81 FR 27433 - Proposed 2025 Power Marketing Plan

DEPARTMENT OF ENERGY
Western Area Power Administration

Federal Register Volume 81, Issue 88 (May 6, 2016)

The Department of Energy (DOE), Western Area Power Administration (Western), Sierra Nevada Region (SNR) has developed a Proposed 2025 Power Marketing Plan (Proposed Plan). The Proposed Plan provides for marketing power from the Central Valley Project (CVP) and the Washoe Project from January 1, 2025, through December 31, 2054. Western currently markets about 1,580 megawatts (MW) of power from the CVP and 3.65 MW from the Washoe Project under long-term contracts to approximately 80 preference customers in northern and central California and Nevada. On December 31, 2024, all of Western's long-term power sales contracts will expire. Western developed the Proposed Plan to define the products and services to be offered, and the Eligibility and Allocation Criteria that will lead to allocations of SNR's power starting on January 1, 2025, and going through December 31, 2054. This Federal Register notice initiates the formal public process for the Proposed Plan. As part of the process, Western requests public comment.

[Federal Register Volume 81, Number 88 (Friday, May 6, 2016)]
[Notices]
[Pages 27433-27439]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-10620]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Proposed 2025 Power Marketing Plan

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of proposed plan.

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SUMMARY: The Department of Energy (DOE), Western Area Power 
Administration (Western), Sierra Nevada Region (SNR) has developed a 
Proposed 2025 Power Marketing Plan (Proposed Plan). The Proposed Plan 
provides for marketing power from the Central Valley Project (CVP) and 
the Washoe Project from January 1, 2025, through December 31, 2054. 
Western currently markets about 1,580 megawatts (MW) of power from the 
CVP and 3.65 MW from the Washoe Project under long-term contracts to 
approximately 80 preference customers in northern and central 
California and Nevada. On December 31, 2024, all of Western's long-term 
power sales contracts will expire. Western developed the Proposed Plan 
to define the products and services to be offered, and the Eligibility 
and Allocation Criteria that will lead to allocations of SNR's power 
starting on January 1, 2025, and going through December 31, 2054. This 
Federal Register notice initiates the formal public process for the 
Proposed Plan. As part of the process, Western requests public comment.

DATES: On June 1, 2016, beginning at 1 p.m., PT, Western will hold a 
public information forum to present the Proposed Plan and respond to 
questions from the public. On July 12, 2016, beginning at 1 p.m., PT, 
Western will hold a public comment forum to receive oral and written 
comments on the Proposed Plan. To assure consideration, written 
comments on the Proposed Plan must be received or postmarked by 5 p.m. 
August 4, 2016.

ADDRESSES: Each forum will be held at the Lake Natoma Inn, 702 Gold 
Lake Drive, Folsom, CA, 95630. 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 
Western's Web site https://www.wapa.gov/regions/SN/PowerMarketing/Pages/2025-Program.aspx. Send written comments to Ms. Sonja Anderson, 
Vice President of Power Marketing, Sierra Nevada Customer Service 
Region, Western Area Power Administration, 114 Parkshore Drive, Folsom, 
CA 95630, email to [email protected]. Western reserves the right to 
not consider any comments that are received after the close of the 
comment period. The record, including all documents sent to Western by 
the public for the purpose of developing the Proposed Plan, will be 
available on Western's Web site at https://www.wapa.gov/regions/SN/PowerMarketing/Pages/2025-Program.aspx. After all public comments have 
been considered, Western will publish a Final 2025 Power Marketing Plan 
(Final Plan) in the Federal Register.

FOR FURTHER INFORMATION CONTACT: Ms. Sonja Anderson, Vice President of 
Power Marketing, Sierra Nevada Customer Service Region, Western Area 
Power Administration, 114 Parkshore Drive, Folsom, CA 95630, by email 
at [email protected], or by telephone (916) 353-4421.

SUPPLEMENTARY INFORMATION: 

Background

    The CVP is a large water and power system, initially authorized by 
Congress in 1935, which spans approximately one-third of the State of 
California. Congress defined the purposes of the CVP as: (1) River 
regulation; (2) improvement of navigation; (3) flood control; (4) 
irrigation; (5) domestic uses; and (6) power. The CVP Improvement Act 
of 1992 added fish and wildlife habitat to the list of CVP purposes.
    CVP power facilities include 11 powerplants with a maximum 
operating capability of about 2,113 MW and an estimated average annual 
generation of 4.6 million megawatthours (MWh). The U.S. Department of 
the Interior, Bureau of Reclamation (Reclamation) operates the water 
control and delivery system and all of the powerplants with the 
exception of the San Luis Unit, the operation of which Reclamation 
contracted to the State of California Department of Water Resources. 
Western markets and transmits the power available from the CVP. Western 
owns the 94 circuit-mile Malin-Round Mountain 500-kilovolt (kV) 
transmission line (an integral part of the Pacific AC Intertie (PACI)), 
the 84 circuit-mile Los Banos-Gates No. 3 500-kV transmission line, 803 
circuit miles of 230-kV transmission line, 7 circuit miles of 115-kV 
transmission line, and approximately 63 circuit miles of 69-kV and 
below transmission line. Western also has part ownership in the 342-
mile California-Oregon Transmission Project (COTP) 500-kV transmission 
line. Many of Western's existing customers have no direct access to 
Western's transmission lines and receive service over

