Final Power Allocations of the Post-2000 Resource PoolPick- Sloan Missouri Basin Program, Eastern Division

DEPARTMENT OF ENERGY

Western Area Power Administration

Final Power Allocations of the Post-2000 Resource Pool--Pick-

Sloan Missouri Basin Program, Eastern Division

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of final power allocations.

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

marketing agency of the Department of Energy, hereby announces its

Post-2000 Resource Pool Power Allocations to fulfill the requirements

of Subpart C-Power Marketing Initiative of the Energy Planning and

Management Program Final Rule, 10 CFR Part 905. The Post-2000 Resource

Pool Allocations are Western's implementation of Subpart C-Power

Marketing Initiative of the Energy Planning and Management Program

Final Rule for the Pick-Sloan Missouri Basin Program, Eastern Division.

Western's proposed allocations were initially published in the Federal

Register August 30, 1996, and a clarification and response to comments

was published in the Federal Register December 3, 1996. The formal

comment period on the proposed allocations ended on January 6, 1997,

and a discussion of comments received pertaining to the proposed

allocations is included in this notice. After consideration of all of

the comments, Western has decided to finalize the proposed allocations

to new utility and nonutility customers as announced on August 30,

1996, and to finalize the proposed allocations to Native American

tribes based on the levelized methodology adjusted to address the

relatively small indirect benefits provided to the Rosebud Sioux Tribe

by Rosebud Electric Cooperative.

DATES: The Post 2000 Resource Pool Final Power Allocations, as based on

the Pick-Sloan Missouri Basin Program--Eastern Division marketable

resource at this time, will become effective April 10, 1997, and will

remain in effect until December 31, 2020. Electric service contracts

for the sale of power allocated in this notice will be effective when

signed by both the customer and Western. Allottees will have six months

to execute a contract with Western after the initial offer of a draft

contract, unless otherwise agreed in writing by Western. Contracts

entered into under the Post-2000 Resource Pool Allocation Procedures

shall provide for Western to furnish the benefits of firm electric

service effective from January 1, 2001, through December 31, 2020.

ADDRESSES: Information regarding the Post-2000 Resource Pool

Allocations, including comments, letters, and other supporting

documents made or kept by Western for the purpose of developing the

final allocations, are available for public inspection and copying at

the Upper Great Plains Customer Service Regional Office, Western Area

Power Administration, located at 2900 4th Avenue North, Billings,

Montana 59101.

SUPPLEMENTARY INFORMATION: Western published a notice of proposed

allocations in the Federal Register on August 30, 1996, at 61 FR 45957

to implement Subpart C-Power Marketing Initiative of the Energy

Planning and Management Program Final Rule, 10 CFR part 905. The Energy

Planning and Management Program (Program), which was developed in part

to implement section 114 of the Energy Policy Act of 1992, became

effective on November 20, 1995. Subpart C of the Program provides for

the establishment of project-specific resource pools and the allocation

of power from these pools to new preference customers. Western's final

procedures were published in the Federal Register at 61 FR 41142 on

August 7, 1996. Those procedures, in conjunction with the Pick-Sloan

Missouri Basin Program--Eastern Division, Final Post-1985 Marketing

Plan (Post-1985 Marketing Plan) (45 FR 71860, corrected at 45 FR 77509)

established the framework for allocating power from the resource pool

established for the Pick-Sloan Missouri Basin Program--Eastern Division

(P-SMBP-ED).

Western held public information and comment forums on September 18,

19, and 20, 1996, to accept oral and written comments on the proposed

allocations. On October 8, 1996, Western published in the Federal

Register, at 61 FR 52788, a Notice of Time Extension for the Proposed

Allocation which extended the formal comment period for written

comments from October 7 to October 21, 1996. On December 3, 1996,

Western published in the Federal Register, at 61 FR 64080, a Notice of

Clarification, Response to Comments and Request for Additional Comments

regarding the levelized method of calculating proposed allocations for

new Native American customers and proposed an alternative method.

Western held a public information and comment forum on December 17,

1996, to accept oral and written comments regarding the methodology

used to calculate the proposed allocations for new Native American

customers. The comment period for this Federal Register notice ended

January 6, 1997.

The August 30, 1996, Federal Register notice proposed a levelized

methodology for determining Native American allocations (Method One).

Under Method One Western levelized total Federal hydropower benefits to

be received by each tribe. The proposed allocations under Method One

(the direct benefit to each tribe) were determined by taking the total

Federal hydropower benefit (63.323 percent in the summer and 56.869

percent in the winter) to be received by each tribe less the amount of

indirect benefit each tribe receives through its current power

supplier(s). As a result of comments received during the comment period

for 61 FR 45957, Western published an alternative second method (Method

Two) in the Federal Register on December 3, 1996, to calculate the

proposed tribal allocations (direct benefit). Under Method Two the

tribal allocations were determined by prorating the total amount of the

resource pool available to the tribes based on each tribe's estimated

load. This Federal Register notice also republished Method One and

requested comments in support of one of the two methods.

Western has decided to finalize the proposed allocations to new

utility and nonutility customers as announced August 30, 1996, and to

finalize the proposed allocations to Native American tribes based on

Method One adjusted to address the relatively small indirect benefits

provided to the Rosebud Sioux Tribe by Rosebud Electric Cooperative.

Final allocations were determined in the same manner as Method One

except the portion of indirect benefits received by the Rosebud Sioux

Tribe from the Rosebud Electric Cooperative were taken out of the

calculation of Rosebud Sioux Tribe's indirect benefits. This was done

in response to several comments that the Rosebud Electric Cooperative

supplies an insignificant portion of the Rosebud Sioux Tribe's

electrical requirements. Under Method One, as adjusted, Western

levelized total Federal hydropower benefits received by each tribe. The

proposed allocations under adjusted Method One (the direct benefit to

each tribe) were determined by taking the total Federal hydropower

benefit (61.6065 percent in the summer and 55.3396 percent in the

winter) to be

[[Page 11175]]

received by each tribe less the amount of indirect benefit each tribe

receives through its current power supplier(s).

