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Proposed Amended Navajo Power Marketing Plan
Note: EPA no longer updates this information, but it may be useful as a reference or resource.
[Federal Register: August 14, 2006 (Volume 71, Number 156)]
[Notices]
[Page 46467-46470]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14au06-46]
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DEPARTMENT OF ENERGY
Western Area Power Administration
Proposed Amended Navajo Power Marketing Plan
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of public process and call for comments.
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SUMMARY: The Bureau of Reclamation (Reclamation) has requested that
Western Area Power Administration (Western), a Federal power marketing
agency of the Department of Energy (DOE), initiate and administer a
public process to obtain comments on the proposed Amended Navajo Power
Marketing Plan (Amended Plan). This notice initiates that public process.
The proposed Amended Plan is to provide for the future marketing of
the United States' entitlement to generation from the Navajo Generating
Station (Navajo) which is in excess of the pumping requirements of the
Central Arizona Project (CAP) and certain needs for desalting and
protective pumping facilities. The proposed Amended Plan was developed
in consultation with representatives of Reclamation, Western, the
Governor of Arizona, and the Central Arizona Water Conservation
District (CAWCD) as required by the Hoover Power Plant Act of 1984 (Act).
All interested parties are invited to submit comments to Western
concerning the proposed Amended Plan. Western will provide all comments
and related public record documents to Reclamation for its review and
response prior to the consideration and adoption of the Amended Plan by
the Secretary of the Interior, in accordance with the Act.
DATES: The comment period begins today and ends November 13, 2006.
Western will present a detailed explanation of the proposed Amended
Plan at public information forums. The public information forums dates
and times are:
1. September 19, 2006, 1 p.m. MST, Phoenix, AZ.
2. September 22, 2006, 1 p.m. PDT, Ontario, CA.
Western will accept oral and written comments on the proposed
Amended Plan at public comment forums. The public comment forums dates
and times are:
1. October 10, 2006, 1 p.m. MST, Phoenix, AZ.
2. October 11, 2006, 1 p.m. PDT, Ontario, CA.
Western will accept written comments any time during the comment period.
ADDRESSES: The public information forum and the public comment forum
locations are:
1. Phoenix--Western Area Power Administration, Desert Southwest
Regional Office, 615 South 43rd Ave., Phoenix, AZ.
2. Ontario--Doubletree Hotel Ontario Airport, 222 North Vineyard
Ave., Ontario, CA.
Written comments concerning the proposed amendment should be sent
to Mr. J. Tyler Carlson, Regional Manager, Desert Southwest Region,
Western Area Power Administration, P.O. Box 6457, Phoenix, AZ 85005-
6457. Written comments may also be faxed to (602) 605-2490, attention:
Brian Young. Documents associated with this public process may be
viewed at http://www.wapa.gov/dsw/pwrmkt.
As access to Western facilities is controlled, any U.S. citizen
wishing to attend any meeting held at Western must present an official
form of picture identification, such as a driver's license, U.S.
passport, U.S. Government ID, or U.S. Military ID, at the time of the
meeting. Foreign nationals should contact Western at least 45 days in
advance of the meeting to obtain the necessary form to attend the meeting.
FOR FURTHER INFORMATION CONTACT: Mr. Brian Young, Remarketing Program,
Desert Southwest Region, Western Area Power Administration, P.O. Box
6457, Phoenix, AZ 85005-6457, telephone (602) 605-2594, e-mail
navajoplan@wapa.gov. The original Navajo Power Marketing Plan dated
December 1, 1987 (Original Plan) is available for viewing at
http://www.wapa.gov/dsw/pwrmkt.
SUPPLEMENTARY INFORMATION: The United States acquired an entitlement to
24.3 percent of generation available at Navajo for use by CAP pursuant
to the Colorado River Basin Project Act (43 U.S.C. 1501, et seq.) The
CAP is a Reclamation multi-purpose water resource development and
management project in Arizona.
Section 107(a) of the Act provides that the capacity and energy
associated with the United States' interest in Navajo which is in
excess of the pumping requirements of the CAP and any needs for
desalting and protective pumping facilities (Navajo Surplus Power)
shall be marketed and exchanged by the Secretary of Energy.
Furthermore, section 107(c) of the Act provides that in the marketing
and exchanging of Navajo Surplus Power, the Secretary of the Interior
shall adopt the plan deemed most acceptable, after consultation with
the Secretary of Energy, the Governor of Arizona, and CAWCD (or its
successor in interest to the repayment obligation for the CAP).
