[Federal Register Volume 75, Number 105 (Wednesday, June 2, 2010)]
[Notices]
[Pages 30852-30854]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-13149]


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DEPARTMENT OF THE INTERIOR

Bureau of Reclamation


Hydroelectric Power Development at Ridgway Dam, Dallas Creek 
Project, Colorado

AGENCY: Bureau of Reclamation, Interior.

ACTION: Notice of intent to accept proposals, select lessee, and 
contract for hydroelectric power development at Ridgway Dam.

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SUMMARY: Current Federal policy encourages non-Federal development of 
environmentally sustainable hydropower potential on Federal water 
resource projects. The Bureau of Reclamation (Reclamation), in 
consultation with the Department of Energy, Western Area Power 
Administration (Western), will consider proposals for non-Federal 
development of hydroelectric power at Ridgway Dam, a feature of the 
Dallas Creek Project. Reclamation is considering such hydroelectric 
power development under a lease of power privilege. No Federal funds 
will be available for such hydroelectric power development. Western 
would have the first opportunity to purchase and/or market the power 
that would be generated by such development under a lease of power 
privilege. The Dallas Creek Project is a Federal Reclamation project. 
This notice presents background information, proposal content 
guidelines, and information concerning selection of a non-Federal 
entity to develop hydroelectric power at Ridgway Dam, and power 
purchasing and/or marketing considerations.

DATES: A written proposal and seven copies must be submitted on or 
before 5 p.m. (MST), on Friday, December 3, 2010. A proposal will be 
considered timely only if it is received in the office of the Area 
Manager by or before 5 p.m. on the designated date. Interested entities 
are cautioned that delayed delivery to this office due to failures or 
misunderstandings of the entity and/or of mail, overnight, or courier 
services will not excuse lateness and, accordingly, are advised to 
provide sufficient time for delivery. Late proposals will not be 
considered.

ADDRESSES: Send written proposals to Ms. Carol DeAngelis, Area Manager, 
Western Colorado Area Office, Bureau of Reclamation, 2764 Compass 
Drive, Suite 106, Grand Junction, Colorado 81506, telephone (970) 248-
0600.
    A copy of the proposal should also be sent at or about the time it 
is due at Reclamation to: CRSP Manager, Western Area Power 
Administration, 150 Social Hall Avenue, Suite 300, Salt Lake City, Utah 
84111-1534. Western is also available to meet with Reclamation and 
interested entities to discuss Western's potential marketing of 
hydropower.

FOR FURTHER INFORMATION CONTACT: Technical data, including past water 
release patterns, may be obtained by contacting Mr. Dan Crabtree, Water 
Management Group Chief, Western Colorado Area Office, Bureau of 
Reclamation 2764 Compass Drive, Suite 106, Grand Junction, Colorado 
81506, telephone (970) 248-0652.
    Reclamation will be available to meet with interested entities only 
upon written request to the Water Management Group Chief at the above 
cited address. Reclamation will provide an opportunity for a site 
visit. In addition, Reclamation reserves the right

[[Page 30853]]

to schedule a single meeting and/or visit to address the questions of 
all entities that have submitted questions or requested site visits. 
Information related to Western's purchasing and/or marketing of the 
power may be obtained by contacting Ms. LaVerne Kyriss, CRSP Manager, 
Western Area Power Administration, 150 Social Hall Avenue, Suite 300, 
Salt Lake City, Utah 84111-1534, telephone (801) 524-6372. Information 
related to the operation and maintenance of Ridgway Dam may be obtained 
by contacting Mr. Mike Berry, Tri-County Water Conservancy District, 
P.O. Box 347, Montrose, Colorado 81402, telephone (970) 249-3369.