The Post-2000 Resource Pool Allocations set forth in this Federal

Register notice identify the utility and nonutility customers and

Native American tribes to which Western intends to allocate power to

implement Subpart C of the Power Marketing Initiative of the Energy

Planning and Management Program Final Rule in the P-SMBP-ED.

Response to Customer Comments Regarding Post-2000 Resource Pool

Allocations

I. General Comments

Comment: Western received requests for extension of the comment

period for the August 30, 1996, Federal Register notice.

Response: 61 FR 52788 published October 8, 1996, extended the

deadline for submittal of comments until October 21, 1996. Also, 61 FR

64080 published December 3, 1996, clarified, responded to comments, and

requested additional comments regarding the levelized method of

calculating proposed allocations for new Native American customers and

proposed an alternative method. Comments were accepted regarding this

notice until January 6, 1997.

Comment: Western received requests to reconsider the application of

Horsecreek Irrigation Cooperative. Horsecreek Irrigation Cooperative

does not directly or indirectly receive electrical power from McKenzie

Electric Cooperative, Inc. Horsecreek Irrigation Cooperative was formed

solely for the purpose of obtaining Western power and does not yet

receive any power whatsoever from McKenzie Electric Cooperative, Inc.

Horsecreek Irrigation Cooperative is not active and will not be active

unless and until Western power is available.

Response: Because Horsecreek Irrigation Cooperative is inactive,

Western has declared them ineligible based on the Post-2000 Resource

Pool Allocation Procedures General Eligibility Criteria sections III.A,

III.E and III.I.

Comment: Western inappropriately evaluated Horsecreek Irrigation

Cooperatives's meeting of the 100 kW eligibility criteria. The use of

the eligibility criteria that the allocations be based on loads

experienced in the 1994 summer season and the 1994-95 winter season

does not reflect the actual growing seasons, is misguided, and favors

other users over agricultural users, who were the primary users for

which Pick-Sloan power was intended to benefit.

Response: The Post-1985 Marketing Plan established the criterion of

a minimum allocation to determine eligibility for power allocations.

The Post-1985 Marketing Plan minimum allocation criteria was modified

as set forth in the Final Procedures. The final allocations of power

for new utility and nonutility customers were calculated using Post-

1985 Marketing Plan criteria. Under the Post-1985 Marketing Plan

criteria, the summer allocations are 24.84413 percent of total summer

load and the winter allocations are 35.98853 percent of total winter

load. The final allocation procedures as published at 61 FR 41142

stipulated these percentages would be applied to the 1994 summer and

1994-95 winter season loads for utility and nonutility customers. Based

on information Horsecreek Irrigation Cooperative supplied in their

Applicant Profile Data and our calculation of that data, Western again

determined Horsecreek Irrigation Cooperative ineligible under the

General Eligibility Criteria sections III.A, III.E and III.I.

Comment: The contract with Western for the existing allocation is

contracted with the utility. Tribes choosing to form a separate utility

cannot access the allocation already contracted. There is a need for

discussion of this subject for an equitable resolution. In absence of a

resolution, Western is making it extremely difficult for tribes to form

utilities and in some cases, beneficial to the effected utilities that

currently provide service.

Response: The intent of the Program was to provide the benefits of

Federal hydropower allocations directly to individual tribes. Western

does not believe these allocations have created additional burdens for

Native American tribes in forming a separate utility. Those tribes with

smaller allocations under either method may find it more costly to form

a separate utility simply because of the cost associated with

supplemental power due to the loss of their indirect benefits.

Comment: Several applicants requested that their applications be

given reconsideration. Applicants stated that their rates were not

adjusted when the allotment was received by the supplier for power and

therefore have not received benefits, directly or indirectly, of

Western power.

Response: Western reviewed all applications that were requested to

be reconsidered. That review did not find previous applicants declared

ineligible to be eligible. Whether or not rates were adjusted for any

applicant currently receiving benefit, directly or indirectly, from a

current P-SMBP-ED firm power allocation is outside of the scope of this

process.

Comment: One commenter stated that Minot State University's

application was not considered because they are currently receiving

benefits directly or indirectly and requested an explanation.

Response: Our General Eligibility Criteria in the Post-2000

Resource Pool Allocation Procedures states, ``Qualified utility and

nonutility applicants must not be currently receiving benefits,

directly or indirectly, from a current P-SMBP-ED firm power allocation.

Qualified Native American applicants are not subject to this

requirement.'' We have determined that if an entity such as Minot State

University is administered by a State which is receiving benefits, then

they are also receiving the benefits of Federal power and are

therefore, ineligible.

Comment: Western received several comments questioning whether

Western will review the application and change their decision if a

city/municipality should achieve utility status by the deadline stated

in the Federal Register.

Response: It was the responsibility of the city/municipality to

provide necessary documentation for Western to determine if the city/

municipality met the General Eligibility Criteria. Based upon the

information submitted during the application period in their applicant

profile data, Western has determined that those entities would not be

able to achieve utility status in the given time frame.

Comment: If Western should decide to make additional allocations

available in the years 2006 and 2011, a Federal Register notice should

be published two years in advance to allow interested cities a chance

to obtain utility status. Another commenter requested Western provide

applicants ample opportunity prior to the years 2006 and 2011 to

develop their own electrical utility.

