Proposed 2028 Parker-Davis Project Power Marketing Plan, 43841-43847 [2024-10997]

Agencies

• DEPARTMENT OF ENERGY
• Western Area Power Administration

[Federal Register Volume 89, Number 98 (Monday, May 20, 2024)]
[Notices]
[Pages 43841-43847]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-10997]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Proposed 2028 Parker-Davis Project Power Marketing Plan

AGENCY: Western Area Power Administration, Department of Energy (DOE).

ACTION: Notice of proposed plan.

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SUMMARY: The Department of Energy (DOE), Western Area Power 
Administration (WAPA), Desert Southwest Region (DSW) has developed a 
Proposed 2028 Parker-Davis Project (P-DP) Power Marketing Plan 
(Proposed 2028 Plan). The Proposed 2028 Plan provides for marketing 
power from P-DP from October 1, 2028, through September 30, 2048. WAPA 
currently markets 259,206 kilowatts (kW) of capacity and associated 
energy from P-DP in the summer and 198,337 kW in the winter, under 
long-term contracts to 35 customers located in Arizona, California, and 
Nevada. On September 30, 2028, WAPA's existing long-term sales 
contracts for P-DP power will expire, and the Proposed 2028 Plan would 
take effect October 1, 2028. WAPA developed the Proposed 2028 Plan to 
define the products and services to be offered, along with Eligibility 
and Allocation Criteria that will lead to allocations of P-DP power to

[[Page 43842]]

contractors. This Federal Register notice initiates the formal public 
process for the Proposed 2028 Plan. As part of the process, WAPA 
requests public comment.

DATES: A consultation and comment period begins today and will end 
August 19, 2024. WAPA will present a detailed explanation of the 
Proposed 2028 Plan during a public information forum that will be held 
June 20, 2024 from 1 p.m. to no later than 4 p.m. Mountain Standard 
Time (MST). WAPA will host a public comment forum that will be held 
July 19, 2024 from 1 p.m. to no later than 4 p.m. MST, or until the 
last comment is received. The public information and public comment 
forums will be conducted as hybrid meetings with both in-person and 
virtual options. Information and instructions for participating in the 
forums will be posted on DSW's website at least 14 days prior to these 
events at: https://www.wapa.gov/about-wapa/regions/dsw/pdpremarketing.
    Oral and written comments may be presented at the public comment 
forum. A transcript of oral comments made at this forum will be 
available from the court reporter or on DSW's website identified above. 
WAPA will accept written comments at any time during the consultation 
and comment period. To ensure consideration, written comments on the 
Proposed 2028 Plan must be received or postmarked by August 19, 2024. 
WAPA reserves the right not to consider any comments received or 
postmarked after the close of the comment period.
    The record, including all documents sent to WAPA by the public for 
the purpose of developing the new marketing plan, will be available on 
DSW's website. Program information and the existing P-DP marketing plan 
documents are also available on the website.
    After all public comments have been considered, WAPA will publish a 
Final 2028 Power Marketing Plan (Final 2028 Plan) in the Federal 
Register.

ADDRESSES: Written comments regarding the Proposed 2028 Plan may be 
submitted to: Jack D. Murray, Regional Manager, Desert Southwest 
Region, Western Area Power Administration, P.O. Box 6457, Phoenix, AZ 
85005-6457, fax (602) 605-4663, or email: [email protected].
    The public information and public comment forums will be held at 
WAPA's DSW office, located at 615 South 43rd Avenue, Phoenix, Arizona 
85009. As access to WAPA facilities is controlled, any U.S. citizen 
wishing to attend a forum in person must present an official form of 
picture identification (ID), such as a U.S. driver's license, U.S. 
passport, U.S. government ID, or U.S. military ID. Foreign nationals 
should contact Cheryl Cruz at (602) 605-2664 or email: 
[email protected], in advance of the forum to obtain the necessary 
form for admittance.

FOR FURTHER INFORMATION CONTACT: Jennifer Henn, Power Markets Advisor, 
Desert Southwest Region, Western Area Power Administration, (602) 605-
2572 or email: [email protected].

