[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