Subject: Collections From Central Valley Project Power Contractors
[Federal Register: October 29, 2002 (Volume 67, Number 209)]
[Notices]
[Page 65974-65977]
>From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29oc02-70]
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DEPARTMENT OF ENERGY
Western Area Power Administration
Collections From Central Valley Project Power Contractors To
Carry Out the Restoration, Improvement, and Acquisition of
Environmental Habitat Provisions of the Central Valley Project
Improvement Act of 1992
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of proposed procedures.
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SUMMARY: The Western Area Power Administration (Western) is proposing
revised procedures for the assessment and collection of restoration
fund payments from the Central Valley Project (CVP) Power Contractors
as required by the Central Valley Project Improvement Act of 1992
(CVPIA). These proposed procedures take a different approach toward
assessing Power Contractors' collections that more closely reflects
Western's 2004 Power Marketing Plan. Existing procedures are linked to
an older and soon to be obsolete Power Marketing Plan. The existing
procedures became effective on September 3, 1998, and will remain in
effect until superseded by this process.
DATES: The consultation and comment period will begin on the date of
publication of this Federal Register notice and will end December 30,
2002. Western will present a detailed explanation of the proposed
procedures at a public information forum on November 20, 2002, at 10
a.m., PST. It will receive oral and written comments at a public
comment forum beginning at 1 p.m., PST, on this same date. Western
[[Page 65975]]
must receive all comments by the end of the comment period to ensure
they are considered.
ADDRESSES: Western will hold the public information and comment forums
at the Sierra Nevada Region Office, Western Area Power Administration,
114 Parkshore Drive, Folsom, CA 95630-4710. Send comments to: Mr.
Thomas R. Boyko, Power Marketing Manager, Sierra Nevada Customer
Service Region, Western Area Power Administration, 114 Parkshore Drive,
Folsom, CA 95630-4710, e-mail boyko@wapa.gov.
FOR FURTHER INFORMATION CONTACT: Ms. Melinda C. Grow, Public Utilities
Specialist, Rates Division, Sierra Nevada Customer Service Region,
Western Area Power Administration, 114 Parkshore Drive, Folsom, CA
95630-4710, telephone (916) 353-4443, e-mail grow@wapa.gov.
SUPPLEMENTARY INFORMATION: Section 3407 of the CVPIA (Pub. L. 102-575,
Stat. 4706, 4726) establishes in the Treasury of the United States the
CVP Restoration Fund (Restoration Fund) to carry out the habitat
restoration, improvement, and acquisition provisions of the CVPIA. The
CVPIA further requires the Secretary of the Interior to assess and
collect annual mitigation and restoration payments from CVP Water and
Power Contractors (Restoration Payments). The Secretary of the
Interior, through the Bureau of Reclamation (Reclamation), is
responsible for determining and collecting the CVP Water and Power
Contractors' share of the annual Total Power Restoration Fund Payment
Obligation.
Because Western markets and transmits CVP power and maintains all
CVP power contracts, Western agreed to administer the assessment and
collection of the Restoration Payments from CVP Power Contractors.
Western executed a letter of agreement with Reclamation to establish
procedures for depositing collections from CVP Power Contractors into
the Restoration Fund.
Through an open and public process, the existing procedures became
effective on September 3, 1998, and remain in effect until superseded
(63 FR 41561, August 4, 1998). Western indicated that it would review
the procedures associated with the assessment and collection of the
Restoration Payments from CVP Power Contractors every 5 years or if one
of the following occurs: (1) If there is a significant change to or
suspension of the legislation; (2) if a material issue arises; (3) if
an apparent inequity in the procedures is discovered; or (4) if any
significant change occurs that affects the procedures.
Western published a new Marketing Plan (2004 Power Marketing Plan)
in the Federal Register on June 25, 1999, that specifies the terms and
conditions under which Western will market power from CVP and the
Washoe Project beginning January 1, 2005 (64 FR 34417). Since the
current methodology for the assessment and collection of Restoration
Fund payments from the CVP Power Contractors is tied to the 1994
Marketing Plan (57 FR 45782, October 5, 1992) and long-term firm CVP
power contracts will expire on December 31, 2004, it is necessary to
change the assessment and collection of Restoration Payments from CVP
Power Contractors.
Western will prorate and assess to CVP Power Contractors the annual
Power Restoration Payment Obligation (PRPO), as determined by
Reclamation. Western will issue each CVP Power Contractor a monthly
Restoration Fund Bill reflecting its share of the PRPO. The CVP Power
Contractors will pay that amount to Western. Western will transfer all
amounts collected from CVP Power Contractors to Reclamation for deposit
into the Restoration Fund.
