Collections From Central Valley Project Power Contractors to Carry Out the Restoration, Improvement, and Acquisition of Environmental Habitat Provisions of the Central Valley Project Improvement Act of 1992

DEPARTMENT OF ENERGY

Western Area Power Administration

Collections From Central Valley Project Power Contractors to

Carry Out the Restoration, Improvement, and Acquisition of

Environmental Habitat Provisions of the Central Valley Project

Improvement Act of 1992

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of proposed procedures.

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SUMMARY: The Western Area Power Administration (Western) is proposing

revised procedures for the assessment and collection of restoration

fund payments from the Central Valley Project (CVP) power contractors

as required by the CVP Improvement Act of 1992 (Act). Under the

existing procedures, which became effective May 9, 1994, Western

reviews the existing procedures every 5 years, or if: (1) There is a

significant change to, or suspension of, the legislation; (2) a

material issue arises; or (3) an apparent inequity in the assessment

method is discovered. Western reviewed the existing procedures and

found that revised procedures are needed due to an apparent inequity in

the existing procedures. The proposed procedures will supersede the

existing procedures. This Federal Register notice initiates the formal

process for the proposed procedures.

DATES: The consultation and comment period will begin on the date of

publication of this Federal Register notice and will end May 13, 1998.

A public information forum at which Western will present a detailed

explanation of the proposed procedures is scheduled for April 29, 1998,

beginning at 10 a.m. PDT, and will be followed by a public comment

forum at which Western will accept oral and written comments, beginning

at 1 p.m. PDT. The forums will be held at the Sierra Nevada Regional

Office, Western Area Power Administration, 114 Parkshore Drive, Folsom,

CA. Western should receive written comments by the end of the

consultation and comment period to be assured consideration.

ADDRESSES: Written comments are to be sent to: Mr. Jerry W. Toenyes,

Regional Manager, Sierra Nevada Region, Western Area Power

Administration, 114 Parkshore Drive, Folsom, CA 95630-4710.

FOR FURTHER INFORMATION CONTACT: Ms. Debbie Dietz, Rates Manager,

Sierra Nevada Region, Western Area Power Administration, 114 Parkshore

Drive, Folsom, CA, 95630-4710, (916) 353-4453.

SUPPLEMENTARY INFORMATION: Section 3407 of the Act (Pub. L. 102-575,

Stat. 4706, 4726) establishes in the Treasury of the United States the

CVP Restoration Fund (Restoration Fund) to carry out the habitat

restoration, improvement, and acquisition provisions of the Act. The

Act further requires the Secretary of the Interior to assess and

collect annual mitigation and restoration payments from CVP water and

power contractors (Restoration Payments). The Secretary of the

Interior, through the Bureau of Reclamation (Reclamation), is

responsible for determining and collecting the CVP water and power

contractors' shares of the annual Total Restoration Payment Obligation.

Western is responsible for the marketing and transmission of CVP

power. Western has agreed to administer the assessment and collection

of the Restoration Payments from CVP power contractors. Western has

executed a letter of agreement with Reclamation to establish procedures

for depositing the collections from CVP power contractors into the

Restoration Fund.

The annual Power Restoration Payment Obligation, determined by

Reclamation, will be assessed to CVP power contractors. Every month

each CVP power contractor will receive a bill reflecting the amount to

be paid into the Restoration Fund. The CVP power contractor will pay

that amount to Western, who will transfer all amounts collected from

CVP power contractors to Reclamation for deposit into the Restoration

Fund.

The Administrator of Western approved the existing procedures for

the assessment and collection of the Restoration Payments from CVP

power contractors on March 30, 1994. At a minimum, Western reviews the

existing procedures every 5 years or if: (1) There is a significant

change to, or suspension of, the legislation; (2) a material issue

arises; or (3) an apparent inequity in the assessment method is

discovered. Western has reviewed the existing procedures and has

determined that revised procedures are needed due to an apparent

inequity in the existing procedures.

Under the existing procedures, Western may adjust the capacity and

energy multipliers that are applied to each CVP power contractor's

actual capacity and energy amounts delivered by or scheduled with

Western at midyear (on or about April 1) based on Reclamation's midyear

adjustment to the annual Power Restoration Payment Obligation. Western

applies the adjusted multipliers to each CVP power contractor's

capacity and energy purchases for the remaining months of the subject

assessment year. The apparent inequity occurs during this midyear

adjustment process when the adjusted multipliers are applied to CVP

power contractors with higher capacity and energy purchases from

Western during the remaining months. This process could adversely

impact these CVP power contractors. If the midyear adjustment is

distributed over the capacity and energy purchases during the entire

assessment year, then this apparent inequity would not occur.