SUPPLEMENTARY INFORMATION: The Dallas Creek Project, located near the 
town of Ridgway in west-central Colorado on the Uncompahgre River in 
the Colorado River Basin, was authorized for construction (including 
hydropower) by the Colorado River Basin Project Act of September 30, 
1968 (Pub. L. 90-537), as a participating project under the Colorado 
River Storage Project Act of April 11, 1956 (Pub. L. 84-485). The Tri-
County Water Conservancy District (District), under its contracts with 
the United States, has certain operation, maintenance, replacement, and 
repayment responsibilities and obligations concerning Ridgway Dam.
    Reclamation, in consultation with Western, is considering 
hydroelectric power development at Ridgway Dam under a lease of power 
privilege. A lease of power privilege is an alternative to Federal 
hydroelectric power development. A lease of power privilege is a 
contractual right given to a non-Federal entity to use a Reclamation 
facility for electric power generation consistent with Reclamation 
project purposes. Leases of power privilege have terms not to exceed 40 
years. The general authority for lease of power privilege under 
Reclamation law includes, among others, the Town Sites and Power 
Development Act of 1906 (43 U.S.C. 522), and the Reclamation Project 
Act of 1939 (43 U.S.C. 485h(c)) (1939 Act). Reclamation will be the 
lead Federal agency for ensuring compliance with the National 
Environmental Policy Act (NEPA) of any lease of power privilege 
considered in response to this notice. Leases of power privilege may be 
issued only when Reclamation, upon completion of the NEPA process, 
determines that the proposed hydropower development is environmentally 
acceptable. Any lease of power privilege at Ridgway Dam must 
accommodate existing contractual and environmental commitments related 
to operation and maintenance of such existing facilities. The lessee 
(i.e., successful proposing entity) would be required to enter into a 
contract with the District to coordinate operation and maintenance of 
any proposed hydropower development with existing Federal features.
    Western would have the first opportunity to purchase and/or market 
the power that would be generated under any lease of power privilege. 
Western would have 60 days from the date of notification of selection 
of a lessee in which to decide whether to purchase and/or market the 
power.
    All costs incurred by the United States related to development and 
operation and maintenance under a lease of power privilege, including 
NEPA compliance, engineering reviews, and development of the lease of 
power privilege, would be the expense of the lessee. In addition, the 
lessee would be required to make annual payments to the United States 
for the use of a Government facility. Depending on the economic 
capability of the proposed hydropower development, this amount will be 
not less than 3 mills per kilowatt-hour of generation. If conditions 
provide opportunity for substantial benefits to accrue to the lessee, 
then the United States will benefit proportionally. Also, under the 
lease of power privilege, provisions will be included for inflation of 
the annual payment with time. Such annual payments to the United States 
would be deposited as a credit to the Upper Colorado River Basin Fund.

Proposal Content Guidelines

    Interested parties should submit proposals explaining in as precise 
detail as is practicable how the hydropower potential would be 
developed. Factors which a proposal should consider and address 
include, but are not limited to, the following:
    (a) Provide all information relevant to the qualifications of the 
proposing entity to plan and implement such a project, including, but 
not limited to, information about preference status, type of 
organization, length of time in business, experience in funding, design 
and construction of similar projects, industry rating(s) that indicate 
financial soundness and/or technical and managerial capability, 
experience of key management personnel, history of any reorganizations 
or mergers with other companies, and any other information that 
demonstrates the interested entity's organizational, technical, and 
financial ability to perform all aspects of the work. Include a 
discussion of past experience in operating and maintaining similar 
facilities and provide references as appropriate. The term ``preference 
entity,'' as applied to a lease of power privilege, means an entity 
qualifying for preference under Section 9c of the 1939 Act as a 
municipality, public corporation or agency, or cooperative or other 
nonprofit organization financed in whole or in part by loans made 
pursuant to the Rural Electrification Act of 1936, as amended.
    (b) Provide geographical locations and describe principal 
structures and other important features of the proposed development 
including roads and transmission lines. Note: Due to possible 
forthcoming modifications at Ridgway Dam, the available sites for a 
powerhouse are presently limited. It is therefore imperative that any 
potential lessee consult with Reclamation to obtain current information 
regarding acceptable potential powerhouse locations. Estimate and 
describe installed capacity and the capacity of the power facilities 
under dry, average, and wet hydrological conditions. Also describe 
seasonal or annual generation patterns. Include estimates of the amount 
of electrical energy that would be produced from the facility for each 
month of average, dry, and wet water years. If capacity and energy can 
be delivered to another location, either by the proposing entity or by 
potential wheeling agents, specify where capacity and energy can be 
delivered. Include concepts for power sales and contractual 
arrangements, involved parties, and the proposed approach to wheeling 
if required. To determine the marketability of the generated 
hydropower, Western requires the following information: Cost of 
delivered generation in $/megawatt-hour, including any variations in 
cost (on-peak, off-peak, seasonal), including escalation factors and 
any other charges; delivery point and voltage of generation plus any 
arrangements the lessee has to wheel power to an alternate location(s); 
the daily, weekly, monthly, and annual pattern of expected generation 
under average, wet, and dry hydrological conditions; ability of 
generation to provide ancillary services such as regulation, spinning 
reserves, and volt-ampere reactive support; and information on the 
reliability of the generation, potential maintenance outage schedule, 
and duration.
    (c) Indicate title arrangements and the ability for acquiring title 
to or the right to occupy and use lands necessary for the proposed 
development(s), including such additional lands as may be required 
during construction.
    (d) Identify water rights applicable to the operation of the 
proposed development(s), the holder of such

