[Federal Register Volume 62, Number 47 (Tuesday, March 11, 1997)]
[Notices]
[Pages 11174-11182]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-5996]



[[Page 11174]]

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DEPARTMENT OF ENERGY
Western Area Power Administration


Final Power Allocations of the Post-2000 Resource Pool--Pick-
Sloan Missouri Basin Program, Eastern Division

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of final power allocations.

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SUMMARY: Western Area Power Administration (Western), a Federal power 
marketing agency of the Department of Energy, hereby announces its 
Post-2000 Resource Pool Power Allocations to fulfill the requirements 
of Subpart C-Power Marketing Initiative of the Energy Planning and 
Management Program Final Rule, 10 CFR Part 905. The Post-2000 Resource 
Pool Allocations are Western's implementation of Subpart C-Power 
Marketing Initiative of the Energy Planning and Management Program 
Final Rule for the Pick-Sloan Missouri Basin Program, Eastern Division. 
Western's proposed allocations were initially published in the Federal 
Register August 30, 1996, and a clarification and response to comments 
was published in the Federal Register December 3, 1996. The formal 
comment period on the proposed allocations ended on January 6, 1997, 
and a discussion of comments received pertaining to the proposed 
allocations is included in this notice. After consideration of all of 
the comments, Western has decided to finalize the proposed allocations 
to new utility and nonutility customers as announced on August 30, 
1996, and to finalize the proposed allocations to Native American 
tribes based on the levelized methodology adjusted to address the 
relatively small indirect benefits provided to the Rosebud Sioux Tribe 
by Rosebud Electric Cooperative.

DATES: The Post 2000 Resource Pool Final Power Allocations, as based on 
the Pick-Sloan Missouri Basin Program--Eastern Division marketable 
resource at this time, will become effective April 10, 1997, and will 
remain in effect until December 31, 2020. Electric service contracts 
for the sale of power allocated in this notice will be effective when 
signed by both the customer and Western. Allottees will have six months 
to execute a contract with Western after the initial offer of a draft 
contract, unless otherwise agreed in writing by Western. Contracts 
entered into under the Post-2000 Resource Pool Allocation Procedures 
shall provide for Western to furnish the benefits of firm electric 
service effective from January 1, 2001, through December 31, 2020.

ADDRESSES: Information regarding the Post-2000 Resource Pool 
Allocations, including comments, letters, and other supporting 
documents made or kept by Western for the purpose of developing the 
final allocations, are available for public inspection and copying at 
the Upper Great Plains Customer Service Regional Office, Western Area 
Power Administration, located at 2900 4th Avenue North, Billings, 
Montana 59101.

SUPPLEMENTARY INFORMATION: Western published a notice of proposed 
allocations in the Federal Register on August 30, 1996, at 61 FR 45957 
to implement Subpart C-Power Marketing Initiative of the Energy 
Planning and Management Program Final Rule, 10 CFR part 905. The Energy 
Planning and Management Program (Program), which was developed in part 
to implement section 114 of the Energy Policy Act of 1992, became 
effective on November 20, 1995. Subpart C of the Program provides for 
the establishment of project-specific resource pools and the allocation 
of power from these pools to new preference customers. Western's final 
procedures were published in the Federal Register at 61 FR 41142 on 
August 7, 1996. Those procedures, in conjunction with the Pick-Sloan 
Missouri Basin Program--Eastern Division, Final Post-1985 Marketing 
Plan (Post-1985 Marketing Plan) (45 FR 71860, corrected at 45 FR 77509) 
established the framework for allocating power from the resource pool 
established for the Pick-Sloan Missouri Basin Program--Eastern Division 
(P-SMBP-ED).
    Western held public information and comment forums on September 18, 
19, and 20, 1996, to accept oral and written comments on the proposed 
allocations. On October 8, 1996, Western published in the Federal 
Register, at 61 FR 52788, a Notice of Time Extension for the Proposed 
Allocation which extended the formal comment period for written 
comments from October 7 to October 21, 1996. On December 3, 1996, 
Western published in the Federal Register, at 61 FR 64080, a Notice of 
Clarification, Response to Comments and Request for Additional Comments 
regarding the levelized method of calculating proposed allocations for 
new Native American customers and proposed an alternative method. 
Western held a public information and comment forum on December 17, 
1996, to accept oral and written comments regarding the methodology 
used to calculate the proposed allocations for new Native American 
customers. The comment period for this Federal Register notice ended 
January 6, 1997.
    The August 30, 1996, Federal Register notice proposed a levelized 
methodology for determining Native American allocations (Method One). 
Under Method One Western levelized total Federal hydropower benefits to 
be received by each tribe. The proposed allocations under Method One 
(the direct benefit to each tribe) were determined by taking the total 
Federal hydropower benefit (63.323 percent in the summer and 56.869 
percent in the winter) to be received by each tribe less the amount of 
indirect benefit each tribe receives through its current power 
supplier(s). As a result of comments received during the comment period 
for 61 FR 45957, Western published an alternative second method (Method 
Two) in the Federal Register on December 3, 1996, to calculate the 
proposed tribal allocations (direct benefit). Under Method Two the 
tribal allocations were determined by prorating the total amount of the 
resource pool available to the tribes based on each tribe's estimated 
load. This Federal Register notice also republished Method One and 
requested comments in support of one of the two methods.
    Western has decided to finalize the proposed allocations to new 
utility and nonutility customers as announced August 30, 1996, and to 
finalize the proposed allocations to Native American tribes based on 
Method One adjusted to address the relatively small indirect benefits 
provided to the Rosebud Sioux Tribe by Rosebud Electric Cooperative. 
Final allocations were determined in the same manner as Method One 
except the portion of indirect benefits received by the Rosebud Sioux 
Tribe from the Rosebud Electric Cooperative were taken out of the 
calculation of Rosebud Sioux Tribe's indirect benefits. This was done 
in response to several comments that the Rosebud Electric Cooperative 
supplies an insignificant portion of the Rosebud Sioux Tribe's 
electrical requirements. Under Method One, as adjusted, Western 
levelized total Federal hydropower benefits received by each tribe. The 
proposed allocations under adjusted Method One (the direct benefit to 
each tribe) were determined by taking the total Federal hydropower 
benefit (61.6065 percent in the summer and 55.3396 percent in the 
winter) to be

[[Page 11175]]

received by each tribe less the amount of indirect benefit each tribe 
receives through its current power supplier(s).
    The Post-2000 Resource Pool Allocations set forth in this Federal 
Register notice identify the utility and nonutility customers and 
Native American tribes to which Western intends to allocate power to 
implement Subpart C of the Power Marketing Initiative of the Energy 
Planning and Management Program Final Rule in the P-SMBP-ED.