[[Page 27434]]

transmission lines owned by other utilities.
    Congress authorized the Washoe Project in 1956. The Washoe Project 
is located in west-central Nevada and east-central California and was 
designed to regulate runoff from the Truckee and Carson Rivers and to 
enhance irrigation; water drainage; municipal, industrial, and 
fisheries uses; provide flood protection; fish and wildlife habitat; 
and recreation. The Washoe Project includes Prosser Creek Dam and 
reservoir; Stampede Dam, reservoir, and powerplant; Marble Creek Dam; 
and Pyramid Lake Fishway. The Stampede Powerplant, located in Sierra 
County, California, was completed in 1987 and has a maximum operating 
capability of 3.65 MW with an estimated annual generation of 10,000 
MWh. Sierra Pacific Power Company (SPPC) owns and operates the only 
transmission system available for access to Stampede Powerplant.

History of Central Valley Project Power Allocations

    The United States began generating power in the CVP from the Shasta 
Powerplant in 1944. Formal allocations of 450 MW of CVP power were 
first made in 1952. In 1964, with the addition of the Trinity River 
Division facilities, Reclamation increased allocations to preference 
customers to 925 MW. In 1967, under terms of Contract 14-06-200-2948A 
(Contract 2948A) with the Pacific Gas and Electric Company, power 
imports over the PACI (Northwest imports) were incorporated along with 
provisions for load level increases up to 985 MW in 1975 and up to 
1,050 MW in 1980.
    Later in 1980, the load level under Contract 2948A was increased by 
102 MW to 1,152 MW and Western increased allocations under the 1981 
Power Marketing Plan (47 FR 4139). New customers received 26 MW of 
nonwithdrawable power and 42 MW of withdrawable power \1\ for a total 
of 68 MW, with 4 MW of withdrawable power left unallocated. Also, 
diversity power \2\ allocations of 30 MW were made to those customers 
who could shed load during SNR's system simultaneous peak.
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    \1\ The Westlands Water District had a very large allocation 
that it was unable to use at the time, but wished to retain the 
right to the power for future load growth. Western determined it 
could allocate the unused Westlands' allocation as a withdrawable 
power product. Withdrawable power allocations were withdrawable on a 
3-month notice. Westlands withdrawable power allocations were in 
effect through 2004.
    \2\ Diversity power allocations were made to entities that had 
the ability to shed load during times of Western's total system 
simultaneous peak in order for Western to remain under its 
contractual system constraint of 1,152 MW.
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    Under the 1994 Power Marketing Plan (57 FR 45782 and 58 FR 34579), 
existing customers with contracts expiring in 1994 were allocated 501 
MW, and approximately 8 MW was allocated to new customers. With these 
allocations, a total of approximately 1,580 MW were under contract 
through 2004.
    On November 30, 1993, the National Defense Authorization Act for 
Fiscal Year 1993 (Pub. L. 102-484; 1993 NDAA) was signed into law. 
Section 2929 of the 1993 NDAA provides that, for a 10-year period, the 
CVP electric power allocations to military installations in the State 
of California which have been closed or approved for closure shall be 
reserved for sale through long-term contracts to preference entities 
which agree to use such power to promote economic development at the 
military installations closed or approved for closure. On December 1, 
1994, Western published the final procedures developed to fulfill the 
requirements of section 2929 of the 1993 NDAA (59 FR 61604). About 41 
MW of long-term firm power and about 8 MW of withdrawable power under 
contract to closing military installations were converted to NDAA power 
allocations.
    Under the 2004 Power Marketing Plan, Western changed the way in 
which it marketed its power resources. Rather than allocating a firm 
contract rate of delivery to each customer, Western allocated a 
percentage of the available power to each customer. Western converted 
existing customers' MW allocations to percentages and then reduced 
those percentages by 4 percent to create a 2005 resource pool. All 
customers' (including 2005 allottees) percentages were reduced again to 
create a 2 percent resource pool in 2015.

