[Federal Register Volume 83, Number 242 (Tuesday, December 18, 2018)]
[Notices]
[Pages 64871-64873]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-27299]
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DEPARTMENT OF THE INTERIOR
Bureau of Reclamation
[RR04651000, 19XR0680G1, RX.08605001.1000000]
Hydroelectric Power Development at Silver Jack Dam, Bostwick Park
Project, Colorado
AGENCY: Bureau of Reclamation, Interior.
ACTION: Notice of intent to accept proposals, select lessee, and
contract for hydroelectric power development at Silver Jack Dam.
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SUMMARY: Current Federal policy allows non-Federal development of
electrical power resource potential on Federal water resource projects.
The Bureau of Reclamation (Reclamation) will consider proposals for
non-Federal development of hydroelectric power at Silver Jack Dam, a
feature of the Bostwick Park Project, located in Colorado. Reclamation
is considering such hydroelectric power development under a Lease of
Power Privilege. No Federal funds will be available for such
hydroelectric power development.
DATES: A written proposal and seven copies must be submitted on or
before 4:00 p.m. (MDT) May 17, 2019. A proposal will be considered
timely only if it is received in the office of the Area Manager on or
before 4:00 p.m. on the designated date. Interested entities are
cautioned that delayed delivery to this office due to failures or
misunderstandings of the entity and/or of mail, overnight, or courier
services will not excuse lateness and, accordingly, are advised to
provide sufficient time for delivery. Late proposals will not be
considered.
ADDRESSES: Send written proposals to Mr. Ed Warner, Area Manager,
Western Colorado Area Office, Bureau of Reclamation, 445 West Gunnison
Avenue, Suite 221, Grand Junction, Colorado 81501-5711, telephone (970)
248-0600.
FOR FURTHER INFORMATION CONTACT: Technical data, including past water
release patterns, may be obtained by contacting Mr. Ryan Christianson,
Water Management Group Chief, Western Colorado Area Office, Bureau of
Reclamation, 445 West Gunnison Avenue, Suite 221, Grand Junction,
Colorado 81501, telephone (970) 248-0652. Reclamation will be available
to meet with interested entities only upon written request to the Water
Management Group Chief at the above cited address. Reclamation will
provide an opportunity for a site visit. In addition, Reclamation
reserves the right to schedule a single meeting and/or visit to address
the questions of all entities that have submitted questions or
requested site visits. Information related to the operation and
maintenance (O&M) of Silver Jack Dam may be obtained by contacting Mr.
Allen Distel, Bostwick Park Water Conservancy District, 400 South 3rd
Street, Montrose, Colorado 81402, telephone (970) 249-8707.
SUPPLEMENTARY INFORMATION: The Bostwick Park Project is a Federal
Reclamation project. This Notice presents background information,
proposal content guidelines, and information concerning selection of a
non-Federal entity to develop hydroelectric power at Silver Jack Dam,
and power purchasing and/or marketing considerations. Interested
parties will not need to file an application with the Federal Energy
Regulatory Commission. To be considered for selection, the applicant's
proposed Lease of Power Privilege (LOPP) project must not impair the
efficiency of Reclamation project power or water deliveries, impact the
structural integrity of the project, jeopardize public safety, or
negatively affect any other Reclamation project purposes.
The Bostwick Park Project, located near the town of Montrose in
west-central Colorado on the Cimarron River in the Colorado River
Basin, was authorized for construction (including hydropower) by the
Colorado River Basin Project Act of September 2, 1964 (Pub. L. 88-568),
as a participating project under the Colorado River Storage Project Act
of April 11, 1956 (Pub. L. 84-485). The Bostwick Park Water Conservancy
District (District), under its contracts with the United States, has
certain operation, maintenance, replacement, and repayment
responsibilities and obligations concerning Silver Jack Dam.
Reclamation is considering hydroelectric power development at
Silver Jack Dam under a LOPP. A LOPP is an alternative to development
under a license from the Federal Energy Regulatory Commission. A LOPP
is a contractual right given to a non-Federal
[[Page 64872]]
entity to use a Reclamation facility for electric power generation
consistent with Reclamation project purposes. Leases of power privilege
have terms not to exceed 40 years. The general authority for LOPP under
Reclamation law includes, among others, the Town Sites and Power
Development Act of 1906 (43 U.S.C. Sec. 522), and the Reclamation
Project Act of 1939 (43 U.S.C. 485h(c)) (1939 Act).