Response to Customer Comments Regarding Post-2000 Resource Pool 
Allocations

I. General Comments

    Comment: Western received requests for extension of the comment 
period for the August 30, 1996, Federal Register notice.
    Response: 61 FR 52788 published October 8, 1996, extended the 
deadline for submittal of comments until October 21, 1996. Also, 61 FR 
64080 published December 3, 1996, clarified, responded to comments, and 
requested additional comments regarding the levelized method of 
calculating proposed allocations for new Native American customers and 
proposed an alternative method. Comments were accepted regarding this 
notice until January 6, 1997.
    Comment: Western received requests to reconsider the application of 
Horsecreek Irrigation Cooperative. Horsecreek Irrigation Cooperative 
does not directly or indirectly receive electrical power from McKenzie 
Electric Cooperative, Inc. Horsecreek Irrigation Cooperative was formed 
solely for the purpose of obtaining Western power and does not yet 
receive any power whatsoever from McKenzie Electric Cooperative, Inc. 
Horsecreek Irrigation Cooperative is not active and will not be active 
unless and until Western power is available.
    Response: Because Horsecreek Irrigation Cooperative is inactive, 
Western has declared them ineligible based on the Post-2000 Resource 
Pool Allocation Procedures General Eligibility Criteria sections III.A, 
III.E and III.I.
    Comment: Western inappropriately evaluated Horsecreek Irrigation 
Cooperatives's meeting of the 100 kW eligibility criteria. The use of 
the eligibility criteria that the allocations be based on loads 
experienced in the 1994 summer season and the 1994-95 winter season 
does not reflect the actual growing seasons, is misguided, and favors 
other users over agricultural users, who were the primary users for 
which Pick-Sloan power was intended to benefit.
    Response: The Post-1985 Marketing Plan established the criterion of 
a minimum allocation to determine eligibility for power allocations. 
The Post-1985 Marketing Plan minimum allocation criteria was modified 
as set forth in the Final Procedures. The final allocations of power 
for new utility and nonutility customers were calculated using Post-
1985 Marketing Plan criteria. Under the Post-1985 Marketing Plan 
criteria, the summer allocations are 24.84413 percent of total summer 
load and the winter allocations are 35.98853 percent of total winter 
load. The final allocation procedures as published at 61 FR 41142 
stipulated these percentages would be applied to the 1994 summer and 
1994-95 winter season loads for utility and nonutility customers. Based 
on information Horsecreek Irrigation Cooperative supplied in their 
Applicant Profile Data and our calculation of that data, Western again 
determined Horsecreek Irrigation Cooperative ineligible under the 
General Eligibility Criteria sections III.A, III.E and III.I.
    Comment: The contract with Western for the existing allocation is 
contracted with the utility. Tribes choosing to form a separate utility 
cannot access the allocation already contracted. There is a need for 
discussion of this subject for an equitable resolution. In absence of a 
resolution, Western is making it extremely difficult for tribes to form 
utilities and in some cases, beneficial to the effected utilities that 
currently provide service.
    Response: The intent of the Program was to provide the benefits of 
Federal hydropower allocations directly to individual tribes. Western 
does not believe these allocations have created additional burdens for 
Native American tribes in forming a separate utility. Those tribes with 
smaller allocations under either method may find it more costly to form 
a separate utility simply because of the cost associated with 
supplemental power due to the loss of their indirect benefits.
    Comment: Several applicants requested that their applications be 
given reconsideration. Applicants stated that their rates were not 
adjusted when the allotment was received by the supplier for power and 
therefore have not received benefits, directly or indirectly, of 
Western power.
    Response: Western reviewed all applications that were requested to 
be reconsidered. That review did not find previous applicants declared 
ineligible to be eligible. Whether or not rates were adjusted for any 
applicant currently receiving benefit, directly or indirectly, from a 
current P-SMBP-ED firm power allocation is outside of the scope of this 
process.
    Comment: One commenter stated that Minot State University's 
application was not considered because they are currently receiving 
benefits directly or indirectly and requested an explanation.
    Response: Our General Eligibility Criteria in the Post-2000 
Resource Pool Allocation Procedures states, ``Qualified utility and 
nonutility applicants must not be currently receiving benefits, 
directly or indirectly, from a current P-SMBP-ED firm power allocation. 
Qualified Native American applicants are not subject to this 
requirement.'' We have determined that if an entity such as Minot State 
University is administered by a State which is receiving benefits, then 
they are also receiving the benefits of Federal power and are 
therefore, ineligible.
    Comment: Western received several comments questioning whether 
Western will review the application and change their decision if a 
city/municipality should achieve utility status by the deadline stated 
in the Federal Register.
    Response: It was the responsibility of the city/municipality to 
provide necessary documentation for Western to determine if the city/
municipality met the General Eligibility Criteria. Based upon the 
information submitted during the application period in their applicant 
profile data, Western has determined that those entities would not be 
able to achieve utility status in the given time frame.
    Comment: If Western should decide to make additional allocations 
available in the years 2006 and 2011, a Federal Register notice should 
be published two years in advance to allow interested cities a chance 
to obtain utility status. Another commenter requested Western provide 
applicants ample opportunity prior to the years 2006 and 2011 to 
develop their own electrical utility.
    Response: If additional allocations are made, they shall be made in 
accordance with the Program. Specifically, 10 CFR 905.35(c) requires 
entities that desire to purchase power from Western for resale to 
consumers obtain utility status 3 years prior to the subsequent 
resource pool. Notice of these requirements were published in a final 
rule November 20, 1995. The implementation of the Program does not 
prevent an entity from obtaining utility status at any given time. 
These allocations and procedures do not in any way affect Western's 
obligations or flexibility in regards to future resource pools as 
stipulated in the Program.
    Comment: Any allocations of power to the tribes need to recognize 
and