SUPPLEMENTARY INFORMATION:

Background

    P-DP, initially authorized by Congress in 1935, is a large power 
and water system of the Lower Colorado River Basin located in Arizona, 
California, and Nevada. In the original 1935 authorization for the 
Parker Dam, Congress defined the purposes of the Project as follows: 
(1) controlling floods; (2) improving navigation; (3) regulating the 
flow of the streams of the United States; (4) providing for storage and 
delivery of water; (5) the reclamation of public lands and Indian 
reservations; (6) other beneficial uses; and (7) for the generation of 
electric energy as a means of financially aiding and assisting such 
undertakings.\1\ The Davis Dam was authorized by the Secretary of 
Interior in 1941 pursuant to his authority under the Reclamation 
Project Act of 1939.\2\ In 1954, Congress consolidated operations of 
the Parker and Davis Dams into a single project, now known as P-DP, for 
the purpose of ``effecting economies'' and increased efficiency in the 
construction, operation, maintenance, and accounting thereof.\3\
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    \1\ 49 Stat. 1028, 1039 (Aug. 30, 1935).
    \2\ See 53 Stat. 1187 (Aug. 4, 1939).
    \3\ 68 Stat. 143 (May 28, 1954).
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    P-DP power facilities include Davis Dam, with its total operating 
capacity of 255,000 kW for P-DP, and Parker Dam, with 60,000 kW of 
operating capacity allotted to P-DP and 60,000 kW allotted to 
Metropolitan Water District of Southern California. Both dams are 
operated and owned by the Bureau of Reclamation (Reclamation). WAPA 
owns and operates approximately 1,500 miles of high voltage 
transmission lines and 45 substations throughout Arizona, California, 
and Nevada to facilitate delivery of P-DP power in those three states.

History of Parker-Davis Project Power Allocations

    WAPA allocates power not reserved for project purposes to 
preference power customers in accordance with its authority under 
Reclamation law \4\ and the Department of Energy Organization Act of 
1977,\5\ which transferred Reclamation's power marketing functions to 
the DOE, acting by and through WAPA.
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    \4\ See, e.g., Reclamation Project Act of 1939, sec. 9(c), 53 
Stat. 1187, 1194 (Aug. 4, 1939), as amended or supplemented (43 
U.S.C. 485h(c)).
    \5\ See 91 Stat. 565, 578, sec. 302 (Aug. 4, 1977) (42 U.S.C. 
7152).
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    On December 28, 1984, following an extensive public process, 
litigation, and congressional action, WAPA published the Conformed 
General Consolidated Power Marketing Criteria or Regulations for 
Boulder City Area Projects (hereinafter referred to as the ``Conformed 
Criteria,'' 49 FR 50582). The Conformed Criteria established general 
marketing principles for the Federal projects within the jurisdiction 
of the then-existing Boulder City Area Office of WAPA, which included 
P-DP, Boulder Canyon Project (Hoover), and Central Arizona Project 
(Navajo) (49 FR 50582, 50584). The Conformed Criteria also set forth 
marketing criteria specific to P-DP once contracts expired on May 31, 
1987, reserved power for existing P-DP contractors upon application and 
made available additional power to new and current contractors in 
excess of that power reserved by existing contractors and reserved for 
priority use (Id. at 49 FR 50584-50587). As part of a separate public 
process and consistent with the Conformed Criteria, WAPA issued final 
allocation criteria and allocations of capacity and energy from P-DP 
for the period beginning June 1, 1987 (52 FR 28333).
    In 2002, WAPA initiated a public process to remarket P-DP power 
when the existing contracts were set to expire on September 30, 2008 
(See 67 FR 51580). On May 5, 2003, WAPA published a decision to: (1) 
apply the Power Marketing Initiative (PMI), 10 CFR 905.30 through 
905.37, to the P-DP remarketing effort; (2) increase the summer and 
winter marketable capacity; (3) increase capacity available to existing 
P-DP contractors as of October 1, 2008; (4) round up allocations of 
less than one mega-watt (MW) to an even one MW in summer and winter, 
and allocations of less than two MW to an even two MW in summer only; 
(5) extend for 20 years 93 percent of existing contractors' adjusted 
allocations; and (6) use the remaining 7 percent of adjusted 
allocations for a resource pool (68 FR 23709). In subsequent, separate 
public processes, WAPA issued decisions on resource pool eligibility 
and allocation criteria and final allocations for the 2008-2028

[[Page 43843]]

marketing period (70 FR 74805; 71 FR 70380). WAPA's decisions for the 
2008-2028 period did not otherwise alter marketing criteria applicable 
to the 1987-2008 marketing period, including the energy allocation 
methodology and minimum scheduling requirements set forth in the 
Conformed Criteria (See 49 FR 50582, 50585, 50587).

