Final National Defense Authorization Act ProceduresCentral Valley Project, California

DEPARTMENT OF ENERGY

Western Area Power Administration

Final National Defense Authorization Act Procedures--Central

Valley Project, California

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of final procedures to implement Sec. 2929 of the 1994

National Defense Authorization Act.

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SUMMARY: The Western Area Power Administration (Western), a Federal

power marketing administration of the Department of Energy (DOE),

hereby announces its final procedures (NDA) Act Procedures) to fulfill

the requirements of section 2929 of the National Defense Authorization

Act for fiscal year (FY) 1994 (National Defense Authorization Act,

Public Law 103-160, 107 Stat. 1547, 1935 (1993)) (NDA Act). The final

NDA Act Procedures consist of Western's decision on how to implement

section 2929 of the NDA Act. Western's proposed NDA Act Procedures were

published in the Federal Register at 59 FR 34604, July 6, 1994. The

public has commented on the proposed NDA Act Procedures, and a

discussion of the comments received is included in this notice.

DATES: The final NDA Act Procedures will become effective January 3,

1995, and will remain in effect until December 31, 2004.

ADDRESSES: Information regarding the final NDA Act Procedures,

including comments, letters, and other supporting documents made or

kept by Western for the purpose of developing the final NDA Act

Procedures, is available for public inspection and copying at Western's

Sacramento Area Office located at 1825 Bell Street, Suite 105,

Sacramento, CA 95825-1097.

FOR FURTHER INFORMATION CONTACT:

Ms. Zola M. Jackson, Assistant Area Manager for Power Marketing,

Sacramento Area Office, Western Area Power Administration, 1825 Bell

Street, Suite 105, Sacramento, CA 95825-1097, (916) 649-4421.

SUPPLEMENTARY INFORMATION:

Background

The NDA Act was signed into law on November 30, 1993. Section 2929

of the NDA Act provides that, for a 10-year period beginning on

November 30, 1993, the electric power allocations provided as of

November 30, 1993, by Western from the Central Valley Project (CVP) to

military installations in the State of California which have been

closed or approved for closure pursuant to the Defense Base Closure and

Realignment Act of 1990 (part A, Title XXIX, Pub. L. 101-510; 10 U.S.C.

2687 note) (1990 Act) shall be reserved for sale through Long-Term

Contracts to Preference Entities which agree to use such Power to

promote economic development at a military installation that is closed

or approved for closure pursuant to the 1990 Act. To the extent Power

reserved by the NDA Act is not disposed of through Long-Term Contracts,

it shall be made available on a temporary basis during such 10-year

period to military installations in the State of California through

Short-Term Contracts. By implementing the final NDA Act Procedures,

Western will establish the criteria to allocate the Power made

available as a result of the NDA Act.

The final NDA Act Procedures set forth in this Federal Register

will explain in detail how Western intends to implement the NDA Act.

Under the final NDA Act Procedures, Western has identified the Power

that will be classified as NDA Act Power and the types of services and

contracts that will be offered. Also set forth under the final NDA Act

Procedures are the general eligibility criteria that Western will apply

to all applicants requesting an Allocation of NDA Act Power, and the

procedures to be used by applicants when applying for NDA Act Power,

which include demonstration that certain economic development criteria

are being met. Last, Western has set forth the procedures that will be

used in allocating NDA Act Power to eligible applicants, including a

priority list developed by Western for allocating NDA Act Power.

On October 5, 1992, Western's Sacramento Area Office published

notice of the Final 1994 Power Marketing Plan, Central Valley Project,

California (57 FR 45782), governing allocations of 529.946 megawatts

(MW) of CVP Power. That notice provided the final allocation of a total

of 119.223 MW of Power to certain Department of Defense (DOD) military

installations, as specified in appendix A herein. Contracts for such

Power were entered into for a term ending December 31, 2004. The power

contracts with the DOD agencies allow for certain shifts of Power among

military installations with approval by Western. Effective November 30,

1993, such shifts became subject to the NDA Act.

As of the date of publication of this Federal Register, the

following military installations with a CVP contract rate of delivery

(CROD) are scheduled to close pursuant to the 1990 Act:

------------------------------------------------------------------------

Long-

term Type III

Military Installations firm withdrawable Total

power

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Naval Air Station Moffett Field, CA... 4.170 2.270 6.440

Naval Station Treasure Island, CA..... 3.020 2.581 5.601

Naval Shipyard, Mare Island Vallejo,

CA................................... 20.020 2.148 22.168

Totals.......................... 27.210 6.999 34.209

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Western is providing notice by this Federal Register that 34.209 MW

of the total possible 119.223 MW (as shown in appendix A) will be

allocated pursuant to the final NDA Act Procedures on a first-come,

first-served basis beginning 30 days after publication of this Federal

Register notice. As any of the remaining amount of 85.014 NW becomes

available for allocation, pursuant to the NDA Act, Western will provide

notification of the availability of that Power.

Acronyms and Definitions

Descriptions of the acronyms and definitions used in this Federal

Register notice may be found in this notice.

Public Notice and Comment

The process used by Western to ensure involvement of known

interested parties in the development of the final NDA Act Procedures

is summarized below:

1. A Federal Register notice was published at 59 FR 34604, July 6,

1994, officially announcing the proposed NDA Act Procedures, initiating

the public consultation and comment period, and announcing the public

information and comment forum.

2. On July 13, 1994, in a letter to all CVP customers and known

interested parties, Western announced that the public consultation and

comment period had begun; announced the dates, times, and locations of

the public information forum and the public comment forum; and enclosed

a copy of the July 6, 1994, Federal Register notice.

3. On July 18, 1994, Western sent a letter to all CVP customers and

interested parties as a reminder of the public information forum and

public comment forum schedule for July 27, 1994.

4. At the public information forum held on July 27, 1994, Western's

staff presented the proposed NDA Act Procedures.

5. A public comment forum was held on July 27, 1994, to give the

public the opportunity to comment for the record. Four persons

representing customers made verbal comments.

6. Eleven comment letters were received during the comment period.

The comment period ended on August 10, 1994. All formally submitted

comments have been considered in the preparation of the final NDA Act

Procedures. In addition, four persons commented during the July 27,

1994, public comment forum.

Written comments were received from the following sources:

Air Force, Department of the

Alameda, City of

Army, Department of the

Bay Area Rapid Transit District

Calaveras Public Power Agency

Hetch Hetchy Water and Power

National Aeronautics and Space Administration

Northern California Power Agency

Oakland, Port of

Pacific Gas and Electric Company

Tuolumne Public Power Agency

Representatives of the following organizations made verbal

comments:

Alameda, City of

Epstein, Mr. Barry

Navy, Department of the

Oakland, Port of

Summary of Revisions to the NDA Act Procedures

As a result of comments received during the comment period, the

proposed NDA Act Procedures, published July 6, 1994, have been revised.

The revisions are summarized as follows:

A change was made to the section entitled ``Acronyms and

Definitions.'' Western revised the definition of a Negatively Affected

Customer to include those Preference Entities which had a CVP power

allocation as of November 30, 1993, and have executed contracts with

Western as of the effective date of the final NDA Act Procedures.