[[Page 11176]]

acknowledge that tribes were denied access to power in all previous 
allocations. Another questioned how individual tribal member land 
owners whose land is in trust, as is the tribes, would be able to 
benefit from the Western allocation program, if the initial motivation 
for including tribes in the Western allocation process was due to 
impacts to Indian lands as a result of hydroelectric development on the 
Missouri. Two commenters stated they would like to remind Western that 
allocations of power in no way abrogates any outstanding treaty 
obligations owed to their tribe nor does it impact the tribe's water 
rights but is merely the result of tribes achieving ``Preference Power 
Customer'' status. Another commented that the fair share of the total 
resource pool allocated to the tribes was determined by Western to 
reflect a portion of the reservation electrical needs by the year 2000 
and to reflect the fact that the tribes had been denied access to 
Western power in previous allocations.
    Response: Western has continued to take steps towards assisting 
Native Americans in meeting their needs for cost-based hydropower. 
Western has always considered tribes to be preference entities, but has 
not historically allocated power to Native Americans in the absence of 
utility status, eligible irrigation load, or special legislation 
enacted by Congress. In the past, the benefits of hydropower have been 
realized by Native Americans through allocations to cooperatives that 
serve tribal load. The Program changed Western's policy regarding 
Native Americans and utility status. Therefore, allocations will now be 
made directly to the tribes. Western agrees that these allocations do 
not impact tribal water rights or treaty obligations.
    Comment: Western received several comments that Western did not 
follow the Final Power Allocation Procedures of the Post-2000 Resource 
Pool as published in the Federal Register on August 7, 1996. 
Specifically, the August 7, 1996, Final Procedures, Section III, 
Paragraph I states, ``The minimum allocation shall be 100 kilowatts 
(kW).'' The Flandreau Santee Sioux Tribe had a proposed winter season 
allocation of only 20 kW under Method One. This allocation is lower 
than the minimum allocation in the Final Power Allocation Procedures .
    Response: The Final Procedures incorporate the Post-1985 Marketing 
Plan criterion of a minimum allocation in establishing these 
allocations. The Post-1985 Marketing Plan established the criterion 
that eligibility for power allocations was based on an annual basis and 
not a seasonal basis. It was never the intent of the Post-1985 
Marketing Plan or the Post-2000 allocation process to infer that all 
seasonal allocations would be a minimum of 100 kW. An applicant meets 
this criterion as long as one season's proposed allocation meets the 
minimum allocation of 100 kW. Therefore, in this case, it is possible 
to receive a winter allocation under the 100 kW minimum as long as the 
summer season is 100 kW or larger. It should be noted that Western 
disqualified several utility and nonutility applicants on the basis 
that both their winter and summer season proposed allocations would be 
below the 100 kW minimum.
    Comment: One commenter expressed concern that Western decided to 
allocate the remainder to the tribes and actually increase the tribes'' 
share of the resource pool from 75 percent to about 80 percent. They 
asked that Western look at the rules that were established and see if a 
greater percentage of people could benefit from low cost hydropower by 
changing some of the rules. Also, they stated that a small part of the 
25 percent of the resource pool originally designated for the new 
utility and nonutility customers was transferred to the Native American 
customers. Again they requested Western review this procedure with 
regard to allocating that small part to either new customers who have 
not yet formed a ``public power agency'' or to entities that are 
preference customers.
    Response: Western was obligated to apply the Post-2000 Resource 
Pool Allocation Procedures to all applicants. This process is designed 
to allocate the 4 percent as set forth by the Program. Two future 1 
percent resource pools were also identified as part of the Program and 
allocations from these future resource pools will be dealt with in 
future public processes.
    Comment: If the ``preference power'' method of calculations is 
used, the tribes should be compensated $10,000 each and Mni Sose 
$100,000 to cover the entire cost for their 3-year effort.
    Response: This comment is outside of this process. Western does not 
have authority to compensate an entity for efforts in this process.
    Comment: The Federal government, Department of Energy, Bureau of 
Reclamation, Army Corps of Engineers, Department of Interior, the 
Bureau of Indian Affairs, and Western, should collaborate to assure 
that tribes be allowed to develop and operate their own power 
utilities. Language should be amended to give tribes the ability to 
form utilities as opposed to keeping the oppressive policies ongoing.
    Response: The implementation of the Program does not prevent an 
entity from obtaining utility status.
    Comment: One commenter protested the allocations process and 
demanded compensation for the use of water river rights for the 
Oglalas, other Sioux tribes, and Missouri River tribes.
    Response: This comment is outside of this process. Western does not 
have authority to compensate an entity for the use of water rights.
    Comment: Three commenters requested Western recalculate the 
proposed allocations for the Native American tribes using only the 
criteria in the final allocation procedures (the estimated loads).
    Response: Western used the Post-2000 Resource Pool Allocation 
Procedures criteria including the estimated loads in the tribal 
applications in determining the final allocations for qualified Native 
American tribes.
    Comment: Allocations were arranged in such a way as to discourage a 
tribe from starting its own utility because the amount allocated was so 
small.
    Response: Allocations were based on the 4 percent resource pool 
which was derived from the Program. Western's final procedures were 
published in the Federal Register at 61 FR 41142. Those procedures, in 
conjunction with the Post-1985 Marketing Plan, established the 
framework for allocating power from the resource pool, are final, and 
cannot be changed in this process.
    Comment: Western needs to increase the size of the resource pool. 
One option would be to revamp current facilities to increase generation 
and reserve surplus for tribes. Another commented that by offering up a 
resource pool which is woefully inadequate to address the needs of the 
tribes Western has forced the tribes to fight with each other. Another 
commented that the tribes now have to place the interest of their own 
tribes in the forefront and decide which of the two alternatives is 
best for their tribe. This may lead to possible dissension among the 
tribes which may be the goal Western is attempting to achieve. 
Additionally, two commenters stated that the fair share determined by 
Western does not reflect the argument made by the tribes that the size 
of the resource pool and the tribal allocation should have been 
substantially greater.
    Response: The 4 percent resource pool was derived from the Program, 
and therefore the size of the pool is outside this process. This 
process is designed to allocate the 4 percent resource pool as set 
forth by the Program. It was the intent of Western to provide benefits

