Notice of Intent To Contract for Hydroelectric Power Development on the San Juan-Chama Project, New Mexico, 48185-48188 [2013-18911]

Agencies

• DEPARTMENT OF THE INTERIOR
• Bureau of Reclamation

[Federal Register Volume 78, Number 152 (Wednesday, August 7, 2013)]
[Notices]
[Pages 48185-48188]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-18911]


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DEPARTMENT OF THE INTERIOR

Bureau of Reclamation

[A10-1517-0008-000-00-0-2, 4P10000]


Notice of Intent To Contract for Hydroelectric Power Development 
on the San Juan-Chama Project, New Mexico

AGENCY: Bureau of Reclamation, Interior.

ACTION: Notice of intent to accept proposals, select lessee, and 
contract for hydroelectric power development on the San Juan-Chama 
Project.

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SUMMARY: Current Federal policy allows non-Federal development of 
electrical power resource potential on Federal water resource projects. 
The Bureau of Reclamation, (Reclamation), in coordination with the 
Department of Energy, Western Area Power Administration (Western), will 
consider proposals for non-Federal development of hydroelectric power 
on the San Juan-Chama Project at any or all of the conduit locations 
specified in this

[[Page 48186]]

Notice. Reclamation is considering such hydroelectric power development 
under a lease of power privilege. 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. No Federal funds 
will be available for such hydroelectric power development. This Notice 
presents background information, proposal content guidelines, and 
information concerning selection of a non-Federal entity to develop 
hydroelectric power on the San Juan-Chama Project.

DATES: A written proposal and seven copies must be submitted on or 
before 5:00 p.m. (Mountain Standard Time) on January 6, 2014. A 
proposal will be considered timely only if it is received in the office 
of the Area Manager at or before 5:00 p.m. on the above-designated 
date. Interested entities are cautioned that delayed delivery to the 
Area Manager's 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 proposal and seven copies to Mr. Mike Hamman, 
Area Manager, Bureau of Reclamation, Albuquerque Area Office, 555 
Broadway NE., Suite 100, Albuquerque, New Mexico 87102-2352; telephone 
(505) 462-3551. A copy of the proposal should also be sent at or about 
the time it is due at Reclamation to Ms. Lynn Jeka, CRSP Manager, 
Western Area Power Administration, 150 Social Hall Avenue, Suite 300, 
Salt Lake City, Utah 84111-1534; telephone (801) 524-6372.

FOR FURTHER INFORMATION CONTACT: Technical data may be obtained from 
Mr. Joseph Alderete, Bureau of Reclamation, Albuquerque Area Office, 
555 Broadway NE., Suite 100, Albuquerque, New Mexico 87102-2352; 
telephone (505) 462-3578. Reclamation will be available to meet with 
interested entities only upon written request to Mr. Alderete. Upon 
request, Reclamation will provide an opportunity for a site visit. 
Reclamation reserves the right 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 operation and maintenance of the Azotea 
Tunnel and the three other drop structures may be obtained by 
contacting Mr. Alderete or Mr. Victor Salazar, Bureau of Reclamation, 
Chama Field Division, 193 North Pinon Drive, P.O. Box 426, Chama, New 
Mexico 87520-0426; telephone (575) 756-2175.
    Information related to Western's purchasing and/or marketing of the 
power may be obtained by contacting Ms. Lynn Jeka, CRSP Manager, 
Western Area Power Administration, 150 Social Hall Avenue, Suite 300, 
Salt Lake City, Utah 84111-1534; telephone (801) 524-6372.

SUPPLEMENTARY INFORMATION: The San Juan-Chama Project was authorized as 
a participating project of the Colorado River Storage Project on June 
13, 1962, by Public Law 87-483. The project is a Federal Reclamation 
project located in northern New Mexico, near the town of Chama, and 
diverts Colorado River water through a series of three dams, three 
diversions, and three tunnels. The Azotea Tunnel Outlet empties into 
Willow Creek and has the capacity to deliver 950 cubic feet per second. 
Reclamation maintains easements along Willow Creek. The Jicarilla 
Apache Indian Reservation is an adjacent landowner.
    Reclamation, in coordination with Western, is considering 
hydroelectric power development on the San Juan-Chama Project under a 
lease of power privilege at up to four conduit drops along the project. 
These locations are the Azotea Tunnel Outlet, the drop located at 
Station 1565+00, the drop located at Station 1702+75, and the drop 
located at Station 1831+17. The station drops are all located 
downstream of the Azotea Tunnel Outlet along Willow Creek and are all 
features of the San Juan-Chama Project.
    A lease of power privilege is an alternative to Federal 
hydroelectric power development. It 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) for any lease of 
power privilege considered in response to this Notice. A lease of power 
privilege may be issued only after Reclamation has reviewed and 
approved compliance with NEPA, the National Historic Preservation Act 
(NHPA), and the Endangered Species Act (ESA). Any lease of power 
privilege on the San Juan-Chama Project must accommodate existing 
contractual commitments related to operation and maintenance of the 
Azotea Tunnel Outlet and other San Juan-Chama Project facilities. The 
lessee (i.e., successful proposing entity) will be responsible for 
operation and maintenance of the proposed hydropower development within 
the existing Federal features. Because the United States is responsible 
for the operation and maintenance of the San Juan-Chama Project, a 
negotiated agreement will be included in the lease development process 
to address coordination of operation and maintenance, including cost-
sharing arrangements associated with any additional operation and 
maintenance costs incurred due to operation of the hydropower 
facilities.
    All costs incurred by the United States related to development and 
operation and maintenance of the hydropower facilities under a lease of 
power privilege, including NEPA compliance and development of the lease 
of power privilege, would be at 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 in the amount of at least 3 
mills per kilowatt-hour of generation. The lease issued to the lessee 
will contain provisions for inflation adjustments to the required 
annual payments throughout the term of the lease. 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. Proposals may include any or all of the conduit drops 
specified in this Notice. In their proposals, interested parties 
should:
    (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, the 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. Interested 
parties should also

