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[House Report 113-249]
[From the U.S. Government Publishing Office]

113th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    113-249

======================================================================

 
 BUREAU OF RECLAMATION CONDUIT HYDROPOWER DEVELOPMENT EQUITY AND JOBS 
                                  ACT

                                _______
                                

October 22, 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. 1963]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Natural Resources, to whom was referred 
the bill (H.R. 1963) to amend the Water Conservation and 
Utilization Act to authorize the development of non-federal 
hydropower and issuance of leases of power privileges at 
projects constructed pursuant to the authority of the Water 
Conservation and Utilization Act, and for other purposes, 
having considered the same, report favorably thereon with an 
amendment and recommend that the bill as amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Bureau of Reclamation Conduit 
Hydropower Development Equity and Jobs Act''.

SEC. 2. AMENDMENT.

  Section 9 of the Act entitled ``An Act authorizing construction of 
water conservation and utilization projects in the Great Plains and 
arid semiarid areas of the United States'', approved August 11, 1939 
(16 U.S.C. 590z-7; commonly known as the ``Water Conservation and 
Utilization Act''), is amended--
          (1) by striking ``In connection with'' and inserting ``(a) In 
        connection with''; and
          (2) by adding at the end the following:
  ``(b) Except as otherwise provided in this section, the Secretary is 
authorized to enter into leases of power privileges for electric power 
generation in connection with any project constructed under this Act, 
and shall have authority in addition to and alternative to any 
authority in existing laws relating to particular projects, including 
small conduit hydropower development, consistent with the terms of this 
Act, the Reclamation Project Act of 1939 (43 U.S.C. 485h), and other 
Federal reclamation laws.
  ``(c) All right, title, and interest to installed power facilities 
constructed by non-Federal entities pursuant to a lease of power 
privilege, and direct revenues derived therefrom, shall remain with the 
lessee unless otherwise required in subsection (d).
  ``(d) Lease of power privilege charges or fees under this section 
shall be credited to the facility from which those revenues were 
derived.
  ``(e) When carrying out this section, the Secretary shall first offer 
the lease of power privilege to an irrigation district or water users 
association operating the applicable transferred conduit, or to the 
irrigation district or water users association receiving water from the 
applicable reserved conduit. The Secretary shall determine a reasonable 
timeframe for the irrigation district or water users association to 
accept or reject a lease of power privilege offer. If the irrigation 
district or water users association elects not to accept a lease of 
power privilege offer under paragraph (1), the Secretary shall offer 
the lease of power privilege to other parties in accordance with this 
section.
  ``(f) The Bureau of Reclamation shall apply its categorical exclusion 
process under the National Environmental Policy Act of 1969 (42 U.S.C. 
4321 et seq.) to small conduit hydropower development under this 
section, excluding siting of associated transmission facilities on 
Federal lands.
  ``(g) Nothing in this section shall obligate the Western Area Power 
Administration or the Bonneville Power Administration to purchase or 
market any of the power produced by the facilities covered under this 
section and none of the costs associated with production or delivery of 
such power shall be assigned to project purposes for inclusion in 
project rates.
  ``(h) Nothing in this section shall alter or impede the delivery and 
management of water by Bureau of Reclamation facilities, as water used 
for conduit hydropower generation shall be deemed incidental to use of 
water for the original project purposes. Lease of power privilege shall 
be made only when, in the judgment of the Secretary, the exercise of 
the lease will not be incompatible with the purposes of the project or 
division involved and shall not create any unmitigated financial or 
physical impacts to the project or division involved. The Secretary 
shall notify and consult with the irrigation district or legally 
organized water users association operating the transferred conduit in 
advance of offering the lease of power privilege and shall prescribe 
such terms and conditions necessary to adequately protect the planning, 
design, construction, operation, maintenance, and other interests of 
the United States and the project or division involved.
  ``(i) Nothing in this section shall alter or affect any agreements in 
effect on the date of the enactment of the Bureau of Reclamation 
Conduit Hydropower Development Equity and Jobs Act for the development 
of conduit hydropower projects or disposition of revenues.
  ``(j) In this section:
          ``(1) The term `conduit' means any Bureau of Reclamation 
        tunnel, canal, pipeline, aqueduct, flume, ditch, or similar 
        manmade water conveyance that is operated for the distribution 
        of water for agricultural, municipal, or industrial consumption 
        and not primarily for the generation of electricity.
          ``(2) The term `irrigation district' means any irrigation, 
        water conservation or conservancy, multi-county water 
        conservation or conservancy district, or any separate public 
        entity composed of two or more such districts and jointly 
        exercising powers of its member districts.
          ``(3) The term `reserved conduit' means any conduit that is 
        included in project works the care, operation, and maintenance 
        of which has been reserved by the Secretary, through the 
        Commissioner of the Bureau of Reclamation.
          ``(4) The term `transferred conduit' means any conduit that 
        is included in project works the care, operation, and 
        maintenance of which has been transferred to a legally 
        organized water users association or irrigation district.
          ``(5) The term `small conduit hydropower' means a facility 
        capable of producing 5 megawatts or less of electric 
        capacity.''.