[[Page 11177]]

from the resource pool to all eligible entities. Two future 1 percent 
resource pools were also identified as part of the Program and 
allocations from these future resource pools will be dealt with in 
future public processes.
    Comment: Outside purchases are needed to supplement the proposed 
Post-2000 allocation and accommodate a larger allocation to the tribes. 
Such purchases would not be a detriment to any existing customer of 
Western. Pick-Sloan purchases are relatively small in contrast to other 
Western areas.
    Response: This comment is outside of this public process. The Final 
Allocation Procedures and Final Allocations are a direct result of the 
Program. The Program does not provide for the acquisition of additional 
outside resources to supplement the 4 percent resource pool.
    Comment: Using the power suppliers' existing hydro allocations to 
provide allocations to tribes implies that the tribes may have rights 
to part of the power suppliers current allocation. Another commented 
that using the power suppliers' existing hydro allocation to provide 
allocations to the tribes implies that the Flandreau Santee Sioux may 
have rights to part of the City of Flandreau's current allocation. This 
is a major concern to the City of Flandreau since the tribe was not 
receiving any power when the City of Flandreau received their 
allocation in 1977.
    Response: The intent of the Program was to provide benefits of 
Federal hydropower allocations directly to qualified Native American 
tribes. This is represented in the final allocations. The use of 
existing hydro allocations in the calculation method does not imply 
that the tribes have rights to any part of these allocations. Further, 
it does not change the contractual commitments between Western and the 
existing customers. Contractual commitments between Western and the 
existing customers are outside of this public process.
    Comments: The proposed allocations for the Native American tribes 
are based on their estimated population, both on and off the 
reservations, with the Ponca Tribe of Nebraska having no land base. The 
commenter believes the allocations should be based on the estimated 
electrical load on the reservations. The proposed allocation from the 
estimated loads based on population projections, result in allocations 
larger than some tribes can utilize. Two commenters stated that the 
proposed allocations from the estimated loads result in allocations 
larger than some tribes can currently utilize. Another commented that 
allocations are more favorable to tribes without service from an 
existing Western customer and less favorable to tribes with service 
from an existing Western customer. Another commented that the amount of 
the Crow Tribe allocation derived from Method Two, plus the tribe's 
power supplier's existing allocation, may be larger than the entire 
load of the Crow Tribe. Finally, one commented that Method Two would 
provide the Crow Creek Tribe more than 100 percent of their load.
    Response: Western does not agree with these comments and our 
analysis does not support this conclusion. Allocations for Native 
American tribes were based on estimated loads for the year 2000. In the 
absence of reliable load data for Native American tribes, population 
data was used in an effort to estimate Native Americans loads in the 
year 2000. In this notice, Western has levelized the total Federal 
hydropower benefits (61.6065 percent in the summer and 55.3396 percent 
in the winter) to be received by each tribe.
    Comment: It should be clearly defined in the contracts that the 
allocations go to the tribes themselves or beneficiaries of the tribes.
    Response: Contracts for the Post-2000 Resource Pool allocations 
will be between Western and the allottee.
    Comment: One commenter asked if the original low cost power issued 
to the tribes will still be low cost after all the transmission costs 
are considered. Another commented that there should be no transmission 
costs associated with distribution of power to tribes in the Missouri 
River Basin.
    Response: Western will assist the allottee in obtaining third-party 
transmission arrangements for delivery of firm power. To the extent 
that utilities are involved in these arrangements, Western will work 
with those entities. However, as stated in the Final Procedures, it is 
the ultimate responsibility of the allottee to obtain its own delivery 
arrangements and to pay the associated costs.
    Comment: Western should have allowed tribal input in developing the 
allocation process.
    Response: Tribal input, as well as input from other entities, has 
been solicited in conjunction with the public process comment period 
that was initiated January 29, 1996, and concluded January 6, 1997. 
During that time frame seven informational forums and seven comment 
forums were held and ongoing opportunities to provide written comments 
were allowed at each step of the process.
    Comment: Two comments stated that the tribes should directly 
receive the entire allocation to service the tribal load.
    Response: The intent of the Program was to provide the benefits of 
Federal hydropower allocations directly to individual tribes. The 
entire allocations contained in this notice will be made directly to 
the tribes. Any indirect benefits recognized in the calculation method 
were utilized only to levelize total benefits across the Region at the 
time of allocation with no intent to create any commitment whatsoever, 
to transfer these benefits to the tribes. Any indirect benefits 
received by the tribes are contractual commitments between Western and 
the existing customers and are outside of this public process.
    Comment: The allocation as proposed (under Method One) penalizes 
the Crow Tribe as a recipient of Federal power and subjects the Crow 
Tribe to anti-Indian policies by an existing power supplier.
    Response: It is not the intent of the Program to penalize any 
recipient of Federal power. Under any method of direct allocation, 
which does not result in full requirements being met by P-SMBP-ED, the 
tribe will be subject to existing power supplier policies to the extent 
they desire the existing power supplier to continue to supply the 
tribe's remaining power needs.
    Comment: Revenues from Western could be more helpful to tribes by 
providing set-aside monies, grants, and startup monies. This is the 
prime time for a tribe to initially plan for utility status, if it 
wants to.
    Response: This comment is outside of this process. Western does not 
have the authority to provide revenues to the tribes for set-aside 
monies, grants or startup monies through this allocation process.
    Comment: Was the motivation for the provisions in the 1992 Energy 
Policy Act to include Indian tribes in Western's allocation planning? 
Did tribes or representatives from tribes provide testimony, initially 
under the Energy Policy Act to include benefit provisions to tribal 
governments?
    Response: These comments are outside of this process.
    Comment: Did tribes use the negative impacts to Indian lands from 
hydroelectric development on the Missouri River as justification to 
include tribes as beneficiaries of Western allocations?
    Response: This comment is outside of this process.
    Comment: If Western would refer the individual land owner back to 
the tribe, would Western be predisposed to assist and advocate for 
individual land owners, directly impacted by