History of Washoe Project (Stampede Powerplant) Allocations

    Pursuant to the Final Allocation of Stampede Powerplant Power (50 
FR 43456), Western allocated all the energy generated at Stampede 
Powerplant in excess of that needed to serve project use (Lahontan Fish 
Hatchery and Marble Bluff Fish Facility) to Truckee Donner Public 
Utility District (Truckee Donner). Because Truckee Donner was unable to 
obtain transmission service, it was unable to enter into a contract 
with Western to receive Stampede energy. In 1988, Western rescinded the 
allocation of Stampede energy to Truckee Donner and marketed Stampede 
energy to SPPC under short-term agreements.
    In 1990, Western began conducting a marketing process for the sale 
of Stampede energy, giving priority to preference entities. Since no 
preference entity met the marketing criteria, SPPC continued to 
purchase Stampede energy under short-term agreements.
    In April 1994, Western executed agreements with SPPC and the U.S. 
Department of the Interior, Fish and Wildlife Service (FWS) that 
established a mechanism to provide project use service to the FWS 
facilities. These agreements also provided Western the option to market 
and transmit all energy, in excess of that which is required to provide 
project use service, outside of SPPC's control area.
    Under the 2004 Power Marketing Plan, the Washoe Project was 
financially integrated with the CVP to ensure cost recovery of the 
Washoe Project.
    After electric industry restructuring and open transmission access, 
Truckee Donner was finally able to obtain transmission service from 
SPPC and, in May 2007, Western terminated its agreement with SPPC and 
executed an agreement with Truckee Donner and the City of Fallon 
(Fallon) for the Stampede generation. Under this agreement, Truckee 
Donner and Fallon provide power to the FWS facilities. Revenues from 
this agreement flow back to the SNR's power revenue requirement. This 
agreement terminates December 31, 2024.

Development of the Proposed Plan

    Western is developing the Proposed Plan: (1) To define the products 
and services Western will offer, and (2) to determine the criteria for 
marketing and allocating power starting on January1, 2025, and going 
through December 31, 2054.
    In the Proposed Plan, Western is proposing to offer a resource 
extension to existing customers and to offer a portion of the resource 
to new customers. The Proposed Plan provides a balance between existing 
and new customers.
    As explained in the DATES section of this notice, Western will hold 
public information and comment forums on the Proposed Plan. After 
considering all public comments, Western will publish a notice of the 
Final Plan in the Federal Register. With that notice, Western also will 
announce its decisions regarding power resource extensions to existing 
customers and new allocations. After completing the Final Plan, Western 
will publish a call for applications. The deadline for receipt of 
applications will be set forth in the call for applications. Western 
will then evaluate the applications, determine which applications meet 
the requirements of the Final Plan, and exercise its

[[Page 27435]]

discretion, provided by law, to allocate power to certain eligible 
applicants. Proposed and final allocations will subsequently be 
published in the Federal Register.
    Western developed the schedule for the Proposed Plan recognizing 
the importance of: (1) Necessary planning time (approximately 5 years 
after final contract commitments) for customers to acquire new power 
resources should their allocation of power change; (2) sufficient time 
for SNR or its customers to negotiate contracts for balancing area 
services, third-party transmission, and supplemental power supplies; 
and (3) time to meet with each customer to design a product/service 
package prior to the customer making a final commitment.
    The Proposed Plan also incorporates the intent of Energy Planning 
and Management Program (EPAMP) (10 CFR part 905), published by Western 
on October 20, 1995 (60 FR 54151). EPAMP implements Section 114 of the 
Energy Policy Act of 1992, and requires Western's customers to prepare 
Integrated Resource Plans. The Power Marketing Initiative (PMI) of 
EPAMP provides a framework for extending a major portion of the power 
available at the time current contracts expire to existing customers, 
and for establishing project-specific resource pools.

Proposed 2025 Power Marketing Plan

    The Proposed Plan addresses: (1) The power to be marketed after 
December 31, 2024, which is the termination date for all SNR electric 
service contracts; (2) the general terms and conditions under which the 
power will be marketed starting on January 1, 2025, and going through 
December 31, 2054; and (3) the criteria to determine who will be 
eligible to receive allocations from the resource pools.
    Within broad statutory guidelines and operational constraints of 
the CVP and the Washoe Project, Western has wide discretion as to whom 
and under what terms it will contract for the sale of Federal power, as 
long as preference is accorded to statutorily defined public bodies. 
Western markets power in a manner that will encourage the most 
widespread use at the lowest possible rates consistent with sound 
business principles.

I. Acronyms and Definitions

    As used herein, the following acronyms and terms, whether singular 
or plural, capitalized or not capitalized, shall have the following 
meanings:

Allocation An offer from Western to sell Federal power for a certain 
period of time, which will convert to a right to purchase after 
execution of a contract.
Allocation Criteria Criteria used to determine the amount of energy 
allocated to allottees.
Allottee A preference entity receiving an allocation percentage.
Ancillary Services Those services necessary to support the transfer 
of electricity while maintaining reliable operation of the 
transmission provider's transmission system in accordance with good 
utility practice. Ancillary services are generally defined by the 
North American Electric Reliability Corporation.
Base Resource CVP and Washoe Project power output determined by 
Western to be available for marketing, including the environmental 
attributes, after meeting the requirements of project use and first 
preference customers, and any adjustments for maintenance, reserves, 
system losses, and certain ancillary services.
Bill Crediting Contractual provisions whereby payments due to 
Western by a customer shall be paid by a customer to a third party 
when so directed by Western.
Capacity The electrical capability of a generator, transformer, 
transmission circuit or other equipment.
Central Valley Project (CVP) A multipurpose Federal water 
development project extending from the Cascade Range in northern 
California to the plains along the Kern River, south of the City of 
Bakersfield.
Chief Executive Officer and Administrator The Administrator and 
Chief Executive Officer of Western Area Power Administration.
Contract Principles Provisions of the electric service contracts, 
including Western's General Power Contract Provisions.
Custom Product A combination of products and services, excluding 
provisions for load growth, which may be made available by Western 
per customer request, using the customer's Base resource and 
supplemental purchases made by Western.
Customer An entity with a contract and receiving electric service 
from Western's Sierra Nevada Region.
Eligibility Criteria Conditions that must be met to qualify for an 
allocation.
Energy Measured in terms of the work it is capable of doing over a 
period of time; electric energy is usually measured in kilowatthours 
or megawatthours.
Final Plan Western's Final 2025 Marketing Plan for the Sierra Nevada 
Region.
Firm A type of product and/or service that is available to a 
customer at the times it is required.
First Preference Customer/Entity A preference customer and/or a 
preference entity (an entity qualified to use, but not using, 
preference power) within a county of origin (Trinity, Calaveras, and 
Tuolumne) as specified under the Trinity River Division Act (69 
Stat. 719) and the New Melones project provisions of the Flood 
Control Act of 1962 (76 Stat. 1173, 1191-1192).
General Power Contract Provisions (GPCP) Standard terms and 
conditions that are included in Western's electric service 
contracts.
Integrated Resource Plan (IRP) A process and framework within which 
the costs and benefits of both demand and supply-side resources are 
evaluated to develop the least total cost mix of utility resource 
options.
Kilowatt (kW) A unit measuring the rate of production of 
electricity; one kilowatt equals one thousand watts.
Long-Term A designation for a contractual period of time greater 
than 5 years.
Megawatt (MW) A unit measuring the rate of production of 
electricity; one megawatt equals one million watts.
Net Billing Payments due to Western by a customer may be offset 
against payments due to that customer by Western.
Power Capacity and energy.
Power Marketing Initiative (PMI) A component of Western's EPAMP 
providing criteria regarding certain Western power marketing 
programs.
Preference The requirements of Reclamation Law that provide that 
preference in the sale of Federal power be given to certain 
entities, such as governments (state, Federal and Native American), 
municipalities and other public corporations or agencies, and 
cooperatives and other nonprofit organizations financed in whole or 
in part by loans made pursuant to the Rural Electrification Act of 
1936 (See, e.g., Reclamation Project Act of 1939, Section 9(c), 43 
U.S.C. 485h(c)).
Primary Marketing Area The area which generally encompasses northern 
and central California extending from the Cascade Range to the 
Tehachapi Mountains and west-central Nevada.
Project Use Power as defined by Reclamation Law and/or used to 
operate CVP and Washoe Project facilities.
Proposed Plan Western's Proposed 2025 Power Marketing Plan.
Reclamation Law Refers to a series of Federal laws with a lineage 
dating back to the late 1800s. Viewed as a whole, those laws create 
the framework under which Western markets power.
Reimbursable Financing Western may purchase power or provide other 
services using reimbursable authority pursuant to the Economy Act, 
31 U.S.C. 1535. This is a funding mechanism used by Federal 
customers.
Sierra Nevada Region The Sierra Nevada Customer Service Region of 
the Western Area Power Administration.
Unbundled Electric service that is separated into its components and 
offered for sale with separate rates for each component.
Washoe Project A Federal water project located in the Lahontan Basin 
in west-central Nevada and east-central California.
Western Western Area Power Administration, United States Department 
of Energy, a Federal power marketing administration responsible for 
marketing and transmitting of Federal power pursuant to Reclamation 
Law and the DOE Organization Act (42 U.S.C. 7101, et seq.).

II. Marketable Power Resource

    The primary purpose of the CVP and Washoe Project is water control 
and

[[Page 27436]]

delivery. The water control system consists of storage reservoirs that 
provide daily, seasonal, and annual flow regulation, and smaller 
regulating reservoirs for diverting water and smoothing upstream dam 
and powerplant releases. Power generated from these resources depends 
on hydrology and water operation requirements. Some of the power 
generated is used for project use to operate pumping and fishery 
facilities. Currently, project use power is metered at 189 locations in 
northern and central California and Nevada.
    Expected CVP generation (energy and capacity) for 2025 and beyond 
will vary annually, monthly, and daily based on hydrology and other 
constraints that govern CVP operations. CVP generation is available at 
the generator bus and must be adjusted for project use, maintenance, 
reserves, system losses, and certain ancillary services before the Base 
Resource is available for marketing. The power resources will be 
further adjusted for transmission losses to the point of delivery. The 
power resources also will be adjusted for first preference customers as 
described in this Proposed Plan.
    The following table lists estimates of CVP power resources and 
adjustments. This table is for informational purposes only and does not 
imply the power resources and adjustments shown will be the actual 
amounts available or adjustments applied.