[[Page 30854]]

rights, and how these rights would be acquired or perfected.
    (e) Discuss any studies necessary to adequately define impacts on 
the Dallas Creek Project and the environment of the development. 
Describe any significant environmental issues associated with the 
development and the proposing entity's approach for gathering relevant 
data and resolving such issues to protect and enhance the quality of 
the environment. Explain any proposed use of the hydropower development 
for conservation and utilization of the available water resources in 
the public interest.
    (f) Describe anticipated contractual arrangements with the entity 
or entities having operation and maintenance responsibility for the 
Dallas Creek Project feature(s) that are proposed for utilization in 
the hydropower development under consideration. Define how the 
hydropower development would operate in harmony with the multiple 
purposes of the Dallas Creek Project and existing applicable contracts 
related to operation and maintenance of Dallas Creek Project feature(s) 
being considered for modification.
    (g) Describe plans for assuming liability for damage to the 
operational and structural integrity of the Dallas Creek Project caused 
by construction, operation, and/or maintenance of the hydropower 
development.
    (h) Identify the organizational structure planned for the long-term 
operation and maintenance of any proposed hydropower development.
    (i) Provide a management plan to accomplish such activities as 
planning, NEPA compliance, lease of power privilege development, 
design, construction, facility testing, and start of hydropower 
production. Prepare schedules of these activities as is applicable. 
Describe what studies are necessary to accomplish the hydroelectric 
power development and how the studies would be implemented.
    (j) Estimate development cost. This cost should include all 
investment costs such as the cost of studies to determine feasibility, 
NEPA compliance, design, construction, and financing as well as the 
amortized annual cost of the investment; also, the annual operation, 
maintenance, and replacement expense for the hydropower development; 
annual payments to the United States; expenses that may be associated 
with the Dallas Creek Project; and the anticipated return on 
investment. If there are additional transmission or wheeling expenses 
associated with the development of the hydropower development, these 
should be included. Identify proposed methods of financing the 
hydropower development. An economic analysis should be presented that 
compares the present worth of all benefits and costs of the hydropower 
development.

Selection of Lessee

    Reclamation, in consultation with Western, will evaluate proposals 
received in response to this published notice. Reclamation may request 
additional information from individual proposing entities and/or all 
proposing entities after proposals are submitted, but prior to making a 
selection of a lessee.
    Reclamation will give more favorable consideration to proposals 
that (1) emphasize sustainable, low impact, or small hydropower 
development that avoids, reduces, or minimizes environmental impacts; 
(2) improve ecosystem function; (3) utilize water and natural resources 
in an environmentally and economically sound manner; (4) clearly 
demonstrate that the offeror is qualified to develop the hydropower 
facility and provide for long-term operation and maintenance; and (5) 
best share the economic benefits of the hydropower development among 
parties (including the United States) to the lease of power privilege. 
A proposal will be deemed unacceptable if it is inconsistent with 
Dallas Creek Project purposes, as determined by Reclamation. 
Reclamation will give preference to those entities that qualify as 
preference entities, as defined under Proposal Content Guidelines, item 
(a), provided that their proposal is at least as well-adapted to 
developing, conserving, and utilizing the water and natural resources 
as other submitted proposals and that the preference entity is well 
qualified. Through written notice, all preference entities submitting 
proposals would be allowed 90 days to improve their proposals, if 
necessary, to be made at least equal to a proposal(s) that may have 
been submitted by a non-preference entity.

Power Purchasing and/or Marketing Considerations

    Western would have the first opportunity to purchase and/or market 
the power that would be generated by the project under a lease of power 
privilege. Western will consult with Reclamation on such power 
purchasing and/or marketing considerations.
    Western may market the power available from the project as part of 
its Salt Lake City Area Integrated Projects (SLCA/IP) or on a stand-
alone basis, first to preference entities qualified under criteria 
established by Western and second to non-preference entities, by 
developing an individual marketing plan for this power. This marketing 
plan would be developed through a separate subsequent public process 
beginning with a notice in the Federal Register of Western's intent to 
market the power. The marketing plan would include all aspects of 
marketing the power, including assignment of power to qualified 
preference and/or non-preference entities, pricing, transmission, and 
delivery of power. Western would recover the costs it would incur in 
purchasing and/or marketing the power through the rates charged for the 
power. Firm power rates would be established through a public process, 
initiated by a notice in the Federal Register, separate from the 
marketing plan.
    In the event Western elects to not purchase and/or market the power 
generated by the hydropower development or such a decision cannot be 
made within 60 days of notification of selection of a lessee, the 
lessee would be responsible for marketing the power generated by the 
project with priority given to preference entities as heretofore 
defined in Proposal Content Guidelines, item (a).

Notice and Time Period To Enter Into Lease of Power Privilege

    Reclamation will notify, in writing, all entities submitting 
proposals of Reclamation's decision regarding selection of the 
potential lessee. The selected potential lessee will have two years 
from the date of such notification to enter into a lease of power 
privilege for the proposed development of hydropower at Ridgway Dam. 
Any excessive delay resulting from compliance with the provisions of 
Federal environmental laws or administrative review by a Federal 
agency, pertaining to the project, may extend the two-year time period 
for a period equal to that of the delay. In the event of litigation 
related to the proposed project, the two-year time period will be 
extended for a period equal to that of the delay, provided such 
litigation was initiated by parties other than the selected potential 
lessee or its employees, officers, agents, assigns, shareholders, 
customers, or persons or groups served by or in privity with the 
potential lessee.

    Dated: May 13, 2010.
Anamarie Gold,
Assistant Regional Director, Upper Colorado Region.
[FR Doc. 2010-13149 Filed 6-1-10; 8:45 am]
BILLING CODE 4310-MN-P