[[Page 11178]]

hydroelectric development activities, in respect to energy allocations, 
either through low or no cost energy benefits after the year 2001?
    Response: Western intends to provide benefits directly to Native 
American tribes beginning in 2001 and will work with the tribes to 
assure receipt of those benefits.
    Comment: There is not a clear enough definition as to who a 
qualified allocation beneficiary can be outside of a reservation 
boundary.
    Response: Off-reservation use of Native American tribe allocations 
under certain circumstances as determined by Western was allowed for in 
60 FR 54151. The circumstances under which off-reservation use of a 
Native American tribe allocation will be allowed will be determined by 
Western on a case-by-case basis during the contract negotiation 
process.
    Comment: The allocation should be made to the tribe and to the 
utility.
    Response: The intent of the Program was to provide the benefits of 
Federal hydropower allocations directly to individual tribes. This 
principal is consistent with how Western treats existing customers. 
Western does not feel that the goal of the Program would be served by 
jointly allocating Native American allocations to utilities and tribes.
    Comment: The very concept of the allocation/credit has caused 
concern among the cooperative membership and an increase to a 
nonjustifiable higher level will enhance divisiveness and ill feelings.
    Response: This situation does exist among some of Western's long 
term firm power customers who have a different blend of low-cost 
hydropower and supplemental power. This comment is outside of this 
process.
    Comment: As new preference customers, Native Americans should 
receive the benefit of the same principles Western has applied in 
previous marketing plans.
    Response: Western's final procedures were published in the Federal 
Register at 61 FR 41142. Those procedures, in conjunction with the 
Post-1985 Marketing Plan, established the framework for allocating 
power from the resource pool. The current process has incorporated 
principles from prior marketing plans as well as establishing that the 
new customers will be bound by similar general contract principles as 
existing customers.
    Comment: To revisit the Native American allocation methodology at 
this late date is counterproductive to expeditious implementation of 
this program.
    Response: This comment was directed at the December 3, 1996, 
Federal Register notice, which proposed an alternate second method to 
calculate the proposed tribal allocations. Based upon input received 
during the public process, Western felt it appropriate to propose an 
alternate Native American allocation methodology and to extend the 
comment period to determine power allocations to assure the intent of 
the Program is satisfied.
    Comment: It is important that Western directly involve the 
Sisseton-Wahpeton Sioux Tribe, and the other Missouri River basin 
tribes in all future resource planning and allocations. Mni Sose 
Intertribal Water Rights Coalition, Inc. will also continue to be an 
active representative of these tribes. Also, one commenter stated that 
comments submitted pursuant to this notice should not be considered the 
final comments of their Tribe/Nation. The Crow Tribe Public Utility 
Commission will continue to review and report on the various aspects of 
Energy, Electrical Power and ancillary services. Another commented that 
Western, along with the rest of the Federal Government, has an enduring 
and continuing trust responsibility for the tribes in the Missouri 
River Basin.
    Response: Western supports the Department of Energy's American 
Indian policy which stresses the need for a government-to-government, 
trust-based relationship. Western intends to continue its practice of 
consultation with tribal governments so that tribal rights and concerns 
are considered prior to any actions being taken that effect the tribes.
    Comment: The delivery of Federal hydropower to the tribes should be 
made in such a way that the benefit of the allocation is realized by 
the end user.
    Response: Contracts for power of the Post-2000 Resource Pool will 
be between Western and the allottee.
    Comment: One commenter expressed the desire for Western to come to 
the Standing Rock Reservation to present the contracts in negotiating 
with Standing Rock Sioux Tribe to honor the government-to-government 
relationship, because it is taken very seriously at Standing Rock 
Reservation.
    Response: Entering into contractual arrangements with the various 
entities is the next step of this process. However, this will not begin 
until the final allocation process has been completed.
    Comment: The allocation should be made in the form of energy and 
not a credit.
    Response: Western agrees that allocations in the form of energy is 
one viable method of delivering the benefits of Federal hydropower to 
Native American tribes. However, flexibility must be retained in the 
delivery of such benefits in order to fit a diverse group of Native 
American tribes and power suppliers. The method for delivering the 
benefits of Federal hydropower to the tribes will be determined during 
the contract negotiation process.

B. Methodology Comments

    <bullet> Western departed from the Mni Sose Intertribal Water 
Rights Coalition, Inc. method of allocation without consultation with 
the tribes and created inequities.
    <bullet> Western ignored the allocation formula which the tribes 
agreed upon and poured considerable resources into preparing.
    <bullet> Two commenters mentioned the plan put forth by Mni Sose 
Intertribal Water Rights Coalition, Inc. must be acknowledged and used.
    <bullet> The proposed allocation to the Pine Ridge Tribe is 40 
percent greater than what Mni Sose Intertribal Water Rights Coalition, 
Inc. estimated as their current requirements.
    <bullet> Current use figures were often unavailable because the 
five companies that currently serve the Lake Traverse Reservation were 
not totally cooperative in providing data.
    <bullet> The allocation process is sorely lacking in consideration 
of the tribe's needs and wants and the Yankton Sioux Tribe is not going 
to indicate a preference for either allocation method.
    <bullet> The differences between the proposed methods of allocation 
may be perceived to instigate confrontations among or between various 
tribes, but the ultimate concern of the Native American tribes/Nations 
is to improve and expand electric goods and services available to 
improve living conditions and address conditions on many ``Indian 
Reservations'' within and throughout the native life sustaining regions 
of the Upper Missouri River region and beyond.
    <bullet> Several commented that Section 3, Paragraph D of the 
General Allocation Criteria, states, ``Allocations made to Native 
American Tribes will be based on estimated load developed by the Native 
American tribes. Inconsistent estimates will be adjusted by Western 
during the allocation process.'' Under Method One, ``Proposed 
Allocations'' were not only based on the estimated load developed by 
the Native Americans, they were adjusted by the estimated current 
service the Native Americans were already receiving from their power 
suppliers. The so called ``levelizing'' of benefits was not part of

