[Federal Register Volume 85, Number 170 (Tuesday, September 1, 2020)]
[Notices]
[Pages 54399-54401]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-19261]


-----------------------------------------------------------------------

DEPARTMENT OF THE INTERIOR

Bureau of Reclamation

[RR04651000, 20XR0680A1, RX003150012000000]


Hydroelectric Power Development at Taylor Park Dam, Uncompahgre 
Project, Colorado

AGENCY: Bureau of Reclamation, Interior.

ACTION: Notice of intent to accept proposals, select lessee, and 
contract for hydroelectric power development at Taylor Park Dam.

-----------------------------------------------------------------------

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 Taylor Park Dam, a 
feature of the Uncompahgre Project, located in Colorado. Reclamation is 
considering such hydroelectric power development under a Lease of Power 
Privilege (LOPP). 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) January 29, 2021. 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; email [email protected]. 
Reclamation will be available to meet with interested entities only 
upon written request to the Water Management Group Chief at the 
previously provided 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 Taylor 
Park Dam may be obtained by contacting Mr. Steve Anderson, Uncompahgre 
Valley Water Users Association; 601 North Park Avenue, Montrose, 
Colorado 81401; telephone 970-249-3813; email [email protected].

SUPPLEMENTARY INFORMATION: The Uncompahgre 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 Taylor Park Dam, 
and power purchasing and/or marketing considerations. Interested 
parties will not need to file an application with the Federal Energy 
Regulatory Commission (FERC). To be considered for selection, the 
applicant's proposed 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.
    Taylor Park Dam is located near the town of Gunnison in west-
central Colorado on the Taylor River in the Colorado River Basin. The 
Uncompahgre Project (initially authorized as the Gunnison Project) was 
authorized by the Secretary of the Interior on March 14, 1903, under 
the Reclamation Project Act of 1902 (32 Stat. 388) and approved by the 
President on January 5, 1911, pursuant to the act of June 25, 1910 (36 
Stat. 835). The construction of Taylor Park Dam was approved by the 
President on November 6, 1935, pursuant to section 4 of the act

[[Page 54400]]

of June 25, 1910 (36 Stat. 836), and subsection B of section 4 of the 
act of December 5, 1924 (43 Stat. 702). The Uncompahgre Valley Project 
Act of 1938 (52 Stat. 941) authorizes the Secretary of the Interior to 
contract for the sale or development of surplus power on the 
Uncompahgre Project. The Uncompahgre Valley Water Users Association 
(UVWUA) under its contracts with the United States, has certain 
operation, maintenance, and replacement responsibilities and 
obligations concerning Taylor Park Dam.
    Reclamation is considering hydroelectric power development at 
Taylor Park Dam under an LOPP. An LOPP is a contractual right given to 
a non-Federal entity to use a Reclamation facility for electric power 
generation consistent with Reclamation project purposes. LOPPs have 
terms not to exceed 40 years. The general authority for LOPPs 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 of 1969 (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 of 1966 (NHPA), 
Endangered Species Act of 1973 (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 Taylor Park Dam must accommodate existing contractual and 
environmental commitments related to operation and maintenance (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 
O&M with Uncompahgre Project stakeholders (including Upper Gunnison 
Water Conservancy District (UGWCD) stakeholders), and (2) stipulate 
that the LOPP lessee will be responsible for any increase in O&M costs 
that are attributable to the hydroelectric power development.
    All costs incurred by the United States related to development and 
O&M under an 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 2-3 mills per kilowatt-hour of gross generation, 
allowing the United States to 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 Uncompahgre Project until an 
eligible reimbursable project expense is incurred against which the 
credit can be applied.

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:
    (1) Anticipated contractual arrangements with UVWUA for the 
Uncompahgre 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 
Uncompahgre Project and existing applicable contracts related to O&M of 
Uncompahgre Project feature(s) being considered for modification.
    (2) 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.
    (3) 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.
    (4) 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.
    (5) 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.
    (6) A description of studies necessary to adequately define impacts 
of the proposed LOPP project on the Uncompahgre 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.

[[Page 54401]]

    (7) Plans for assuming liability for damage to the operational and 
structural integrity of the Uncompahgre Project caused by construction, 
operation, and/or maintenance of the hydropower development.
    (8) Identify the organizational structure planned for the long-term 
O&M of any proposed hydropower development.
    (9) A management plan, including schedules of these activities as 
applicable, to accomplish activities such as planning; NEPA, NHPA, and 
ESA compliance; necessary studies; LOPP project development; design, 
construction, safety plan, and facility testing; and the start of 
hydropower production.
    (10) An estimate of development costs. These costs will include all 
investment costs such as the cost of studies to determine feasibility; 
NEPA, NHPA, and 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 
Uncompahgre Project purposes or interferes with UGWCD's ability to use 
their water allocation in Taylor Park Reservoir, 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 Regional Director, Upper Colorado Basin--
Interior Region 7. 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 Regional Director, Upper 
Colorado Basin--Interior Region 7.

Wayne G. Pullan,
Deputy Regional Director, Upper Colorado Basin--Interior Region 7, 
Bureau of Reclamation.
[FR Doc. 2020-19261 Filed 8-31-20; 8:45 am]
BILLING CODE 4332-90-P