              Estimated CVP Power Resources and Adjustments
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        Power resources/Adjustment                   Range/Value
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Annual energy generation..................  2,400,000-8,600,000 MWh.
Monthly energy generation.................  100,000-1,100,000 MWh.
Monthly capacity..........................  1,100-1,900 MW.
Annual project use........................  670,000-1,670,000 MWh.
Monthly project use.......................  10,000-180,000 MWh.
Monthly project use (on peak).............  30-230 MW.
Monthly maintenance.......................  0-300 MW.
Reserves--hydro...........................  minimum 5% of monthly
                                             capacity.
CVP transmission and transformation losses  1.6%.
 from the generator bus to a 230-kV load
 bus.
------------------------------------------------------------------------

    All of the power resource adjustments and variables mentioned above 
will influence the amount of Base Resource available to customers. 
During some critically dry months, purchases may be required to meet 
project use and only a minimal amount of Base Resource will be 
available during such months. The usability of the Base Resource for 
meeting customers' loads will be directly related to a customer's 
ability to integrate this power resource into their power resource mix.
    Energy from the Washoe Project is estimated to be about 10,000 MWh 
annually. Currently, approximately half of the energy is being provided 
to F&WS Lahontan National Fish Hatchery and Marble Bluff Fish Facility. 
These F&WS facilities are project use loads of the Washoe Project and 
have first call on the power resources from the Washoe Project. All 
costs associated with providing F&WS project use service are, by law, 
non-reimbursable, and are not included in the Washoe Project energy 
rates.
    Western will continue to make every effort to provide the Washoe 
Project power resource to F&WS. F&WS is currently using approximately 
50 percent of Washoe Project generation, and the same percentage of 
costs is considered non-reimbursable. Western expects that F&WS loads 
will increase, reducing the cost to be repaid from power revenues.

III. Products and Services

    Western proposes to market its Base Resource alone or in 
combination with a Custom Product, which could include purchasing some 
level of firming power on behalf of all customers, a group of 
customers, or individual customers. All costs incurred by Western in 
providing additional services to customers will be paid by those 
customers using the services. The degree to which Western continues to 
purchase power will depend on customer requests and Federal 
authorities. After the effective date of the Marketing Plan, Western 
will determine, in a collaborative process with the customers, the best 
use of Western's power and transmission resources to provide the Base 
Resource and Custom Products.
    Each allottee will be allocated a percentage of the Base Resource. 
Following the offer of a contract pursuant to the Final Plan, Western 
will work with each individual allottee to determine the best use of 
the Base Resource for that allottee. All allottees will be required to 
commit to the Base Resource within 6 months of a contract offer. Upon 
request, Western may develop a Custom Product for any customer. A 
Custom Product may include any products or services mutually negotiated 
between Western and a customer. This may include firming and/or 
renewable power purchases, ancillary services, reserves, portfolio 
management services, scheduling coordinator services, etc. Commitments 
to purchase a Custom Product must be made by January 1, 2023, for a 
period of no less than 5 years of service, beginning January 1, 2025. 
Thereafter, the Custom Product will be offered for periods as agreed to 
by Western. Western may, at its discretion, extend the commitment dates 
for the Base Resource and Custom Product.
    Western proposes to manage an exchange program to allow all 
customers to fully and efficiently use their power allocations. Any 
power allocated by Western to a customer that cannot be used on a real-
time basis due to that customer's load profile will be offered under 
this program to other customers.
    Any unused resources may be marketed for periods of time as 
determined by Western, and may be marketed outside the primary 
marketing area. Such sales may be to any entity (preference or non-
preference), under any terms, conditions, rates or charges, determined 
solely by Western.

IV. Proposed Resource Extensions and Resource Pool Allocations

    On December 31, 2024, all of the Sierra Nevada Region's long-term 
power sales contracts will expire. This Proposed Plan addresses how 
Western will market CVP and Washoe Project power after these contracts 
expire. Western proposes to apply the principles of the PMI of EPAMP to 
allocate power starting on January 1, 2025. Using the PMI as a 
framework, Western proposes to set aside a portion of its available 
power resource for new allocations. Based on Western's evaluation of 
potential new loads, Western proposes to initially provide 98 percent 
of its available power resource