Development of the Proposed 2028 Plan

    WAPA developed the Proposed 2028 Plan: (1) to define the products 
and services WAPA will offer, and (2) to determine the criteria for 
marketing and allocating power from October 1, 2028, through September 
30, 2048. In the Proposed 2028 Plan, WAPA proposes to offer a resource 
extension to existing contractors and to offer a portion of the 
resource to new allottees.
    As explained in the DATES section of this notice, WAPA will hold 
public information and public comment forums on the Proposed 2028 Plan. 
After considering all public comments, WAPA will publish a notice of 
the Final 2028 Plan in the Federal Register. As part of that notice, 
WAPA will announce its decisions regarding power resource extensions to 
existing contractors and resource allocations to new allottees. If WAPA 
determines to issue resource allocations to new allottees in the Final 
2028 Plan, it will include in the same Federal Register notice a call 
for applications from preference entities interested in receiving an 
allocation of Federal power from P-DP (Call for Resource Pool 
Applications). The deadline for receipt of applications will be set 
forth in the notice. WAPA then would evaluate the applications, 
determine which applications meet the requirements of the Final 2028 
Plan, and exercise its discretion, provided by law, to allocate power 
to certain eligible applicants. Proposed and final allocations 
subsequently will be published in the Federal Register.
    The Proposed 2028 Plan incorporates the intent of the Energy 
Planning and Management Program (EPAMP) (10 CFR part 905), published by 
WAPA on October 20, 1995 (herein referred to as the ``Final Rule,'' 60 
FR 54151). EPAMP implements Section 114 of the Energy Policy Act of 
1992,\6\ and requires WAPA's customers to prepare Integrated Resource 
Plans. The PMI (10 CFR 905.30 through 905.37) provides a framework for 
extending power allocations to existing contractors and establishing 
project-specific resource pools.\7\
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    \6\ 106 Stat. 2776, 2799 (Oct. 24, 1992) (42 U.S.C. 7275 et 
seq.).
    \7\ In the Final Rule, WAPA stated that application of the PMI, 
including the amount of resource extended, would initially apply 
only to the Pick-Sloan Missouri Basin Program-Eastern Division and 
the Loveland Area Projects. Applicability to other projects would be 
determined through future, project-specific public processes. As 
noted previously, on May 5, 2003, WAPA published a decision to apply 
the Power Marketing Initiative (PMI), 10 CFR 905.30 through 905.37, 
to the P-DP remarketing effort for the 2008-2028 period.
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    The PMI calls for extending a major portion of the resources 
currently under contract to existing long-term firm power customers for 
a period beyond the expiration date of their current contracts (10 CFR 
905.30(a)). The PMI provides, ``[t]he remaining unextended power will 
be used to establish project-specific resource pools'' which will be 
made available to new eligible customers (10 CFR 905.32(a)). In 
addition, the PMI states, ``at two 5-year intervals after the effective 
date of the extension to existing customers, [WAPA] shall create a 
project-specific resource pool increment of up to an additional 1 
percent of the long-term marketable resource under contract at the 
time. The size of the additional resource pool increment shall be 
determined by [WAPA] based on consideration of the actual fair-share 
needs of eligible new customers and other appropriate purposes'' (10 
CFR 905.32(b)). The Final Rule adopting EPAMP noted specific terms and 
conditions associated with allocations out of each resource pool would 
be determined during future, project-specific public processes (60 FR 
54151, 54163). The Final Rule further stated, ``[o]ne of [WAPA]'s goals 
in the PMI is to achieve widespread use of [WAPA]'s resources. 
Reservation of a modest percentage of resources to create a resource 
pool is consistent with a policy of encouraging widespread use of 
Federal hydroelectric power'' (Id.).

Proposed 2028 Plan

    The Proposed 2028 Plan will provide new power marketing criteria 
for P-DP. The Proposed 2028 Plan addresses: (1) the power to be 
marketed after September 30, 2028, which is the termination date for 
all P-DP electric service contracts; (2) the general terms and 
conditions under which the power will be marketed starting on October 
1, 2028, and going through September 30, 2048; and (3) the criteria to 
determine eligibility for allocations from the proposed resource pool.
    Within broad statutory guidelines and operational constraints of P-
DP, WAPA has wide discretion as to whom and under what terms it will 
contract for the sale of Federal power, if preference is accorded to 
statutorily defined entities. WAPA markets power in a manner that will 
encourage the most widespread use at the lowest possible rates 
consistent with sound business principles.