Response: If additional allocations are made, they shall be made in

accordance with the Program. Specifically, 10 CFR 905.35(c) requires

entities that desire to purchase power from Western for resale to

consumers obtain utility status 3 years prior to the subsequent

resource pool. Notice of these requirements were published in a final

rule November 20, 1995. The implementation of the Program does not

prevent an entity from obtaining utility status at any given time.

These allocations and procedures do not in any way affect Western's

obligations or flexibility in regards to future resource pools as

stipulated in the Program.

Comment: Any allocations of power to the tribes need to recognize

and

[[Page 11176]]

acknowledge that tribes were denied access to power in all previous

allocations. Another questioned how individual tribal member land

owners whose land is in trust, as is the tribes, would be able to

benefit from the Western allocation program, if the initial motivation

for including tribes in the Western allocation process was due to

impacts to Indian lands as a result of hydroelectric development on the

Missouri. Two commenters stated they would like to remind Western that

allocations of power in no way abrogates any outstanding treaty

obligations owed to their tribe nor does it impact the tribe's water

rights but is merely the result of tribes achieving ``Preference Power

Customer'' status. Another commented that the fair share of the total

resource pool allocated to the tribes was determined by Western to

reflect a portion of the reservation electrical needs by the year 2000

and to reflect the fact that the tribes had been denied access to

Western power in previous allocations.

Response: Western has continued to take steps towards assisting

Native Americans in meeting their needs for cost-based hydropower.

Western has always considered tribes to be preference entities, but has

not historically allocated power to Native Americans in the absence of

utility status, eligible irrigation load, or special legislation

enacted by Congress. In the past, the benefits of hydropower have been

realized by Native Americans through allocations to cooperatives that

serve tribal load. The Program changed Western's policy regarding

Native Americans and utility status. Therefore, allocations will now be

made directly to the tribes. Western agrees that these allocations do

not impact tribal water rights or treaty obligations.

Comment: Western received several comments that Western did not

follow the Final Power Allocation Procedures of the Post-2000 Resource

Pool as published in the Federal Register on August 7, 1996.

Specifically, the August 7, 1996, Final Procedures, Section III,

Paragraph I states, ``The minimum allocation shall be 100 kilowatts

(kW).'' The Flandreau Santee Sioux Tribe had a proposed winter season

allocation of only 20 kW under Method One. This allocation is lower

than the minimum allocation in the Final Power Allocation Procedures .

Response: The Final Procedures incorporate the Post-1985 Marketing

Plan criterion of a minimum allocation in establishing these

allocations. The Post-1985 Marketing Plan established the criterion

that eligibility for power allocations was based on an annual basis and

not a seasonal basis. It was never the intent of the Post-1985

Marketing Plan or the Post-2000 allocation process to infer that all

seasonal allocations would be a minimum of 100 kW. An applicant meets

this criterion as long as one season's proposed allocation meets the

minimum allocation of 100 kW. Therefore, in this case, it is possible

to receive a winter allocation under the 100 kW minimum as long as the

summer season is 100 kW or larger. It should be noted that Western

disqualified several utility and nonutility applicants on the basis

that both their winter and summer season proposed allocations would be

below the 100 kW minimum.

Comment: One commenter expressed concern that Western decided to

allocate the remainder to the tribes and actually increase the tribes''

share of the resource pool from 75 percent to about 80 percent. They

asked that Western look at the rules that were established and see if a

greater percentage of people could benefit from low cost hydropower by

changing some of the rules. Also, they stated that a small part of the

25 percent of the resource pool originally designated for the new

utility and nonutility customers was transferred to the Native American

customers. Again they requested Western review this procedure with

regard to allocating that small part to either new customers who have

not yet formed a ``public power agency'' or to entities that are

preference customers.

Response: Western was obligated to apply the Post-2000 Resource

Pool Allocation Procedures to all applicants. This process is designed

to allocate the 4 percent as set forth by the Program. Two future 1

percent resource pools were also identified as part of the Program and

allocations from these future resource pools will be dealt with in

future public processes.

Comment: If the ``preference power'' method of calculations is

used, the tribes should be compensated $10,000 each and Mni Sose

$100,000 to cover the entire cost for their 3-year effort.

Response: This comment is outside of this process. Western does not

have authority to compensate an entity for efforts in this process.

Comment: The Federal government, Department of Energy, Bureau of

Reclamation, Army Corps of Engineers, Department of Interior, the

Bureau of Indian Affairs, and Western, should collaborate to assure

that tribes be allowed to develop and operate their own power

utilities. Language should be amended to give tribes the ability to

form utilities as opposed to keeping the oppressive policies ongoing.

Response: The implementation of the Program does not prevent an

entity from obtaining utility status.

Comment: One commenter protested the allocations process and

demanded compensation for the use of water river rights for the

Oglalas, other Sioux tribes, and Missouri River tribes.

Response: This comment is outside of this process. Western does not

have authority to compensate an entity for the use of water rights.

Comment: Three commenters requested Western recalculate the

proposed allocations for the Native American tribes using only the

criteria in the final allocation procedures (the estimated loads).

Response: Western used the Post-2000 Resource Pool Allocation

Procedures criteria including the estimated loads in the tribal

applications in determining the final allocations for qualified Native

American tribes.

Comment: Allocations were arranged in such a way as to discourage a

tribe from starting its own utility because the amount allocated was so

small.

Response: Allocations were based on the 4 percent resource pool

which was derived from the Program. Western's final procedures were

published in the Federal Register at 61 FR 41142. Those procedures, in

conjunction with the Post-1985 Marketing Plan, established the

framework for allocating power from the resource pool, are final, and

cannot be changed in this process.

Comment: Western needs to increase the size of the resource pool.

