Final Allocation of Olmsted Powerplant Replacement Project, 45121-45124 [2018-19211]

Agencies

• DEPARTMENT OF ENERGY
• Western Area Power Administration

[Federal Register Volume 83, Number 172 (Wednesday, September 5, 2018)]
[Notices]
[Pages 45121-45124]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-19211]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Final Allocation of Olmsted Powerplant Replacement Project

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of final allocation of Olmsted Powerplant Replacement 
Project.

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SUMMARY: Western Area Power Administration (WAPA) Colorado River 
Storage Project (CRSP) Management Center, a Federal power marketing 
administration within the Department of Energy, announces its Olmsted 
Powerplant Replacement Project (Olmsted) Final Allocation of Energy. 
The Final 2018 Olmsted Power Marketing Plan and Call for Applications 
was published on October 11, 2017, and set forth that an application 
for an allocation of energy from Olmsted was due by December 11, 2017. 
WAPA reviewed and considered the applications received and published 
the Proposed Allocations in the Federal Register on June 13, 2018. 
There was a 30-day comment period for the proposed allocations. WAPA 
has considered the comments received, and

[[Page 45122]]

this Federal Register notice establishes the final allocations.

DATES: The final allocations will be effective on October 5, 2018.

ADDRESSES: Information regarding the Final Allocation of Olmsted Power 
Replacement Project, including comments, letters, and other supporting 
documents, is available for public inspection and copying at the CRSP 
Management Center, Western Area Power Administration, 299 South Main 
Street, Suite 200, Salt Lake City, Utah. Public comments and related 
information may be accessed at https://www.wapa.gov/regions/CRSP/PowerMarketing/Pages/Proposed-Allocations.aspx.

FOR FURTHER INFORMATION CONTACT: Mr. Brent Osiek, Vice President of 
Power Marketing for CRSP, (801) 524-5495; or Mr. Lyle Johnson, Public 
Utilities Specialist, (801) 524-5585. Written requests for information 
should be sent to Western Area Power Administration, CRSP Management 
Center, 299 South Main Street, Suite 200, Salt Lake City, UT 84111; 
faxed to (801) 524-5017; or emailed to: [email protected].

SUPPLEMENTARY INFORMATION: The United States acquired the Olmsted 
Powerplant in 1990 through condemnation proceedings in order to secure 
the water rights associated with the Olmsted Powerplant deemed 
essential to the Central Utah Project (CUP). The CUP is a participating 
project of the Colorado River Storage Project. As part of the 
condemnation proceedings, PacifiCorp continued Olmsted operations until 
2015; after that time, the operation of the facility became the 
responsibility of the Department of the Interior.
    The existing Olmsted Powerplant greatly exceeded its operational 
life, and a replacement facility was needed for the generation of power 
and the preservation of associated non-consumptive water rights. On 
February 4, 2015, the Implementation Agreement (Agreement) for Olmsted 
was signed by Central Utah Water Conservancy District (District); the 
Department of the Interior, Bureau of Reclamation; and WAPA 
(Participants). The Agreement sets forth the responsibilities of the 
Participants and identifies funding of Olmsted. The District will 
construct, operate, maintain, and replace the Olmsted Powerplant and 
incidental facilities in connection with CUP operations including power 
generation.
    WAPA is responsible for marketing the Olmsted energy, which is 
anticipated to be available in the late summer or early fall of 2018. 
Power production will be incidental to the delivery of water and will 
only be available when water is present. Therefore, only energy, 
without capacity, will be available for marketing. It is expected that 
the annual energy production from Olmsted will average around 
27,000,000 kilowatthours per year. The Final 2018 Olmsted Power 
Marketing Plan and Call for Applications was published in the Federal 
Register on October 11, 2017 (82 FR 47201), and set forth that an 
application for an allocation of energy from Olmsted was due by 
December 11, 2017. After review of the applications, the Proposed 
Allocation of Olmsted Powerplant Replacement Project was published in 
the Federal Register on June 13, 2018 (83 FR 27599). The 30-day comment 
period closed on July 13, 2018. After considering the comments 
received, WAPA is now publishing the Final Allocations.