The following table provides a summary comparison of the existing
procedures and proposed procedures.
Table 1.--Highlights of Changes for Assessing the Annual PRPO to CVP
Power Contractors
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Methodology element Existing procedures Proposed procedures
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Effective Date.............. September 3, 1998... January 1, 2005.
Assessment of Prorated Based on actual Based on assigned
Charges. capacity and energy Base Resource
amounts delivered Percentage as
by or scheduled by articulated in the
Western. 2004 Power
Marketing Plan.
Method of Calculation....... Capacity and energy Each Power
multipliers Contractor's Base
multiplied by Resource Percentage
actual capacity and is multiplied by
energy amounts. The the PRPO to
multipliers are determine their
calculated using annual PRPO
prior year power obligation.
sales to recover
the PRPO.
Assessment Year............. June 1 through May None.
31.
Billing Year................ September through No change.
August.
Exclusion of First Three First All First Preference
Preference Customers. Preference Customers.
Customers.
Annual Reconciliation....... None required....... Required due to
Exchange Program
and posted on Power
Contractor's August
bill.
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Acronyms and Definitions
As used throughout the remainder of this notice, the following
acronyms and definitions when used with initial capitalization, whether
singular or plural, will have the following meanings:
2004 Power Marketing Plan: The final marketing program for the
Sierra Nevada Region power after 2004 established through a public
process and published in the June 25, 1999, Federal Register (64 FR
34417).
Administrator: The Administrator of the Western Area Power
Administration.
Assessment Month: The service month, which is 3 months prior to the
Billing Month. This term is used in the August 4, 1998, Federal
Register (63 FR 41561) procedures and will become obsolete assuming
this proposed procedure is finalized and approved.
Assessment Year: The period that uses the service months from June
1 through May 31 for billing CVP Power Contractors for Restoration
Payments. This term is used in the August 4, 1998, Federal Register (63
FR 41561) procedures and will become obsolete assuming this proposed
procedure is finalized and approved.
Base Resource: CVP and Washoe Project power output and existing
power purchase contracts extending beyond 2004, determined by Western
to be available for marketing, after meeting the requirements of
Project Use and First Preference Customers, and any adjustments for
maintenance, reserves,
[[Page 65976]]
transformation losses, and certain ancillary services.
Billing Month: The month CVP Power Contractors will be billed for
the Restoration Payments.
Billing Year: The period, September through August, that represents
the annual Restoration Fund billing cycle.
Central Valley Project (CVP): The multipurpose Federal water and
power project extending from the Cascade Range in northern California
to the plains along the Kern River south of the city of Bakersfield.
CVP Improvement Act of 1992 (CVPIA): Title 34 of Public Law 102-
575, 106 Stat. 4706, et seq. A legislative act, enacted on October 30,
1992, that defines provisions for habitat restoration, improvement and
acquisition, and other fish and wildlife restoration activities in the
CVP area of California.
DOE: United States Department of Energy.
Exchange Program: Established in the Federal Register for the 2004
Power Marketing Plan and intended to allow customers to fully and
efficiently use their power allocations.
First Preference Customer: A customer wholly located in Trinity,
Calaveras, or Tuolumne counties, California, as specified under the
Trinity River Division Act (69 Stat. 719) and the New Melones
provisions of the Flood Control Act of 1962 (76 Stat. 1173, 1191-1192).
Fiscal Year (FY): The year which begins October 1 and ends
September 30.
Interior: United States Department of the Interior.
kW: Kilowatt, the electrical unit of capacity that equals 1,000
watts.
kWh: Kilowatthour, the electrical unit of energy that equals the
generation of 1,000 watts over 1 hour.
Letter of Agreement: Letter of Agreement No. 93-SAO-10156, a
written agreement between Reclamation and Western that establishes
procedures to deposit the Restoration Payments collected from CVP Power
Contractors into the Restoration Fund.
Midyear Adjustment: The adjustment to the annual PRPO as determined
by Reclamation on or about April 1 of each year.
Power: Capacity and energy.
Power Contractor: An entity purchasing power from Western for a
period in excess of 1 year.
Power Restoration Payment Obligation (PRPO): The portion of the
Total Restoration Payment Obligation calculated and assigned annually
to CVP Power Contractors by Reclamation.
Project Use: The power used to operate CVP or Washoe Project
facilities in accordance with authorized purposes and pursuant to
Reclamation law.
Reclamation: United States Department of Interior, Bureau of
Reclamation.