I. Marketable Power Resource

    The primary purpose of P-DP is water control and delivery. The 
water control system consists of storage reservoirs that provide daily, 
seasonal, and annual flow regulation. Power generated from these 
resources depends on hydrology and water operation requirements.
    Some of the power generated by P-DP is reserved for priority use by 
the United States (herein referred to as ``Priority Use Power'' or 
``PUP''). PUP is capacity and energy required for the development and 
operation of Reclamation projects as required by legislation 
(Reclamation project use power), and irrigation pumping on certain 
Indian lands. Reclamation project use power is defined to mean that 
capacity and energy for Reclamation projects in the Lower Colorado 
River Basin. The following is a list of facilities and projects for 
which Reclamation project use power is reserved: relift and drainage 
pumps; construction campsites; the Yuma-Mesa Irrigation and Drainage 
District; Gila Project drainage pumps; Wellton-Mohawk Irrigation and 
Drainage District Plant Nos. 1, 2, and 3; and the Colorado River Front 
Work and Levee System. Power for irrigation pumping on certain Indian 
lands is defined to mean capacity and energy for use in irrigation 
pumping on Indian irrigation projects which are adjacent to the Lower 
Colorado River south of Davis Dam and north of the border between the 
United States and Mexico.
    WAPA proposes that P-DP power in surplus to that reserved for PUP 
shall be reserved for allocation to existing contractors and a resource 
pool shall be offered to potential new contractors, consistent with 
applicable law and the terms and conditions provided herein. Power that 
is reserved as PUP, but not presently needed, also may be marketed to 
contractors as withdrawable power. Withdrawable power is power that can 
be withdrawn for Reclamation project use power and power for irrigation 
pumping on Indian lands, which shall have equal priority. When PUP is 
requested, WAPA will confirm that the power to be withdrawn will be 
used for the above specified purposes, and then will withdraw the 
necessary amount of PUP upon a two-year advance notice. Withdrawals of 
power will be made as requested and confirmed until the total

[[Page 43844]]

amount of power reserved for priority use purposes is in use.

II. Products and Services

    WAPA proposes to market a fixed amount of capacity, referred to as 
Contract Rate of Delivery (CROD), for the summer and winter seasons. As 
described in further detail in Part III, WAPA proposes to have at least 
259,206 kW of marketable capacity in the summer and at least 198,337 kW 
of marketable capacity in the winter, beginning October 1, 2028. The 
summer season for any calendar year is the seven-month period beginning 
the first day of P-DP's March billing period and continuing through the 
last day of its September billing period. The winter season is the 
five-month period beginning the first day of P-DP's October billing 
period and continuing through the last day of its February billing 
period in the next succeeding calendar year.
    Under the existing P-DP marketing plan, energy allocations are a 
fixed seasonal amount for the length of customers' contracts and are 
equal to 3,441 kWh/kW, a 67 percent capacity factor, in the summer 
season, and 1,703 kWh/kW, a 47 percent capacity factor, in the winter 
season (49 FR 50582, 50587; 68 FR 23709, 23709). Due to challenging 
hydrological conditions in the Colorado River Basin, this methodology 
has imposed increasing financial burdens on contractors during the 
current marketing period, as WAPA has been required to purchase 
significant amounts of power to meet contractors' firm energy 
requirements. Accordingly, WAPA proposes to eliminate this methodology 
and instead offer energy amounts for three-month periods (``Quarterly 
Energy'') based on Reclamation's 24-month generation projection studies 
(``24-Month Study''), which are released every month. The Quarterly 
Energy would be published for contractors by no later than the last day 
of August for October through December, the last day of November for 
January through March, the last day of February for April through June, 
and the last day of May for July through September, of each year during 
the marketing period. This would allow for energy deliveries to be more 
aligned with actual generation, thereby decreasing the amount of power 
WAPA would have to purchase and reducing financial burdens on 
contractors. Under the Proposed 2028 Plan, available generation, less 
PUP (which would continue to be fixed on the same terms as under the 
existing marketing plan), would be published for contractors in the 
form of Quarterly Energy based on a pro rata share of their seasonal 
CROD.
    WAPA is also proposing to purchase energy on behalf of contractors 
to supplement projected hydropower generation (``Optional Energy''), if 
requested. Contractors must elect to purchase Optional Energy from WAPA 
no later than the day before prescheduling takes place. The amount of 
Optional Energy requested, combined with the contractor's monthly 
energy entitlement pursuant to its Quarterly Energy, must not exceed 
the contractor's CROD scheduled at a hundred percent capacity factor 
(contractor's CROD multiplied by twenty-four hours multiplied by the 
number of days in the month). An estimated monthly price for Optional 
Energy will be published by WAPA at least quarterly but may be revised 
and re-published as conditions dictate. The actual costs associated 
with Optional Energy purchased by WAPA will be passed through to the 
contractor who elects to receive it.
    There may be instances, after Quarterly Energy has been published, 
that Reclamation makes significant reductions to generation 
projections. For example, sustained periods of precipitation and/or run 
off from water sources other than the Colorado River can result in 
water being stored in Lake Mead for later use, thereby reducing P-DP 
generation. To minimize power purchases resulting from these 
situations, WAPA proposes to revise contractors' monthly energy 
entitlements when significant generation reductions occur after 
Quarterly Energy has been published. A significant reduction in 
generation would occur when dollars associated with projected purchase 
power requirements needed to maintain the Quarterly Energy for a 
particular month exceed dollars associated with that month's portion of 
WAPA's Annual Purchase Power Projection. The Annual Purchase Power 
Projection is an annual estimate of what power WAPA will purchase in 
the upcoming fiscal year, from October 1 through September 30. 
Currently, WAPA's Annual Purchase Power Projection is used as a 
component of the P-DP firm electric service (FES) rate. When such 
significant reductions occur, WAPA would publish contractors' revised 
energy for the month using the reduced generation projections. Revised 
energy would continue to be based on a pro rata share of contractors' 
CROD and would be effective no later than one day prior to 
prescheduling. Contractors could request that WAPA purchase Optional 
Energy on their behalf per the terms described above to obtain energy 
following a revision.
    WAPA also proposes to designate the portion of projected annual 
generation exceeding a kWh calculation of all projected marketable 
capacity (including PUP) multiplied by a 67 percent capacity factor in 
the summer season and 47 percent capacity factor in the winter season 
as ``Excess Energy.'' If the current 24-Month Study generation 
projection for a year exceeds the result of the capacity factor 
calculation described above, energy exceeding that calculation (Excess 
Energy) would be distributed to all contractors and PUP recipients 
based on a pro rata share of their seasonal CROD. Excess Energy will be 
distributed to contractors monthly and included as an addition to each 
contractor's Quarterly Energy. Excess Energy would be subject to the 
same rate and payment requirements as other available P-DP hydropower. 
The 24-Month Study yearly projections could show Excess Energy at the 
beginning of a year, but such Excess Energy may not remain at 
originally projected levels for the full year. Excess Energy 
distributed in part of a year may be subject to adjustment in 
subsequent months if the 24-Month Study yearly generation projection 
drops below the Excess Energy threshold later that year. WAPA would 
establish procedures for designating and adjusting Excess Energy in 
Metering and Scheduling Instructions (MSI), which would be incorporated 
into the electric service contracts, to minimize subsequent energy 
adjustments as much as possible.
    WAPA also is proposing an option that would allow contractors to 
use transmission capacity, reserved for delivery of their P-DP FES 
allocation, for contractor-owned or -purchased resources. Transmission 
capacity used for such energy could not exceed a contractor's CROD.