The proposed procedures will incorporate the existing procedures,

with the exception of the following:

1. During each assessment year's midyear adjustment period, any

adjustments to the capacity and energy multipliers will be based on

Western's total capacity and energy sales to all CVP power contractors

during the entire assessment year. Under the existing procedures, any

adjusted multipliers resulting from the midyear adjustment process are

based on Western's total capacity and energy sales from the prior year.

2. An alternative method for assessing the annual Power Restoration

Payment Obligation will be offered by Western. If requested by the CVP

power contractor, Western will determine the CVP power contractor's

equal monthly Restoration Payment amounts for the assessment year.

Under the existing procedures, the monthly Restoration Payments are

variable amounts depending upon the CVP power contractor's actual

monthly capacity and energy purchases from Western.

3. Revised provisions for late payment charges assessed to

delinquent Restoration Payments are described in detail in the Proposed

Procedures section.

The existing procedures will be superseded by the proposed

procedures. The final procedures are to become effective not less than

30 days after publication of notice of final procedures in the Federal

Register, or August 1, 1998, whichever occurs later.

[[Page 18006]]

Acronyms and Definitions

As used herein, the following acronyms and definitions apply:

Administrator: The Administrator of the Western Area Power

Administration.

Assessment Month: The service month, which is 1 month prior to the

Billing Month.

Assessment Year: The period that uses the service months from

August 1 through July 31 for which CVP Power Contractors will be billed

Restoration Payments.

Billing Month: The month CVP Power Contractors will be billed for

the Restoration Payments.

Central Valley Project (CVP): A multipurpose Federal water

development project extending from the Cascade Range in northern

California to the plains along the Kern River south of the city of

Bakersfield.

CVP Improvement Act of 1992 (Act): Title 34 of Public Law 102-575,

106 Stat. 4706 et seq. A legislative act, which was enacted on October

30, 1992, and defines provisions for habitat restoration, improvement

and acquisition, and other fish and wildlife restoration activities in

the CVP area of California.

DOE: United States Department of Energy.

Fiscal Year (FY): The fiscal year, which begins October 1 and ends

September 30.

Interior: United States Department of the Interior.

kW: Kilowatt, the electrical unit of capacity that equals 1000

watts.

kWh: Kilowatt-hour, the electrical unit of energy that equals the

generation of 1000 watts over 1 hour.

Letter of Agreement: Letter of Agreement No. 93-SAO-10156, a

written agreement between Reclamation and Western that established

procedures to deposit the Restoration Payments collected from CVP Power

Contractors into the Restoration Fund.

Load Adjustment(s): The adjustment(s) to CVP Power Contractors'

forecasted monthly capacity and energy purchases from Western as

determined by Western based on CVP Power Contractors' actual capacity

and energy amounts delivered by or scheduled with Western.

Midyear Adjustment: The adjustment to the annual Power Restoration

Payment Obligation determined by Reclamation on or about April 1 of the

Assessment Year.

Power: Capacity and energy.

Power Contractor: An entity purchasing firm capacity and/or energy

from Western for a period in excess of 1 year.

Power Restoration Payment Obligation: The portion of the Total

Restoration Payment Obligation calculated and assigned annually to CVP

Power Contractors by Reclamation.

Reclamation: United States Department of Interior, Bureau of

Reclamation.

Restoration Fund: The CVP Restoration Fund, established by Section

3407 of the Act, into which revenues provided by the Act are deposited,

and from which funds are appropriated by the Secretary to carry out the

habitat restoration, improvement and acquisition provisions of the Act.

Restoration Fund Bill(s): The instrument prepared and issued

monthly by Western as a mechanism for collecting the Restoration

Payments from CVP Power Contractors.

Restoration Payment(s): The amount(s) recorded as payable on CVP

Power Contractors' Restoration Fund Bills.

Secretary: Secretary of DOE.

Total Restoration Payment Obligation: The total amount of payments

to be collected from the CVP water and power contractors, calculated

annually by Reclamation.