                          Purpose of the Bill

    The purpose of H.R. 1963 is to amend the Water Conservation 
and Utilization Act to authorize the development of non-federal 
hydropower and issuance of leases of power privileges at 
projects constructed pursuant to the authority of the Water 
Conservation and Utilization Act.

                  Background and Need for Legislation

    Established in 1902, the Bureau of Reclamation's 
(Reclamation) primary mission is to provide a reliable source 
of water and power for irrigated agriculture and rural and 
urban communities. While the larger, multi-purpose projects 
such as Grand Coulee and Hoover Dams are well known for their 
significant hydropower contribution, Reclamation has hundreds 
of much smaller projects which, at the time of their creation, 
were not considered for hydropower potential due to economics, 
lack of technology and other factors. Today, with the improved 
ability to harness the energy of moving water in canals, 
ditches, and pipelines (collectively known as ``conduits''), 
many are pursuing hydropower development on these smaller 
projects. The potential is vast, as Reclamation currently owns 
47,336 miles of canals, laterals, drains, pipelines and tunnels 
in the western United States. In March 2012, Reclamation found 
that at least 373 of its conduit sites had the potential for 
such development. It is important to note that this list is 
deemed by many to be conservative in scope, and interest in 
non-federal hydropower development has been expressed by 
several operators of facilities not included in the list.
    To help spur development at these and other Reclamation 
sites, Public Law 113-24 authorized non-federal hydropower 
development through the use of a ``lease of power privilege,'' 
a contractual arrangement by which a non-federal entity may 
generate hydropower and pay a rental fee to the federal 
government for such generation at the specific Reclamation 
facility on which the entity operates. This law makes clear 
that hydropower development is explicitly authorized at 
Reclamation's conduits, while protecting the original and 
primary Congressionally-authorized purpose of such facilities 
to provide water supplies. The law requires Reclamation to 
offer the lease of power privilege first to the entity 
operating the conduit or the conduit's direct beneficiaries, 
and if that entity elects not to exercise the right, then to 
other interested parties. This ``right of first refusal'' 
provision was intended to significantly decrease conduit 
hydropower planning and study time, as well as staffing costs 
associated with analyzing multiple conduit hydropower 
development applications.
    Public Law 113-24 also attempted to reduce regulatory costs 
and paperwork while protecting the environment. A substantial 
regulatory barrier to conduit hydropower development is 
duplicative environmental analysis. The hydropower units 
covered by Public Law 113-24 are on previously disturbed ground 
within existing man-made facilities. As such, Public Law 113-24 
directs Reclamation to apply its categorical exclusion process 
under the National Environmental Policy Act to small conduit 
hydropower development projects under the bill, excluding 
transmission associated with this hydropower generation. Public 
Law 113-24 applies to the vast majority of Reclamation 
facilities that are covered under the Reclamation Project Act 
of 1939. However, there are some Reclamation projects or 
components of such projects that are not administered under the 
Reclamation Project Act of 1939. H.R. 1963 applies to these 
remaining 11 Reclamation facilities, all of which are governed 
under the different and more complex authorities of the Water 
Conservation and Utilization Act of 1939 (WCUA).
    WCUA, unlike the Reclamation Project Act of 1939, prohibits 
non-federal interests from developing hydropower at these 
facilities and from collecting any revenues received from 
selling hydropower at these facilities. While non-federal 
developers are currently prohibited by federal law to build 
hydropower units (with the exception of one case mandated by 
Title 11 of Public Law 103-434 ), the federal government has 
not developed hydropower at these sites due to lack of funds, 
bureaucratic inertia, and other reasons. As a result, these 11 
facilities have the potential to produce hydropower but remain 
idle. H.R. 1963 encourages hydropower development by removing 
these statutory barriers to non-federal investment. The 
statutory change will also allow non-federal parties to retain 
revenues derived from sales of the developed hydropower. Many 
irrigation districts which plan to develop these hydropower 
units view this revenue as a key source for repairing aging 
infrastructure, offsetting fossil fuel sources used for pumping 
water, and a way to keep water rates down. In addition, these 
developers would pay a lease fee to the federal government 
since they would be generating hydropower on a federal facility 
in the same manner as provided by Public Law 113-24.
    Taken together, Public Law 113-24 and H.R. 1963 authorize a 
uniform, non-federal hydropower generation framework on all 
Reclamation conduits that promotes cost-effective renewable 
energy production and an environment for economic development 
and job creation, while generating federal revenue and 
protecting the environment.