Changes were made to the section entitled ``General Eligibility

Criteria.'' Western deleted the requirement that an applicant's load at

each delivery point be no less than an annual peak of 500 kilowatts

(kW). Western also deleted the requirement that an applicant

demonstrate either that ownership or a long-term lease of the

electrical distribution system has been obtained at the time an

application is submitted, and has replaced it with the requirement that

an applicant need only demonstrate that ownership or a long-term lease

of the electrical distribution system has been obtained or will be

obtained by the delivery date for the NDA Act Power. This necessitated

a change to the section entitled ``Applications for NDA Act Power.''

Such section of the final NDA Act Procedures will provide that no

allocation will be provided until such time as the applicant can

provide evidence that either ownership or a long-term lease of the

electrical distribution system has been obtained, and that if the

applicant does not obtain either ownership or a long-term lease within

1 year of the initial application being received by Western, the

applicant will be required to submit a new application which will again

be subject to Western's review process. Western will reserve the right

to allocate the NDA Act Power to others until all allocation criteria

are met by an applicant.

Another change that was made to the section entitled ``General

Eligibility Criteria'' was in regard to the letter of interest. Western

changed the requirement that an entity requesting NDA Act Power for use

at a Priority-three Base must identify the Closed Military Installation

where the power will be used. An entity requesting NDA Act Power to be

used at a Priority-Three Base only needs to identify a military

installation where the power will be used.

The section entitled ``General Allocation and Contract Principles''

was also modified. For each entity that has received NDA Act Power

which can be recalled upon a 6-month notice, Western has modified the

NDA Act Procedures so that the 6-month notice will not be given any

earlier than 6 months after a contract has been executed. Western also

included the requirement that customers receiving NDA Act Power over

Pacific Gas and Electric Company's (PG&E) transmission system must meet

the minimum load requirements set forth in Contract No. 14-06-200-2948A

(Contract 2948A). Noncompliance gives Western the right to terminate

the NDA Act contract. Western also made a change which clarified the

procedures that will be used when recalling NDA Act Power from a

customer. If the recall of NDA Act Power would cause a customer to have

an allocation of Long-Term Firm NDA Power less than 500 kW, then

Western would withdraw the entire Long-Term Firm NDA Act Power

allocation.

Responses to Customer Comments Regarding the NDA Act Procedures

A. Acronyms and Definitions

1. Western proposed that the definition of a Negatively Affected

Customer include those Preference Entities with a contract for CVP

Power as of November 30, 1993.

Comment: The definition of a Negatively Affected Customer should be

expanded to include Preference Entities which received power

allocations from Western pursuant to the 1994 Power Marketing Plan

(Federal Register, Vol. 58, No. 22, dated June 28, 1993) and which

thereafter executed contracts with Western.

Response: It was Western's original intent to include such entities

in the definition of a Negatively Affected Customer; therefore, Western

will modify the definition of a Negatively Affected Customer to include

Preference Entities which had a CVP power allocation as of November 30,

1993, and have executed contracts with Western by the effective date of

the final NDA Act Procedures.

2. Western proposed that a Priority-Three Base would be defined as

``a military installation, not scheduled for closure, which meets the

eligibility criteria set forth in the Marketing Plan.''

Comment: The definition for a Priority-Three Base should be amended

as follows: ``A military installation, closed under authority other

than the 1990 Act which meets the eligibility criteria set forth in the

Marketing Plan.'' Also a definition of a Priority-Four Base should be

added to the procedures which would read as follows: ``A military

installation not scheduled for closure, which meets the eligibility

criteria set forth in the Marketing Plan.''

Response: The National Defense Authorization Act states that only

bases closed or approved for closure pursuant to the Defense Base

Closure and Realignment Act of 1990 (part A, Title XXIX, Pub. L. 101-

510; 10 U.S.C. 2687 note) are eligible under the NDA Act; therefore,

the definition of a Priority-Three Base will not be modified. Thus, it

will not be necessary to include a definition of a Priority-Four Base.

3. Western proposed that the definition of the CVP Marketing Area

would be the area which generally encompasses the CVP water basin in

northern and central California extending from the Cascade Range in

northern California to the plains along the Kern River south of

Bakersfield.

Comment: Western should further expand upon the definition of the

CVP Marketing Area, such as defining it as the transmission service

boundaries in Contract 2948A between PG&E and Western or cite the

appropriate statutory authority for the definition it has proposed.

Response: Section 302 of Public Law 95-91 (Stat. 578) transferred

the power marketing functions of the Bureau of Reclamation

(Reclamation) to the Department of Energy (DOE). Reclamation had an

established geographic boundary for the CVP, and Western initially

adopted the geographic boundaries which had been established by

Reclamation. The definition of the CVP Marketing Area used in the final

NDA Act Procedures is the same description used in the Marketing Plan

to describe Western's marketing area; therefore, the definition of the

CVP Marketing Area will not be changed. However, for clarification

purposes, the following characterizes the CVP Marketing Area: The area

that generally encompasses northern and central California, extending

from the Oregon-California border south along the California coast to

near Santa Monica, California, then northeast to Vincent, California,

then northwest to near Gorman, California. From this, the CVP Marketing

Area's Boundary follows the Sierra Nevada Mountain Range east and north

to just north of Mono Lake, then northeasterly to the Nevada-California

border, and then north along the Nevada-California border to the Oregon

State line.

E. General Eligibility Criteria

1. Western proposed that each applicant's load at each delivery

point shall be no less than an annual peak of 500 kW.

Comment: Why is Western requiring that a customer's load at each

delivery point be no less than a minimum of a 500 kW, as opposed to the

requirement in the Marketing Plan for a minimum load of 500 kW per

customer?

Response: Western has decided to delete its requirement that an

applicant's load at each delivery point be no less than an annual peak

of 500 kW. This criteria has been deleted from the procedures because

there is no basis for inclusion of minimum loads at each delivery

point. However, this requirement will be placed with the requirement

that Western has the right to terminate a contract if a customer

receiving NDA Act Power over PG&E's transmission system does not meet

the minimum load requirements set forth in Contract 2948A (see

Sec. G.5.(v)).

2. Western proposed to allocate NDA Act Power to Negatively

Affected Customers.

Comment: Does Western intend to allocate power to any entity

negatively affected by a base closure or just to any current Western

customer negatively affected by a base closure? Only eligible

preference entities should be considered for an allocation.

Response: Western's procedures specify that NDA Act Power will be

available to a current Western customer that has been negatively

affected by a base closure under the 1990 Act.

3. Western proposed that applicants must demonstrate that either

ownership or a long-term lease of the electrical distribution system

has been obtained at the time of application.

