83 FR 28861 - Notice of Intent To Contract for Hydroelectric Power Development on the Bureau of Reclamation's North Unit Main Canal, Deschutes Project, Madras, Oregon

DEPARTMENT OF THE INTERIOR
Bureau of Reclamation

Federal Register Volume 83, Issue 120 (June 21, 2018)

The Bureau of Reclamation (Reclamation) has received a proposal to allow hydroelectric power development on the North Unit Main Canal (NUMC) under a Lease of Power Privilege (LOPP). To ensure fair and open competition, Reclamation is soliciting competing proposals at this time.

[Federal Register Volume 83, Number 120 (Thursday, June 21, 2018)]
[Notices]
[Pages 28861-28863]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-13363]


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DEPARTMENT OF THE INTERIOR

Bureau of Reclamation

[RR01016000; XXXR4524KK; RX.41129361.1010000]


Notice of Intent To Contract for Hydroelectric Power Development 
on the Bureau of Reclamation's North Unit Main Canal, Deschutes 
Project, Madras, Oregon

AGENCY: Bureau of Reclamation, Interior.

ACTION: Notice of intent to accept proposals, select lessee(s), and 
contract for hydroelectric power development.

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SUMMARY: The Bureau of Reclamation (Reclamation) has received a 
proposal to allow hydroelectric power development on the North Unit 
Main Canal (NUMC) under a Lease of Power Privilege (LOPP). To ensure 
fair and open competition, Reclamation is soliciting competing 
proposals at this time.

DATES: Submit the written proposal on or before November 19, 2018. Late 
proposals will not be considered. Delayed delivery to the Regional 
Power Manager's office due to failures or misunderstandings of the 
entity and/or of mail, overnight, or courier services will not excuse 
lateness, and accordingly, are advised to provide sufficient time for 
delivery.

ADDRESSES: Send eight copies of the written proposal to Mr. Joseph 
Summers, Regional Power Manager, Bureau of Reclamation, 1150 North 
Curtis Road, Suite 100, Boise, ID 83706; telephone (208) 378-5290.

FOR FURTHER INFORMATION CONTACT: Questions regarding proposal 
requirements or technical data available for the North Unit Main Canal 
may be directed to Mr. Jake Nink, Bureau of Reclamation, 1150 North 
Curtis Road, Suite 100, Boise, ID 83706; telephone (208) 378-5090; 
email [email protected]. Upon receipt of written request, Mr. Nink will 
also arrange an informational meeting and/or site visit with interested 
entities. In this regard, Reclamation reserves the right to schedule a 
single meeting and/or visit to address the questions of all entities 
that have submitted questions or requested site visits.
    Specific information related to operations and maintenance of the 
canal system may be obtained from Mr. Mike Britton, Bureau of 
Reclamation, North Unit Irrigation District Manager, 2024 Northwest 
Beech Street, Madras, OR 97741; telephone (541) 475-3625; email to 
[email protected].

SUPPLEMENTARY INFORMATION: 
    General Overview. The North Unit Irrigation District (NUID) 
operates and maintains the NUMC on the Deschutes Project located in the 
Deschutes River Basin, which supplies irrigation water to nearly 59,000 
acres of farmland in Jefferson County, Oregon. Reclamation is 
considering allowing hydroelectric power development on the NUMC under 
a Lease of Power Privilege (LOPP).
    A LOPP is a congressionally authorized alternative to Federal 
hydroelectric power development. It is a contractual right given to a 
non-federal entity to use a Reclamation asset for electric power 
generation consistent with Reclamation project purposes. Terms of a 
LOPP shall not exceed 40 years. General authority under Reclamation law 
for a LOPP includes, among others, the Town Sites and Power Development 
Act of 1906 (43 U.S.C. 522), the Reclamation Project Act of 1939 (43 
U.S.C. 485h(c)) (1939 Act), and the Bureau of Reclamation Small Conduit 
Hydropower Development and Rural Jobs Act of 2013 (Act of August 9, 
2013, 127 Stat. 498).
    Reclamation will be responsible for compliance with the National 
Environmental Policy Act (NEPA) related to any project selected for 
consideration pursuant to this Notice of Intent. Reclamation will also 
lead necessary consultation with American Indian Tribal Governments and 
compliance with the National Historic Preservation Act, Endangered 
Species Act, and other related environmental regulations for all 
elements of the proposed project. A LOPP may be issued only after 
Reclamation has determined that NEPA and any other regulatory 
compliance requirements are completed.