[[Page 27437]]

to existing customers and to establish a resource pool for new 
allocations, as described below. Starting on January 1, 2040, Western 
will reduce the then-existing customers' allocations by 1 percent to 
develop the 2040 resource pool.
A. Extension for Existing Customers
    1. Starting January 1, 2025, Western proposes that existing 
customers will have a right to purchase 98 percent of their current 
Base Resource percentage amount; except as provided below:
    2. In the event that an existing customer(s) forfeits some or all 
of its allocation prior to 2025, that percentage, up to 2 percent of 
the total Base Resource, will be returned to the existing customers on 
a pro rata basis.
    3. In January 2024, Western will compare all existing customers' 
allocations to their loads. Western will use the average Base Resource 
MWh annual generation and the customers' previous 5 years energy 
consumption to compare allocations to loads. No customer should have an 
allocation greater than its load. If, after the comparison, Western 
believes a customer(s) has an allocation greater than its load, Western 
will consult with the customer(s) to determine if the allocation is, in 
fact, larger than its load. If SNR determines the allocation is too 
large, SNR will reduce that customer(s) allocation to 98 percent of its 
load.
    4. Starting on January 1, 2040, Western is proposing to reduce all 
customers, including 2025 Resource Pool customers, by an additional 1 
percent to create the 2040 Resource Pool.
B. Resource Pool Allocations
    1. Western proposes to establish a resource pool by reserving a 
portion of the power available after 2024 for allocation to eligible 
preference entities and existing customers. A second resource pool is 
proposed starting on January 1, 2040. The second resource pool will 
consist of 1 percent of the power resource available after 2039. 
Allocations for the resource pools will be determined through a 
separate public process at a later date.

2. Proposed Resource Pool Amount

    The 2025 Resource Pool will initially consist of 2 percent of the 
power resources available after 2024. Should any Base Resource become 
available because of Sections IV.A.2 and IV.A.3 above, Western will, 
using its discretion, allocate the additional Base Resource at that 
time. Western will, at its discretion, allocate a percentage of the 
2025 Resource Pool to applicants that meet the Eligibility and 
Allocation Criteria. Allocations from the 2040 Resource Pool will be 
determined through a separate public process conducted prior to 2040.

3. Eligibility Criteria

    Western proposes to apply the following Eligibility Criteria to all 
applicants seeking a resource pool allocation under the Marketing Plan.
    a. 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.
    b. Applicants should be located within SNR's primary marketing area 
(map of marketing area available upon request). If SNR's power 
resources are not fully subscribed, Western may market its resource 
outside the primary marketing area.
    c. Applicants that require power for their own use must be ready, 
willing, and able to receive and use Federal power.
    d. Applicants that provide retail electric service must be ready, 
willing, and able to receive and use the Federal power to provide 
electric service to their customers, not for resale to others.
    e. Applicants must submit an application in response to the Call 
for Resource Pool Applications issued by Western in a separate Federal 
Register notice. The notice will include the deadline for receipt of 
those applications.
    f. Native American applicants must be a Native American tribe as 
defined in the Indian Self Determination Act of 1975 (25 U.S.C. 450b, 
as amended).
    g. Western generally will not allocate power to applicants with 
loads of less than 1 MW; however, allocations to applicants with loads 
which are at least 500 kilowatts may be considered, provided the loads 
can be aggregated with other allottees' loads to schedule and deliver 
to a minimum load of 1 MW.

4. Allocation Criteria

    Western proposes to apply the following Allocation Criteria to all 
applicants receiving a resource pool allocation under the Marketing 
Plan.
    a. Allocations will be made in amounts as determined solely by 
Western in exercise of its discretion under Reclamation Law and 
considered to be in the best interest of the U.S. Government.
    b. Allocations will be based on the applicant's load during the 
calendar year prior to the Call for Applications or the amount 
requested, whichever is less.
    c. An allottee will have the right to purchase power from Western 
only upon the execution of an electric service contract between Western 
and the allottee, and satisfaction of all conditions in that contract.
    d. All customers, including those receiving an allocation from the 
2025 Resource Pool, will be subject to the 2040 Resource Pool 
adjustment.
    e. Eligible Native American entities will receive greater 
consideration for an allocation of up to 65 percent of their total 
energy load in the calendar year prior to the Call for Applications.

V. General Criteria and Contract Principles

    Western proposes to apply the following criteria and contract 
principles to all contracts executed under the Marketing Plan, except 
that certain criteria may not apply to contracts for first preference 
customers (see section VI for a definition of those customers):
    A. Electric service contracts shall be executed within 6 months of 
a contract offer, unless otherwise agreed to in writing by Western.
    B. Allocation percentages shall be subject to adjustment.
    C. All power supplied by Western will be delivered pursuant to a 
scheduling arrangement.
    D. Customers will be required to pay for their percentage of the 
Base Resource, regardless of whether they can actually use the power.
    E. Customers must pay for all charges associated with the products 
and services provided, including charges associated with ancillary 
services, Custom Products, and transmission. Those charges will be 
passed on to the customer(s) contracting for the product or service.
    F. Western may develop rate schedules for services provided under 
the Proposed Plan. Such rates will be developed through a separate 
process.
    G. Customers must pay all applicable rates and charges in the 
manner and within the time prescribed in the contract.
    H. A written commitment to the Custom Product will be required on 
or before January 1, 2023. Western may extend the final commitment 
dates for the Custom Product.
    I. Contracts will include clauses specifying criteria that 
customers must meet on a continuous basis to be eligible to receive 
electric service from Western.
    J. Upon request, Western shall provide, or assist each new and 
existing customer in obtaining transmission arrangements for delivery 
of power marketed under the Marketing Plan; nonetheless, each entity is 
ultimately responsible for obtaining its own