On December 1, 1987, Reclamation, on behalf of the Secretary of the
Interior, adopted the Original Plan which provided for long-term
contracts through September 30, 2011. By letter dated July 3, 2006,
Reclamation requested that Western initiate and administer a public
process to obtain comments on the proposed Amended Plan to provide for
the future marketing of Navajo Surplus Power.
This proposed Amended Plan contains the framework for the sale and
exchange of Navajo Surplus Power, including an annual process to
determine the power to be marketed, eligibility criteria, contract
provisions, ratesetting provisions, and revenue collection and
distribution criteria. Following consideration of comments received and
adoption of the Amended Plan by the Secretary of the Interior, the
Amended Plan will become effective 30 days after publication in the
Federal Register. The ratesetting provisions in the proposed Amended
Plan were developed to accomplish the requirements of the Act to market
and exchange Navajo Surplus Power ``for the purposes of optimizing the
availability of Navajo surplus and providing financial assistance in
the timely construction and repayment of construction costs of
authorized features of the Central Arizona project.'' These provisions
also provide that ``rates shall not exceed levels that allow for an
appropriate saving for the contractor.''
The proposed Amended Plan implements provisions of the Revised
Stipulation Regarding A Stay of Litigation (Central Arizona Water
Conservation District v. United States, et al., No. CIV 95-625-TUC-WDB
(EHC), No. CIV 95-1720-PHX-EHC). The Revised Stipulation requires that
the Original Plan be amended to provide for the establishment of rates
for the sale or exchange of Navajo Surplus Power after September 30,
2011 ``which optimize the availability and use of revenues'' for the
Lower Colorado River Basin Development Fund in a manner consistent with
the Act. The Arizona Water Settlements Act, Pub. L. 108-451 amends the
use of Navajo Surplus Power revenues set forth in 43 U.S.C. 1543(f).
The Original Plan also contains a provision to collect an
additional rate component that allows CAWCD to recover an advance of
funds made to Reclamation for the construction of authorized features
of the CAP. The repayment of this advance will be satisfied under
contracts pursuant to the Original Plan. The Original Plan also
[[Page 46468]]
contains specified quantities of capacity and energy to be marketed
under long-term contracts. This proposed Amended Plan provides for an
annual determination of capacity and energy resources for marketing as
Navajo Surplus Power based upon the availability of water for CAP
pumping, in conjunction with an annual determination of rates and the
various capacity and energy products to be marketed. Navajo Surplus
Power under this Amended Plan will be placed under contract for various
time periods, which may be short-term, annual, or multi-year.
Proposed Amended Navajo Power Marketing Plan
I. Purpose and Scope
Section 107 of the Hoover Power Plant Act of 1984 requires that a
power marketing plan be developed to provide for marketing and
exchanging of Navajo Surplus for the purposes of optimizing the
availability of Navajo Surplus and providing financial assistance in
the timely construction and repayment of construction costs of
authorized features of the Central Arizona Project. The Secretary of
the Interior adopted the original Navajo Power Marketing Plan on
December 1, 1987 (Original Plan). The Revised Stipulation entered in
the Central Arizona Project repayment litigation, Central Arizona Water
Conservation District v. United States, et al., No. CIV 95-625-TUC-WDB
(EHC), No. CIV 95-1720-PHX-EHC (Consolidated Action) requires the
Original Plan be amended. The Revised Stipulation requires the amended
Navajo Power Marketing Plan provide for the establishment and
collection of rates for the sale or exchange of Navajo Surplus Power
that optimize the availability and use of revenues for the Lower
Colorado River Basin Development Fund while allowing for an appropriate
saving for the contractor. Satisfying the requirements of the Revised
Stipulation is necessary for final judgment to be entered in the
Central Arizona Project litigation. The entry of final judgment in that
litigation permits the Secretary of the Interior to make a required
finding under the terms of the Arizona Water Settlements Act.
A. This Amended Navajo Power Marketing Plan hereinafter called
``Plan'' shall be applicable to all new or amended contracts for Navajo
Surplus entered into after this Plan is adopted. The Original Plan
shall remain in effect for all Navajo Surplus contracts entered into
before the adoption of this Plan and shall continue until such
contracts terminate or are amended in accordance with this Plan.