Project Definition and Location

    On August 7, 2017, Reclamation received a formal proposal for non-
federal hydroelectric power development from Kinet Inc. at 12 sites on 
the NUMC. Kinet Inc. proposes to develop these sites utilizing a new 
technology called linear Pelton turbines. This solicitation is 
exclusive to the following 12 NUMC sites:
    Site Name--Mile 2 South.
    Latitude Longitude--44.082201-121.286401.
    Canal Mile Maker--1.78
    Head (m)--6.1.
    Flow (cms)--20.

    Site Name--Mile 2 North.
    Latitude Longitude--44.086971-121.274233.
    Canal Mile Marker--2.11.
    Head (m)--6.1.
    Flow (cms)--20.

    Site Name--Mile 3.
    Latitude Longitude--44.092839-121.256296.
    Canal Mile Marker--3.52.
    Head (m)--6.1.
    Flow (cms)--20.

    Site Name--Mile 18.
    Latitude Longitude--44.251184-121.128517.
    Canal Mile Marker--18.34.
    Head (m)--6.71.
    Flow (cms)--21.

    Site Name--Mile 19.

[[Page 28862]]

    Latitude Longitude--44.2666-121.12075.
    Canal Mile Marker--19.
    Head (m)--4.4.
    Flow (cms)--16.

    Site Name Mile--20.
    Latitude Longitude--44.2838-121.11471.
    Canal Mile Marker--20.
    Head (m)--5.36.
    Flow (cms)--21.

    Site Name Mile--43.
    Latitude Longitude--44.500374-121.154865.
    Canal Mile Marker--45.
    Head (m)--18.2.
    Flow (cms)--7.1.

    Site Name--Mile 48.
    Latitude Longitude--44.5368587-121.153547.
    Canal Mile Marker--47.98.
    Head (m)--3.66.
    Flow (cms)--7.2.

    Site Name--Mile 50 East.
    Latitude Longitude--44.571091-121.158783.
    Canal Mile Marker--19.
    Head (m)--51.
    Flow (cms)--2.98.

    Site Name--Mile 50 West.
    Latitude Longitude--44.572148-121.160127.
    Canal Mile Marker--19.
    Head (m)--3.05.
    Flow (cms)--7.0.

    Site Name--Mile 52 South.
    Latitude Longitude--44.601337-121.162522.
    Canal Mile Marker--53.69.
    Head (m)--3.05.
    Flow (cms)--7.0.

    Site Name--Mile 52 North.
    Latitude Longitude--44.603526-121.161854.
    Canal Mile Marker--19.
    Head (m)--3.05.
    Flow (cms)--7.0.

    Reclamation notified NUID of the Kinet Inc. proposal and solicited 
NUID's interest in submitting a proposal as a preferred entity. In a 
subsequent letter dated September 21, 2017, NUID declined interest in 
hydroelectric power development at the proposed sites. As a result, 
Reclamation is soliciting proposals for consideration to allow 
hydroelectric power development under a LOPP on the NUMC system.