Comment: Western should not require that a preference customer

seeking an NDA Act allocation present an economic development plan for

the closed military base that demonstrates ``either that ownership or a

long-term lease of the electrical distribution system has been

obtained.'' It should be sufficient for the applicant to demonstrate

that it will own or lease the system by the time the NDA Act Power is

to be transmitted. This language should be revised to state: * * *

ownership or a long-term lease of the electrical distribution system

has been obtained or will be obtained by the delivery date for the NDA

Act Power * * *.''

Response: Western agrees that it is not necessary that an applicant

demonstrate that either ownership or a long-term lease of the

electrical distribution system has been obtained at the time an

application is submitted. Therefore, Western has modified the final NDA

Act Procedures so that an applicant must only demonstrate that

ownership or a long-term lease of the electrical distribution system

has been obtained or will be obtained by the delivery date for the NDA

Act Power. Western has modified the final NDA Act Procedures to provide

that no allocation will be given to the applicant until such time that

the applicant can provide evidence that it has obtained either a long-

term lease or ownership of the electrical distribution system. The

final NDA Act Procedures have been further modified so that if the

applicant does not obtain either a long-term lease or ownership of the

electrical distribution system within 1 year of Western's receipt of

the applicant's initial application, the applicant will be required to

submit a new application which will again be subject to Western's

review process. Western reserves the right to allocate any NDA Act

Power to others until all allocation criteria are met by the applicant.

4. Western proposed that applicants applying for NDA Act Power to

be used at a Priority-Three Base must be ready, willing, and able to

receive and use or distribute such NDA Act Power beginning on the date

of application.

Comment: A military base closed prior to the 1990 Act should be

included in the definition of a Priority-Three Base, and Sec. E.7.

should be revised to reflect the change by stating: ``Those applicants

applying for NDA Act Power to be used at a Priority-Three Base must

exist and operate and be ready, willing, and able to receive and use,

or receive and distribute such NDA Act Power beginning on the date of

application, except that those applicants applying for NDA Act Power to

be used at a closed Priority-Three Base may have up to 1 year of the

execution of the contract.''

Response: As discussed previously in this Federal Register notice,

the definition of a Priority-Three Base will not be modified. The

requirement that an entity be ready, willing, and able to receive and

use, or receive and distribute NDA Act Power at a Priority-Three Base

at the time of application is still warranted and has not been changed.

5. Western proposed that the use of the NDA Act Power be restricted

to the immediate area of the military installation for which it was

requested and that NDA Act Power requested by a Negatively Affected

Customer could be used in the Negatively Affected Customer's service

territory.

Comment: Western should add flexibility so that NDA Act Power may

be used beyond the immediate area of the closed military base.

Response: The procedures do allow for some flexibility. An entity

which can be classified as a Negatively Affected Customer is allowed to

use the NDA Act Power beyond the immediate area of the closed military

base. The entities restricted to using the NDA Act Power at a military

installation are those that request NDA Act Power for use at a

Priority-One, Priority-Two, or Priority-Three Base. Therefore, no

changes are necessary to accommodate this comment.

F. Applications for NDA Act Power

1. Western proposed that allocations of NDA Act Power would be made

on a first-come, first-served basis, and that if two or more entities

were requesting an allocation, Western would use its discretion in

determining the amounts of NDA Act Power to be allocated.

Comment: Western should further clarify the approach it will use

when two or more applicants are requesting NDA Act Power and Western

does not have enough NDA Act Power available to meet such request. Will

western use its discretion to determine the amounts of NDA Act Power to

be allocated pursuant to Sec. F.3.(iv), or allocate on a first-come,

first-served basis beginning 30 days after publication of the final

procedures pursuant to Sec. F?

Response: It is Western's intention that allocations will be

granted on a first-come, first-served basis pursuant to Sec. F, and

within the allocation rights set forth in Sec. G. In the event that

Western receives more than one application for power at the same time,

Western will determine the amounts of NDA Act Power to be allocated

pursuant to Sec. F.3.(iv). Western reserves the right to use its

discretion when applying these procedures.

2. Western proposed that an applicant applying for NDA Act Power at

a Priority-Three Base identify the Closed Military Installation where

such power would be used.

Comment: Western should revise Sec. 4.1.(i)(A) as follows: ``For

Preference Entities requesting an allocation of NDA Act Power to be

used at a Priority-One or Priority-Two Base, the letter of interest

must also indicate the Closed Military Installation where the NDA Act

Power will be used, and for those requesting an allocation at a

Priority-Three Base, the military installation, and whether it is open

or closed. All prospective applicants shall indicate the estimated date

when the economic development project plan will be completed.''

Response: Western agrees that an applicant requesting an allocation

for a Priority-Three Base would be unable to identify the Closed

Military Installation where the power will be used. Therefore, Western

has revised the procedures, specifically, Sec. F.1.(i)(A) to require

that an entity requesting power to be used at a Priority-Three Base

need only identify a military installation where the NDA Act Power will

be utilized. However, Western will retain the requirement that all

prospective applicants applying for NDA Act Power to be used at a

Priority-One or Priority-Two Base must indicate the estimated date when

the economic development project plan will be completed.

G. General Allocation and Contract Principles

1. Western proposed that any Closed Military Installation which had

a CVP CROD as of November 30, 1993, would have the highest priority to

NDA Act Power and would be described as a Priority-One Base, and that

any other military installation closed pursuant to the 1990 Act would

be classified as a Priority-Two Base and would have the second highest

priority to NDA Act Power.

Comment: Combine Priority-One Bases with Priority-Two Bases.

Alternatively, the allocation rights for Priority-One and Priority-Two

Bases should be reversed.

Comment: Congress was explicit about the NDA Act Power coming from

Priority-One Bases but said nothing about limiting or even favoring

those bases in reallocating the power. If there is authority in the

statute of legislative history to support this view--something to show

that Congress created such a priority within the class of potential

allottees, Western--should describe it.

Response: Each Priority-One Base had an allocation of CVP Power

prior to the NDA Act being signed into public law. The NDA Act

specifies that any CVP Power provided at each Priority-One Base would

be reserved for use under the NDA Act. Therefore, it is appropriate

that the Priority-One Bases should have the highest right to the amount

of NDA Act Power which represents the amount of CVP Power allocated to

such base prior to the NDA Act being signed into public law. No changes

will be made to this section.

2. Western proposed to limit the marketing area for NDA Act Power

to the CVP Marketing Area.

Comment: Two commentors supported Western's proposal to utilize CVP

boundaries as an important part of the NDA Act Procedures.

Comment: Western's proposal to limit new allocations only to

Preference Entities using the power on Closed Military Installations in

the CVP Marketing Area should be revised so that the geographic area is

at least as extensive as the State of California.

Comment: The area of consideration for allocating power to military

installations should be amended from the CVP Marketing Area to the

State of California.

Response: The NDA Act specifically addresses the Central Valley

Project, which has a defined marketing area. Therefore, Western's

interpretation of the NDA Act is that the NDA Act was written to help

mitigate the effects of base closures and encourage economic

development in areas affected by base closures within the CVP Marketing

Area. The NDA Act gives Western no geographical requirement for long-

term reallocations and only provides that reallocations on a temporary

basis be given to military installations in the State of California.