III. Proposed Resource Extensions and Resource Pool Allocations

    On September 30, 2028, WAPA's long-term sales contracts for P-DP 
power will expire. As part of its Proposed 2028 Plan, WAPA proposes to 
apply the principles of the PMI (10 CFR 905.30 through 905.37) to P-DP 
for the forthcoming marketing period. This includes a proposal to 
extend 98 percent of P-DP contractors' existing CROD, as of September 
30, 2028, for an additional 20 years, from October 1, 2028, through 
September 30, 2048. The existing CROD for PUP contractors will remain 
unchanged. WAPA proposes that a resource pool of two percent of 
available P-DP capacity (CROD) be established for new allottees. Energy 
associated

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with the new resource pool would be based on a pro rata share of the 
allottee's seasonal CROD and published in the form of Quarterly Energy. 
WAPA proposes creation of a single, one-time resource pool of a 
definite size, given the small size of the P-DP resource relative to 
those of other WAPA projects and the substantial costs and effort 
associated with creation of incremental resource pools. Specific terms 
and conditions governing the extensions and resource pool are described 
below.

A. Extension for Existing Contractors

    WAPA proposes to have at least 259,206 kW or marketable capacity in 
the summer and at least 198,337 kW of marketable capacity in the 
winter, beginning October 1, 2028. WAPA expects the addition of 3,750 
kW of capacity resulting from the rewind of Davis Dam Unit 5, 
anticipated to be available in July 2025 or earlier. With the addition 
of 3,750 kW, WAPA would have 262,956 kW of marketable capacity in the 
summer and 202,087 kW of marketable capacity in the winter. The actual 
marketable capacity for the forthcoming marketing period will be 
identified in the Final 2028 Plan. Consistent with 10 CFR 905.32(e)(2), 
WAPA intends to retain the capacity increase associated with the Davis 
Dam rewind effort through the end of the current marketing period to 
enhance operational flexibility.
    WAPA proposes to extend existing contractors' allocations using the 
formula contained in the PMI: ``Customer Contract Rate of Delivery 
(CROD) today/total project CROD under contract today x project-specific 
percentage x marketable resource determined to be available at the time 
future resource extensions begin = CROD extended'' (10 CFR 905.33(a)). 
After adjusting each contractor's CROD by applying the increase in 
marketable capacity and then reducing the adjusted CROD by two percent 
(the amount of the proposed resource pool), the net effect to each 
contractor's current CROD would be a reduction of approximately 0.6 
percent in the summer and 0.2 percent in the winter. Reductions would 
be mitigated if additional capacity gains are achieved prior to October 
1, 2028. The creation of a resource pool would not affect PUP 
customers' CROD.
    In the event any existing contractors forfeit or express an 
intention not to extend some or all of their allocations prior to 
October 1, 2028, such resources will be returned to the other existing 
contractors on a pro rata basis.