Fundamental Considerations and Requirements

    1. Under this solicitation, Reclamation may only issue a LOPP for 
hydroelectric power development at the 12 identified NUMC sites 
described herein.
    2. Any LOPP terms for hydroelectric power development on the NUMC 
must not interfere with existing contractual commitments related to 
operations and maintenance of the canal system. The lessee (i.e., 
successful proposing entity) will be required to enter into a contract 
with Reclamation. This contract will, (1) address requirements related 
to coordination of operations and maintenance with Deschutes Project 
stakeholders (including the NUID); and (2) stipulate that the lessee 
will be responsible for any increase in operations or maintenance costs 
that are attributable to the hydroelectric power development.
    3. The lessee would be responsible for securing transfer and 
marketing of the power generated by the proposed project.
    4. All costs incurred by the United States related to a proposed 
LOPP project will be at the expense of the lessee. Such costs include 
management and coordination of necessary Reclamation activities, 
provision of information, conduct of or assistance with regulatory 
compliance (including NEPA), consultation during design development and 
related to operations and maintenance under a LOPP, development of the 
LOPP, necessary contracts with outside consultants, or any other cost 
for which the government would be reimbursed by an applicant or the 
general public. In addition, the lessee will be required to make annual 
payments to the United States for the use of a government facility in 
the amount of at least 2-3 mills per kilowatt-hour of gross energy 
produced by the facility, measured at the generator(s).
    5. The LOPP will include provisions for the mill rate to increase 
each year commensurate with inflation based on the previous 5-year 
average of the Gross Domestic Product (GDP) Price Deflator; however, 
the rate of increase will be capped at 5 percent. If the 5-year GDP 
Price Deflator average shows no change or deflation, the mill rate will 
remain the same as the previous year's rate. Annual payments to the 
United States will be deposited as a credit to the Reclamation fund and 
project to be applied against the total outstanding reimbursable 
repayment obligation for reimbursable project construction costs of the 
Deschutes Project pursuant to the existing construction cost allocation 
(not applied only against power construction costs). If the outstanding 
reimbursable repayment obligation for project construction costs is 
satisfied, then the payments will be held as a statutory credit for the 
project or program until an eligible reimbursable project expense is 
incurred against which the credit can be applied.

Proposal Content Guidelines

    Interested parties should submit proposals specifically addressing 
the following qualifications, capabilities, and approach factors. 
Proposals submitted will be evaluated and ranked directly based on 
these factors. Additional information may be provided at the discretion 
of those submitting proposals.
    (a) Qualifications of Proposing Entity: Provide relevant 
information describing/documenting the qualifications of the proposing 
entity to plan, design, and implement such a project, including, but 
not limited to:
     Type of organization.
     Business history, including length of time in business, 
experience in funding, and design and construction of similar projects.
     Industry rating(s) that indicate financial soundness and/
or technical and managerial capability.
     Experience of key management personnel.
     History of any reorganizations or mergers with other 
companies (if applicable).
     Preference status (as applied to a LOPP, the term 
``preference entity'' means an entity qualifying for preference under 
Section 9(c) of the 1939 Act as a municipality, public corporation or 
agency, or cooperative or other nonprofit organization financed in 
whole or in part by loans made pursuant to the Rural Electrification 
Act of 1936, as amended).
     Any other information not already requested above or in 
the following evaluation categories that demonstrates the interested 
entity's organizational, technical, and financial ability to perform 
all aspects of the work.
    (b) Proposed Development Plan: Describe and provide mapping and 
drawings of proposed facilities and equipment comprising the LOPP 
project. Include descriptions and locations of structures, turbines, 
penstocks, transmission lines, access roads, and other appurtenant 
facilities.
    Describe proposed capacities and general operation of the 
hydroelectric projects to include generation capacity, power source and 
power consumption, configuration, turbine generating capacity, 
distribution transmission line size and route, and other relevant 
aspects of the project.
    Describe the ability of generation to provide ancillary services, 
such as regulation, spinning reserves, and volt-ampere reactive 
support, and information on the reliability of the generation, 
potential maintenance outage schedule, and duration.

[[Page 28863]]