Western: United States Department of Energy, Western Area Power

Administration.

Proposed Procedures

Determination of the Power Restoration Payment Obligation

Reclamation is responsible for determining the annual Power

Restoration Payment Obligation for CVP Power Contractors. Prior to each

Assessment Year, on or about July 1, Reclamation will, by letter,

provide to Western's Regional Manager of the Sierra Nevada Region the

amount determined to be the Power Restoration Payment Obligation and a

detailed explanation of the computation of the amount for the upcoming

Assessment Year. Upon receiving this letter from Reclamation, Western's

Sierra Nevada Region will notify each CVP Power Contractor of the

annual Power Restoration Payment Obligation, the capacity and energy

multipliers for the Assessment Year, and for CVP Power Contractors

choosing the alternative method for assessing the annual Power

Restoration Payment Obligation, the resulting monthly Restoration

Payment amount. Any adjustments to the annual Power Restoration Payment

Obligation will be accomplished through the Midyear Adjustment

determined by Reclamation.

Assessing the Power Restoration Payment Obligation

For each Assessment Year, Western will prorate the annual Power

Restoration Payment Obligation to actual capacity and energy amounts

delivered by or scheduled with Western for each CVP Power Contractor.

Western will assess 50 percent of the annual Power Restoration Payment

Obligation to capacity and 50 percent to energy. Western will determine

a capacity multiplier and an energy multiplier using projected Power

sales based on CVP Power Contractors' forecasts and/or prior FY total

capacity and energy amounts delivered or scheduled to all CVP Power

Contractors. Prior to July 1, when Western receives Reclamation's

letter for the annual Power Restoration Payment Obligation, Western

will request each CVP Power Contractor to submit to Western its

forecasted monthly capacity and energy purchases from Western. The CVP

Power Contractor's forecast will be for August 1 through July 31 of the

subject Assessment Year. If the CVP Power Contractor does not submit a

forecast of monthly capacity and energy purchases, Western will use the

CVP Power Contractor's prior year's (August 1 through July 31) actual

capacity and energy amounts delivered or scheduled, with adjustments

Western may deem appropriate, as the projected Power sales used for the

subject Assessment Year.

The annual Power Restoration Payment Obligation for the subject

Assessment Year to be prorated to capacity will be divided by Western's

projected capacity sales to determine the capacity multiplier. The same

process will be repeated using the annual Power Restoration Payment

Obligation prorated to energy divided by Western's projected energy

sales to determine the energy multiplier. During each Assessment Month

of the subject Assessment Year, these capacity and energy multipliers

will be applied to each CVP Power Contractor's actual capacity and

energy amounts delivered by or scheduled with Western to determine the

CVP Power Contractor's Restoration Payment, unless the alternative

method for assessing the Power Restoration Payment Obligation is used.

For each Billing Month of the subject Assessment Year, each CVP Power

Contractor will be billed for its individual monthly Restoration

Payment.

[[Page 18007]]

Alternative Method for Assessing the Power Restoration Payment

Obligation

As an alternative method to the assessment method described above

and if requested by the CVP Power Contractor, Western will determine

the CVP Power Contractor's monthly Restoration Payments as equal

monthly payment amounts, as adjusted, for the subject Assessment Year.

The monthly Restoration Payment amounts will be based on the CVP Power

Contractor's forecasted or prior year's actual capacity and energy

amounts delivered by or scheduled with Western.

Under this alternative method, for each Assessment Year, Western

will prorate the annual Power Restoration Payment Obligation based on

the CVP Power Contractor's forecasted or prior year's monthly capacity

and energy purchases from Western. Western will determine the CVP Power

Contractor's monthly Restoration Payment amount by multiplying the CVP

Power Contractor's total forecasted or prior year's capacity purchases

by the capacity multiplier determined by Western, and repeating the

calculation for energy using the energy multiplier. Western will sum

the resulting capacity and energy calculations and then divide by 12 to

determine the monthly Restoration Payment amount. For each Billing

Month of the subject Assessment Year, the CVP Power Contractor will be

billed for its individual monthly Restoration Payment.

CVP Power Contractors who prefer this alternative method for

assessing the annual Power Restoration Payment Obligation must notify

Western in writing prior to August 1, 1998. Once the CVP Power

Contractor elects this alternative method, the method will remain in

effect unless otherwise mutually agreed by Western and the CVP Power

Contractor.