One option would be to revamp current facilities to increase generation

and reserve surplus for tribes. Another commented that by offering up a

resource pool which is woefully inadequate to address the needs of the

tribes Western has forced the tribes to fight with each other. Another

commented that the tribes now have to place the interest of their own

tribes in the forefront and decide which of the two alternatives is

best for their tribe. This may lead to possible dissension among the

tribes which may be the goal Western is attempting to achieve.

Additionally, two commenters stated that the fair share determined by

Western does not reflect the argument made by the tribes that the size

of the resource pool and the tribal allocation should have been

substantially greater.

Response: The 4 percent resource pool was derived from the Program,

and therefore the size of the pool is outside this process. This

process is designed to allocate the 4 percent resource pool as set

forth by the Program. It was the intent of Western to provide benefits

[[Page 11177]]

from the resource pool to all eligible entities. Two future 1 percent

resource pools were also identified as part of the Program and

allocations from these future resource pools will be dealt with in

future public processes.

Comment: Outside purchases are needed to supplement the proposed

Post-2000 allocation and accommodate a larger allocation to the tribes.

Such purchases would not be a detriment to any existing customer of

Western. Pick-Sloan purchases are relatively small in contrast to other

Western areas.

Response: This comment is outside of this public process. The Final

Allocation Procedures and Final Allocations are a direct result of the

Program. The Program does not provide for the acquisition of additional

outside resources to supplement the 4 percent resource pool.

Comment: Using the power suppliers' existing hydro allocations to

provide allocations to tribes implies that the tribes may have rights

to part of the power suppliers current allocation. Another commented

that using the power suppliers' existing hydro allocation to provide

allocations to the tribes implies that the Flandreau Santee Sioux may

have rights to part of the City of Flandreau's current allocation. This

is a major concern to the City of Flandreau since the tribe was not

receiving any power when the City of Flandreau received their

allocation in 1977.

Response: The intent of the Program was to provide benefits of

Federal hydropower allocations directly to qualified Native American

tribes. This is represented in the final allocations. The use of

existing hydro allocations in the calculation method does not imply

that the tribes have rights to any part of these allocations. Further,

it does not change the contractual commitments between Western and the

existing customers. Contractual commitments between Western and the

existing customers are outside of this public process.

Comments: The proposed allocations for the Native American tribes

are based on their estimated population, both on and off the

reservations, with the Ponca Tribe of Nebraska having no land base. The

commenter believes the allocations should be based on the estimated

electrical load on the reservations. The proposed allocation from the

estimated loads based on population projections, result in allocations

larger than some tribes can utilize. Two commenters stated that the

proposed allocations from the estimated loads result in allocations

larger than some tribes can currently utilize. Another commented that

allocations are more favorable to tribes without service from an

existing Western customer and less favorable to tribes with service

from an existing Western customer. Another commented that the amount of

the Crow Tribe allocation derived from Method Two, plus the tribe's

power supplier's existing allocation, may be larger than the entire

load of the Crow Tribe. Finally, one commented that Method Two would

provide the Crow Creek Tribe more than 100 percent of their load.

Response: Western does not agree with these comments and our

analysis does not support this conclusion. Allocations for Native

American tribes were based on estimated loads for the year 2000. In the

absence of reliable load data for Native American tribes, population

data was used in an effort to estimate Native Americans loads in the

year 2000. In this notice, Western has levelized the total Federal

hydropower benefits (61.6065 percent in the summer and 55.3396 percent

in the winter) to be received by each tribe.

Comment: It should be clearly defined in the contracts that the

allocations go to the tribes themselves or beneficiaries of the tribes.

Response: Contracts for the Post-2000 Resource Pool allocations

will be between Western and the allottee.

Comment: One commenter asked if the original low cost power issued

to the tribes will still be low cost after all the transmission costs

are considered. Another commented that there should be no transmission

costs associated with distribution of power to tribes in the Missouri

River Basin.

Response: Western will assist the allottee in obtaining third-party

transmission arrangements for delivery of firm power. To the extent

that utilities are involved in these arrangements, Western will work

with those entities. However, as stated in the Final Procedures, it is

the ultimate responsibility of the allottee to obtain its own delivery

arrangements and to pay the associated costs.

Comment: Western should have allowed tribal input in developing the

allocation process.

Response: Tribal input, as well as input from other entities, has

been solicited in conjunction with the public process comment period

that was initiated January 29, 1996, and concluded January 6, 1997.

During that time frame seven informational forums and seven comment

forums were held and ongoing opportunities to provide written comments

were allowed at each step of the process.

Comment: Two comments stated that the tribes should directly

receive the entire allocation to service the tribal load.

Response: The intent of the Program was to provide the benefits of

Federal hydropower allocations directly to individual tribes. The

entire allocations contained in this notice will be made directly to

the tribes. Any indirect benefits recognized in the calculation method

were utilized only to levelize total benefits across the Region at the

time of allocation with no intent to create any commitment whatsoever,

to transfer these benefits to the tribes. Any indirect benefits

received by the tribes are contractual commitments between Western and

the existing customers and are outside of this public process.

Comment: The allocation as proposed (under Method One) penalizes

the Crow Tribe as a recipient of Federal power and subjects the Crow

Tribe to anti-Indian policies by an existing power supplier.

Response: It is not the intent of the Program to penalize any

recipient of Federal power. Under any method of direct allocation,

which does not result in full requirements being met by P-SMBP-ED, the

tribe will be subject to existing power supplier policies to the extent

they desire the existing power supplier to continue to supply the

tribe's remaining power needs.

Comment: Revenues from Western could be more helpful to tribes by

providing set-aside monies, grants, and startup monies. This is the

prime time for a tribe to initially plan for utility status, if it

wants to.

Response: This comment is outside of this process. Western does not

have the authority to provide revenues to the tribes for set-aside

monies, grants or startup monies through this allocation process.