B. This Plan recognizes the obligation of the United States to use
its entitlement to electrical capacity and energy from Navajo to
provide necessary power for the pumping requirements of the Central
Arizona Project and any such needs for desalting and protective pumping
facilities as may be required under section 101(b)(2)(B) of the
Colorado River Basin Salinity Control Act.
C. This Plan provides that Western, working closely with
Reclamation and CAWCD, will be the marketing entity responsible for the
sale and exchange of Navajo Surplus in accordance with applicable
Federal law, regulations and the Revised Stipulation. Western shall
market Navajo Surplus directly to, with, or through the Arizona Power
Authority, and/or other entities having the status of preference
entities under the Reclamation Project Act of 1939. Western may utilize
exchange, banking, purchase or sales agreements, or integration with
other resources to fulfill any purpose of this Plan.
D. This Plan sets parameters for the establishment of Rates, not
exceeding levels that allow for an appropriate saving for the
contractor, that will optimize the availability and use of revenues
from the sale and exchange of Navajo Surplus to provide financial
assistance for payment of the operation and maintenance expenses
associated with Navajo Surplus and for the purposes set forth in 43
U.S.C. 1543(f), as amended by the Arizona Water Settlements Act, Public
Law 108-451.
E. This Plan satisfies the obligation of the United States in
accordance with the Revised Stipulation, to amend the Original Plan
``to provide for the establishment and collection of rates for the sale
or exchange of Navajo Surplus Power after September 30, 2011.''
F. This Plan specifies that for so long as Navajo operates and
there is Navajo Surplus, Western shall continue to market Navajo
Surplus under this Plan with such amendments or revisions as may be
adopted by the Secretary of the Interior, after consultation with the
Secretary of Energy, CAWCD, and the Governor of Arizona and as provided
by law, including the authorities set forth in section II.
II. Authorities
The authorities under which this Plan is developed are:
A. Federal Reclamation laws (43 U.S.C. 372 et seq., and all Acts
amendatory thereof or supplementary thereto); in particular, the
Colorado River Basin Project Act of 1968 (Pub. L. 90-537), the Colorado
River Basin Salinity Control Act of 1974 (Pub. L. 93-320), as amended,
the Hoover Power Plant Act of 1984 (Pub. L. 98-381), and the Arizona
Water Settlements Act of 2005 (Pub. L. 108-451).
B. Rules, regulations, and agency agreements of Western and
Reclamation issued or made pursuant to applicable law.
III. Definitions
The following terms wherever used herein shall have the following
meanings:
A. ``Boulder City Marketing Area'' shall mean the marketing area
defined in the 1984 Conformed Criteria published in the Federal
Register (49 FR 50585) on December 28, 1984.
B. ``Central Arizona Project'' or ``CAP'' shall mean the
Reclamation multipurpose water resource development and management
project in Arizona authorized by the Colorado River Basin Project Act,
as amended (43 U.S.C. 1501 et seq.).
C. ``CAWCD'' shall mean the Central Arizona Water Conservation District.
D. ``Conformed Criteria'' shall mean the Conformed General
Consolidated Power Marketing Criteria or Regulations for Boulder City
Area Projects published in the Federal Register (49 FR 50582) on
December 29, 1984.
E. ``Development Fund'' shall mean the Lower Colorado River Basin
Development Fund established under section 403 of the Colorado River
Basin Project Act.
F. ``Exchange'' shall mean any arrangements providing for delivery
of capacity and energy to Western and return of capacity and energy by
Western from Navajo within a one year period.
G. ``Navajo'' shall mean the Navajo Generating Station, the thermal
generating power plant located near Page, Arizona, and associated
transmission facilities.
H. ``Navajo Entitlement'' shall mean the United States' entitlement
of 24.3 percent of the generation from Navajo.
I. ``Navajo Surplus'' shall mean capacity and energy associated
with the Navajo Entitlement which is in excess of the pumping
requirements of the Central Arizona Project and any such needs for
desalting and protective pumping facilities as may be required under
section 101(b)(2)(B) of the Colorado River Basin Salinity Control Act.
J. ``New Waddell Dam'' or ``New Waddell Reservoir'' shall mean the
regulatory storage facilities constructed on the Agua Fria River as a
feature of the CAP.
[[Page 46469]]
K. ``Original Plan'' shall mean the original Navajo Power Marketing
Plan adopted on December 1, 1987.
L. ``Plan'' shall mean this Amended Navajo Power Marketing Plan.
M. ``Rate(s)'' shall mean the price(s) established by a marketing
process for various Navajo Surplus capacity or energy products marketed
under this Plan to optimize the availability and use of revenues for
the Development Fund.