[[Page 11179]]

the General Allocation Criteria in the Final Procedures. Also, under 
this method, the Flandreau Tribe will lose 4 percent or 53 kW in the 
year 2000. After 2000 the tribe will have a net loss of 33 kW.
    <bullet> Several commenters expressed concern that the average 
current Western service to the Rosebud Sioux Reservation, as published 
in the Federal Register, is not correct. Ninety-nine percent of the 
Rosebud Sioux Tribe's load is served by LaCreek-Electric Cooperative, 
Inc. and Cherry-Todd Electric Cooperative, Inc., both members of 
Rushmore Electric Power Cooperative. The small portion of Rosebud 
Electric Power Cooperative's service with a higher allocation should be 
ignored for this calculation in order to make the balance correct in 
how much the tribe should get. Take Rosebud Electric Cooperative out of 
the formula and the allocation would be fair and correct.
    <bullet> It is important to the members of Hot Springs Rural 
Electric Association, Inc. that the precedent set in the P-SMBP-ED be a 
fair and equitable allocation of the Resource Pool. In the near future, 
Western will begin to allocate the Resource Pool in the Pick Sloan 
Missouri Basin, Western Division, and we anticipate similar action in 
the Colorado River Storage Project.
    <bullet> The amount of allocation derived from the use of Method 
One more clearly represents a fair allocation to the Crow Tribe.
    <bullet> Several commenters strongly encourage Western to apply the 
levelized method (Method One) of calculating proposed allocations to 
Native American customers. The support is based on the principle of 
applying equity among tribal members. These comments suggest that 
Method Two is not consistent with the principle of equity. Method Two 
offers greater benefits to some at the expense of others. Unless 
existing Federal bulk power supply available through current power 
suppliers is taken into account as part of the final allocations, 
variations in the amount of Federal power available among tribal 
interests will vary and lead to further retail rate disparities.
    To increase the allocation to Method Two levels does not make 
sense.
    <bullet> We support ``Method One'' as fair and equitable to all 
Native Americans and current electric utility providers. Neither they 
nor its member systems serve the region defined in the Federal Register 
notice but think its important to comment. They anticipate similar 
action in the Colorado River Storage Project and it is very important 
to them and its member systems that the precedent set in the P-SMBP-ED 
be fair and equitable. Also, they submitted recommendations because 
expenses for the Pick-Sloan Missouri Basin Program are shared over both 
divisions. The alternative method does not equitably distribute the 
benefits of the resource pool or take into account benefits for Native 
Americans already received through the current electric utility.
    <bullet> If Western utilizes ``Method Two'', the Turtle Mountain 
band of Chippewa Indians would suffer a 27 percent reduction. Tribes 
which are currently receiving much higher benefits, will receive the 
much higher allocation which will result in a greater disparity among 
the tribes.
    <bullet> Method One is considered inequitable for the reason that 
tribes receiving Western power through the existing rural electrical 
cooperatives are more likely to fall in the category of the Crow Creek 
Sioux Indian Reservation and are not likely to benefit from the current 
contractual arrangements between the rural electrical cooperatives and 
Western.
    <bullet> We request Western use Method Two in calculating the 
proposed allocations for new Native American customers. The comment 
suggested that Method Two not only follows the criteria in the final 
procedures, it also appears to treat all tribes on a more equitable and 
fair basis.
    <bullet> Several commenters recommended Method Two for new Native 
American customers. The ``second'' method presented by Western more 
adequately addresses the tribal needs and demands for electrical energy 
to improve and expand allocations to meet conditions as discussed and 
developed during coordinated meetings among tribes and Western. Method 
Two also more fairly distributes the Native American tribes' share of 
the resource pool among the tribes. Under Method One, some tribes would 
receive an allocation greatly in excess of their load requirements.
    <bullet> Method One simply does not do what Western states it is 
intended to do. It is not a fair or equitable allocation to the tribes.
    Response: Western used components of the Mni Sose Water Rights 
Coalition's allocation method in the development of the Final 
Allocation Procedures and the Final Allocations. As stated in the Post-
2000 Resource Pool Allocation Procedures General Eligibility Criteria 
section III.D, ``Allocations made to Native American tribes will be 
based on estimated load developed by the Native American tribes. 
Inconsistent estimates will be adjusted by Western during the 
allocation process.'' Western accepted loads submitted by the tribes 
which were estimated by the Mni Sose Intertribal Water Rights 
Coalition, Inc. Western also accepted loads estimated using other 
methods developed by individual tribes. Western only adjusted tribal 
load estimates when an obvious error was made in the load calculation 
or when an unreasonable assumption was used in the estimation method.
    Western provided an additional opportunity to address and clarify 
comments regarding the levelized method of calculating proposed 
allocations for new Native American customers and proposed an 
alternative method. On December 3, 1996, Western published in the 
Federal Register, at 61 FR 64080, a Notice of Clarification, Response 
to Comments and Request for Additional Comments. Western held a public 
information and comment forum on December 17, 1996, to accept oral and 
written comments regarding the methodology used to calculate the 
proposed allocations for new Native American customers. The comment 
period for this Federal Register notice ended January 6, 1997. The 
public process was a consultation period for both Native Americans and 
other interested entities, and the Mni Sose Intertribal Water Rights 
Coalition, Inc. was involved in that process.
    Western recognizes the concern expressed by the Rosebud Sioux Tribe 
regarding the minor contribution of indirect benefits from the Rosebud 
Electric Cooperative in comparison to the other two co-suppliers and 
the inequitable effect it has on the Rosebud Sioux Tribe's proposed 
allocation under Method One. It was appropriate to adjust the 
calculation of Rosebud Sioux Tribe's indirect benefit by excluding the 
indirect benefits provided by Rosebud Electric Cooperative. The Rosebud 
Sioux Tribe and others raised this issue in both the information 
meetings and the formal comment forums in addition to sending in 
written comments. The adjustment to Method One was a data issue and not 
a change in the guidelines for making the allocations established 
through the public process. Western was not aware of this discrepancy 
until information was provided during the process. As a result of this 
information, Western has adjusted Method One as originally published to 
address this concern.
    Western reviewed the commenter's concern that the Flandreau Tribe 
could possibly experience a net loss of hydropower benefits, as 
proposed, when considering their total power supply (supplemental power 
and direct benefits). All long term firm power customers of Western are 
subject to the