B. Resource Pool Allocations

    WAPA proposes to establish a resource pool by reserving a portion 
of the power available during the forthcoming marketing period for 
allocation to new, eligible preference entities, or returned to 
existing contractors if enough new preference customers are not found. 
Allocations for the resource pool would be determined through a 
separate public process.
    The 2028 resource pool would consist of two percent of the power 
resources available beginning October 1, 2028. The two-percent 
reduction to the adjusted allocations of existing contractors 
(described in Part III.A) would create a resource pool of approximately 
5,259 kW of summer capacity and 4,041 kW of winter capacity. The new 
resource pool would include approximately 748 kW of summer withdrawable 
capacity and 146 kW of winter withdrawable capacity.
    When reducing existing allocations to create the resource pool, 
WAPA would first take energy from existing contractors' withdrawable 
allocations up to the total reduction, when available. The remaining 
reductions would come from nonwithdrawable energy.

C. Eligibility Criteria for Resource Pool Allocations

    WAPA proposes to apply the following Eligibility Criteria to all 
applicants seeking a resource pool allocation under the new marketing 
plan.
    1. Qualified applicants must meet the preference requirements under 
Section 9(c) of the Reclamation Project Act of 1939 (43 U.S.C. 485(c)), 
as amended and supplemented.
    2. Qualified applicants will be located within the P-DP marketing 
area that includes: (1) all of the drainage area considered tributary 
to the Colorado River below a point one mile downstream from the mouth 
of the Paria River (Lees Ferry); (2) the State of Arizona, excluding 
that portion lying in the Upper Colorado River Basin; (3) that portion 
of the State of New Mexico lying in the Lower Colorado River Basin and 
the independent Quemada Basin lying north of the San Francisco River 
drainage area; (4) those portions of the State of California lying in 
the Lower Colorado River Basin and in drainage basins of all streams 
draining into the Pacific Ocean south of Calleguas Creek; and (5) those 
parts of the States of California and Nevada in the Lahontan Basin 
including and lying south of the drainages of Mono Lake, Adobe Meadows, 
Owens Lake, Amargosa River, Dry Lakes, and all closed independent 
basins or other areas in southern Arizona not tributary to the Colorado 
River.
    3. Qualified applicants must not have an existing allocation of 
Federal power or be a member of a parent entity that has an allocation 
of Federal power.
    4. Qualified applicants, except Native American tribes, must be 
ready, willing, and able to receive and distribute or use power from 
WAPA. Ready, willing, and able means that the potential allottee has 
the facilities needed for the receipt of power or has made the 
necessary arrangements for transmission and/or distribution service; 
and the potential allottee's power supply contracts with third parties 
permit the delivery of WAPA power.
    5. Qualified applicants that desire to purchase power from WAPA for 
resale to consumers, including cooperatives, public utility districts, 
public power districts and municipalities, must achieve electric 
utility status and have necessary arrangements for transmission and/or 
distribution service in place by January 31, 2028. Native American 
tribes are not subject to this requirement. Electric utility status 
means the applicant has responsibility to meet load growth, has a 
distribution system, and is ready, willing, and able to purchase P-DP 
Federal power from WAPA on a wholesale basis for resale to retail 
customers.
    6. Qualified Native American applicants must be a Native American 
tribe as defined in the Indian Self Determination Act of 1975 (25 
U.S.C. 5301 et seq., as amended or supplemented).
    7. Qualified applicants must apply in response to the Call for 
Resource Pool Applications issued by WAPA in a separate Federal 
Register notice. The notice will include the deadline for receipt of 
those applications.

D. Allocation Criteria for Resource Pool Allocations

    WAPA proposes to apply the following Allocation Criteria to all 
applicants seeking a resource pool allocation under the new marketing 
plan.
    1. Allocations will be made in amounts as determined solely by WAPA 
in exercise of its discretion consistent with its governing authorities 
and considered to be in the best interest of the United States.
    2. Allocations will be based on the applicant's load during the 
calendar year prior to the Call for Resource Pool Applications or the 
amount requested, whichever is less.