[[Page 27438]]

delivery arrangements to its load. Transmission service over the CVP 
system will be provided in accordance with Section VII of this Proposed 
Plan.
    K. Contracts shall provide for Western to furnish electric service 
effective January 1, 2025, through December 31, 2054.
    L. Specific products and services may be provided for periods of 
time as agreed to in the electric service contract.
    M. Contracts shall incorporate Western's standard provisions for 
electric service contracts, integrated resource plans, and General 
Power Contract Provisions, as determined by Western.
    N. Contracts will include a clause that allows Western to reduce or 
rescind a customer's allocation percentage, upon 90 days' notice, if 
Western determines that (1) the customer is not using this power to 
serve its own loads, except as otherwise specified in Section III; or 
(2) the allocation amounts are consistently greater than the customer's 
maximum load.
    O. Any power not under contract may be allocated at any time, at 
Western's sole discretion, or sold as deemed appropriate by Western.
    P. Contracts will include a clause providing for Western to adjust 
the customers' allocation percentage for the 2040 Resource Pool.
    Q. Contracts may include a clause providing for alternative funding 
arrangements, including Net Billing, Bill Crediting, Reimbursable 
Financing, and advance payment.

VI. First Preference Entitlement and Allocation

    The Trinity River Division Act and the New Melones Project 
provisions of the Flood Control Act of 1962 (Acts) specify that 
contracts for the sale and delivery of the additional electric energy, 
available from the CVP power system as a result of the construction of 
the plants authorized by these Acts and their integration into the CVP 
system, shall be made in accordance with preferences expressed in 
Federal Reclamation Laws. These Acts also provide that a first 
preference of up to 25 percent of the additional energy shall be given, 
under Federal Reclamation Law, to preference customers in the counties 
of origin (Trinity, Tuolumne, and Calaveras), for use in those 
counties, who are ready, willing, and able to enter into contracts for 
the energy.
    Western proposes to calculate and allocate the maximum entitlements 
of first preference customers (MEFPC), which is the maximum amount of 
energy available to first preference customers/entities, in accordance 
with the following:
    A. The MEFPC will be calculated separately for the New Melones 
Project, Calaveras and Tuolumne Counties, and the Trinity River 
Division (TRD), Trinity County (first preference projects). To 
determine the 25 percent of additional energy made available to the CVP 
as a result of the construction of each of these projects, Western 
proposes to use the average of the previous 20 years of historical 
annual generation. The TRD MEFPC includes generation from Trinity, 
Carr, and Spring Creek Powerplants and a portion of the Keswick 
Powerplant generation. Based on the most current information available, 
this calculation results in an estimated MEFPC of 122,800 MWh available 
from the New Melones Project, and an estimated MEFPC of 361,500 MWh 
available from the TRD. Western proposes to recalculate the MEFPC every 
5 years, with the initial recalculation pertaining to this Proposed 
Plan completed by June 1, 2024.
    B. Upon recalculation, if the MEFPC from a first preference project 
is 10 percent above or below the currently effective MEFPC from that 
first preference project, the MEFPC will be adjusted to reflect that 
increase or decrease. Western will notify affected first preference 
customers at least 6 months before making an adjustment to the MEFPC. 
If recalculation reduces the MEFPC to an amount less than the load 
previously served, Western may, upon request and at its discretion, 
make purchases necessary to replace that amount of power no longer 
available. The costs for all such purchases made on behalf of a first 
preference customer will be passed on to that first preference 
customer.
    C. An allocation made to a first preference customer/entity under 
the Final Plan will be based on the power requirements of that first 
preference customer/entity. The sum of allocations of first preference 
power, including losses, shall not exceed the MEFPC from each first 
preference project, or a county of origin's share of the MEFPC, except 
as allowed under Section VI.7 below.
    D. Western proposes to provide full requirements service as 
described below to first preference customers. The first preference 
customer will be responsible for transformation and transmission losses 
to the first preference customer delivery point. Transmission losses 
shall include losses for CVP transmission and third-party transmission.
    Western will provide the first preference customer with its full 
power requirements (capacity and energy) up to its right to the MEFPC 
at the Base Resource rate. If there is more than one first preference 
customer in a county of origin, or a first preference entity in that 
county makes a request for power, Western reserves the right to 
establish a maximum amount of power available to each first preference 
customer from the MEFPC. Payment for full requirements service will be 
based on usage.
    E. A first preference entity may exercise its right to use a 
portion of the MEFPC by providing written notice to Western at least 18 
months prior to the anniversary date of the first preference project 
located in its county. The anniversary date is the successive fifth 
year anniversary of the date the Secretary of the Interior declared the 
availability of power from the powerplants in the counties of origin. 
New applications for service to begin on January 1, 2025, must be 
received 18 months prior to January 1, 2022 (i.e., July 1, 2020), for 
Trinity County and 18 months prior to April 5, 2022 (i.e., October 5, 
2020), for Calaveras and Tuolumne Counties. Other anniversary years 
applicable to this Proposed Plan are 2027, 2032, 2037, 2042, 2047, and 
2052.
    F. If the request of a first preference customer/entity for power, 
including adjustment for losses, is greater than the remaining MEFPC 
from that county's first preference project, then Western will allocate 
the remaining MEFPC to the first preference customer/entity first 
making a request for a power allocation or a justified increase in its 
allocation percentage.
    G. Power allocated to first preference customers/entities in 
Tuolumne and Calaveras Counties will be subject to the following 
additional conditions:
    1. Tuolumne and Calaveras Counties shall each be entitled to one-
half of the New Melones Project MEFPC.
    2. If first preference customers in either Tuolumne County or 
Calaveras County are not using their county's full one-half share, and 
a first preference customer/entity in the other county requests power 
in an amount exceeding that county's one-half share, then Western will 
allocate the unused power, on a withdrawable basis, to the requesting 
first preference customer/entity. Such power may be withdrawn for use 
by a first preference customer/entity in the county not using its full 
one-half share upon 6 months' written notice from Western.
    H. Trinity Public Utilities District is currently the sole 
recipient of the TRD's first preference rights.
    I. Transmission service will be provided in accordance with 
applicable