Restoration Fund: The CVP Restoration Fund, established by Section
3407 of the CVPIA, into which revenues provided by the CVPIA are
deposited, and from which funds are appropriated by the Secretary to
carry out the habitat restoration, improvement, and acquisition
provisions of the CVPIA.
Restoration Fund Bill(s): The instrument prepared and issued
monthly as a mechanism for collecting the Restoration Payments from CVP
Power Contractors.
Restoration Payment(s): The amount(s) recorded as payable on CVP
Power Contractors' Restoration Fund Bills.
Secretary: Secretary of DOE.
Total Power Restoration Fund Payment Obligation: The total amount
of payments collected from the CVP Water and Power Contractors
calculated annually by Reclamation.
Washoe Project: The Federal water project located in the Lahontan
Basin in west-central Nevada and east-central California, as described
in Western's final 2004 Power Marketing Plan for the Sierra Nevada
Region.
Western: United States Department of Energy, Western Area Power
Administration.
Proposed Procedures
Determination of the Total Power Restoration Fund Payment Obligation
Reclamation is responsible for assigning the PRPO for the CVP Power
Contractors. On or about July 1 of each year, Reclamation will provide
a letter to Western's Regional Manager of the Sierra Nevada Region with
the determined PRPO amount and a detailed explanation of the
computation for the upcoming FY. Upon receiving the letter from
Reclamation, Western will notify each CVP Power Contractor of the Total
Power Restoration Fund Payment Obligation and the monthly amounts to be
collected from CVP Power Contractors.
Allocating the Power Restoration Payment Obligation (PRPO)
Western will allocate the PRPO among CVP Power Contractors each FY.
After notification by Reclamation, Western will calculate the annual
obligation for each CVP Power Contractor. Western will base its
calculation on the assigned Base Resource percentage for each CVP Power
Contractor as detailed in the 2004 Power Marketing Plan. This annual
obligation will be divided by the number of months in the FY; i.e.,
twelve, or in the case of FY 2005, the number of months remaining in
the FY; i.e., nine, to determine the monthly obligation.
Since the 2004 Power Marketing Plan does not begin until January 1,
2005, and Restoration Fund collections for FY 2005 (October 1, 2004,
through September 30, 2005) begin prior to this, FY 2005 will be a
transition year for Restoration Fund collections from Power
Contractors.
Western will base Restoration Fund collections from Power
Contractors for October through December 2004 upon the existing
collection methodology articulated in the August 4, 1998, Federal
Register. Western intends to begin collection under these new proposed
procedures beginning with January 2005 collections. As a point of
clarification, Western will bill the Power Contractors for the October
2004 collection in their September 2004 bills based upon energy and
capacity amounts for their June 2004 service month. A similar process
will continue through the December 2004 collection.
In December 2004, Western will total the Restoration Fund
collections made by the Power Contractors from October and November
2004, and the amounts payable for December 2004, and subtract this
amount from the annual PRPO to calculate the balance to collect for the
remaining 9 months (January through September) of the FY. Western will
multiply this total by each Power Contractor's Base Resource
percentage. This amount will then be divided by nine to determine each
Power Contractor's monthly obligation.
Year-End Reconciliation Process
Implementation of the Exchange Program may result in some Power
Contractors receiving small amounts of energy in excess of their Base
Resource in some months. Although recipients of this exchange energy
will pay for this power, Restoration Fund obligations are based on the
Power Contractors' percentage of the Base Resource excluding exchange
energy. Alternatively, some Power Contractors that are not able to use
all of their Base Resource and return it as exchange energy could be
overpaying their Restoration Fund obligations since their actual power
usage might be less than their Base Resource percentage.
In an effort to rectify underpayment made by recipients of exchange
energy and overpayments by other Power Contractors, Western will
conduct a
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reconciliation process, otherwise known as an annual true up, before
preparing August Restoration Fund Bills. This reconciliation will
require Western to identify energy amounts exchanged among individual
Power Contractors on a monthly basis through July. This information
will provide the basis for determining the amount of energy exchanged
during the billing year.
Western will add an additional charge or a balloon payment to the
August Restoration Fund Bills for each Power Contractor who received
exchange energy during the past year. Conversely, Western will also
post an offsetting credit for those Power Contractors that provided
exchange energy on their August bill.
Exclusion of First Preference Customers From the Power Restoration
Payment Obligation
Western has discretion how the PRPO is assessed to CVP Power
Contractors. As a consequence, Western previously reviewed the CVPIA
regarding the assessment of the Restoration Fund's costs, and similar
costs under other related legislation affecting CVP Power Contractors.
