[Federal Register Volume 76, Number 76 (Wednesday, April 20, 2011)]
[Notices]
[Pages 22143-22145]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-9533]


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DEPARTMENT OF THE INTERIOR

Bureau of Reclamation


Notice of Intent To Accept Proposals, Select One Lessee, and 
Contract for Hydroelectric Power Development at the Pueblo Dam River 
Outlet, a feature of the Fryingpan-Arkansas Project (Fry-Ark Project), 
Colorado

AGENCY: Bureau of Reclamation, Interior.

ACTION: Notice of intent.

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SUMMARY: Promoting responsible development of renewable energy and 
moving the Nation toward a clean energy future is a top priority of the 
Department of the Interior. The Department signed a Memorandum of 
Understanding in March 2010 intended to focus on opportunities for 
development of environmentally sustainable hydropower at existing 
Bureau of Reclamation (Reclamation) facilities. The Department, acting 
through the Reclamation will consider proposals for non-Federal 
development of hydroelectric power at Pueblo Dam River Outlet of the 
Fry-Ark Project, 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. The Department will prioritize projects that appropriately 
balance increased energy generation with consideration of environmental 
impacts. The Western Area Power Administration (Western) would have the 
first opportunity to purchase and/or market the power that would be 
generated by such development under a lease of power privilege. The 
Fry-Ark Project is a Reclamation project. This Notice presents 
background information, proposal content guidelines, information 
concerning selection of one or more non-Federal entities to develop 
hydroelectric power at Pueblo Dam River Outlet, and power purchasing 
and/or marketing considerations. Interested entities are invited to 
submit a proposal on this project.

DATES: A written proposal and seven copies must be submitted on or 
before 12 p.m. (MDT), on August 19, 2011. A proposal will be considered 
timely only if it is received in the office of the Lease of Power 
Privilege Coordinator by or before 12 p.m. (MDT) 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: Written proposals and seven copies should be sent to Mr. 
George Gliko, Lease of Power Privilege Coordinator (GP-2200), Bureau of 
Reclamation, Great Plains Regional Office (GP-2200), P.O. Box 36900, 
Billings, MT 59107-6900.
    Information related to Western's purchasing and/or marketing the 
power may be obtained at Western Area Power Administration, Rocky 
Mountain Region, Attn: Dave Neumayer, Power Marketing Manager, 5555 
East

[[Page 22144]]

Crossroads Blvd., Loveland, CO 80538, Telephone: (970) 461-7322.
    Information related to the operation and maintenance of Pueblo Dam 
and Reservoir may be obtained from Mr. Karl Thiel at the Bureau of 
Reclamation, Eastern Colorado Area Office, 11056 W County Road 18E, 
Loveland, CO 80537-9711, Telephone: (970) 962-4331.

FOR FURTHER INFORMATION CONTACT: Mr. George Gliko at (406) 247-7651.
    Reclamation will be available to meet with interested entities only 
upon written request to the Lease of Power Privilege Coordinator at the 
above address. Reclamation reserves the right to schedule a single 
meeting and/or visit to address at once the questions of all entities 
that have submitted questions or requested site visits.

SUPPLEMENTARY INFORMATION: The Fry-Ark Project, located in south-
central Colorado, was authorized for construction, including 
hydroelectric power, by Public Law 87-590; 76 stat. 389. Specifically, 
the act authorizes the Secretary of the Interior to construct, operate 
and maintain the Fryingpan-Arkansas Project, Colorado, in substantial 
accordance with House Document 187. House Document 187 states in 
several sections (Page 29, Section 45; Page 31, Section 49) that a 
project power system will be included as project features (including 
Pueblo Powerplant to be located at Pueblo Dam and Reservoir) and is 
authorized to be constructed, operated, and maintained. Reclamation 
operates and maintains Pueblo Dam and Reservoir. Reclamation has 
recently released its Hydropower Resource Assessment (March 2011), 
which estimated that Pueblo Dam is economically feasible to develop 
(benefit-cost ratio 2.34, including green incentives), and that there 
is a potential capacity of 13 MW. The Assessment may be viewed in its 
entirety at http://www.usbr.gov/power/.
    Reclamation is considering hydroelectric power development at 
Pueblo Dam River Outlet through a lease of power privilege. A lease of 
power privilege is a congressionally authorized alternative to Federal 
hydroelectric power development. A lease of power privilege grants to a 
non-Federal entity the right to utilize the Fry-Ark project for non-
Federal electric power generation and sale, consistent with project 
purposes. Leases of power privilege have terms not to exceed 40 years. 
The general authority for lease of power privilege under Reclamation 
law includes, among others, the Town Sites and Power Development Act of 
1906 (43 U.S.C. 522) (1906 Act) 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 lease of power privilege considered in response to 
this Notice. Leases of power privilege may be issued only when 
Reclamation, upon completion of the NEPA process, determines that the 
affected hydroelectric power sites are environmentally acceptable. Any 
lease of power privilege at Pueblo Dam River Outlet must accommodate 
existing contractual commitments related to operation and maintenance 
of such existing facilities, and must meet the requirements of 
applicable law, including, but not limited to, the 1906 Act and the 
1939 Act.
    Western would have the first opportunity to purchase and/or market 
the power that would be generated under any lease of power privilege. 
Under this process, Western would either purchase and market the power 
as Loveland Area Power power or market the power independently by first 
offering it to preference entities and secondly to non-preference 
entities.
    All costs incurred by the United States related to development and 
operation and maintenance under a lease of power privilege, including 
but not limited to NEPA compliance, development of the lease of power 
privilege, design reviews, construction oversight, and any other 
associated documents, would be the expense of the lessee.
    Proposal Content Guidelines: Interested parties should submit one 
or more proposals explaining in as precise detail as is practicable how 
the hydropower potential at each site would be developed. Factors which 
proposals should consider and address include, but are not limited to, 
the following:
    1. Provide all information relevant to the qualifications of the 
proposing entity to plan and implement such a project, including, but 
not limited to, information about preference status, 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, safety record, and any other 
information that demonstrates the interested entity's organizational, 
technical and financial ability to perform all aspects of the work. 
Include a discussion of past experience in operating and maintaining 
similar facilities and provide references as appropriate. The term 
preference entity, as applied to a lease of power privilege, means an 
entity qualifying for preference under Section 9(c) 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.
    2. Provide geographical locations and describe principal structures 
and other important features of the proposed development including 
roads and transmission lines. Estimate and describe installed capacity 
and the capacity of the power facilities under dry, average, and wet 
hydrological conditions. Also describe seasonal or annual generation 
patterns. Include estimates of the amount of electrical energy that 
would be produced from each facility for each month of average, dry and 
wet water years. If capacity and energy can be delivered to another 
location, either by the proposing entity or by potential wheeling 
agents, specify where capacity and energy can be delivered. Include 
concepts for power sales and contractual arrangements, involved parties 
and the proposed approach to wheeling if required.
    3. Indicate title arrangements and the ability to acquire title to 
or the right to occupy and use lands necessary for the proposed 
development, including such additional lands as may be required during 
construction.
    4. Identify water rights applicable to the operation of the 
proposed development, the holder of such rights, and how these rights 
would be acquired or perfected.
    5. Discuss any studies necessary to adequately define impacts on 
the Fry-Ark Project and the environment required by the development. 
Describe any significant environmental issues associated with the 
development and the proposing entity's approach for gathering relevant 
data and resolving such issues to protect and enhance the quality of 
the environment. Explain any proposed use of the hydropower development 
for conservation and utilization of the available water resources in 
the public interest.
    6. Describe anticipated contractual arrangements with the entity or 
entities having operation and maintenance responsibility for the Fry-
Ark 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 Fry-Ark Project, not 
impact Fry-Ark Project operations, existing applicable contracts 
related to operation and maintenance of Fry-Ark Project

