pages/power-marketing.aspx.
Procedural Requirements
Environmental Compliance
In compliance with the National Environmental Policy Act (NEPA) of
1969 (42 U.S.C. 4321-4347), the Council on Environmental Quality
Regulations (40 CFR parts 1500-1508), and DOE NEPA Regulations (10 CFR
part 1021), WAPA issued a Finding of No Significant Impact (FONSI) on
January 13, 2017. The FONSI and other NEPA compliance documentation may
be found at https://www.wapa.gov/regions/CRSP/environment/Pages/environment.aspx.
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.
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: August 24, 2018.
Mark A. Gabriel,
Administrator.
[FR Doc. 2018-19211 Filed 9-4-18; 8:45 am]
BILLING CODE 6450-01-P