29–006 

113TH CONGRESS REPT. 113–25 " ! HOUSE OF REPRESENTATIVES 1st Session Part 1 

BONNEVILLE UNIT CLEAN HYDROPOWER FACILITATION 

ACT 

APRIL 9, 2013.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. HASTINGS of Washington, from the Committee on Natural 

Resources, submitted the following 

R E P O R T 

[To accompany H.R. 254] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Natural Resources, to whom was referred the 

bill (H.R. 254) to authorize the Secretary of the Interior to facilitate 

the development of hydroelectric power on the Diamond Fork System of the Central Utah Project, having considered the same, report favorably thereon without amendment and recommend that 

the bill do pass. 

PURPOSE OF THE BILL

The purpose of H.R. 254 is to authorize the Secretary of the Interior to facilitate the development of hydroelectric power on the Diamond Fork System of the Central Utah Project. 

BACKGROUND AND NEED FOR LEGISLATION

H.R. 254 removes administrative barriers to jumpstart non-federal hydropower development at an existing federal water supply 

facility. This hydropower development could occur in the Diamond 

Fork System within the Central Utah Project’s Bonneville Unit, 

which is a system of dams, pipelines and tunnels that transports 

water from the eastern mountains in Utah to the Wasatch Front, 

where approximately 80% of Utah’s population resides. 

A Department of the Interior cost formula has prohibited any hydropower development for years. Under a 2004 ‘‘use of facilities’’ 

cost allocation formula, any hydropower developer must agree to 

pay $106 million over 50 years as part of installing any hydropower 

infrastructure at Diamond Fork. This would be in addition to the 


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actual capital cost of the facilities, which would be borne by the developer. One witness at a hearing in the 111th Congress likened 

this situation to one that requires any developer to start $106 million ‘‘in the hole.’’ As a result, hydropower investment has not occurred because a developer would not want to assume the $106 

million cost, as it far outweighs the annual benefits of generating 

hydropower. Because hydropower has not been developed, the $106 

million is not being paid and the federal government is not receiving any lease revenue from a hydropower developer. 

H.R. 254 defers the $106 million, which is similar to deferrals 

made with respect to municipal and industrial water costs addressed by the Central Utah Project Completion Act provisions in 

Public Law 102–575. Under this deferral, hydroelectric power generation at the Diamond Fork System will now become economic, 

while lease revenues to the federal government will likely be facilitated by the bill. The bill also ensures that any developer would be 

required to pay for the cost of hydropower infrastructure. If H.R. 

254 becomes law, it is anticipated that the Department of the Interior will initiate an open and competitive process to issue a lease 

of power privilege for the right to install hydropower turbines at 

Diamond Fork. 

COMMITTEE ACTION

H.R. 254 was introduced on January 15, 2013, by Congressman 

Jason Chaffetz (R–UT). The bill was referred to the Committee on 

Natural Resources, and within the Committee to the Subcommittee 

on Water and Power. The bill was also referred to the Committee 

on the Budget. On March 5, 2013, the Subcommittee on Water and 

Power held a hearing on the bill. On March 20, 2013, the Full Natural Resources Committee met to consider the bill. The Subcommittee on Water and Power was discharged by unanimous consent. No amendments were offered to the bill, and the bill was 

adopted and ordered favorably reported to the House of Representatives by unanimous consent. 

SECTION-BY-SECTION ANALYSIS

Section 1. Short title 

This section provides the short title of the bill: ‘‘Bonneville Unit 

Clean Hydropower Facilitation Act.’’ 

Section 2. Diamond Fork System defined 

Section 2 defines the Diamond Fork System as the facilities described in Chapter 4 of the October 2004 Supplement to the 1988 

Definite Plan Report for the Bonneville Unit. 

Section 3. Cost allocations 

This section states that the current amount of reimbursable costs 

allocated to power for the Diamond Fork System are final costs. 