The law does not state that Western must offer a reallocation to all

preference entities and military installations in California but only

that the temporary reallocations of power to be given to certain

preference entities and military installations must be in California.

Therefore, Western has chosen to consider allocating power to

preference entities and military installations within the CVP Marketing

Area, and no changes will be made to the marketing area.

3. Western proposed to allocate NDA Act Power to a group of

Preference Entities entitled Negatively Affected Customers.

Comment: Western should delete the proposed class of Negatively

Affected Customers and assign the lowest priority to CVP preference

customers who will not use the allocation of NDA Act Power on a closed

base for economic development.

Response: The NDA Act was written to help mitigate the effects of

base closures and encourage economic development in areas affected by

base closures. By allowing CVP preference customers which were or will

be detrimentally affected by base closures an opportunity to utilize

the NDA Act Power, Western is not only retaining the purpose of the NDA

Act but also assisting entities that have made financial investments in

their electrical systems in order to receive CVP Power to serve

military loads in their service territory, and therefore, have a vested

interest in the outcome of the final NDA Act Procedures. Thus, Western

has retained the category of a Negatively Affected Customer. However,

Western will modify the NDA Act Procedures to provide Western the

discretion to allocate on a temporary basis to other preference

entities any amount of NDA Act Power which is not fully allocated under

the four categories specified in the NDA Act Procedures.

4. Western proposed that within the fourth level of priority, the

right of the military to serve a military load at a military base that

is not closing, and a Negatively Affected Customer would have similar

priority.

Comment: The final NDA Act Procedures should clarify that within

the fourth priority level, the military installations have a higher

priority in the allocation of power than a Negatively Affected

Customer.

Comment: Western should give greater preference, in the allocations

of power within each allocation priority level, to the Negatively

Affected Customers and communities, as opposed to allowing the military

agencies to move power to new or existing facilities.

Comment: One commenter recommended in an earlier comment that

Western should revise the definition of a Priority-Three Base so that

it covers closed bases not subject to the 1990 Act and create another

category (formerly Priority-Three) called a Priority-Four Base that

would allow for allocations for use at military installations not

scheduled for closure. If revised, the procedures should then be

changed to give a higher priority to preference customers using power

at closed Priority-Three Bases above the military's use of power at

currently operating bases.

Response: The NDA Act was drafted to provide a mechanism to help

entities promote economic development at military installations

approved for closure and to mitigate adverse impacts from such

closures. The NDA Act also provides a mechanism for allocating power

not being utilized for economic development to military loads at

military bases that are not closing, on a temporary basis. Since some

of Western's CVP customers will suffer significant negative impacts as

a result of a base closure in their service territory, it is Western's

belief that within the fourth class of priority, Negatively Affected

Customers should have a priority level that is similar to a military

load at a Priority-Three Base. Therefore, no changes were made to this

section.

5. Western proposed that Preference Entities receiving an

allocation of NDA Act Power to be used for an economic development

project must provide a report to Western each year which describes the

benefits of the NDA Act Power being passed on to the organization

operating the economic development project.

Comment: Western's procedures should include criteria for measuring

economic development achievements. For example, the number of jobs

created/retained, quantities of products manufactured/sold, and

buildings retained/constructed could be used to measure if those

entities receiving power have met the stated criteria. If the

performance does not meet the pre-established criteria, the allocation

of power should be withdrawn.

Response: As a power marketing agency, Western does not have the

proper resources (manpower, experience, knowledge, etc.) to evaluate

economic development projects on a continuing basis. However, Western's

procedures do require that the allottee provide an annual report to

Western which must state that the benefits of the NDA Act Power are

being passed on to the organization operating the economic development

project, and that the economic development project is still occurring.

Western believes that its requirements are adequate, and no changes

will be made based on this comment.

6. Western proposed a 3-year withdrawal notice period for entities

who were receiving NDA Act Power at Priority-One and Priority-Two

Bases, and a 6-month withdrawal notice period for all other entities

receiving NDA Act Power.

Comment: The 3-year and 6-month power withdrawal notice periods

should be revised to 5 years and 1 year respectively.

Response: The NDA Act reserves power for only a 10-year period

ending November 30, 2003. With that in mind, Western feels that the 3-

year and 6-month recall periods are reasonable. Lengthening the recall

periods may limit the number of entities that would have an opportunity

to benefit from the NDA Act Power and would not be the most widespread

and efficient use of the power within that time period. However, so

that an entity using NDA Act Power under a Short-Term Contract can have

a greater opportunity to benefit from the use of the power, Western

will modify the procedures so that a 6-month recall notice will not be

given any earlier than 6 months after a contract has been executed.

7. Western proposed specific procedures that need to be followed in

order to receive an allocation of NDA Act Power.

Comment: One commentor requested an allocation under the National

Defense Authorization Act Procedures.

Response: Western did not request applications for NDA Act Power.

Requests for allocations of NDA Act Power will be accepted no sooner

than 30 days after the publication date of this notice.

Responses to Customer Comments Regarding Other Issues

Comment: A commentor urged Western to recognize the November 30,

1993, allocations of CVP CROD in developing the post-2004 Federal

preference power allocations.

Response: This comment is outside the scope of these procedures.

Final NDA Act Procedures

Western plans to allocate up to 119.223 MW of CVP which was under

contract as of November 30, 1993, to military installations closed or

approved for closure pursuant to the 1990 Act. When determining who

will receive Allocations of Power, Western will exercise its discretion

as provided by law and subject to these procedures.

A. Acronyms and Definitions

As used herein, the following acronyms and definitions when used

with initial capitalization, whether singular or plural, shall have the

following meanings:

1,152-MW Load Level: the maximum simultaneous demand that Western

provides, and that PG&E is obligated to support, in accordance with the

terms of Contract 2948A.

Allocation: An offer by Western to sell to an applicant a specified

type and quantity of NDA Act Power made available by Western in

accordance with the NDA Act Procedures.

Allottee: A Preference Entity receiving an Allocation pursuant to the

NDA Act Procedures.

Closed Military Installation: A military installation in the CVP

Marketing Area which is closed or approved for closure pursuant to the

1990 Act.

Contract Rate of Delivery (CROD): The maximum amount of Power served by

Western on an annual basis under contract between a contractor and

Western and as it may be reduced or increased in accordance with

applicable law or contractual terms.

Contract 2948A: Contract No. 14-06-200-2948A between the Pacific Gas

and Electric Company and Western, which provides for certain sales,

exchanges, and transmission of electric Power.

CVP: The Central Valley Project, a multipurpose Federal water

development project extending from the Cascade Range in northern

California to the plains along the Kern River south of Bakersfield,

operated by the Bureau of Reclamation.

CVP Marketing Area: The area which generally encompasses the CVP water

basin in northern and central California extending from the Cascade

Range in northern California to the plains along the Kern River south

of Bakersfield.

Final Withdrawal Procedures: Those procedures published in the Federal

Register on March 5, 1986 (51 FR 7702), which specify the methods to be

used by Western for the adjustment of CROD under varying circumstances.