                            Committee Action

    H.R. 1963 was introduced on May 14, 2013, by Congressman 
Steve Daines (R-MT). The bill was referred to the Committee on 
Natural Resources, and within the Committee to the Subcommittee 
on Water and Power. On May 23, 2013, the Subcommittee held a 
hearing on the bill. On July 31, 2013, the full Natural 
Resources Committee met to consider the bill. The Subcommittee 
on Water and Power was discharged by unanimous consent. 
Congressman Daines offered an amendment designated _009 to the 
bill; the amendment was adopted by unanimous consent. No 
further amendments were offered, and the bill, as amended, was 
then adopted and ordered favorably reported to the House of 
Representatives by unanimous consent.

                      Section-by-Section Analysis

Section 1. Short title

    This section provides that the Act may be cited as the 
``The Bureau of Reclamation Conduit Hydropower Development 
Equity and Jobs Act.''

Section 2. Authorization

    Section 2 amends Section 590z-7 of the Water Conservation 
and Utilization Act of 1939 (WCUA) to provide the exclusive 
authority to the Secretary of the Interior to contract with 
non-federal entities for the development of small conduit 
hydropower at facilities governed under WCUA, while leaving 
intact the other existing authorities under WCUA. In addition, 
Section 2 allows non-federal parties to retain revenues derived 
from sales of the hydropower they develop on WCUA projects in 
accordance with existing Reclamation law and in parity with 
non-federal hydropower development authorized by Public Law 
113-24.
    It is also the intent of this section to authorize a lease 
of power privilege program within WCUA so that facilities 
constructed under WCUA are treated identically to those covered 
by Public Law 113-24 for the purpose of small conduit 
hydropower development. This authorization covers all potential 
hydropower-related features of the 11 WCUA facilities to which 
the legislation applies. This section also requires the Bureau 
of Reclamation to offer the ``lease of power privilege'' first 
to the entity operating the conduit or the conduit's direct 
water user beneficiaries. This provision reinforces and 
strengthens Reclamation's current arrangement of giving 
irrigation districts the preference to lease hydropower 
projects on canals that the districts operate and maintain on 
behalf of the federal government. The Committee understands 
that these long-time operators/beneficiaries know the operating 
intricacies and primary water supply features of the respective 
Reclamation facilities, and are often the best candidates to 
take advantage of hydropower development on the facilities they 
already operate for water supply delivery. As such, the 
Committee expects Reclamation to work cooperatively and 
communicate directly with these operators/beneficiaries prior 
to and during the lease process, particularly because a 
conduit's primary purpose is to deliver water.
    Identical to Public Law 113-24, this provision does not 
prohibit the operators/beneficiaries of the conduit facility 
from participating with any third-party interest in the 
hydropower development on the respective conduit. The Committee 
also expects Reclamation to undergo a good faith effort to 
allow the operators/beneficiaries a reasonable and justifiable 
time frame to accept or reject a conduit lease of power 
privilege offer. Such time frames should factor in the 
complexity of the facility, prior communications, any stated 
concerns of the operators/beneficiaries, and other matters. If 
after such a good faith effort to communicate a lease 
opportunity and a reasonable time frame during which to assess 
the offer, the operator/beneficiary elects not to exercise its 
right of first refusal, the Secretary is directed to offer the 
lease of power privilege to other parties and consider their 
applications according to existing Reclamation law.
    This section also directs Reclamation to apply its 
categorical exclusion process under the National Environmental 
Policy Act to small conduit hydropower development projects 
covered by the bill.
    Section 2 also clarifies that the Western Area Power 
Administration, the Bonneville Power Administration and the 
Southwestern Power Administration are not obligated to purchase 
or market the conduit hydropower generated at Reclamation 
facilities and that none of the costs associated with the 
generation shall be assigned to these agencies' power rates. 
This provision is intended to allow the free market to decide 
who will purchase the conduit hydropower. This section also 
provides a number of water supply savings clauses. These 
provisions specifically ensure conduit hydropower development 
will not harm or impact existing water supplies and water 
deliveries and acknowledges that water used for conduit 
hydropower generation is incidental to water supply purposes. 
This incidental purpose specifically means hydropower 
development is subordinate to the original Congressionally-
authorized water supply project purposes.
    This section also makes clear that Reclamation shall notify 
and consult with the applicable water users benefitting from 
the conduit. The Committee expects Reclamation to communicate 
in written and verbal form with the operators and beneficiaries 
of a Reclamation conduit facility prior to issuing any lease of 
power privilege or when identifying a conduit for potential 
hydropower development. These operators/beneficiaries are 
acutely aware of facility operations and can provide valuable 
knowledge and experience to determine the feasibility of the 
contemplated small-scale hydropower development.
    This section also requires the federal government to 
completely protect the planning, design, construction, 
operation, maintenance and other interests of the federally-
owned conduit. The Committee expects Reclamation to work with 
the applicable conduit operator/beneficiary on these terms and 
conditions prior to issuance. The Committee also expects that 
such terms and conditions will be written and detailed in 
nature, mandatory for the conduit hydropower developer, and 
shall be enforced by Reclamation. The Committee is aware that 
Reclamation has come under significant and justified criticism 
for not adequately communicating with operators/beneficiaries 
on existing conduit hydropower projects. Section 2 also ensures 
that nothing in the bill shall alter or affect any existing 
agreements for the development of conduit hydropower projects 
or disposition of revenues.
    Finally, this section provides definitions for terms used 
in the bill.