Comment: Was the motivation for the provisions in the 1992 Energy

Policy Act to include Indian tribes in Western's allocation planning?

Did tribes or representatives from tribes provide testimony, initially

under the Energy Policy Act to include benefit provisions to tribal

governments?

Response: These comments are outside of this process.

Comment: Did tribes use the negative impacts to Indian lands from

hydroelectric development on the Missouri River as justification to

include tribes as beneficiaries of Western allocations?

Response: This comment is outside of this process.

Comment: If Western would refer the individual land owner back to

the tribe, would Western be predisposed to assist and advocate for

individual land owners, directly impacted by

[[Page 11178]]

hydroelectric development activities, in respect to energy allocations,

either through low or no cost energy benefits after the year 2001?

Response: Western intends to provide benefits directly to Native

American tribes beginning in 2001 and will work with the tribes to

assure receipt of those benefits.

Comment: There is not a clear enough definition as to who a

qualified allocation beneficiary can be outside of a reservation

boundary.

Response: Off-reservation use of Native American tribe allocations

under certain circumstances as determined by Western was allowed for in

60 FR 54151. The circumstances under which off-reservation use of a

Native American tribe allocation will be allowed will be determined by

Western on a case-by-case basis during the contract negotiation

process.

Comment: The allocation should be made to the tribe and to the

utility.

Response: The intent of the Program was to provide the benefits of

Federal hydropower allocations directly to individual tribes. This

principal is consistent with how Western treats existing customers.

Western does not feel that the goal of the Program would be served by

jointly allocating Native American allocations to utilities and tribes.

Comment: The very concept of the allocation/credit has caused

concern among the cooperative membership and an increase to a

nonjustifiable higher level will enhance divisiveness and ill feelings.

Response: This situation does exist among some of Western's long

term firm power customers who have a different blend of low-cost

hydropower and supplemental power. This comment is outside of this

process.

Comment: As new preference customers, Native Americans should

receive the benefit of the same principles Western has applied in

previous marketing plans.

Response: Western's final procedures were published in the Federal

Register at 61 FR 41142. Those procedures, in conjunction with the

Post-1985 Marketing Plan, established the framework for allocating

power from the resource pool. The current process has incorporated

principles from prior marketing plans as well as establishing that the

new customers will be bound by similar general contract principles as

existing customers.

Comment: To revisit the Native American allocation methodology at

this late date is counterproductive to expeditious implementation of

this program.

Response: This comment was directed at the December 3, 1996,

Federal Register notice, which proposed an alternate second method to

calculate the proposed tribal allocations. Based upon input received

during the public process, Western felt it appropriate to propose an

alternate Native American allocation methodology and to extend the

comment period to determine power allocations to assure the intent of

the Program is satisfied.

Comment: It is important that Western directly involve the

Sisseton-Wahpeton Sioux Tribe, and the other Missouri River basin

tribes in all future resource planning and allocations. Mni Sose

Intertribal Water Rights Coalition, Inc. will also continue to be an

active representative of these tribes. Also, one commenter stated that

comments submitted pursuant to this notice should not be considered the

final comments of their Tribe/Nation. The Crow Tribe Public Utility

Commission will continue to review and report on the various aspects of

Energy, Electrical Power and ancillary services. Another commented that

Western, along with the rest of the Federal Government, has an enduring

and continuing trust responsibility for the tribes in the Missouri

River Basin.

Response: Western supports the Department of Energy's American

Indian policy which stresses the need for a government-to-government,

trust-based relationship. Western intends to continue its practice of

consultation with tribal governments so that tribal rights and concerns

are considered prior to any actions being taken that effect the tribes.

Comment: The delivery of Federal hydropower to the tribes should be

made in such a way that the benefit of the allocation is realized by

the end user.

Response: Contracts for power of the Post-2000 Resource Pool will

be between Western and the allottee.

Comment: One commenter expressed the desire for Western to come to

the Standing Rock Reservation to present the contracts in negotiating

with Standing Rock Sioux Tribe to honor the government-to-government

relationship, because it is taken very seriously at Standing Rock

Reservation.

Response: Entering into contractual arrangements with the various

entities is the next step of this process. However, this will not begin

until the final allocation process has been completed.

Comment: The allocation should be made in the form of energy and

not a credit.

Response: Western agrees that allocations in the form of energy is

one viable method of delivering the benefits of Federal hydropower to

Native American tribes. However, flexibility must be retained in the

delivery of such benefits in order to fit a diverse group of Native

American tribes and power suppliers. The method for delivering the

benefits of Federal hydropower to the tribes will be determined during

the contract negotiation process.

B. Methodology Comments

Western departed from the Mni Sose Intertribal Water

Rights Coalition, Inc. method of allocation without consultation with

the tribes and created inequities.

Western ignored the allocation formula which the tribes

agreed upon and poured considerable resources into preparing.

Two commenters mentioned the plan put forth by Mni Sose

Intertribal Water Rights Coalition, Inc. must be acknowledged and used.

The proposed allocation to the Pine Ridge Tribe is 40

percent greater than what Mni Sose Intertribal Water Rights Coalition,

Inc. estimated as their current requirements.

Current use figures were often unavailable because the

five companies that currently serve the Lake Traverse Reservation were

not totally cooperative in providing data.

The allocation process is sorely lacking in consideration

of the tribe's needs and wants and the Yankton Sioux Tribe is not going

to indicate a preference for either allocation method.

The differences between the proposed methods of allocation

may be perceived to instigate confrontations among or between various

tribes, but the ultimate concern of the Native American tribes/Nations

is to improve and expand electric goods and services available to

improve living conditions and address conditions on many ``Indian

Reservations'' within and throughout the native life sustaining regions

of the Upper Missouri River region and beyond.