Western also reviewed Trinity County's contribution toward the
restoration programs compared to contributions made by other CVP Power
Contractors. Western concluded from this review that Trinity County
may, at times, pay a greater share of the costs toward the restoration
programs. As a means of mitigating the effects of these restoration
programs on Trinity County, coupled with the socioeconomic effects the
construction of the Trinity Dam has had on the community, Western
intends to exclude Trinity County indefinitely from the PRPO.
Similar consideration was given to the remaining three First
Preference Customers: Tuolumne Public Power Agency (TPPA), Calaveras
Public Power Agency (CPPA), and Sierra Conservation Center (SCC).
Construction of the New Melones Dam on the Stanislaus River has
contributed to improved fishery habitat and water quality in the
Stanislaus and San Joaquin rivers, as well as the South Delta. Given
these circumstances, Western intends to exclude TPPA, CPPA, and SCC
indefinitely from the PRPO.
Collection of CVP Power Contractors Restoration Fund Payment
Each CVP Power Contractor will receive a Restoration Fund Bill each
month on or about the twenty-fifth (25th), but no later than the last
day of the month. The Restoration Fund billing cycle for each FY will
begin within 30 days following August 1 or the date written
notification of the annual PRPO is received from Reclamation, whichever
occurs later.
Payment Due Date
All CVP Power Contractors' Restoration Payments are due and payable
before the close of business on the twentieth (20th) calendar day each
Restoration Fund Bill is issued or the next business day thereafter if
said day is a Saturday, Sunday, or Federal holiday.
Late Payment Charges Assessed to Delinquent Restoration Payments
Western will add a late payment charge of five hundredths percent
(0.05%) of the principal amount unpaid for each day the Restoration
Fund Bill payment is delinquent. Western will apply any payments
received to the charges for the late payment assessed on the principal
first and then to the payment of the principal.
Deposit of CVP Power Contractors' Restoration Payments Into the
Restoration Fund
On or about the twenty-seventh (27th) calendar day of the month
following each Billing Month, Western will transfer all of the
Restoration Payments received, including late payment charges, to
Reclamation for deposit into the Restoration Fund. The thirtieth (30th)
of September of each FY is the last day Western will transfer
Restoration Payments, including late payment charges, to Reclamation
for that FY.
Adjustment to the PRPO
Each FY's annual PRPO is subject to a Midyear Adjustment determined
by Reclamation. The Midyear Adjustment occurs on or about April 1 of
each FY, following Reclamation's annual determination of available CVP
water supply for the year. Reclamation notifies Western, in writing, of
the Midyear Adjustment. Upon receiving Reclamation's notification,
Western will factor the Midyear Adjustment amount into the calculation
for the remaining PRPO for the year. Western will then notify each CVP
Power Contractor of the Midyear Adjustment to the annual PRPO.
Instruction for Mailing Public Comments
The comment period will begin with the publication of this notice
in the Federal Register and will end 60 days after publication. Western
must receive all comments by the end of the comment period to assure
consideration. Written comments can be mailed, faxed, or e-mailed to
Mr. Thomas R. Boyko, Power Marketing Manager, Sierra Nevada Region,
Western Area Power Administration, 114 Parkshore Drive, Folsom, CA
95630-4710, fax (916) 985-1931, e-mail boyko@wapa.gov.
Availability of Information
All studies, comments, letters, memorandums, or other documents
made or kept by Western for developing the final procedures, will be
made available for inspection and copying at Western's Sierra Nevada
Regional Office, located at 114 Parkshore Drive, Folsom, CA 95630-4710.
Regulatory Flexibility Analysis
The Regulatory Flexibility Act of 1980 (5 U.S.C. 601, et seq.)
requires Federal agencies to perform a regulatory flexibility analysis
if a final rule is likely to have a significant economic impact on a
substantial number of small entities. Western has determined that this
action relates to rates or services offered by Western and, therefore,
is not a rule within the purview of the Act.
Environmental Compliance
In compliance with the National Environmental Policy Act (NEPA) of
1969 (42 U.S.C. 4321, et seq.); the Council on Environmental Quality
Regulations for implementing NEPA (40 CFR parts 1500 through 1508); and
the Integrated DOE NEPA Implementing Procedures (10 CFR part 1021),
Western has determined that this action is categorically excluded from
the preparation of an environmental assessment or an environmental
impact statement.
Determination Under Executive Order 12866
Western has an exemption from centralized regulatory review under
Executive Order 12866. This notice is not required to be cleared by the
Office of Management and Budget.
Dated: October 9, 2002.
Michael S. Hacskaylo,
Administrator.
[FR Doc. 02-27442 Filed 10-28-02; 8:45 am]
BILLING CODE 6450-01-P