[[Page 43846]]

    3. WAPA will base allocations made to Native American tribes on the 
actual load experienced during the calendar year prior to the Call for 
Resource Pool Applications or the amount requested, whichever is less. 
WAPA may use estimated load values if actual load data is not 
available. WAPA will review and adjust, where necessary, inaccurate 
estimates received during the allocation process.
    4. WAPA will consider allocations below 1,000 kW. As part of the 
2008 resource pool, WAPA set forth a 1,000 kW minimum for new 
allocations given operational constraints in scheduling. However, with 
rounding tools now available, WAPA will be able to ensure that CROD is 
not exceeded.
    5. Qualified applicants seeking an allocation as an aggregated 
group must demonstrate to WAPA's satisfaction the existence of a 
contractual aggregation arrangement prior to WAPA's notice of final 
allocations. Members of an aggregated group must individually and 
collectively meet preference status and all other eligibility 
requirements. Qualified applicants aggregating their loads will be 
required to enter into a single firm power contract with WAPA, with the 
aggregated group entity as the contracting Party.
    6. An allottee will have the right to purchase power from WAPA only 
upon execution of an electric service contract between WAPA and the 
allottee, and satisfaction of all conditions in that contract.

IV. General Criteria and Contract Principles

    WAPA proposes to apply the following criteria and contract 
principles to all contracts executed under the new marketing plan:
    A. Electric service contracts shall be executed no later than May 
31, 2028, unless otherwise agreed to in writing by WAPA.
    B. Contracts will include clauses specifying criteria that 
contractors must meet on a continuous basis to be eligible to receive 
electric service from WAPA.
    C. All power supplied by WAPA will be delivered pursuant to MSI, 
which will be part of contractors' electric service contracts.
    D. Contracts shall provide for WAPA to furnish electric service 
effective October 1, 2028, through September 30, 2048.
    E. Contracts shall incorporate WAPA's standard provisions for 
electric service contracts, integrated resource plans, and General 
Power Contract Provisions, as determined by WAPA.
    F. WAPA proposes a new minimum scheduling requirement that aligns 
with Reclamation's generation schedule and how energy is scheduled 
within the Western Interconnection.\8\ WAPA intends for contractors to 
receive the maximum benefit of their resource allocations while 
accommodating the following goals: meeting Reclamation's water 
requirements; reducing purchase power and wheeling costs; and 
minimizing sales of energy in low load hours. WAPA would develop a tool 
that uses Reclamation's 24-Month Study data, the status of generators, 
water volumes and elevation, reduced water releases, hourly pricing and 
projected hourly load, and other relevant information to model and 
produce an optimized monthly capacity and monthly minimum energy 
requirement for each contractor. During the public process and prior to 
the execution of contracts for the 2028-2048 marketing period, WAPA 
would provide examples of methods being considered, seek feedback from 
existing contractors and potential new allottees, and select which 
option provides the greatest flexibility and achieves the goals 
identified in this notice. Minimum scheduling requirements will be 
included in the MSI.
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    \8\ This proposal would eliminate the current P-DP marketing 
plan criterion that all power contractors be required to schedule a 
minimum rate of delivery during off peak load hours (See 49 FR 
50852, 50585). The Conformed Criteria and existing contracts 
specifically provide that the number of kilowatt hours to be taken 
during off peak load hours at the minimum rate of delivery will not 
exceed 25% of the contractor's monthly energy entitlement (Id.). 
Scheduling trends no longer follow the traditional on/off peak 
hours, due to changes in load demand. Furthermore, the availability 
and integration of renewable energy resources, such as wind and 
solar during certain hours of the day, are also now competing with 
hydropower generation.
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    G. WAPA may, as it deems reasonable and necessary, enter into other 
agreements such as: transmission service agreements, interchange 
agreements, reserve agreements, load regulation agreements, exchange 
agreements, maintenance and emergency service agreements, power pooling 
agreements, or other transactions.
    H. P-DP will remain operationally integrated with the Boulder 
Canyon Project, subject to applicable operational restraints of the 
Bureau of Reclamation, applicable laws, and the other requirements of 
the marketing plan.
    I. WAPA, at its discretion and sole determination, reserves the 
right to adjust the CROD on five years' written notice in response to 
changes in hydrology and river operations. Such adjustments will take 
place only after WAPA conducts a public process.
    J. Renewable energy certificates associated with P-DP power will be 
made available to contractors and may be sold or transferred to third 
parties, provided such sale or transfer is consistent with WAPA policy 
and documented in electric service contracts.
    K. Each entity is ultimately responsible for obtaining its own 
delivery or other arrangements to its load. Transmission service over 
the P-DP system will be provided in accordance with Part V of this 
Proposed 2028 Plan.
    L. WAPA may develop rate schedules for services provided under the 
Proposed 2028 Plan. Such rates will be developed through a separate 
public process.
    M. Contractors must pay all applicable rates and charges in the 
manner and within the time prescribed in the contract.
    N. P-DP will remain financially segregated for the purposes of 
accounting and project repayment. Beginning June 1, 2005, and until the 
end of the repayment period for the Central Arizona Project, P-DP 
provides for surplus revenues by including the equivalent of 4 \1/2\ 
mills per kWh in the rates charged to contractors in Arizona and by 
including the equivalent of 2 \1/2\ mills per kWh in the rates charged 
to contractors in California and Nevada. After the repayment period for 
the Central Arizona Project, the equivalent of 2 \1/2\ mills per kWh 
shall be included in the rate charged to all contractors in Arizona, 
Nevada, and California.
    O. Consistent with the current P-DP Advancement of Funds contract, 
new allottees would be required to reimburse existing contractors for 
undepreciated replacement advances, to the extent existing contractors' 
allocations are reduced as a result of creating the resource pool. New 
allottees who receive an allocation would be required to prepay for 
service according to the applicable rate schedule and may participate 
in advance funding of WAPA's and Reclamation's operation and 
maintenance expenses, consistent with the existing Advancement of Funds 
contract, or an updated version of the contract that addresses the 
status of P-DP, as appropriate.
    P. Deficits for costs incurred during a previous marketing period 
would not be passed through to new allottees.