Several commented that Section 3, Paragraph D of the

General Allocation Criteria, states, ``Allocations made to Native

American Tribes will be based on estimated load developed by the Native

American tribes. Inconsistent estimates will be adjusted by Western

during the allocation process.'' Under Method One, ``Proposed

Allocations'' were not only based on the estimated load developed by

the Native Americans, they were adjusted by the estimated current

service the Native Americans were already receiving from their power

suppliers. The so called ``levelizing'' of benefits was not part of

[[Page 11179]]

the General Allocation Criteria in the Final Procedures. Also, under

this method, the Flandreau Tribe will lose 4 percent or 53 kW in the

year 2000. After 2000 the tribe will have a net loss of 33 kW.

Several commenters expressed concern that the average

current Western service to the Rosebud Sioux Reservation, as published

in the Federal Register, is not correct. Ninety-nine percent of the

Rosebud Sioux Tribe's load is served by LaCreek-Electric Cooperative,

Inc. and Cherry-Todd Electric Cooperative, Inc., both members of

Rushmore Electric Power Cooperative. The small portion of Rosebud

Electric Power Cooperative's service with a higher allocation should be

ignored for this calculation in order to make the balance correct in

how much the tribe should get. Take Rosebud Electric Cooperative out of

the formula and the allocation would be fair and correct.

It is important to the members of Hot Springs Rural

Electric Association, Inc. that the precedent set in the P-SMBP-ED be a

fair and equitable allocation of the Resource Pool. In the near future,

Western will begin to allocate the Resource Pool in the Pick Sloan

Missouri Basin, Western Division, and we anticipate similar action in

the Colorado River Storage Project.

The amount of allocation derived from the use of Method

One more clearly represents a fair allocation to the Crow Tribe.

Several commenters strongly encourage Western to apply the

levelized method (Method One) of calculating proposed allocations to

Native American customers. The support is based on the principle of

applying equity among tribal members. These comments suggest that

Method Two is not consistent with the principle of equity. Method Two

offers greater benefits to some at the expense of others. Unless

existing Federal bulk power supply available through current power

suppliers is taken into account as part of the final allocations,

variations in the amount of Federal power available among tribal

interests will vary and lead to further retail rate disparities.

To increase the allocation to Method Two levels does not make

sense.

We support ``Method One'' as fair and equitable to all

Native Americans and current electric utility providers. Neither they

nor its member systems serve the region defined in the Federal Register

notice but think its important to comment. They anticipate similar

action in the Colorado River Storage Project and it is very important

to them and its member systems that the precedent set in the P-SMBP-ED

be fair and equitable. Also, they submitted recommendations because

expenses for the Pick-Sloan Missouri Basin Program are shared over both

divisions. The alternative method does not equitably distribute the

benefits of the resource pool or take into account benefits for Native

Americans already received through the current electric utility.

If Western utilizes ``Method Two'', the Turtle Mountain

band of Chippewa Indians would suffer a 27 percent reduction. Tribes

which are currently receiving much higher benefits, will receive the

much higher allocation which will result in a greater disparity among

the tribes.

Method One is considered inequitable for the reason that

tribes receiving Western power through the existing rural electrical

cooperatives are more likely to fall in the category of the Crow Creek

Sioux Indian Reservation and are not likely to benefit from the current

contractual arrangements between the rural electrical cooperatives and

Western.

We request Western use Method Two in calculating the

proposed allocations for new Native American customers. The comment

suggested that Method Two not only follows the criteria in the final

procedures, it also appears to treat all tribes on a more equitable and

fair basis.

Several commenters recommended Method Two for new Native

American customers. The ``second'' method presented by Western more

adequately addresses the tribal needs and demands for electrical energy

to improve and expand allocations to meet conditions as discussed and

developed during coordinated meetings among tribes and Western. Method

Two also more fairly distributes the Native American tribes' share of

the resource pool among the tribes. Under Method One, some tribes would

receive an allocation greatly in excess of their load requirements.

Method One simply does not do what Western states it is

intended to do. It is not a fair or equitable allocation to the tribes.

Response: Western used components of the Mni Sose Water Rights

Coalition's allocation method in the development of the Final

Allocation Procedures and the Final Allocations. As stated in the Post-

2000 Resource Pool Allocation Procedures General Eligibility Criteria

section III.D, ``Allocations made to Native American tribes will be

based on estimated load developed by the Native American tribes.

Inconsistent estimates will be adjusted by Western during the

allocation process.'' Western accepted loads submitted by the tribes

which were estimated by the Mni Sose Intertribal Water Rights

Coalition, Inc. Western also accepted loads estimated using other

methods developed by individual tribes. Western only adjusted tribal

load estimates when an obvious error was made in the load calculation

or when an unreasonable assumption was used in the estimation method.

Western provided an additional opportunity to address and clarify

comments regarding the levelized method of calculating proposed

allocations for new Native American customers and proposed an

alternative method. On December 3, 1996, Western published in the

Federal Register, at 61 FR 64080, a Notice of Clarification, Response

to Comments and Request for Additional Comments. Western held a public

information and comment forum on December 17, 1996, to accept oral and

written comments regarding the methodology used to calculate the

proposed allocations for new Native American customers. The comment

period for this Federal Register notice ended January 6, 1997. The

public process was a consultation period for both Native Americans and

other interested entities, and the Mni Sose Intertribal Water Rights

Coalition, Inc. was involved in that process.