Long-Term Contract: A contract offered to a Preference Entity who

is promoting an economic development project at either a Priority-One

Base or a Priority-Two Base.

Long-Term Firm NDA Act Power: Firm Power allocated by Western and

subject to the terms and conditions specified in an electric service

contract and the NDA Act Procedures.

Marketing Plan: The Final 1994 Power Marketing Plan, Central Valley

Project, California (57 FR 45782).

Military Branch: The four individual entities consisting of the U.S.

Departments of the Air Force, Army, Navy, and the U.S. Marine Corps,

which collectively make up the Department of Defense.

NDA Act Power: The CVP CROD, in the amounts set forth in appendix A,

which shall be determined to be NDA Act Power by Western based on the

following two conditions: (1) Such CVP CROD was under contract to

military installations in the CVP Marketing Area as of November 30,

1993, and (2) the military installations with such CVP CROD are closed

or approved for closure pursuant to the 1990 Act.

NDA Act Power Entitlement: An amount of NDA Power equal to the amount

of CVP CROD under contract with a Priority-One Base as of November 30,

1993.

NDA Act Procedures: These procedures, adopted by Western to fulfill the

requirements of the NDA Act.

Negatively Affected Customer: A Preference Entity with a CVP Power

Allocation as of November 30, 1993, which has an executed contract with

Western as of the effective date of the NDA Act Procedures, and has

been detrimentally affected as a result of a Closed Military

Installation which is located within the service area of such

Preference Entity.

PG&E: Pacific Gas and Electric Company--the investor-owned utility

having a service area in northern and central California and load

control responsibility for the northern and central California area.

Power: Capacity and associated energy.

Preference Entity: An entity that meets the requirements of Reclamation

Law, which provides that preference shall be given to municipalities

and other public corporations or agencies and also to cooperatives and

other nonprofit organizations financed in whole or in part by loans

made pursuant to the Rural Electrification Act of 1936 (Reclamation Act

of 1939, section 9(c), 43 U.S.C. 485h(c)).

Priority-One Base: A Closed Military Installation with CVP CROD as of

November 30, 1993.

Priority-Two Base: A Closed Military Installation without a CVP CROD.

Priority-Three Base: A military installation, not scheduled for

closure, which meets the eligibility criteria set forth in the

Marketing Plan.

Short-Term Contract: A contract offered on a temporary basis either to

a Preference Entity at a Priority-Three Base or to a Negatively

Affected Customer.

Type III Withdrawable NDA Act Power: Firm Power which is withdrawable

to protect the 1,152-MW Load level before withdrawal of other types of

noninterruptible Power and which is subject to additional terms and

conditions specified in an electric service contract.

Unutilized NDA Act Power: NDA Act Power which is not allocated under

the NDA Act Procedures.

Western: Western Area Power Administration, United States Department of

Energy (DOE--a Federal power marketing administration responsible for

marketing the surplus generation from Federal hydroelectric

multipurpose projects pursuant to Reclamation Law and the DOE

Organization Act (91 Stat. 565, 42 U.S.C. 7101 et seq.).

B. Reclassification of CVP CROD to NDA Act Power

If at any time through November 30, 2003, an amount of CVP CROD set

forth in appendix A is determined to be NDA Act Power by Western,

Western will administratively reclassify that amount of CVP CROD to NDA

Act Power. Western shall recall that amount of CVP CROD from the

military branch with a contractual right for that CVP CROD, and Western

shall amend the associated contract to reflect the recall of that

amount of reclassified CROD. At that time, Western shall offer the

military branch the right to shift any remaining CVP CROD among the

bases with CVP CROD at the time of the recall. The NDA Act Power will

be offered to the military branch it was recalled from, under a short-

term contract, subject to Western allocating all or part of such NDA

Act Power first to a qualified applicant with a greater right to such

NDA Act Power pursuant to the NDA Act Procedures.

C. Types of Service

1. Long-Term Firm NDA Act Power

Western proposes to allocate up to a total of 106 MW as Long-Term

Firm NDA Act Power (identified in appendix A), as such Power becomes

available due to base closures pursuant to the 1990 Act.

2. Type III Withdrawable NDA Act Power

Western proposes to allocate up to a total of 13.223 MW as Type III

Withdrawable NDA Act Power (identified in appendix A), as such Power

becomes available due to base closures pursuant to the 1990 Act.

D. Types of Contracts

1. Long-Term Contracts

Long-Term Contracts may be offered to Preference Entities promoting

an economic development project at a Closed Military Installation. The

termination date of any such contract shall be no later than December

31, 2004, and such contracts shall be subject to the NDA Act

Procedures, the Final Withdrawal Procedures, and the Marketing Plan.

2. Short-Term Contracts

Short-Term Contracts may be offered to Preference Entities at a

Priority-Three Base or to a Negatively Affected Customer. Western shall

have the right to recall all or any part of the NDA Act Power CROD

under such Short-Term Contracts upon giving a minimum of a 6-month

written notice. However, such 6-month written notice will not be given

any earlier than 6 months after a contract has been executed. The

termination date for Short-Term Contracts shall be no later than

December 31, 2004, and such contract shall be subject to the NDA Act

Procedures, the Final Withdrawal Procedures, and the Marketing Plan.

E. General Eligibility Criteria

General eligibility criteria apply to applicants seeking an

Allocation of NDA Act Power under the NDA Act Procedures. Criteria 1

through 5 shall apply to applicants who are promoting an economic

development project at a Closed Military Installation. Criteria 4

through 6 shall apply to all other applicants seeking an Allocation of

NDA Act Power.

1. Applicant must have an economic development project plan that

fulfills the following criteria:

a. Promotes the establishment or expansion of industrial,

commercial, or governmental facilities at the Closed Military

Installation, and

b. Helps create or retain jobs in the near term and assists in the

creation of additional long-term employment opportunities. The economic

development project plan must include a specific plan for hiring the

unemployed and underemployed persons from the area near the Closed

Military Installation, and

c. Has been approved by the appropriate governing body of the

military installation in which it is, or will be, located and has

community support, which is demonstrated by appropriate local

government agency's written approval of the economic development

project plan, and

d. Is supported by public and/or private sector investment and can

present evidence of adequate funding, and

e. Demonstrates that necessary permits, land acquisitions, or

options on land and right-of-way have been obtained; demonstrates that

all other legal requirements of the application process have been

satisfied; and demonstrates that ownership or a long-term lease of the

electrical distribution system has been obtained or will be obtained by

the delivery date for the NDA Act Power.

2. The economic development project must occur at a Closed Military

Installation.

3. Applicant must provide documentation certifying that the entity

operating the economic development project is eligible to exist and

operate at the Closed Military Installation that is the site of the

economic development project.

4. Applicant must qualify as a Preference Entity.

5. Applicant must be located within the CVP Marketing Area.

6. Applicants applying for NDA Act Power to be used at a Priority-

Three Base must exist and operate and be ready, willing, and able to

receive and use, or receive and distribute such NDA Act Power beginning

on the date of application. An applicant applying for NDA Act Power as

a Negatively Affected Customer must demonstrate it meets the definition

of a Negatively Affected Customer.