[[Page 27439]]

laws and Section VII of this Proposed Plan.
    J. For planning purposes, first preference customers may be 
required to provide forecasts and other information required by Western 
as set forth in the electric service contract.
    K. The general criteria and contract principles set forth in 
Sections V.A, C through I, K, M, and O of this Proposed Plan will apply 
to first preference customers.

VII. Transmission Service

    Allottees and customers must secure all necessary transmission 
service to deliver Federal power. Western will provide transmission 
service to deliver the Base Resource over the CVP transmission system. 
Western will work with allottees and customers to secure bundled or 
unbundled transmission services as appropriate beyond its CVP 
transmission system in conjunction with its power sales in a manner 
consistent with Federal Energy Regulatory Commission orders, legislated 
mandates, or California Independent System Operator agreements. While 
Western will work with allottees and customers, it is the allottees and 
customers obligations to secure all necessary transmission service.
    Generally, Western will market surplus transmission capacity on the 
CVP and COTP available under Western's Open Access Transmission Tariff. 
The legislation authorizing the PACI provides for the Secretary to 
market surplus available transmission capacity on the PACI at equitable 
rates to aid and benefit the CVP. Western will determine the use of its 
transmission resources concurrently with further development of the 
products and services under this Proposed Plan. Specific terms and 
conditions for transmission will be provided for in future service 
agreements. Western will develop transmission rates under a separate 
proceeding.

VIII. Changes in the Electric Utility Industry

    Western recognizes that there have been, and continue to be, 
significant changes in the electric utility industry. In order to 
address this concern, Western is proposing, in collaboration with its 
customers, to include the ability to make changes in how the Federal 
resource is marketed if there is deemed a benefit to Western and its 
customers. Any changes implemented would be done through negotiation 
and revision to individual customer contracts.

Authorities

    Western developed this Proposed 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 
(ch. 1093, 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 the 
projects involved.

Regulatory Procedure Requirements

Review Under the Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1980 (44 U.S.C. 
3501, et seq.), Western has received approval from the Office of 
Management and Budget for the collection of customer information in 
this rule, under control number 1910-5136, which expires on September 
30, 2017.

Regulatory Flexibility Analysis

    The Regulatory Flexibility Act of 1980 (5 U.S.C. 601, et seq.), 
requires preparation of an initial regulatory flexibility analysis 
whenever an agency is required by 5 U.S.C. 553, or any other law, to 
publish general notice of proposed rulemaking for any proposed rule. A 
final regulatory flexibility analysis is required whenever the agency 
promulgates a final rule under 5 U.S.C. 553, after being required by 
that section or any other law to publish a general notice of proposed 
rulemaking. Western has determined that the analytical requirements of 
the Regulatory Flexibility Act do not apply to this rulemaking because 
it is a rulemaking involving services applicable to public property.

Environmental Compliance

    In compliance with the National Environmental Policy Act (NEPA) (42 
U.S.C. 4321-4370), Council on Environmental Quality NEPA implementing 
regulations (40 CFR parts 1500-1508), and DOE NEPA implementing 
regulations (10 CFR part 1021), Western completed a Categorical 
Exclusion (CX). Since Western is reallocating its existing resources 
and is not planning to increase its generation or transmission under 
this Proposed Plan, a CX is the appropriate level of environmental 
review.

Determination Under Executive Order 12866

    Western 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: April 22, 2016.
Mark A. Gabriel,
Administrator.
[FR Doc. 2016-10620 Filed 5-5-16; 8:45 am]
 BILLING CODE 6450-01-P