Western recognizes the concern expressed by the Rosebud Sioux Tribe

regarding the minor contribution of indirect benefits from the Rosebud

Electric Cooperative in comparison to the other two co-suppliers and

the inequitable effect it has on the Rosebud Sioux Tribe's proposed

allocation under Method One. It was appropriate to adjust the

calculation of Rosebud Sioux Tribe's indirect benefit by excluding the

indirect benefits provided by Rosebud Electric Cooperative. The Rosebud

Sioux Tribe and others raised this issue in both the information

meetings and the formal comment forums in addition to sending in

written comments. The adjustment to Method One was a data issue and not

a change in the guidelines for making the allocations established

through the public process. Western was not aware of this discrepancy

until information was provided during the process. As a result of this

information, Western has adjusted Method One as originally published to

address this concern.

Western reviewed the commenter's concern that the Flandreau Tribe

could possibly experience a net loss of hydropower benefits, as

proposed, when considering their total power supply (supplemental power

and direct benefits). All long term firm power customers of Western are

subject to the

[[Page 11180]]

requirement that they will lose 4 percent of their allocation as

provided by the Program regardless of what amount is allocated to the

tribe.

We recognize the concern of the Crow Creek Sioux Tribe regarding

the different rate designs of the cooperatives that serve the

reservation and their effect on the ratepayers. Western has no control

over these rate designs and this issue is outside of our allocation

process. It should be noted that although Crow Creek Sioux Tribe's

comment was directed at Method One, Method Two does not correct the

rate design problem either.

Western received diverse comments regarding the proposed Method One

and Method Two. The intent of the Program was to provide the benefits

of Federal hydropower allocations directly to individual tribes in an

equitable manner. After reviewing all comments, Western selected Method

One, adjusted to address the relatively small indirect benefits

provided to the Rosebud Sioux Tribe by Rosebud Electric Cooperative, to

determine the size of the allocations based upon the need to meet an

appropriate share of the load for qualified Native American tribes.

Western used the Post-2000 Resource Pool Allocation Procedures criteria

and exercised its discretion under Reclamation Law in shaping the Final

Allocations in response to input during the public process in

allocating this resource to eligible applicants. Method One, as

adjusted, meets Western's Program requirements and the needs of

Western's new customers, while being responsive to the comments

received in this process. Western did not receive comments showing an

overwhelming support for a change to Method Two. In particular, Mni

Sose Intertribal Water Rights Coalition, Inc., did not indicate a

preference for either Method One or Method Two.

III. Final Power Allocations

The following final power allocations are made in accordance with

the Final Procedures published in the Federal Register at 61 FR 41142

on August 7, 1996. All of the allocations are subject to the execution

of a contract in accordance with the procedures. Western announces that

Native American tribes' share of the resource pool is 80.64 percent in

the summer season and 78.33 percent in the winter season. The new

utility and nonutility customers' share of the resource pool is 19.36

percent in the summer season and 21.67 percent in the winter season.

Allocations to Native American Tribes

The final allocations of power for new Native American customers

and the data these allocations are based upon are as follows:

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

Average current western Post-2000 power

Estimated service allocation

New native American customers demand ---------------------------------------------------

kilowatts Summer Winter

Summer Winter kilowatts kilowatts

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

Blackfeet Nation............................... 18,600 32 27 5,507 5,271

Cheyenne River Sioux........................... 13,500 33 29 3,862 3,556

Chippewa Cree-Rocky Boy........................ 5,000 55 44 330 567

Crow Creek..................................... 4,100 50 47 476 342

Crow........................................... 12,500 55 44 826 1,417

Devils Lake Sioux.............................. 7,700 22 14 3,050 3,183

Flandreau Santee Sioux......................... 2,355 55 56 156 0

Fort Belknap Indian Community.................. 6,200 28 22 2,084 2,067

Fort Peck Tribes............................... 15,300 34 31 4,224 3,724

Lower Brule Sioux.............................. 3,100 33 29 887 817

Lower Sioux.................................... 3,750 0 0 2,310 2,075

Northern Cheyenne.............................. 9,400 36 37 2,407 1,724

Oglala Sioux-Pine Ridge........................ 29,600 28 24 9,948 9,277

Omaha Tribe of Nebraska........................ 5,100 15 14 2,377 2,108

Ponca Tribe of Nebraska........................ 2,100 8 6 1,126 1,036

Rosebud Sioux.................................. 21,300 33 29 6,093 5,610

Santee Sioux Tribe of Nebraska................. 1,100 10 8 568 521

Sisseton-Wahpeton Sioux........................ 7,500 40 38 1,620 1,300

Standing Rock Sioux............................ 12,900 30 29 4,077 3,398

Three Affiliated Tribes........................ 8,000 30 25 2,529 2,427

Turtle Mountain Chippewa....................... 18,000 35 18 4,789 6,721

Upper Sioux.................................... 1,250 42 39 245 204

White Earth Indian Reservation................. 3,500 6 7 1,946 1,692

Winnebago Tribe of Nebraska.................... 3,100 10 8 1,600 1,468

Yankton Sioux.................................. 5,300 25 24 1,940 1,661

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

The final allocations for new Native American customers were

calculated based upon the estimated demand figures set forth in the

table above. Estimated demand figures were taken from the Native

American tribal applications. Inconsistent demand estimates were

adjusted by Western.

In order to appropriately distribute the benefits of Federal

hydropower among the tribes, Western calculated the proposed power

allocations in the table above in such a manner as to levelize total

Federal hydropower benefits to each of the Native American tribes. This

results in a total Federal hydropower benefit of 61.6065 percent in the

summer season and 55.3396 percent in the winter season to each of the

tribes. To levelize the total Federal hydropower benefits, the average

current percentage of Western service that each of the tribes receives

through their current power supplier(s) was utilized and is as shown in

the table above. For the Blackfeet Nation, Western used the weighted

average of the current percentage of Western service for the remaining

tribes. The Blackfeet Nation is served by Glacier Electric Cooperative,

which is a total requirements customer of Bonneville Power

Administration, therefore the Blackfeet Nation does not receive Western

service, but does receive the benefit of Federal hydropower. The

[[Page 11181]]

weighted average of the current percentage of Western service changed

under the adjusted Method One because Rosebud Sioux Tribe's average

current percentage of Western service changed. The final power

allocation for each tribe was determined by multiplying the difference

between the total Federal hydropower benefit provided to each tribe

(61.6065 percent in the summer season and 55.3396 percent in the winter

season) and each tribe's average current percentage of Western service

by each tribe's estimated demand.