F. Applications for NDA Act Power

Prospective applicants may begin requesting NDA Act Power from

Western no earlier than the effective date of these final NDA Act

Procedures and no later than November 30, 2003. Requests shall be

considered on a first-come, first-served basis consistent with General

Allocation and Contract Principles in section G below.

1. Letter of Interest

a. To be considered for NDA Act Power, each prospective applicant

must first submit to the Area Manager, Sacramento Area Office, a letter

of interest in receiving NDA Act Power. In the letter of interest, the

prospective applicant must indicate whether it is either a Preference

Entity requesting an allocation of NDA Act Power for use at a Priority-

One, Priority-Two, or Priority-Three Base, or a Negatively Affected

Customer.

(1) For Preference Entities requesting an allocation of NDA Act

Power to be used at a Priority-One or Priority-Two Base, the letter of

interest must also indicate the Closed Military Installation where the

NDA Act Power will be used and the estimated date when the economic

development project plan will be completed.

(2) For Preference Entities requesting an allocation of NDA Act

Power to be used at a Priority-Three Base, the letter of interest must

indicate the military installation where the NDA Act Power will be

utilized.

(3) Negatively Affected Customers must also identify in the letter

of interest, the Closed Military Installation that is located within

its service area and the direct effects of the closing of that military

installation on the Negatively Affected Customer.

b. If the letter of interest does not meet the criteria set forth

in Sec. F.1.(a), Western will notify the requestor within 60 days of

receiving the request.

c. If the letter of interest meets the criteria set forth in

Sec. F.1.(a), Western will determine whether NDA Act Power can be made

available to meet the request.

(1) If NDA Act Power is available, Western shall mail an applicant

profile data (APD) form to the prospective applicant within 60 days of

receiving the request. A completed application package which contains

all of the information listed on the APD will be required. This ensures

that Western will have a uniform basis upon which to evaluate the

applications.

(2) If NDA Act Power is not available, Western will send a letter

to the prospective applicant within 60 days of receiving the letter of

interest. This letter will state that there is no NDA Act Power

currently available to meet the request. Western will place the

prospective applicant's name on a list of interested parties. At any

time that NDA Act Power becomes available, Western will send a notice

of availability to all interested parties from which Western has

received a letter of interest and mail an APD form to prospective

applicants.

2. Applicant Profile Data (APD)

The content and format of the APD is outlined below. The

information should be submitted in the sequence listed. The applicant

must provide all requested information or the most reasonable estimates

that are available. The applicant should note any requested information

that is not applicable or not available. The APD must be typed and two

copies submitted by certified mail to the address provided by Western's

Sacramento Area Office. The burden of ensuring consistency of the

content of both copies rests with the applicant. Western is not

responsible for errors in data or missing pages.

All items of information in the APD should be answered as if

prepared by the organization seeking the Allocation. The application

package shall consist of the following:

a. Applicant. (1) Applicant's name and address.

(2) Person(s) representing applicant: Please provide the name,

address, title, and telephone number of such person(s).

(3) Type of organization: For example, municipality, rural electric

cooperative, irrigation district, State agency, or Federal agency.

(4) Parent organization.

(5) Names of members.

(6) Applicable law under which organization was established.

b. The proposed economic development project plan, including the

name of the military installation on which the economic development

project is proposed.

c. Documentation certifying that the entity operating the economic

development project is eligible to exist and operate at the Closed

Military installation.

d. Service Requested: The amount of electrical service requested.

e. Loads: Projected maximum demand (kilowatts (kW)) and energy use

(kilowatthours kWh)) for each month for a period of 5 calendar years,

beginning on the proposed date that the economic development project

begins operating.

f. Transmission: (1) Points of delivery: Provide the preferred

point(s) of delivery on Western's system or a third-party's system, the

required voltage of service, and the capacity desired at each point of

delivery.

(2) Transmission arrangements: Describe the transmission

arrangements necessary to deliver Power to the requested points of

delivery.

g. Other Information: The applicant is welcome to provide any other

information pertinent to receiving an Allocation.

h. Signature: The signature and title of an appropriate official

who is able to attest to the validity of the information submitted and

who is authorized to submit the application is required.

3. Western's Consideration of Applications

a. When the application package is received by Western, Western

will verify that the general eligibility criteria set forth in section

E have been met, and that all items requested in the APD have been

provided.

(1) Western will request in writing additional information from any

applicant whose application package is determined to be deficient. The

applicant shall have 60 days from the postmark date on Western's

request to provide the information.

(2) If Western determines that the applicant does not meet the

general eligibility criteria, Western will send (within 60 days of

Western's receipt of the application package) a letter explaining why

the applicant did not qualify.

(3) If the applicant has met the general eligibility criteria,

Western will determine the amount of Power to be allocated pursuant to

the general allocation and contract principles set forth in section G,

provided that no allocation will be given until such time as the

applicant can provide evidence that it has obtained either a long-term

lease or ownership of the electrical distribution system. If the

applicant does not obtain either a long-term lease or ownership of the

electrical distribution system within 1 year of Western's receipt of

the applicant's initial application, the application will no longer be

valid and the applicant will be required to submit a new application

which will again be subject to Western's review process. Western may

allocate any NDA Act Power to others until all allocation criteria are

met by the applicant. Once it has been determined that the applicant

has obtained either a long-term lease or ownership of the electrical

distribution system, Western will send a draft contract to the

applicant for review which identifies the terms and conditions of the

offer and the amounts and types of available Power.

b. All NDA Act Power shall be allocated according to the procedures

set forth in the general allocation and contract principles.

c. If Western determines that reallocations are necessary to

fulfill the applicant's request, Western will initiate the reallocation

procedures set forth in the general allocation and contract principles.

d. In the event that two or more applicants are requesting NDA Act

Power and Western does not have enough NDA Act Power available to meet

those requests, Western shall use its discretion to determine the

amounts of NDA Act Power to be allocated. Western shall use information

contained in the application package, including, if applicable, the

economic development project plan, to make its decision.

e. Western reserves the right to determine the amount of NDA Act

Power to allocate to an applicant, as justified by the applicant in its

application package, including, if applicable, the economic development

project plan. As loads increase at a Priority-One Base, the Allottee

may request and Western may allocate any amount of NDA Act Power up to

the Priority-One Base's NDA Act Power Entitlement to meet such increase

in loads. If necessary, Western may recall NDA Act Power under the

general allocation and contract principles to allocate to the Priority-

One Base.

G. General Allocation and Contract Principles

The general allocation criteria and contract principles established

in the Marketing Plan shall apply to Allocations of NDA Act Power. To

meet the specific requirements of the NDA Act, Western shall also apply

the following allocation criteria to all applicants seeking an

Allocation of NDA Act Power. All Allocations of NDA Act Power shall be

at the sole discretion of Western and shall be determined on a case-by-

case basis.

Allocations of NDA Act Power will be made in amounts solely

determined by Western, subject to the NDA Act Procedures.