Reclamation will be the lead Federal agency for ensuring compliance
with the National Environmental Policy Act (NEPA) of any LOPP
considered in response to this Notice. Reclamation will also lead
necessary consultation with American Indian Tribal Governments and
compliance with the National Historic Preservation Act (NHPA),
Endangered Species Act (ESA), and other related environmental
regulations for all elements of the proposed project.
LOPPs may be issued only when Reclamation has determined that NEPA
and any other regulatory compliance requirements are completed. Any
LOPP at Silver Jack Dam must accommodate existing contractual and
environmental commitments related to O&M of such existing facilities.
The lessee (i.e., successful proposing entity) will be required to
enter into a contract with Reclamation. This contract will (1) address
requirements related to coordination of operations and maintenance with
Bostwick Park Project stakeholders (including the District) and (2)
stipulate that the LOPP lessee will be responsible for any increase in
operations or maintenance costs that are attributable to the
hydroelectric power development.
All costs incurred by the United States related to development and
O&M under a LOPP, including NEPA and other environmental regulatory
compliance, engineering reviews, and development of the LOPP, would be
the expense of the lessee. In addition, the lessee would be required to
make annual payments to the United States for the use of a Federal
facility at a rate of 3 mills per kilowatt-hour of generation. If
conditions provide opportunity for substantial benefits to accrue to
the lessee, then the United States will benefit proportionally.
Under the LOPP, provisions will be included for the mill rate to
increase each year commensurate with inflation based on the average of
the previous 5 years of the Gross Domestic Product (GDP) Price
Deflator. If the 5-year GDP Price Deflator average shows no change or
deflation, the LOPP rate will remain the same as the previous year's
rate. The rate of increase of the 5-year GDP Price Deflator average
will be capped at 5 percent. Such annual payments to the United States
would be deposited as a credit to the Upper Colorado River Basin Fund,
and are applied against the total outstanding reimbursable repayment
obligation for reimbursable project construction costs of the Federal
project, on which the LOPP is issued, pursuant to the existing
construction cost allocation (not applied only against power
construction costs).
Proposal Content Guidelines
Interested parties should submit proposals explaining in as precise
detail as is practicable how the hydropower potential would be
developed. Minimum factors by which a proposal will be scored and
criteria evaluated include the following:
(a) Anticipated contractual arrangements with the District for the
Bostwick Park Project feature(s) that are proposed for utilization in
the hydropower development under consideration. Define how the
hydropower development would operate in harmony with the multiple
purposes of the Bostwick Park Project and existing applicable contracts
related to O&M of Bostwick Park Project feature(s) being considered for
modification.
(b) Information regarding whether the applicant qualifies as a
preference entity. If the proposal is made by a group of entities or by
a subdivision of an entity, then the application must explain whether
and why the applicant or applicants qualify as preference entities. The
term ``preference entity,'' as applied to a LOPP, means an entity
qualifying for preference under Section 9c of the 1939 Act as a
municipality, public corporation or agency, or cooperative or other
nonprofit organization financed in whole or in part by loans made
pursuant to the Rural Electrification Act of 1936, as amended.
(c) Information relevant to the qualifications of the proposing
entity to plan and implement such a project, including but not limited
to: Type of organization; length of time in business; experience in
funding, design, and construction of similar projects; industry
rating(s) that indicate financial soundness and/or technical and
managerial capability; experience of key management personnel; history
of any reorganizations or mergers with other companies; and any other
information that demonstrates the interested entity's organizational,
technical, and financial ability to perform all aspects of the work.
Proposals will include a discussion of past experience in developing,
operating, and maintaining similar facilities and provide references as
appropriate.
(d) Geographical locations and descriptions of principal structures
and other important features of the proposed development including
roads and transmission lines. Proposals must estimate and describe
installed capacity and the capacity of the power facilities under dry,
average, and wet hydrological conditions. Proposals must also describe
the daily, weekly, monthly, and annual pattern of expected generation
under average, wet, and dry hydrological conditions; the ability of
generation to provide ancillary services such as regulation, spinning
reserves, and voltampere reactive support; and information on the
reliability of the generation, potential maintenance outage schedule,
and duration. If capacity and energy can be delivered to another
location, either by the proposing entity or by potential third party
transmission agents, the proposal must specify where that capacity and
energy can be delivered. The proposal must describe the concepts and
contractual arrangements (including the involved parties) related to
transmission interconnection, power sales, and the proposed approach to
third party transmission if required.