            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:

H.R. 1963--Bureau of Reclamation Conduit Hydropower Development Equity 
        and Jobs Act

    H.R. 1963 would authorize the Bureau of Reclamation to 
enter into leases with nonfederal entities to develop 
hydropower at 11 water project facilities owned by the 
government. Based on information from the bureau, CBO estimates 
that enacting the bill would have an impact on direct spending; 
therefore, pay-as-you-go procedures apply. However, we estimate 
such effects would not be significant. Enacting the legislation 
would not affect revenues or discretionary spending.
    In 2011, the bureau completed an assessment of the 11 
facilities and found the potential to develop hydropower at 
seven of the locations. Under current law, the bureau is 
authorized to develop federally financed and owned hydropower 
production at those seven facilities; however, it has no plans 
to do so. Under the bill, the bureau would also be authorized 
to work with nonfederal entities to develop hydropower through 
lease agreements at the 11 facilities. Under such agreements, 
which we expect the bureau would take advantage of, nonfederal 
entities would finance the necessary hydropower improvements 
and own the electricity derived from those improvements in 
exchange for a lease payment to the federal government. CBO 
estimates that those lease payments would increase federal 
receipts. However, because the receipts would be available to 
the bureau to be spent without further appropriation on 
rehabilitation work at the facility where they were collected, 
we expect H.R. 1963 would have a negligible net impact on the 
budget.
    H.R. 1963 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact for this estimate is Aurora Swanson. 
The estimate was 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 
enacting the bill would have an impact on direct spending; 
therefore, pay-as-you-go procedures apply. CBO estimates that 
lease payments from the hydropower projects authorized by the 
bill would increase federal receipts. However, CBO estimates 
such effects would not be significant.
    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 amend the Water Conservation and 
Utilization Act to authorize the development of non-federal 
hydropower and issuance of leases of power privileges at 
projects constructed pursuant to the authority of the Water 
Conservation and Utilization Act.

                           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.
    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 Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

                SECTION 9 OF THE ACT OF AUGUST 11, 1939

 AN ACT Authorizing construction of water conservation and utilization 
projects in the Great Plains and arid and semiarid areas of the United 
                                States.