1. Allocation Rights

Western will allocate NDA Act Power to qualified applicants based

on the following hierarchy:

a. First, for a military load at a Priority-One Base, or to

qualified Preference Entities promoting economic development at a

Priority-One Base.

Such first right to NDA Act Power will be limited to the NDA Act

Power Entitlement designated for a Priority-One Base.

b. Second, to a Preference Entity at a Priority-One Base for

amounts in excess of the NDA Act Power Entitlement for such base, to

serve a military load or to promote an economic development project, or

to a Preference Entity promoting an economic development project at a

Priority-Two Base.

NDA Act Power allocated under this paragraph will be subject to

recall upon 3 years' written notice in order to fulfill an Allocation

to a Priority-One Base which has not fully utilized its NDA Act Power

Entitlement under Sec. G.1.(a.) above.

c. Third, to a military branch which had a CVP CROD at a Closed

Military Installation as of November 30, 1993, for use at a Priority-

Three Base within that military branch within the CVP Marketing Area.

NDA Act Power allocated under this paragraph will be subject to

recall upon a 6-month written notice in order to serve a Priority-One

or Priority-Two Base. Such 6-month written notice will not be given any

earlier than 6 months after a contract has been executed.

d. Fourth, to any military branch for use at a Priority-Three Base

within the CVP Marketing Area, or to a Negatively Affected Customer.

NDA Act Power allocated under this subparagraph will be subject to

recall upon a 6-month written notice to serve a Priority-One or

Priority-Two Base, or a Priority-Three Base pursuant to Sec. G.1.(c.)

above. Such 6-month written notice will not be given any earlier than 6

months after a contract has been executed.

2. Allocation of NDA Act Power

Western will use the following procedures to allocate NDA Act Power

to a qualified applicant:

a. Western will determine whether sufficient Unutilized NDA Act

Power is available to fulfill the applicant's request.

b. If sufficient Unutilized NDA Act Power is available to fulfill

the applicant's request, Western shall allocate the amount needed.

c. If sufficient Unutilized NDA Act Power is not available to

fulfill the applicant's request, Western shall allocate all Unutilized

NDA Act Power and recall and reallocate NDA Act Power CROD to fulfill

the request by following the reallocation procedures stated in

Sec. G.3.

d. To ensure the most equitable distribution of Long-Term Firm NDA

Act and Type III Withdrawable NDA Act Power, Western proposes that each

Allocation of NDA Act Power shall be determined as follows:

TN01DE94.013

A is defined as Long-Term Firm NDA Act Power available at the time

of the Allocation.

B is defined as Type III Withdrawable NDA Act Power available at

the time of Allocation.

If using the above procedure would result in an Allocation of Long-

Term Firm NDA Act Power which is less than 500 kW., Western will modify

the procedure to ensure that the Allottee receives a minimum of 500 kW

of Long-Term Firm NDA Act Power as long as there is at least 500 kW of

Long-Term Firm NDA Act Power available.

e. Allocations will be made on to those applicants who qualify

pursuant to the NDA Act Procedures. The NDA Act Power must be used at a

Closed Military Installation or a Priority-Three Base, or the NDA Act

Power must be used by a Negatively Affected Customer.

f. The Allottee has the right to purchase NDA Act Power only when a

new electric service contract between Western and the Allottee has been

executed and when all conditions in that contract have been satisfied.

g. To consummate any Allocation of NDA Act Power, an electric

service contract shall be executed within 6 months of a contract offer

by Western, unless otherwise agreed in writing by Western.

h. Western reserves the right to recall any amount of NDA Act Power

CROD from an Allottee if the NDA Act Power CROD allocated is in excess

of the loads being served by the Allottee.

i. Western's Administrator has the sole discretion to reallocate

any NDA Act Power CROD that becomes available for marketing if an

Allottee has failed to accept a contract within the period allowed, or

if a contract has terminated, subject to the NDA Act Procedures.

j. Western's Administrator has the sole discretion to allocate any

amount of NDA Act Power which is not fully allocated under the four

levels of priority specified in the NDA Act Procedures. Any NDA Act

Power allocated pursuant to this paragraph will be recalled, at

Western's discretion, prior to any NDA Act Power being recalled from

any of the priority groups set forth in the NDA Act Procedures.

3. Reallocation Procedures

When Western must recall NDA Act Power CROD in order to meet a

request for NDA Act Power, Western will use the following procedures

and hierarchy:

a. Allottees receiving Power pursuant to Sec. G.1.(d.). This Power

is subject to recall by Western upon a 6-month written notice. Such 6-

month written notice will not be given any earlier than 6 months after

a contract has been executed.

b. Allottees receiving Power pursuant to Sec. G.1.(c.). This Power

is subject to recall by Western upon a 6-month written notice. Such 6-

month written notice will not be given any earlier than 6 months after

a contract has been executed.

c. Allottees receiving Power pursuant to Sec. G.1.(b.). This Power

is subject to recall by Western upon a 3-year written notice.

d. If Western determines that a partial recall of NDA Act Power

from any of the priority groups identified above is necessary to

fulfill the request, Western shall apply the following formula to

determine the amount of NDA Act Power to be recalled from each

Allottee.

TN01DE94.014

C is defined as each Allottee's contribution to the sum of the NDA

Act Power CROD for all Allottees in the priority group.

D is the sum of all Allottees' NDA Act Power CROD in the priority

group.

E is the requested amount to be recalled from the priority group.

e. If using the above reallocation formula causes an Allottee's

Long-Term Firm NDA Act Power allocation to be reduced below 500 kW,

Western will withdraw the entire Long-Term Firm Allocation.

4. Withdrawal Procedures

When Western is required to initiate withdrawals of Type III

Withdrawable NDA Act Power pursuant to the Final Withdrawal Procedures,

Western shall determine the amount to be withdrawn from each Allottee

by using the Final Withdrawn Procedures. Western will then total the

amounts to be withdrawn from each Allottee and will use the following

hierarchy to initiate withdrawals of the Type III Withdrawable NDA Act

Power:

a. Allottees receiving Power pursuant to Sec. G.1.(d.).

b. Allottees receiving Power pursuant to Sec. G.1.(c.).

c. Allottees receiving Power pursuant to Sec. G.1.(b.).

d. Allottees receiving Power pursuant to Sec. G.1.(a.).

e. If Western determines that a partial withdrawal of Type III

Withdrawable NDA Act Power from any of the above-mentioned groups is

necessary, Western shall apply the following formula to determine the

amount of Type III Withdrawable NDA Act Power to be withdrawn.

TN01DE94.015

F is defined as each Allottee's contribution to the sum of the Type

III Withdrawable NDA Act Power for all the Allottees within the group.

G is the sum of all Allottees' Type III Withdrawable NDA Act Power

within the group.

H is the requested amount of Type III Withdrawable NDA Act Power to

be withdrawn from the group.