This defers costs that are preventing hydropower development and 

clears the way for the federal government to receive revenue once 

development is complete. The Committee expects that the Interior 

Department will follow the longstanding federal ‘‘beneficiary pays’’ 

concept to ensure ratepayers who do not benefit from the Diamond 

Fork System will not have to pay for any deferment costs. In parVerDate Mar 15 2010 22:55 Apr 10, 2013 Jkt 029006 PO 00000 Frm 00002 Fmt 6659 Sfmt 6602 E:\HR\OC\HR025P1.XXX HR025P1

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ticular, the Committee expects that such deferred costs not be allocated to power users for repayment. 

Section 4. No purchase or market obligation; No costs assigned to 

power 

Section 4 ensures that nothing obligates the Western Area Power 

Administration to purchase or market any of the power produced 

by the Diamond Fork System. This section also ensures that none 

of the transmission costs associated with the Diamond Fork power 

plant will be assigned to other power users. 

Section 5. Prohibition on tax-exempt financing 

This section prohibits the use of tax-exempt financing to fund 

any facility for the generation or transmission of hydropower on 

the Diamond Fork System. 

Section 6. Reporting requirement 

This provision requires the Secretary of the Interior to report to 

the House Committee on Natural Resources and the Senate Energy 

and Natural Resources Committee if hydropower production on the 

Diamond Fork System has not commenced within 24 months after 

the date of enactment, and requires the Secretary to provide a detailed timeline for future hydropower production. 

Section 7. Paygo 

This provision contains language complying with the Statutory 

Pay-As-You-Go Act of 2010. 

Section 8. Limitation on the use of funds 

This section ensures that the project is not eligible for funding 

under the Western Area Power Administration’s borrowing authority created in Public Law 111–5. 

COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of rule XIII 

of the Rules of the House of Representatives, the Committee on 

Natural Resources’ oversight findings and recommendations are reflected in the body of this report. 

COMPLIANCE WITH HOUSE RULE XIII

1. Cost of Legislation. Clause 3(d)(1) of rule XIII of the Rules of 

the House of Representatives requires an estimate and a comparison by the Committee of the costs which would be incurred in carrying out this bill. However, clause 3(d)(2)(B) of that Rule provides 

that this requirement does not apply when the Committee has included in its report a timely submitted cost estimate of the bill prepared by the Director of the Congressional Budget Office under section 402 of the Congressional Budget Act of 1974. Under clause 

3(c)(3) of rule XIII of the Rules of the House of Representatives and 

section 403 of the Congressional Budget Act of 1974, the Committee has received the following cost estimate for this bill from the 

Director of the Congressional Budget Office: 


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H.R. 254—Bonneville Unit Clean Hydropower Facilitation Act 

Summary: CBO expects that enacting H.R. 254 would lead to the 

development of hydropower facilities at the Diamond Fork Project 

in Utah by a nonfederal entity within a few years, sooner than expected under current law. Based on information from the Bureau 

of Reclamation, CBO estimates that the federal government would 

receive payments from the hydropower developer of about $4 million over the 2014–2023 period. Enacting the bill would decrease 

direct spending (by increasing offsetting receipts); therefore, payas-you-go procedures apply. Enacting the bill would not affect revenues. 

H.R. 254 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) 

and would impose no costs on state, local, or tribal governments. 

Estimated cost to the Federal Government: The costs of this legislation fall within budget function 300 (natural resources and environment). CBO estimates that enacting H.R. 254 would increase 

offsetting receipts by $600,000 a year, beginning in 2018; collections would total about $4 million over the 2018–2023 period. 

Basis of estimate: Based on information from the Bureau of Reclamation, CBO expects that under current law, the federal government is unlikely to develop the hydropower resources of the Diamond Fork project for at least the next 10 years. Although there 

are no formal development proposals currently being considered by 

the bureau, two nonfederal entities—the Central Utah Water Conservancy District and the Strawberry Water Users’ Association— 

have expressed interest in developing those resources. 

Among the reasons that CBO expects the site will probably not 

be developed over the next 10 years under current law is a requirement that project sponsors pay the Treasury for a portion of the 

federal government’s previous investments in the water project. According to the bureau, those payments would average about $5 million annually, beginning after the hydroelectric facilities go into 

service and continuing through the life of the lease. 