Response to Comments on Olmsted Final Allocation of Energy

    WAPA received numerous comments about its Olmsted final allocation 
of energy during the comment period. WAPA reviewed and considered all 
comments received, and this section summarizes and responds to those 
comments. For brevity, when it was possible to do so without affecting 
the meaning of the statements, the public comments below were 
paraphrased.
    Comment: Several commenters supported the proposed allocation of 
Olmsted energy.
    Response: WAPA acknowledges the comments in support of the proposed 
allocations.
    Comment: Several commenters suggested specific changes that should 
occur in the next marketing plan.
    Response: Issues concerning future marketing plan criteria or 
suggested changes to the geographic marketing areas are more 
appropriately addressed during the public process for future marketing 
plans for the Olmsted Powerplant and are beyond the scope of the 
proposed allocation comment process. Commenters will have the 
opportunity to express their suggestions during the public process for 
future Olmsted marketing plans.
    Comment: One commenter requested an additional allocation of 
Olmsted energy, citing their future electrical resource needs and the 
limited amounts of Federal power they currently receive.
    Response: WAPA does not have the authority to develop resources to 
meet customers' future electrical resource needs and load growth. WAPA 
is limited to marketing only the resources authorized by Congress as 
part of Federal water development projects.
    Comment: One commenter asked how the allocations were developed, 
especially for the entities with small percentages of load served by 
Federal power.
    Response: The percentage of applicants' load served by Federal 
power was determined by comparing current loads, as submitted in the 
Applicant Profile Data, to that applicant's current allocation(s) of 
Federal power. Pursuant to the Final Power Marketing Criteria, 
allocations of energy from Olmsted were made based on a percentage of 
annual generation rather than fixed quantities of energy. WAPA received 
applications from four entities representing a total of 14 eligible 
applicants. Due to its role in the construction, operation, 
maintenance, and replacement of Olmsted, WAPA awarded the District 30 
percent of the annual generation at Olmsted. As explained more 
thoroughly below, WAPA also awarded Utah Municipal Power Agency (UMPA) 
with 30 percent, largely based on UMPA's facilitating exchange and 
interchange accounting services. WAPA determined it would use the 
remaining energy to increase allocations to those applicants with the 
least amount of existing Federal allocations. Four of the applicants 
receive less than 10 percent of their energy resources from Federal 
power while all other applicants receive more than 20 percent. 
Therefore, WAPA evenly divided the remaining 40 percent of the annual 
generation at Olmsted among those four applicants.
    Comment: One commenter asked how the costs and fees associated with 
interconnecting with Provo, Utah, compare to interconnecting with 
PacifiCorp.
    Response: The cost of interconnecting to the Provo system was 
estimated to be much less than connecting to the facilities of 
PacifiCorp. WAPA requested multiple interconnection studies from 
PacifiCorp to determine potential costs and infrastructure 
requirements. PacifiCorp's costs for interconnecting at its congested 
Hale Substation were significantly higher than interconnecting with 
Provo at the same voltage and at essentially the same location; the 
overall savings was about $1.4 million. Additionally, interconnecting 
with Provo allowed further reduction in costs to customers by allowing 
WAPA to enter into a Scheduling and Interchange Agreement with the 
UMPA, which serves as a scheduling and resource agent for Provo. This 
allowed Olmsted energy to be delivered to customers under current 
transmission arrangements rather than

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requesting new agreements with PacifiCorp.
    Comment: One commenter asked about the scheduling and displacement 
agreement that was developed with UMPA and inquired if a similar 
agreement was pursued with any other entities.
    Response: Only Provo and PacifiCorp have facilities in the vicinity 
of the Olmsted Powerplant to directly receive the power to facilitate a 
scheduling and displacement agreement. Interconnecting to any other 
entities would require construction of extensive transmission 
facilities in an urban area and would have been cost prohibitive.
    Comment: One commenter asked if UMPA received any type of priority 
in receiving an allocation and why UMPA received a 30 percent 
allocation since it already has a relatively large Federal allocation 
of hydropower.
    Response: UMPA did not receive priority over the other applicants. 
UMPA was awarded 30 percent in consideration for providing scheduling 
and interchange services.
    Comment: One commenter asked why UMPA received an allocation, 
rather than its individual member cities, since some members of UMPA 
are outside of the marketing area.
    Response: UMPA applied for an allocation of power on behalf of its 
specific members located in the marketing area.
    Comment: One commenter asked why UMPA received an allocation rather 
than payment for scheduling and interchange services.
    Response: The 30 percent allocation is in consideration of the 
overall savings that the arrangement with UMPA provides to all 
recipients of Olmsted energy as well as facilitating exchange and 
interchange accounting services. Without its current arrangement with 
UMPA, WAPA would need to enter into a separate transmission agreement 
with PacifiCorp to deliver the energy, which would likely result in 
cost-prohibitive transmission and ancillary expenses. Based on the 
published firm transmission rates of PacifiCorp, WAPA would need to pay 
approximately $208,000 under PacifiCorp's Open Access Transmission 
Tariff firm rate schedules, not including ancillary service charges. A 
yearly charge for scheduling services would be, based on WAPA's 
experience, around $25,000/year. Assuming an average year and a cost of 
$30 per megawatthour, the services WAPA receives from UMPA would be 
worth approximately $243,000/year for Olmsted power. Therefore, WAPA 
believes that an allocation to UMPA of 30 percent approximates the 
value of the displacement and exchange agreement.
    Comment: One commenter stated that its Salt Lake City Area 
Integrated Projects (SLCA/IP) contract rate of delivery (CROD) is in 
conflict with the Olmsted historical generation profile and asked how 
its SLCA/IP allocation will be handled and if an energy interchange 
account will be required.
    Response: WAPA is aware that the customer has an SLCA/IP capacity 
allocation, or CROD, during the summer season and not during the winter 
season. Olmsted is an energy-only product and will be delivered under 
the customer's SLCA/IP CROD. The Olmsted Powerplant will generate 
energy in both the summer and winter seasons. WAPA will work with the 
customer and its scheduling agent to develop procedures that ensure 
that the customer will receive all of its allocated Olmsted energy.