(e) Existing title arrangements or a description of the ability to
acquire title to or the right to occupy and use lands necessary for the
proposed LOPP project, including such additional lands as may be
required during construction.
(f) A description of studies necessary to adequately define impacts
of the proposed LOPP project on the Bostwick Park Project, historic
properties (if such are present), and the environment. The proposal
must describe any significant environmental issues associated with the
proposed LOPP project and the proposing entity's approach for gathering
relevant data and resolving such issues to protect and enhance the
quality of the environment. The proposal will explain any proposed use
of the LOPP project for conservation and utilization of the available
water resources in the public interest.
(g) Plans for assuming liability for damage to the operational and
structural integrity of the Bostwick Park Project caused by
construction, operation, and/or maintenance of the hydropower
development.
(h) Identify the organizational structure planned for the long-term
O&M of any proposed hydropower development.
(i) A management plan, including schedules of these activities as
applicable, to accomplish activities such
[[Page 64873]]
as planning; NEPA compliance; NHPA compliance; ESA compliance;
necessary studies; LOPP project development; design, construction,
safety plan, and facility testing; and the start of hydropower
production.
(j) An estimate of development costs. These costs will include all
investment costs such as the cost of studies to determine feasibility;
NEPA compliance; NHPA compliance; ESA compliance; other statutory
compliance; design; construction; financing as well as the amortized
annual cost of the investment; annual O&M expense for the hydropower
development; lease payments to the United States; expenses associated
with the Reclamation project; and anticipated return on investment. If
there are additional transmission expenses associated with the
development of the LOPP project, these expenses must also be included.
The proposal must identify proposed methods of financing the LOPP
project. The proposal must include an economic analysis that compares
the present worth of all benefits and costs of the hydropower
development.
Selection of Lessee
Reclamation will evaluate proposals received in response to this
published Notice. Reclamation may request additional information from
individual proposing entities and/or all proposing entities after
proposals are submitted, but prior to making a selection of a lessee.
Reclamation will give more favorable consideration to proposals
that (1) responsibly develop hydropower; (2) avoid, reduce, or minimize
environmental impacts; (3) clearly demonstrate that the offeror is
qualified to develop the hydropower facility and provide for long-term
O&M; and (4) best share the economic benefits of the hydropower
development among parties (including the United States) to the LOPP. A
proposal will be deemed unacceptable if it is inconsistent with
Bostwick Park Project purposes, as determined by Reclamation.
Reclamation will give preference to those entities that qualify as
preference entities, as defined under Proposal Content Guidelines, item
(b) of this Notice, provided that they are well qualified to develop
and provide for long-term O&M of the hydropower facility. If one
applicant is a preference entity and the other is not, and the
preference entity's proposed plans are not as well qualified as the
non-preference entity's plans, Reclamation will inform the preference
entity of the specific reasons why its plans are not as well qualified
and afford up to 30 calendar days for the preference entity to render
its plans at least as well qualified as the other plans. All other
applicants will be informed of this action. If the plans of the
preference entity are rendered at least as well qualified within the
time allowed, Reclamation will favor the preference entity. If the
preference entity's plans are not rendered at least as well qualified
within the time allowed, Reclamation will favor the other applicant.
Notice and Time Period To Enter Into LOPP
Reclamation will notify, in writing, all entities submitting
proposals of Reclamation's decision regarding selection of the
potential lessee. The selected potential lessee will be provided a
maximum of 24 months from the date of selection to sign the preliminary
lease, complete the requirements set forth in the preliminary lease,
and to sign the LOPP. The lessee will have a maximum of 1 year from the
date of the execution of the LOPP to complete final designs,
specifications, etc., and an additional 1 year to begin construction. A
maximum of 4 years is allowed, from the date of the preliminary lease
to the beginning of construction. Maximum timeframes for construction
will be determined by the Upper Colorado Regional Director. The above
timeframes will only be extended for just cause resulting from actions
and/or circumstances that are beyond the control of Reclamation or the
lessee. Just cause and timeframe adjustments will be determined solely
by the Upper Colorado Regional Director.
Dated: October 24, 2018.
Brent Rhees,
Regional Director, Upper Colorado Region.
[FR Doc. 2018-27299 Filed 12-17-18; 8:45 am]
BILLING CODE 4332-90-P