    (c) Proposed Approach to Acquisition of Necessary Property Rights: 
Specify plans for acquiring title to or the right to occupy and use all 
lands necessary for the proposed development, including such additional 
lands as may be required during construction. Address lands necessary 
for electrical distribution lines, access roads, and all aspects of 
project development and operation and maintenance.
    (d) Long-Term Operation and Maintenance: Provide a description 
(with relevant references) of the project proponent's experience in 
operation and maintenance of hydroelectric or similar facilities once 
they are operational and over the long-term (i.e., the 40-year lease 
contemplated for the proposed development). Identify the organizational 
structure and plan for the long-term operation and maintenance of the 
proposed development. Define how the proposed development would operate 
in harmony with the NUMC system.
    (e) Contractual Arrangements: Describe any anticipated contractual 
arrangements with project stakeholders of the Deschutes Project, 
including contractual arrangements to utilize water rights held by 
NUID. Define how the proposed development would operate in harmony with 
the NUMC system.
    (f) Management Plan: Provide a management plan to accomplish such 
activities as planning, NEPA compliance, LOPP development, design, 
construction, facility testing, start-up of hydropower production, and 
preparation of an Emergency Action Plan. Prepare schedules of these 
activities as applicable. Describe what studies are necessary to 
accomplish the hydroelectric power development and how the studies 
would be implemented.
    (g) Environmental Impact: Discuss potential significant adverse 
impacts from the proposed development on biophysical or sociocultural 
resource parameters. Of particular concern are potential impacts on any 
protected aquatic or terrestrial wildlife species or associated 
protected habitat. Other concerns may include, but are not limited to, 
the impact on land use adjacent to the proposed development, recreation 
at the surrounding areas, cultural resources, and Indian Trust assets. 
Provide information on the types and severity of expected impacts and 
proposed methods of resolving or mitigating these impacts.
    Describe potential beneficial impacts that may be expected from the 
development to include such perspectives as energy conservation or 
using available water resources in the public interest.
    Describe proposed studies to adequately define the extent of the 
adverse and beneficial impacts, potential severity, and potential 
alternatives to mitigate impacts.
    (h) Other Study and/or Permit Requirements: Describe planned 
response to other applicable regulatory requirements, including the 
National Historic Preservation Act, Clean Water Act, Endangered Species 
Act, and state and local laws and licensing requirements. Also describe 
any known potential for impact on lands or resources of American Indian 
tribes, including trust resources.
    (i) Project Development Costs and Economic Analysis: Estimate the 
costs of development, including the cost of studies to determine 
feasibility, environmental compliance, project design, construction, 
financing, and the amortized annual cost of the investment. Estimate 
annual operation and maintenance, replacement expenses, annual payments 
to the United States, and those potentially associated with the 
Deschutes Project. Estimate costs associated with any anticipated 
additional transmission or wheeling services. Identify proposed methods 
of financing the project. The anticipated return on investment should 
be estimated and an economic analysis should be presented that compares 
the present worth of all benefits and the costs of the project.
    (j) Performance Guarantee and Assumption of Liability: Describe 
plans for (1) providing the government with performance bonds or 
irrevocable letter of credit covering completion of the proposed 
project, (2) assuming liability for damage to the operational and 
structural integrity of the NUMC or other aspects of the Deschutes 
Project caused by construction, operations and/or maintenance of the 
hydropower development, and (3) obtaining general liability insurance.
    (k) Other Information: This final paragraph is provided for the 
applicant to include additional information considered relevant to 
Reclamation's selection process in this matter.

Selection of Lessee

    Reclamation will evaluate proposals received in response to this 
published notice. Proposals will be ranked according to response to the 
factors described in Fundamental Considerations and Requirements and 
Proposal Content Guidelines sections of this notice. In general, 
Reclamation will give more favorable consideration to proposals that 
(1) are well adapted to developing, conserving, and utilizing the water 
resource and protecting natural resources; (2) clearly demonstrate that 
the offeror is qualified to develop the hydropower facility and provide 
for long-term operation and maintenance; and (3) best share the 
economic benefits of the hydropower development among parties to the 
LOPP. A proposal will be deemed unacceptable if it is inconsistent with 
Deschutes Project purposes, as determined by Reclamation.
    Reclamation will give preference to those entities that qualify as 
preference entities (as defined under Proposal Content Guidelines, item 
(a), of this notice) provided that the preference entity is well 
qualified and their proposal is at least as well adapted to developing, 
conserving, and utilizing the water and natural resources as other 
submitted proposals. Preference entities will be allowed 30 days to 
improve their proposals, if necessary, to be made at least equal to a 
proposal(s) that may have been submitted by a non-preference entity.

Notice and Time Period To Enter Into LOPP

    Reclamation will notify, in writing, all entities submitting 
proposals of Reclamation's decision regarding selection of the 
potential lessee. The selected potential lessee will have 15 months 
from the date of selection of the lessee to sign the preliminary lease, 
complete the requirements set forth in the preliminary lease, and to 
sign the LOPP. The lessee will then have up to 3 years from the date of 
the preliminary lease agreement to the beginning of construction. 
Maximum timeframes for construction will be determined by the Regional 
Director. Such timeframes may be adjusted for just cause resulting from 
actions and/or circumstances that are beyond the control of the lessee.

    Dated: March 22, 2018.
 Lorri J. Gray,
Regional Director, Pacific Northwest Region.
[FR Doc. 2018-13363 Filed 6-20-18; 8:45 am]
 BILLING CODE 4332-90-P