[[Page 22145]]

feature(s) that are proposed for utilization in the hydropower 
development under consideration, and any other applicable water-related 
contracts.
    7. Identify the organizational structure planned for the long-term 
operation and maintenance of any proposed hydropower development.
    8. Provide a management plan to accomplish such activities as 
planning, NEPA compliance, lease of power privilege development, 
design, construction, facility testing, and start of hydropower 
production. Prepare schedules of these activities as applicable. 
Describe what studies are necessary to accomplish the hydroelectric 
power development and how the studies would be implemented.
    9. Estimate development cost. This cost should include all 
investment costs such as the cost of studies to determine feasibility, 
NEPA compliance, design, construction, associated bonding and financing 
as well as the amortized annual cost of the investment; also, the 
annual operation, maintenance, and replacement expense for the 
hydropower development; lease payments to the United States; and 
expenses that may be associated with the Fry-Ark Project. If there are 
additional transmission or wheeling expenses associated with the 
development of the hydropower development, these should be included. 
Identify proposed methods of financing and hydropower development. An 
economic analysis should be presented 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 will give more favorable consideration to proposals 
that (1) Are well-adapted to developing, conserving, and utilizing the 
water and natural resources, (2) clearly demonstrate that the offeror 
is qualified to develop the hydropower facility and provide for long-
term operation and maintenance, and (3) develop the hydropower 
potential economically. Credit will be given to those proposals that 
demonstrate development of power in an environmentally-friendly manner. 
While all developments will be required to perform NEPA analysis, 
proposals should include information as to how the proposer will 
minimize environmental impact during construction, maintenance and 
operation. Proposers should also include design characteristics and 
methods that will be used to minimize environmental impacts and improve 
the environmental attributes of the facility. Any work the developer is 
proposing to do to enhance the ecosystem should also be explained in 
the proposal. A proposal will be deemed unacceptable if it is 
inconsistent with Fry-Ark 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 1.) provided that their proposal is at least as well-
adapted to developing, conserving, and utilizing the water and natural 
resources as other submitted proposals and that the preference entity 
is well qualified. Preference entities would be allowed 90 days to 
improve their proposals, if necessary, to be made at least equal to a 
proposal that may have been submitted by a non-preference entity.
    Power Purchasing and/or Marketing Considerations: Western would 
have the first opportunity to purchase and/or market the power that 
would be generated by the project under a lease of power privilege. 
Western will consult with Reclamation on such power purchasing and/or 
marketing considerations.
    In the event Western elects to not purchase and/or market the power 
generated by the hydropower development or such a decision cannot be 
made prior to execution of the lease of power privilege, the lessee 
would be responsible for marketing the power generated by the project 
with priority given to preference entities as heretofore defined in 
Proposal Content Guidelines, item 1.
    Notice and Time Period to Enter Into Lease of Power Privilege: 
Reclamation will notify, in writing, all entities submitting proposals 
of Reclamation's decision regarding selection of the potential lessee. 
The selected potential lessee will have 2 years from the date of such 
notification to enter into a lease of power privilege for the site or 
sites identified in the proposal. This period may only be extended by 
the United States in writing. Such leases of power privilege will state 
whether and how Western will be involved in purchasing and/or marketing 
the power.

    Dated: April 14, 2011.
Michael J. Ryan,
Regional Director.
[FR Doc. 2011-9533 Filed 4-19-11; 8:45 am]
BILLING CODE 4310-MN-P