[[Page 11180]]

requirement that they will lose 4 percent of their allocation as 
provided by the Program regardless of what amount is allocated to the 
tribe.
    We recognize the concern of the Crow Creek Sioux Tribe regarding 
the different rate designs of the cooperatives that serve the 
reservation and their effect on the ratepayers. Western has no control 
over these rate designs and this issue is outside of our allocation 
process. It should be noted that although Crow Creek Sioux Tribe's 
comment was directed at Method One, Method Two does not correct the 
rate design problem either.
    Western received diverse comments regarding the proposed Method One 
and Method Two. The intent of the Program was to provide the benefits 
of Federal hydropower allocations directly to individual tribes in an 
equitable manner. After reviewing all comments, Western selected Method 
One, adjusted to address the relatively small indirect benefits 
provided to the Rosebud Sioux Tribe by Rosebud Electric Cooperative, to 
determine the size of the allocations based upon the need to meet an 
appropriate share of the load for qualified Native American tribes. 
Western used the Post-2000 Resource Pool Allocation Procedures criteria 
and exercised its discretion under Reclamation Law in shaping the Final 
Allocations in response to input during the public process in 
allocating this resource to eligible applicants. Method One, as 
adjusted, meets Western's Program requirements and the needs of 
Western's new customers, while being responsive to the comments 
received in this process. Western did not receive comments showing an 
overwhelming support for a change to Method Two. In particular, Mni 
Sose Intertribal Water Rights Coalition, Inc., did not indicate a 
preference for either Method One or Method Two.

III. Final Power Allocations

    The following final power allocations are made in accordance with 
the Final Procedures published in the Federal Register at 61 FR 41142 
on August 7, 1996. All of the allocations are subject to the execution 
of a contract in accordance with the procedures. Western announces that 
Native American tribes' share of the resource pool is 80.64 percent in 
the summer season and 78.33 percent in the winter season. The new 
utility and nonutility customers' share of the resource pool is 19.36 
percent in the summer season and 21.67 percent in the winter season.

Allocations to Native American Tribes

    The final allocations of power for new Native American customers 
and the data these allocations are based upon are as follows:

----------------------------------------------------------------------------------------------------------------
                                                               Average current western       Post-2000 power    
                                                  Estimated            service                 allocation       
         New native American customers              demand   ---------------------------------------------------
                                                  kilowatts                                Summer       Winter  
                                                                 Summer       Winter     kilowatts    kilowatts 
----------------------------------------------------------------------------------------------------------------
Blackfeet Nation...............................       18,600           32           27        5,507        5,271
Cheyenne River Sioux...........................       13,500           33           29        3,862        3,556
Chippewa Cree-Rocky Boy........................        5,000           55           44          330          567
Crow Creek.....................................        4,100           50           47          476          342
Crow...........................................       12,500           55           44          826        1,417
Devils Lake Sioux..............................        7,700           22           14        3,050        3,183
Flandreau Santee Sioux.........................        2,355           55           56          156            0
Fort Belknap Indian Community..................        6,200           28           22        2,084        2,067
Fort Peck Tribes...............................       15,300           34           31        4,224        3,724
Lower Brule Sioux..............................        3,100           33           29          887          817
Lower Sioux....................................        3,750            0            0        2,310        2,075
Northern Cheyenne..............................        9,400           36           37        2,407        1,724
Oglala Sioux-Pine Ridge........................       29,600           28           24        9,948        9,277
Omaha Tribe of Nebraska........................        5,100           15           14        2,377        2,108
Ponca Tribe of Nebraska........................        2,100            8            6        1,126        1,036
Rosebud Sioux..................................       21,300           33           29        6,093        5,610
Santee Sioux Tribe of Nebraska.................        1,100           10            8          568          521
Sisseton-Wahpeton Sioux........................        7,500           40           38        1,620        1,300
Standing Rock Sioux............................       12,900           30           29        4,077        3,398
Three Affiliated Tribes........................        8,000           30           25        2,529        2,427
Turtle Mountain Chippewa.......................       18,000           35           18        4,789        6,721
Upper Sioux....................................        1,250           42           39          245          204
White Earth Indian Reservation.................        3,500            6            7        1,946        1,692
Winnebago Tribe of Nebraska....................        3,100           10            8        1,600        1,468
Yankton Sioux..................................        5,300           25           24        1,940        1,661
----------------------------------------------------------------------------------------------------------------

    The final allocations for new Native American customers were 
calculated based upon the estimated demand figures set forth in the 
table above. Estimated demand figures were taken from the Native 
American tribal applications. Inconsistent demand estimates were 
adjusted by Western.
    In order to appropriately distribute the benefits of Federal 
hydropower among the tribes, Western calculated the proposed power 
allocations in the table above in such a manner as to levelize total 
Federal hydropower benefits to each of the Native American tribes. This 
results in a total Federal hydropower benefit of 61.6065 percent in the 
summer season and 55.3396 percent in the winter season to each of the 
tribes. To levelize the total Federal hydropower benefits, the average 
current percentage of Western service that each of the tribes receives 
through their current power supplier(s) was utilized and is as shown in 
the table above. For the Blackfeet Nation, Western used the weighted 
average of the current percentage of Western service for the remaining 
tribes. The Blackfeet Nation is served by Glacier Electric Cooperative, 
which is a total requirements customer of Bonneville Power 
Administration, therefore the Blackfeet Nation does not receive Western 
service, but does receive the benefit of Federal hydropower. The

[[Page 11181]]

weighted average of the current percentage of Western service changed 
under the adjusted Method One because Rosebud Sioux Tribe's average 
current percentage of Western service changed. The final power 
allocation for each tribe was determined by multiplying the difference 
between the total Federal hydropower benefit provided to each tribe 
(61.6065 percent in the summer season and 55.3396 percent in the winter 
season) and each tribe's average current percentage of Western service 
by each tribe's estimated demand.
    The final allocations to new Native American customers set forth in 
the table above are based on the P-SMBP-ED marketable resource 
available at this time. If the P-SMBP-ED marketable resource is 
adjusted in the future, the final allocations will be adjusted 
accordingly.