  Sec. 9. (a) In connection with any project undertaken 
pursuant to this Act, provisions, including contracts of sale, 
may be made for furnishing municipal or miscellaneous water 
supplies, or for developing and furnishing power in addition to 
the power requirements of irrigation: Provided, That 
expenditures from appropriations made directly pursuant to the 
authority contained in section 12 (1) to meet costs allocated 
to municipal or miscellaneous water supplies or surplus power 
shall not exceed $500,000 for any one project: Provided 
further, That no contract relating to a water supply for 
municipal or miscellaneous purposes or to electric power shall 
be made unless, in the judgment of the Secretary, it will not 
impair the efficiency of the project for irrigation purposes. 
On any project where such provisions are made, the Secretary 
shall allocate to municipal or miscellaneous water purposes or 
to surplus power the part of the estimated construction costs 
of the project which he deems properly so allocable; and such 
allocations shall not be included in the reimbursable 
construction costs covered by the repayment contract or 
contracts required under section 4. All right, title, and 
interest in the facilities provided for such municipal or 
miscellaneous water supplies or surplus power and the revenues 
derived therefrom shall be and remain in the United States. 
Contracts for such municipal or miscellaneous water supplies or 
for such surplus power shall be at such rates as, in the 
Secretary's judgment, will produce revenues at least sufficient 
to cover the appropriate share of the annual operation and 
maintenance cost of the project and such fixed charges, 
including interest, as the Secretary deems proper. Contracts 
for the sale of surplus power shall be for periods not to 
exceed forty years and contracts for water supply for municipal 
or miscellaneous purposes shall be for such periods as the 
Secretary may determine and may include such renewal options as 
the Secretary deems desirable: And provided further, That in 
sales or leases of such power, preference shall be given to 
municipalities and other public corporations or agencies; and 
also to cooperatives and other nonprofit organizations financed 
in whole or in part by loans made pursuant to the Rural 
Electrification Act of 1936 and any amendments thereof.
  (b) Except as otherwise provided in this section, the 
Secretary is authorized to enter into leases of power 
privileges for electric power generation in connection with any 
project constructed under this Act, and shall have authority in 
addition to and alternative to any authority in existing laws 
relating to particular projects, including small conduit 
hydropower development, consistent with the terms of this Act, 
the Reclamation Project Act of 1939 (43 U.S.C. 485h), and other 
Federal reclamation laws.
  (c) All right, title, and interest to installed power 
facilities constructed by non-federal entities pursuant to a 
lease of power privilege, and direct revenues derived 
therefrom, shall remain with the lessee unless otherwise 
required in subsection (d).
  (d) Lease of power privilege charges or fees under this 
section shall be credited to the facility from which those 
revenues were derived.
  (e) When carrying out this section, the Secretary shall first 
offer the lease of power privilege to an irrigation district or 
water users association operating the applicable transferred 
conduit, or to the irrigation district or water users 
association receiving water from the applicable reserved 
conduit. The Secretary shall determine a reasonable timeframe 
for the irrigation district or water users association to 
accept or reject a lease of power privilege offer. If the 
irrigation district or water users association elects not to 
accept a lease of power privilege offer under paragraph (1), 
the Secretary shall offer the lease of power privilege to other 
parties in accordance with this section.
  (f) The Bureau of Reclamation shall apply its categorical 
exclusion process under the National Environmental Policy Act 
of 1969 (42 U.S.C. 4321 et seq.) to small conduit hydropower 
development under this section, excluding siting of associated 
transmission facilities on Federal lands.
  (g) Nothing in this section shall obligate the Western Area 
Power Administration or the Bonneville Power Administration to 
purchase or market any of the power produced by the facilities 
covered under this section and none of the costs associated 
with production or delivery of such power shall be assigned to 
project purposes for inclusion in project rates.
  (h) Nothing in this section shall alter or impede the 
delivery and management of water by Bureau of Reclamation 
facilities, as water used for conduit hydropower generation 
shall be deemed incidental to use of water for the original 
project purposes. Lease of power privilege shall be made only 
when, in the judgment of the Secretary, the exercise of the 
lease will not be incompatible with the purposes of the project 
or division involved and shall not create any unmitigated 
financial or physical impacts to the project or division 
involved. The Secretary shall notify and consult with the 
irrigation district or legally organized water users 
association operating the transferred conduit in advance of 
offering the lease of power privilege and shall prescribe such 
terms and conditions necessary to adequately protect the 
planning, design, construction, operation, maintenance, and 
other interests of the United States and the project or 
division involved.
  (i) Nothing in this section shall alter or affect any 
agreements in effect on the date of the enactment of the Bureau 
of Reclamation Conduit Hydropower Development Equity and Jobs 
Act for the development of conduit hydropower projects or 
disposition of revenues.
  (j) In this section:
          (1) The term ``conduit'' means any Bureau of 
        Reclamation tunnel, canal, pipeline, aqueduct, flume, 
        ditch, or similar manmade water conveyance that is 
        operated for the distribution of water for 
        agricultural, municipal, or industrial consumption and 
        not primarily for the generation of electricity.
          (2) The term ``irrigation district'' means any 
        irrigation, water conservation or conservancy, multi-
        county water conservation or conservancy district, or 
        any separate public entity composed of two or more such 
        districts and jointly exercising powers of its member 
        districts.
          (3) The term ``reserved conduit'' means any conduit 
        that is included in project works the care, operation, 
        and maintenance of which has been reserved by the 
        Secretary, through the Commissioner of the Bureau of 
        Reclamation.
          (4) The term ``transferred conduit'' means any 
        conduit that is included in project works the care, 
        operation, and maintenance of which has been 
        transferred to a legally organized water users 
        association or irrigation district.
          (5) The term ``small conduit hydropower'' means a 
        facility capable of producing 5 megawatts or less of 
        electric capacity.

                                  
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