5. Contract Terms for the Purpose of NDA Act Power

a. Long-Term Contracts. Western proposes that Long-Term Contracts

entered into under the NDA Act Procedures shall provide for electric

service for a period ending by December 31, 2004, and be subject to the

reallocation procedures set forth in the NDA Act Procedures. The

effective date of the Long-Term Contract shall be determined by Western

at the time of the contract offer. To abide by the requirements of the

NDA Act, Western shall have the right to recall all or any part of the

NDA Act Power CROD.

b. Short-Term Contracts. Western proposes that Short-Term Contracts

entered into under the NDA Act Procedures shall provide for electric

service during a temporary period ending by December 31, 2004, subject

to the reallocation procedures set forth in the NDA Act Procedures. The

effective date of the Short-Term Contract shall be determined by

Western at the time of the contract offer. To abide by the requirements

of the NDA Act, Western shall have the right to recall all or any part

of the NDA Act Power CROD.

c. For any applicant requesting NDA Act Power to be used for an

economic development project, the point of delivery for the NDA Act

Power must be at the Closed Military Installation where the NDA Act

Power will be used, unless otherwise agreed to by Western.

d. The minimum Long-Term Firm NDA Act Power CROD shall be 500 kW.

However, Western reserves the right to terminate a contract if a

customer receiving NDA Act Power over PG&E's transmission system does

not meet the minimum load requirements set forth in Contract 2948A.

e. Transmission Service. All transmission arrangements beyond

Western's CVP system are the full responsibility of the Allottee.

Western will assist the Allottee in obtaining third-party transmission

arrangements with PG&E for delivery of Power allocated under the NDA

Act Procedures. Nonetheless, each Allottee is ultimately responsible

for obtaining its own delivery arrangements. Western reserves the right

to terminate a contract if the Allottee is unable to arrange for the

transmission necessary to receive the CROD within 6 months of the

execution of the contract.

f. For those Allottees receiving NDA Act Power to be used at a

Closed Military Installation, the following provisions must be complied

with:

(1) Western reserves the right to terminate a contract if the

Allottee cannot demonstrate that it is using the NDA Act Power for an

economic development project within 1 year of the execution of the

contract, unless otherwise agreed.

(2) The Allottee must provide a report to Western each January 15,

which describes the benefits of the NDA Act Power CROD being passed on

to the organization operating the economic development project. This

report must be provided to Western in such a way that Western can

separately identify the composite energy and capacity costs stated in

mills per kWh of NDA Act Power and non-NDA Act Power. The report must

also show that the economic development project is still in operation.

(3) Western, at its sole discretion, shall have the right to either

withdraw NDA Act Power or terminate its contract with the Allottee upon

30 days' written notice if the Allottee does not comply with

Sec. G.5.(vi)(2) for each year of the contract.

3. Standard Provisions

The contracts entered into as a result of the NDA Act Procedures

will incorporate Western's standard provisions for power sales

contracts, resale of electric energy, and integrated resource planning

in addition to the General Power Contract Provisions.

Appendix A

The military installations receiving CVP Power and their

respective CVP CRODs as of November 30, 1993, are listed below:

----------------------------------------------------------------------------------------------------------------

Long-term firm Type III

Military installations power withdrawable Total

----------------------------------------------------------------------------------------------------------------

Parks Reserve Forces Training Area, Dublin, CA.................. 0.500 .............. 0.500

Defense Distribution Depot, San Joaquin, CA (Sharpe Facility)... 4.000 .............. 4.000

Defense Distribution Deport, San Joaquin, CA (Tracy Facility)... 3.800 .............. 3.800

Naval Weapoons Station, Concord, CA............................. 2.170 0.098 2.268

Naval Radio Station, Dixon, CA.................................. 1.040 .............. 1.040

Naval Air Station, Lemoore, CA.................................. 16.000 .............. 16.000

Naval Air Station, Moffett Field, CA............................ 4.170 2.270 6.440

Naval Security Group Activity, Skaggs Island, CA................ 0.650 .............. 0.650

Naval Communication Station, Stockton, CA....................... 3.630 .............. 3.630

Naval Station, Treasure Island, CA.............................. 3.020 2.581 5.601

Naval Shipyard, Mare Island, Vallejo, CA........................ 20.020 2.148 22.168

Beale AFB, Marysville, CA....................................... 20.507 1.068 21.575

McCellan AFB, Sacramento, CA.................................... 15.094 1.906 17.000

Onizuka AFB, Menlo Park, CA..................................... .............. 0.500 0.500

Travis AFB, Fairfield, CA....................................... 11.299 1.352 12.651

Travis Wherry, Fairfield, CA.................................... 0.100 1.300 1.400

-----------------------------------------------

Totals.................................................... 106.00 13.223 119.223

----------------------------------------------------------------------------------------------------------------

Regulatory Flexibility Analysis: Pursuant to the Regulatory

Flexibility Act of 1980, 5 U.S.C. 601 et seq., each agency, when

required to publish a proposed rule, is further required to prepare and

make available for public comment an initial regulatory flexibility

analysis to describe the impact of the rule on small entities. Western

has determined that (1) this rulemaking relates to services offered by

Western and, therefore, is not a rule within the purview of the Act,

and (2) the impacts of an Allocation from Western would not cause an

adverse economic impact to such entities. The requirements of this Act

can be waived if the head of the agency certifies that the rule will

not, if promulgated, have a significant economic impact on a

substantial number of small entities. By his execution of this Federal

Register notice, Western's Administrator certifies that no significant

economic impact on a substantial number of small entities will occur.

Environmental Compliance: The National Environmental Policy Act of

1969, 42 U.S.C. 4321 et seq., and implementing regulations issued by

the Council on Environmental Qualit , 40 CFR part 1500 et seq., and the

Department of Energy, 10 CFR part 1021, require that the environmental

effects of agency decisions be studied and considered by decision

makers. Studies were made to determine whether there were significant

impacts to the environment as a result of the original allocation of

the Power to the military installations. These studies and analyses are

published in the Revised Environmental Assessment (DOE/EA-0467) and

Finding of No Significant Impact (FONSI) which were prepared by Western

for its Sacramento Area Office 1994 Power Marketing Plan. The proposal

to implement the requirements of section 2929 of the National Defense

Authorization Act involves the same 529 MW of power addressed in DOE/EA

0467.

Paperwork Reduction Act of 1980: The Paperwork Reduction Act of

1980, 44 U.S.C. 3501 et seq., requires that certain information

collection requirements be approved by the Office of Management and

Budget (OMB) before information is requested of the public. OMB has

issued a final rule on the Paperwork Burdens on the Public, 48 FR

13666, March 31, 1983.

Determination Under Executive Order 12866: DOE has determined that

this is not a significant regulatory action because it does not meet

the criteria of Executive Order 12866, 58 FR 51735. Western has an

exemption from centralized regulatory review under Executive Order

12866; accordingly, no clearance of this notice by OMB is required.

Issued in Golden, Colorado, November 21, 1994.

J.M, Shafer,

Administrator.

[FR Doc. 94-29607 Filed 11-30-94; 8:45 am]

BILLING CODE 6450-01-P-M