V. Transmission Service

    P-DP power will be delivered to designated points of delivery on 
WAPA's P-DP transmission system. Contractors must secure all necessary 
transmission service to deliver Federal

[[Page 43847]]

power beyond WAPA's P-DP transmission system. WAPA may assist new 
contractors in obtaining third-party transmission arrangements for 
delivery of firm power allocated during the forthcoming marketing 
period. WAPA will determine the use of its transmission resources 
concurrently with further development of the products and services 
under this Proposed 2028 Plan. A list of designated delivery points 
will be provided with the Call for Resource Pool Applications. WAPA 
will market surplus transmission capacity on P-DP under WAPA's Open 
Access Transmission Tariff and other applicable arrangements.

Legal Authorities

    WAPA developed this Proposed 2028 Plan in accordance with its power 
marketing authorities pursuant to the Department of Energy Organization 
Act (42 U.S.C. 7101, et seq.); the Reclamation Act of June 17, 1902 (32 
Stat. 388), as amended and supplemented by subsequent enactments, 
particularly section 9(c) of the Reclamation Project Act of 1939 (43 
U.S.C. 485(c)); and other acts specifically applicable to P-DP.

Procedural Requirements

Review Under the Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1980 (44 U.S.C. 
3501, et seq.), WAPA has received approval from the Office of 
Management and Budget for the collection of customer information under 
control number 1910-5136.

Environmental Compliance

    WAPA has determined this action fits within the following 
categorical exclusions listed in appendix B to subpart D of 10 CFR part 
1021: B4.1 (Contracts, policies, and marketing and allocation plans for 
electric power) and B4.4 (Power marketing services and activities). 
Categorically excluded projects and activities do not require 
preparation of either an environmental impact statement or an 
environmental assessment.\9\A copy of the categorical exclusion 
determination is available on WAPA's website under the 2024 accordion 
menu at www.wapa.gov/about-wapa/regions/dsw/environment.
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    \9\ The determination was done in compliance with NEPA (42 
U.S.C. 4321-4347); the Council on Environmental Quality Regulations 
for implementing NEPA (40 CFR parts 1500-1508); and DOE NEPA 
Implementing Procedures and Guidelines (10 CFR part 1021).
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Determination Under Executive Order 12866

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

Signing Authority

    This document of the Department of Energy was signed on May 13, 
2024, by Tracey A. LeBeau, Administrator, Western Area Power 
Administration. For administrative purposes only, and in compliance 
with requirements of the Office of the Federal Register, the 
undersigned DOE Federal Register Liaison Officer has been authorized to 
sign and submit the document in electronic format for publication, as 
an official document of the Department of Energy. This administrative 
process in no way alters the legal effect of this document upon 
publication in the Federal Register.

    Signed in Washington, DC, on May 15, 2024.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2024-10997 Filed 5-17-24; 8:45 am]
BILLING CODE 6450-01-P