N. ``Reclamation'' shall mean the Bureau of Reclamation, United
States Department of the Interior.
O. ``Revised Stipulation'' shall mean the Revised Stipulation
Regarding a Stay of Litigation, Resolution of Issues During the Stay
and for Ultimate Judgment Upon the Satisfaction of Conditions, filed
with the United States District Court for the District of Arizona in
Central Arizona Water Conservation District v. United States, et al.,
No. CIV 95-625-TUC-WDB (EHC), No. CIV 95-1720-PHX-EHC (Consolidated
Action), and that court's order dated April 28, 2003, and any
amendments or revisions thereto.
P. ``Western'' shall mean the Western Area Power Administration,
United States Department of Energy.
IV. Power To Be Marketed
A. Reclamation, in consultation with CAWCD, shall annually or more
frequently, as appropriate, determine the Navajo Surplus available for
sale and exchange by Western, and the period for which it will be
available for sale and exchange, taking into consideration among other
factors, the following:
1. Existing contractual commitments to deliver Navajo Surplus,
including new contracts entered into under the first opportunity
provisions of section IV.G of the Original Plan.
2. CAP estimated pumping energy requirements in excess of capacity
and energy supplied to CAWCD from Hoover Dam or New Waddell Dam, based
on projected CAP water deliveries for that year and successive years.
3. Estimated capacity and energy needs of the United States for
desalting and protective pumping facilities, as may be required under
section 101(b)(2)(B) of the Colorado River Basin Salinity Control Act.
4. Projected Navajo generation.
B. Any Navajo Surplus not sold or exchanged in accordance with
paragraph A of this section may, as determined by Western, in
cooperation with CAWCD and Reclamation, be sold under appropriate long-
term or short-term arrangements.
V. Optimization
A. To optimize the availability of Navajo Surplus, CAWCD shall
utilize, for CAP pumping requirements, Hoover capacity and energy
scheduled from Hoover Dam in accordance with the terms and conditions
of CAWCD's contract with the Arizona Power Authority to permit
additional Navajo capacity and energy to be sold or exchanged by
Western as Navajo Surplus.
B. To optimize the availability and use of revenues from the sale
and exchange of Navajo Surplus:
1. CAWCD will use seasonal and daily power management.
Specifically, CAWCD will divert maximum amounts of water from the
Colorado River in the winter season for storage in the New Waddell
Reservoir and then serve CAP water demands in the summer season from
water previously placed in storage. On a daily basis, CAWCD to the
extent possible will pump off-peak to optimize the on-peak availability
of Navajo Surplus.
2. Western, in consultation with Reclamation and CAWCD, shall
develop capacity and energy products from the Navajo Surplus determined
to be available under section IV.A for sale or exchange, taking into
account market prices for standard capacity and energy products.
VI. Eligibility
A. Western shall offer Navajo Surplus for sale in the following
order of priority, in accordance with part IV, section A of the
Conformed Criteria:
1. Preference entities within Arizona.
2. Preference entities within the Boulder City Marketing Area.
3. Preference entities in adjacent Federal marketing areas.
4. Non-preference entities in the Boulder City Marketing Area.
B. In the event a bidding or request for proposal process is
utilized, after the bids or proposals are received the bidding entities
will be given first opportunity, in order of priority, to purchase at a
price which is based on the highest offer.
C. In the event that a potential contractor fails to place Navajo
Surplus capacity and energy under contract within a reasonable period,
as specified by Western and in accordance with the terms and conditions
offered by Western, the amounts of capacity and energy not placed under
contract will be reoffered in accordance with the order of priority
specified in paragraph A of this section.
D. Arizona entities, regardless of preference status, shall have
first opportunity for electrical capacity and energy exchange rights as
necessary to implement this Plan. Western, in consultation with CAWCD
and Reclamation, may determine that any capacity and energy not
subscribed to by Arizona entities for exchange may be offered for sale
in the order of priority stated in paragraph A of this section or may
be offered to non-Arizona entities for exchange.
VII. Contract Provisions
A. Western, after consultation with Reclamation and CAWCD, shall
enter into all power sales and exchange contracts necessary to carry
out the provisions of this Plan in selling and exchanging Navajo
Surplus. Navajo Surplus shall be marketed, and exchange rights granted,
by Western on behalf of the Secretary of the Interior, under contracts
consistent with this Plan and the Conformed Criteria.