[[Page 48187]]

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 9(c) of the 1939 Act 
as a municipality, public corporation or agency, or cooperative or 
other non-profit 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. Estimate and describe installed 
capacity and the capacity of the power facilities. Also describe 
seasonal or annual generation patterns. Include estimates of the 
electrical energy that would be produced from the facility for each 
month in dry, average, and wet hydrologic scenarios. 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.
    (c) Indicate plans for acquiring title to or the right to occupy 
and use lands necessary for the proposed development, 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 rights, and how these 
rights would be used, acquired, or perfected.
    (e) Discuss any studies necessary to adequately define impacts of 
the development on the San Juan-Chama Project and the environment. 
Describe any significant environmental issues associated with the 
development and the proposing entity's approach for gathering relevant 
data and resolving or mitigating 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 Reclamation, 
which has operation and maintenance responsibility for the San Juan-
Chama Project feature(s), that are proposed for utilization in the 
hydropower development under consideration. Describe how the hydropower 
development would operate in harmony with the San Juan-Chama Project 
and existing applicable contracts related to operation and maintenance 
of San Juan-Chama Project feature(s) being considered for modification.
    (g) Describe plans for assuming liability for damage to the 
operational and structural integrity of the San Juan-Chama 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, NHPA compliance, ESA compliance, lease of 
power privilege development, design, construction, facility testing, 
and start of hydropower production. Prepare schedules of these 
activities as 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, NHPA compliance, ESA 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 lease payments to the United States; 
expenses that may be associated with the San Juan-Chama Project; and 
the anticipated return on investment should be included. If there are 
transmission or wheeling expenses associated with the hydropower 
development, these should also 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 the costs 
of the hydropower development.

Selection of Lessee

    Proposals will be evaluated with equal consideration given to the 
following criteria: (1) The relevant qualifications of the proposing 
entity, based on past experience, to develop similar hydropower 
projects in terms of complexity and scale; (2) the proposed overall 
design of the project in terms of how the principal structures fit 
within the existing project features, including the optimization of 
developing the hydropower potential with consideration to environmental 
factors; (3) the projected developmental and operational costs, 
including construction, operation and maintenance costs as well as the 
overall cost effectiveness of the power produced at the proposed 
hydropower facility; (4) the marketing plan for the power produced at 
the proposed hydropower facility; and (5) the proposed organizational 
structure for the long-term operation and maintenance of the proposed 
hydropower facility including the qualifications of the operating 
entity. A proposal will be deemed unacceptable if it is inconsistent 
with San Juan-Chama 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), of this Notice) 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. Preference entities would be allowed 30 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 and will be given 60 days from the date of the initial offer 
from the Lessee to make their decision. Western will consult with 
Reclamation on such power purchasing and/or marketing considerations.
    In the event Western elects to purchase and/or market the power 
generated by the hydropower development, Western may market the power 
available from the project as part of its Salt Lake City Area 
Integrated Projects (SLIP) 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

[[Page 48188]]

would be established through a public process, initiated by a notice in 
the Federal Register, separate from the marketing plan.

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 15 months 
from the date of such notification to accomplish NEPA compliance, NHPA 
compliance, ESA compliance, and enter into a lease of power privilege 
for the proposed development of hydropower on the San Juan-Chama 
Project. The lease of power privilege will address only the sites 
identified in the lessee's proposal and will not provide broad 
development rights elsewhere on the San Juan-Chama Project. The lessee 
will then have up to 9 months from the date of execution of the lease 
to complete the designs and specifications and an additional year to 
begin construction. Such timeframes may be adjusted for just cause 
resulting from actions and/or circumstances that are beyond the control 
of the lessee.

    Dated: June 27, 2013.
Larry Walkoviak,
Regional Director, Upper Colorado Region.
[FR Doc. 2013-18911 Filed 8-6-13; 8:45 am]
BILLING CODE 4310-MN-P