Olmsted Final Allocation of Energy

    Pursuant to the Final Power Marketing Criteria, allocations of 
energy from Olmsted were made based on a percentage of annual 
generation rather than fixed quantities of energy. Olmsted is a ``take 
all, pay all'' project; the annual revenue requirement does not depend 
on the amount of energy available each year. Customers with an 
allocation will receive a share of the energy and will annually pay a 
proportional share of the operation, maintenance, and replacement 
expenses in 12 monthly installments.
    Applications were received from four entities representing a total 
of 14 eligible applicants. In considering the Power Marketing Criteria, 
priority was given to the District due to its role in the construction, 
operation, maintenance, and replacement of Olmsted. The District will 
receive 30 percent of Olmsted's annual generation.
    Olmsted will be electrically interconnected to Provo's distribution 
and transmission facilities. Provo is a participant of UMPA, a joint-
action agency responsible for supplying the wholesale power needs to 
Provo and other municipal electric utilities in the area. UMPA, a long-
term power customer of WAPA, has agreed to accept all Olmsted energy as 
it is generated and, under a scheduling and displacement agreement with 
WAPA, provide Olmsted customers with their respective Olmsted 
allocation amounts from a portion of UMPA's allocation of SLCA/IP 
resources, which is also marketed by WAPA. This arrangement will allow 
the Olmsted recipients more flexibility since it will be easier to 
schedule this SLCA/IP resource, which is essentially exchanged for 
Olmsted generation and it allows the use of existing scheduling and 
transmission wheeling arrangements. In consideration for providing 
these arrangements and the overall savings it is anticipated to 
generate, UMPA will receive a 30 percent allocation of Olmsted 
generation.
    After consideration of the allocations to the District and UMPA, 
WAPA determined it would use the remaining Olmsted energy to increase 
the allocations of those applicants that have the lowest percentages of 
their current loads served by Federal power. Four of the applicants 
receive less than 10 percent of their energy resources from Federal 
power. All of the other applicants currently receive over 20 percent of 
their energy requirements from Federal allocations. Therefore, WAPA 
awarded 10 percent of the Olmsted generation to the four applicants 
receiving less than 10 percent of their energy from Federal sources. 
The following table shows the final allocation percentages of the 
annual energy production of Olmsted:

------------------------------------------------------------------------
                         Applicant                            Percentage
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Central Utah Water Conservancy District....................           30
Utah Municipal Power Agency................................           30
Lehi City, Utah............................................           10
Kaysville City, Utah.......................................           10
Weber Basin Water Conservancy District.....................           10
Springville City, Utah.....................................           10
------------------------------------------------------------------------

    With the exception of UMPA, all of the recipients receive 
scheduling and delivery services for their allocations of Federal power 
from Utah Associated Municipal Power Systems (UAMPS) under SLCA/IP 
Contract No. 87-SLC-0037. Since Olmsted energy will be delivered by 
means of transmission and scheduling arrangements existing for Contract 
No. 87-SLC-0037 with UAMPS, the allocations to these recipients may be 
handled in a similar manner. WAPA plans to enter into contracts with 
customers after publication of this Federal Register notice.

Availability of Information

    Documents developed or retained by WAPA during this public process 
will be available, by appointment, for inspection and copying at the 
CRSP Management Center, 299 South Main Street, Suite 200, Salt Lake 
City, Utah. The comments received during the 30-day comment period have 
been posted to WAPA's website at the following address: https://
www.wapa.gov/regions/

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CRSP/PowerMarketing/Pages/power-marketing.aspx.

Procedural Requirements

Environmental Compliance

    In compliance with the National Environmental Policy Act (NEPA) of 
1969 (42 U.S.C. 4321-4347), the Council on Environmental Quality 
Regulations (40 CFR parts 1500-1508), and DOE NEPA Regulations (10 CFR 
part 1021), WAPA issued a Finding of No Significant Impact (FONSI) on 
January 13, 2017. The FONSI and other NEPA compliance documentation may 
be found at https://www.wapa.gov/regions/CRSP/environment/Pages/environment.aspx.

Regulatory Flexibility Analysis

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601, et 
seq., requires a Federal agency to perform a regulatory flexibility 
analysis whenever the agency is required by law to publish a general 
notice of proposed rulemaking for any proposed rule unless the agency 
can certify that the rule will not have a significant economic impact 
on a substantial number of small entities. In defining the term 
``rule,'' the RFA specifies that a ``rule'' does not include ``a rule 
of particular applicability relating to rates [and] services . . . or 
to valuations, costs or accounting, or practices relating to such rates 
[and] services. . . .'' 5 U.S.C. 601. WAPA has determined that this 
action relates to rates or services offered by WAPA and, therefore, is 
not a rule within the purview of the RFA.

Determination Under Executive Order 12866

    WAPA has an exemption from centralized regulatory review under 
Executive Order 12866; accordingly, no clearance of this Federal 
Register notice by the Office of Management and Budget is required.

    Dated: August 24, 2018.
Mark A. Gabriel,
Administrator.
[FR Doc. 2018-19211 Filed 9-4-18; 8:45 am]
 BILLING CODE 6450-01-P