B. Allocation to Utility and Nonutility Customers

    The final allocations of power for new utility and nonutility 
customers and the loads these allocations are based upon are as 
follows:

----------------------------------------------------------------------------------------------------------------
                                                                                             Post-2000 power    
                                                              1994 Summer    1994-95           allocation       
              Utility and Nonutility Customers                season load     Winter   -------------------------
                                                               kilowatts   season load     Summer       Winter  
                                                                            kilowatts    kilowatts    kilowatts 
----------------------------------------------------------------------------------------------------------------
Village of Emerson, NE......................................        1,454        1,146          361          412
City of Estherville, IA.....................................       11,040        7,820        2,743        2,814
City of Randolph, NE........................................        1,861        1,386          462          499
City of Pocahontas, IA......................................        3,980        3,144          989        1,131
City of Madison, NE.........................................       10,034        8,759        2,493        3,152
City of South Sioux City, NE \1\............................       24,977       21,846        5,000        5,000
City of Sergeant Bluff, IA..................................        6,076        3,888        1,510        1,399
City of Wakefield, NE.......................................        4,717        3,667        1,172        1,320
City of Fairmont, MN........................................        2,330        2,464          579          887
City of Marathon, IA........................................          520          764          129          275
City of Stanton, ND.........................................          656          850          163          306
----------------------------------------------------------------------------------------------------------------
\1\ 5,000 kW is the maximum allocation allowed under the Final Procedures.                                      

    The final allocations of power for new utility and nonutility 
customers were calculated using Post-1985 Marketing Plan criteria. 
Under the Post-1985 Marketing Plan criteria, the summer allocations are 
24.84413 percent of total summer load and the winter allocations are 
35.98853 percent of total winter load.
    The final allocations to new utility and nonutility customers set 
forth in the table above are based on the P-SMBP-ED marketable resource 
available at this time. If the P-SMBP-ED marketable resource is 
adjusted in the future, the final allocations will be adjusted 
accordingly.

III. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (Act), 
requires Federal agencies to perform a regulatory flexibility analysis 
if a proposed regulation is likely to have a significant economic 
impact on a substantial number of small entities. Western has 
determined that this rulemaking relates to services offered by Western, 
and, therefore, is not a rule within the purview of the Act.

IV. Review Under the Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1980, 44 U.S.C. 
3501-3520, Western has received approval from the Office of Management 
and Budget (OMB) for the collection of customer information in this 
rule, under control number 1910-1200.

V. Review Under the National Environmental Policy Act

    Western requested input regarding the identification of any 
additional environmental issues both in the Federal Register at 61 FR 
2817, January 29, 1996, and at the public meetings. No environmental 
comments were received or additional environmental issues identified. 
Therefore, Western has determined that the analysis in the Program 
Environmental Impact Statement is sufficient for this action and 
current DOE (10 CFR part 1021) regulations indicate that no further 
National Environmental Policy Act impact analysis documentation is 
required.

VI. Determination Under Executive Order 12866

    DOE has determined this action does not meet the criteria of 
Executive Order 12866, 58 FR 51735 and is not a significant regulatory 
action. Western has an exemption from centralized regulatory review 
under Executive Order 12866; accordingly, no clearance of this notice 
by Office of Management and Budget is required.

VII. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of Executive Order 12988, 
``Civil Justice Reform,'' 61 FR 4729 (February 7, 1996), imposes on 
Executive agencies the general duty to adhere to the following 
requirement: (1) Eliminate drafting errors and ambiguity; (2) write 
regulations to minimize litigation; and (3) provide a clear legal 
standard for affected conduct rather that a general standard and 
promote simplification and burden reduction. With regard to the review 
required by sections 3(a), sections 3(b) of Executive Order 12988 
specifically requires that Executive agencies make every reasonable 
effort to ensure that the regulation: (1) Clearly specifies the 
preemptive effect, if any; (2) clearly specifies any effect on existing 
Federal law or regulation; (3) provides a clear legal standard for 
affected conduct while promoting simplification and burden reduction; 
(4) specifies the retroactive effect, if any; (5) adequately defines 
key terms; and (6) addresses other important issues affecting clarity 
and general draftsmanship under any guidelines issued by the Attorney 
General. Section 3(c) of Executive Order 12988 requires Executive 
agencies to review regulations in light of applicable standards in 
section 3(a) and section 3(b) to determine whether they are met or it 
is unreasonable to meet one or more or them. DOE has completed the 
required review and determined that, to the extent permitted by law, 
the final regulations meet the relevant standards of Executive Order 
12988.

[[Page 11182]]

VIII. Congressional Notification

    The final regulations published today are subject to the 
Congressional notification requirements of the Small Business 
Regulatory Enforcement Fairness Act 1996. The Office of Management and 
Budget has determined that the final regulations do not constitute a 
``major rule'' under the Act (5 USC 801, 804). DOE will report to 
Congress on the promulgation of the final regulations prior to the 
effective date set forth at the beginning of this notice.

    Issued at Golden, Colorado, February 28, 1997.
J.M. Shafer,
Administrator.
[FR Doc. 97-5996 Filed 3-10-97; 8:45 am]
BILLING CODE 6450-01-P