The final allocations to new Native American customers set forth in

the table above are based on the P-SMBP-ED marketable resource

available at this time. If the P-SMBP-ED marketable resource is

adjusted in the future, the final allocations will be adjusted

accordingly.

B. Allocation to Utility and Nonutility Customers

The final allocations of power for new utility and nonutility

customers and the loads these allocations are based upon are as

follows:

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

Post-2000 power

1994 Summer 1994-95 allocation

Utility and Nonutility Customers season load Winter -------------------------

kilowatts season load Summer Winter

kilowatts kilowatts kilowatts

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

Village of Emerson, NE...................................... 1,454 1,146 361 412

City of Estherville, IA..................................... 11,040 7,820 2,743 2,814

City of Randolph, NE........................................ 1,861 1,386 462 499

City of Pocahontas, IA...................................... 3,980 3,144 989 1,131

City of Madison, NE......................................... 10,034 8,759 2,493 3,152

City of South Sioux City, NE \1\............................ 24,977 21,846 5,000 5,000

City of Sergeant Bluff, IA.................................. 6,076 3,888 1,510 1,399

City of Wakefield, NE....................................... 4,717 3,667 1,172 1,320

City of Fairmont, MN........................................ 2,330 2,464 579 887

City of Marathon, IA........................................ 520 764 129 275

City of Stanton, ND......................................... 656 850 163 306

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

\1\ 5,000 kW is the maximum allocation allowed under the Final Procedures.

The final allocations of power for new utility and nonutility

customers were calculated using Post-1985 Marketing Plan criteria.

Under the Post-1985 Marketing Plan criteria, the summer allocations are

24.84413 percent of total summer load and the winter allocations are

35.98853 percent of total winter load.

The final allocations to new utility and nonutility customers set

forth in the table above are based on the P-SMBP-ED marketable resource

available at this time. If the P-SMBP-ED marketable resource is

adjusted in the future, the final allocations will be adjusted

accordingly.

III. Review Under the Regulatory Flexibility Act

The Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (Act),

requires Federal agencies to perform a regulatory flexibility analysis

if a proposed regulation is likely to have a significant economic

impact on a substantial number of small entities. Western has

determined that this rulemaking relates to services offered by Western,

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

IV. Review Under the Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1980, 44 U.S.C.

3501-3520, Western has received approval from the Office of Management

and Budget (OMB) for the collection of customer information in this

rule, under control number 1910-1200.

V. Review Under the National Environmental Policy Act

Western requested input regarding the identification of any

additional environmental issues both in the Federal Register at 61 FR

2817, January 29, 1996, and at the public meetings. No environmental

comments were received or additional environmental issues identified.

Therefore, Western has determined that the analysis in the Program

Environmental Impact Statement is sufficient for this action and

current DOE (10 CFR part 1021) regulations indicate that no further

National Environmental Policy Act impact analysis documentation is

required.

VI. Determination Under Executive Order 12866

DOE has determined this action does not meet the criteria of

Executive Order 12866, 58 FR 51735 and is not a significant regulatory

action. Western has an exemption from centralized regulatory review

under Executive Order 12866; accordingly, no clearance of this notice

by Office of Management and Budget is required.

VII. Review Under Executive Order 12988

With respect to the review of existing regulations and the

promulgation of new regulations, section 3(a) of Executive Order 12988,

``Civil Justice Reform,'' 61 FR 4729 (February 7, 1996), imposes on

Executive agencies the general duty to adhere to the following

requirement: (1) Eliminate drafting errors and ambiguity; (2) write

regulations to minimize litigation; and (3) provide a clear legal

standard for affected conduct rather that a general standard and

promote simplification and burden reduction. With regard to the review

required by sections 3(a), sections 3(b) of Executive Order 12988

specifically requires that Executive agencies make every reasonable

effort to ensure that the regulation: (1) Clearly specifies the

preemptive effect, if any; (2) clearly specifies any effect on existing

Federal law or regulation; (3) provides a clear legal standard for

affected conduct while promoting simplification and burden reduction;

(4) specifies the retroactive effect, if any; (5) adequately defines

key terms; and (6) addresses other important issues affecting clarity

and general draftsmanship under any guidelines issued by the Attorney

General. Section 3(c) of Executive Order 12988 requires Executive

agencies to review regulations in light of applicable standards in

section 3(a) and section 3(b) to determine whether they are met or it

is unreasonable to meet one or more or them. DOE has completed the

required review and determined that, to the extent permitted by law,

the final regulations meet the relevant standards of Executive Order

12988.

[[Page 11182]]

VIII. Congressional Notification

The final regulations published today are subject to the

Congressional notification requirements of the Small Business

Regulatory Enforcement Fairness Act 1996. The Office of Management and

Budget has determined that the final regulations do not constitute a

``major rule'' under the Act (5 USC 801, 804). DOE will report to

Congress on the promulgation of the final regulations prior to the

effective date set forth at the beginning of this notice.

Issued at Golden, Colorado, February 28, 1997.

J.M. Shafer,

Administrator.

[FR Doc. 97-5996 Filed 3-10-97; 8:45 am]

BILLING CODE 6450-01-P