H.R. 254 would eliminate that requirement, and CBO expects 

that the bill would encourage nonfederal entities to pursue development of the hydropower resources at Diamond Fork. Assuming that 

H.R. 254 is enacted in 2013, we expect that the Bureau of Reclamation would receive a proposal to develop the hydroelectric resources 

within a year or two and that such a project could be completed 

by 2018. In that case, the government would collect annual fees 

from the project developer totaling about $600,000 a year (adjusted 

for inflation) for the life of the project. 

Pay-As-You-Go considerations: The Statutory Pay-As-You-Go Act 

of 2010 establishes budget-reporting and enforcement procedures 

for legislation affecting direct spending or revenues. HR. 254 would 

increase offsetting receipts (a credit against direct spending) by 

about $600,000 annually beginning in 2018. The budgetary changes 

that are subject to those pay-as-you-go procedures are shown in the 

following table. 


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CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 254 AS ORDERED REPORTED BY THE 

HOUSE COMMITTEE ON NATURAL RESOURCES ON MARCH 20, 2013 

By fiscal year, in millions of dollars— 

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2013– 

2018 

2013– 

2023 

NET INCREASE OR DECREASE (¥) IN THE DEFICIT 

Statutory Pay-As-YouGo Impact 0 0 0 0 0 ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 ¥4 

Note: Components do not sum to totals because of rounding. 

Intergovernmental and private-sector impact: H.R. 254 contains 

no intergovernmental or private-sector mandates as defined in 

UMRA; any additional costs to state and local governments would 

result from participating in a voluntary federal program. 

Previous CBO estimate: On April 1, 2013, CBO transmitted a 

cost estimate for S. 26, the Bonneville Unit Clean Hydropower Facilitation Act, as ordered reported by the Senate Committee on Energy and Natural Resources on March 14, 2013. The text of the two 

pieces of legislation is identical, and the CBO cost estimates are 

the same. 

Estimate prepared by: Federal Costs: Aurora Swanson; Impact 

on State, Local, and Tribal Governments: Melissa Merrell; Impact 

on the Private Sector: Amy Petz. 

Estimate approved by: Theresa Gullo, Deputy Assistant Director 

for Budget Analysis. 

2. Section 308(a) of Congressional Budget Act. As required by 

clause 3(c)(2) of rule XIII of the Rules of the House of Representatives and section 308(a) of the Congressional Budget Act of 1974, 

this bill does not contain any new budget authority, spending authority, credit authority, or an increase or decrease in revenues or 

tax expenditures. Based on information from the Bureau of Reclamation, CBO estimates that the federal government would receive payments from the hydropower developer of about $4 million 

over the 2014–2023 period. 

3. General Performance Goals and Objectives. As required by 

clause 3(c)(4) of rule XIII, the general performance goal or objective 

of this bill is to authorize the Secretary of the Interior to facilitate 

the development of hydroelectric power on the Diamond Fork System of the Central Utah Project. 

EARMARK STATEMENT

This bill does not contain any Congressional earmarks, limited 

tax benefits, or limited tariff benefits as defined under clause 9(e), 

9(f), and 9(g) of rule XXI of the Rules of the House of Representatives. 

COMPLIANCE WITH PUBLIC LAW 104–4

This bill contains no unfunded mandates. 

COMPLIANCE WITH H. RES. 5

Directed Rule Making. The Chairman does not believe that this 

bill directs any executive branch official to conduct any specific 

rule-making proceedings. 


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Duplication of Existing Programs. This bill does not establish or 

reauthorize a program of the federal government known to be duplicative of another program. Such program was not included in 

any report from the Government Accountability Office to Congress 

pursuant to section 21 of Public Law 111–139 or identified in the 

most recent Catalog of Federal Domestic Assistance published pursuant to the Federal Program Information Act (Public Law 95–220, 

as amended by Public Law 98–169) as relating to other programs. 

PREEMPTION OF STATE, LOCAL OR TRIBAL LAW

This bill is not intended to preempt any State, local or tribal law. 

CHANGES IN EXISTING LAW

If enacted, this bill would make no changes in existing law. 

Æ 


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