II 118th CONGRESS 2d Session S. 3581 IN THE SENATE OF THE UNITED STATES January 11, 2024 Mr. Kelly (for himself and Ms. Sinema ) introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources A BILL To direct the Administrator of the Western Area Power Administration to reduce rates for firm electric service customers due to shortfalls in generation from certain Bureau of Reclamation hydroelectric facilities, and for other purposes.

1. Short title This Act may be cited as the Hydropower Delivery Rate-reduction Offset Act of 2024 or the HYDRO Act of 2024 . 2. Findings Congress finds that— (1) the sale of hydropower from Federal facilities at cost-based rates to project use and firm electric service customers has financed Federal projects and programs that are not strictly necessary for, or related to, the production of hydropower; (2) maintaining a mutually beneficial contractual relationship with project use and firm electric service customers is beneficial for the integrity of the Federal hydropower program; (3) long-term drought conditions in the Western United States have produced untenable conditions for the delivery of hydropower; and (4) the conditions referred to in paragraph (3) make the recovery of costs unrelated to the production of Federal hydropower inconsistent with sound business principles. 3. Sense of Congress relating to the Administrator of the Western Area Power Administration It is the sense of Congress that— (1) the Administrator of the Western Area Power Administration (referred to in this Act as the Administrator ) has the discretion to exclude nonpower-related costs from power rate repayment studies; and (2) the Administrator should exercise the discretion of the Administrator— (A) to reduce unnecessary expenditures during periods of extreme drought; and (B) to exclude costs from hydropower rates that are inconsistent with an equitable allocation or assignment of nonpower-related costs to project use and firm electric service rates. 4. Hydropower drought mitigation (a) Notification of predicted available power (1) In general Not later than 30 days after the date of enactment of this Act, and each January 1 thereafter, the Administrator shall notify project use and firm electric service customers of each of the Bureau of Reclamation projects described in paragraph (2) of the quantity of energy predicted to be available for delivery from the applicable Bureau of Reclamation project during the 1-year period beginning on the date of the notification, based on the most recent August 24-month study of the Bureau of Reclamation. (2) Description of projects The Bureau of Reclamation projects referred to in paragraph (1) are the following: (A) The Colorado River Storage Project, the Collbran Project, and the Rio Grande Project (collectively referred to in this Act as the Salt Lake City Area Integrated Projects ). (B) The Boulder Canyon Project. (C) The Parker-Davis Project. (b) Conditions warranting rate reduction (1) Salt lake city area integrated projects If a notification under subsection (a)(1) indicates that the annual quantity of energy produced by the Salt Lake City Area Integrated Projects is predicted to be less than 4,900,000 MWh, the Administrator shall reduce rates for each project use and firm electric service customer of the Salt Lake City Area Integrated Projects in each monthly invoice for firm electric service until such time as the expected annual energy production returns to levels equal to or greater than 4,900,000 MWh. (2) Boulder canyon project If a notification under subsection (a)(1) indicates that the annual quantity of energy produced by the Boulder Canyon Project is predicted to be less than 3,600,000 MWh, the Administrator shall reduce rates for each project use and firm electric service customer of the Boulder Canyon Project in each monthly invoice for firm electric service until such time as the expected annual energy production returns to levels equal to or greater than 3,600,000 MWh. (3) Parker-Davis project If a notification under subsection (a)(1) indicates that the annual quantity of energy produced by the Parker-Davis Project is expected to be less than 1,400,000 MWh, the Administrator shall reduce rates for each project use and firm electric service customer of the Parker-Davis Project in each monthly invoice for project use and firm electric service until such time as the expected annual energy production returns to levels equal to or greater than 1,400,000 MWh. (c) Rate reduction (1) In general For purposes of calculating a rate reduction required under subsection (b), the Administrator shall reduce rates for each project use and firm electric service customer in accordance with the principles described in sections 2 and 3. (2) Limitation on rate reduction The Administrator may not reduce rates as required under subsection (b) by an aggregate amount greater than any unobligated balances associated with the projects described in subsection (a)(2). (d) Termination of effectiveness Subsections (a) through (c) shall cease to be effective on December 31, 2031. 5. Effect (a) Cost recovery Nothing in this Act preempts the obligations of the Administrator to set rates to recover costs as may be required by law. (b) Funding (1) In general Nothing in this Act authorizes additional appropriations for the Western Area Power Administration. (2) Use of existing funds The Administrator shall use any funds authorized and appropriated to the Western Area Power Administration on an annual basis to carry out the duties of the Administrator under this Act. (c) No retroactive rates Notwithstanding any other provision of law, the Administrator shall not recover any rate reduction provided pursuant to this section in future rates. (d) Effect on water rights Nothing in this Act— (1) alters or affects any water rights held by— (A) the United States; (B) any Indian Tribe, band, or community; (C) any State or political subdivision of a State; or (D) any person; (2) authorizes the Secretary of the Interior to change or otherwise modify operations at Bureau of Reclamation facilities in the Colorado River Basin; or (3) authorizes a change in the terms of the agreement entitled the Second Memorandum of Agreement Concerning the Upper Colorado River Basin Fund and dated June 10, 2020.