B. Contracts for the sale or exchange of Navajo Surplus shall
specify a delivery point on the Navajo or CAP transmission systems as
may be available. If the contractor cannot take delivery of Navajo
Surplus into its own system at these delivery points, transmission
service arrangements to other delivery points will be the obligation of
the contractor.
C. CAWCD may be a party to contracts for the sale or exchange of
Navajo Surplus for the limited purposes of (i) concurring that the
contracts optimize the financial assistance available for the purposes
set forth in 43 U.S.C. 1543(f), as amended by the Arizona Water
Settlements Act, Public Law 108-451, and (ii) affirming any rights and
obligations of CAWCD under the contracts.
D. Western and the contractor shall agree upon written metering and
scheduling instructions prior to any deliveries under this Plan. The
metering and scheduling instructions shall provide the operating and
accounting procedures for such deliveries. Metering and scheduling
instructions are intended to implement terms of the contract, not to
modify or amend it, and therefore are subordinate to the contract.
Western and the contractor may modify these instructions, as necessary,
to reflect changing power system conditions. In the event the
contractor fails or refuses to execute the initial metering and
scheduling instructions or any revised instructions Western determines
to be necessary, Western shall develop and implement temporary
instructions until acceptable instructions have been developed and
executed by Western and the contractor.
[[Page 46470]]
VIII. Ratesetting
A. Rates for Navajo Surplus developed pursuant to section IV.A
shall be established annually by Reclamation and Western, in
consultation with CAWCD, through a competitive process that optimizes
the availability and use of revenues for the Development Fund with
priority to entities in accordance with section VI.A and that allows
for an appropriate saving for the contractor, taking into consideration,
among other factors, prices for comparable capacity and energy products.
B. Rates for Navajo Surplus developed under section IV.B or
marketed under the first opportunity provision of the Original Plan
shall be established in the contracts for sale of such Navajo Surplus,
taking into consideration, among other factors, prices for comparable
capacity and energy products, and allowing for an appropriate saving
for the contractor.
C. Rates developed annually pursuant to this Plan shall not be
applicable to pre-existing contracts unless provided for in such contracts.
D. Because of the Hoover Power Plant Act of 1984's requirements for
noncost-based rates, the Rates established pursuant to this Plan are
not suitable to the required review of Western's rates by the Federal
Energy Regulatory Commission. All Rates promulgated by the
Administrator of Western under this Plan shall be a final act of the
Secretary of Energy and shall be subject to review pursuant to the
judicial review provided by the Administrative Procedure Act (5 U.S.C.
553, et seq.).
IX. Revenue Collection and Distribution
Western shall deposit all revenue collected from the marketing of
Navajo Surplus under this Plan into the Development Fund, where it will
be used:
A. First, to pay all costs of operation and maintenance determined
to be associated with the sale and exchange of Navajo Surplus,
including actual costs for services performed by Reclamation and
Western under this Plan including appropriate administrative expenses
of Reclamation and Western.
B. Second, for the purposes set forth in 43 U.S.C. 1543(f), as
amended by the Arizona Water Settlements Act, Public Law 108-451,
including crediting funds against the annual CAWCD repayment obligation
and funding specific Indian water-related activities.
X. Effective Date
This Plan will become effective 30 days after publication in the
Federal Register following adoption by the Secretary of the Interior.
XI. Consultation
This Plan is deemed most acceptable in accordance with section
107(c) of the Hoover Power Plant Act of 1984 as evidenced by the
concurrences below from Western (Secretary of Energy), the Governor of
Arizona, and CAWCD.
Regulatory Procedure Requirements
Review Under the Regulatory Flexibility Act
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 and there is a legal requirement
to issue a general notice of proposed rulemaking. Western has
determined that this action does not require a regulatory flexibility
analysis since it is a rulemaking of particular applicability involving
rates or services applicable to public property.
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 1500-1508); and DOE
NEPA Implementing Procedures and Guidelines (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; accordingly, no clearance of this notice by the
Office of Management and Budget is required.
Small Business Regulatory Enforcement Fairness Act
Western determined this rule is exempt from congressional
notification requirements under 5 U.S.C. 801 because the action is a
rulemaking of particular applicability relating to rates or services
and involves matters of procedure.
Dated: August 1, 2006.
Michael S. Hacskaylo,
Administrator.
[FR Doc. E6-13247 Filed 8-11-06; 8:45 am]
BILLING CODE 6450-01-P