Collection of CVP Power Contractors' Restoration Fund Bills

Each CVP Power Contractor will receive a Restoration Fund Bill on

or about the twenty-fifth (25th), but no later than the last day of the

month for each month designating the amount payable. The Restoration

Fund billing cycle, for each Assessment Year, will begin at least 30

days after August 1, or the date written notification of the annual

Power Restoration Payment Obligation is received from Reclamation,

whichever occurs later.

If the Restoration Fund billing is suspended for a time, Western's

Sierra Nevada Region will notify all CVP Power Contractors as soon as

possible. Suspension of billing may occur to avoid overpayment on the

annual Power Restoration Payment Obligation.

Payment Due Date

All CVP Power Contractors' Restoration Payments are due and payable

by CVP Power Contractors before the close of business on the twentieth

(20th) calendar day after the date of the issuance of each Restoration

Fund Bill or the next business day thereafter if said day is a

Saturday, Sunday, or Federal holiday.

Late Payment Charges Assessed to Delinquent Restoration Payments

Restoration Fund Bills not paid in full by the CVP Power

Contractor(s) by the due date as specified above will be assessed a

late payment charge of five hundredths percent (0.05%) of the principal

amount unpaid for each day payment is delinquent, to be added until the

amount due is paid in full. Payments received will be first applied to

the charges for the late payment assessed on the principal and then to

the payment of the principal.

Deposit of CVP Power Contractors' Restoration Payments Into the

Restoration Fund

On or about the twenty-first (21st) calendar day of the month

following each Billing Month, Western will transfer all of the

Restoration Payments received from CVP Power Contractors, including

late payment charges, to Reclamation for deposit into the Restoration

Fund.

Adjustment to the Power Restoration Payment Obligation

There are two types of adjustments that can be made relative to

each Assessment Year's annual Power Restoration Payment Obligation, a

Midyear Adjustment determined by Reclamation and Load Adjustments

determined by Western. Reclamation will notify Western, in writing, of

the Midyear Adjustment. Upon receiving Reclamation's written

notification, Western will notify each CVP Power Contractor of the

Midyear Adjustment to the annual Power Restoration Payment Obligation

and any adjustments to capacity and energy multipliers for the

remaining months of the subject Assessment Year. Any adjustments made

will be based on Western's Power sales to all CVP Power Contractors for

the entire Assessment Year.

The Midyear Adjustment is determined by Reclamation and occurs on

or about April 1, of the subject Assessment Year, following

Reclamation's annual determination of available CVP water supply for

the year. This adjustment applies to the annual Power Restoration

Payment Obligation and is based on hydrological conditions and

Reclamation's most recently available forecast of CVP water deliveries

to the CVP water contractors applicable to the subject Assessment Year.

Upon receiving Reclamation's notification, Western may adjust the

capacity and energy multipliers as appropriate to coincide with the

adjusted annual Power Restoration Payment Obligation.

During the Midyear Adjustment period, Western will also review the

Restoration Payments from the CVP Power Contractors received thus far

for the subject Assessment Year. If the actual payment amounts are 25

percent greater or less than projected, Western may adjust the capacity

and energy multipliers for the remaining months of the subject

Assessment Year. Beginning May 1, and continuing throughout the

remaining months of the subject Assessment Year, the adjusted

multipliers will be applied to each CVP Power Contractor's actual

capacity and energy amounts delivered by or scheduled with Western.

For the alternative method for assessing the Power Restoration

Payment Obligation, Load Adjustment(s), determined by Western, will be

evaluated quarterly during the subject Assessment Year for each CVP

Power Contractor. Western will compare the CVP Power Contractor's

forecasted or prior year's capacity and energy amounts to the actual

capacity and energy amounts delivered by or scheduled with Western

during the subject Assessment Year. If, in Western's judgment, the

difference would significantly impact other CVP Power Contractors,

Western will adjust the CVP Power Contractor's forecasted or prior

year's capacity and energy amounts to align with actual load data. This

adjustment will result in a change to the CVP Power Contractor's

monthly Restoration Payment amount. Western will notify the CVP Power

Contractor(s) of any Load Adjustment(s) and the resulting change(s) to

the monthly Restoration Payment amount prior to any adjustments.

To the extent practicable, Western will also make Load

Adjustment(s) during the last quarter of the subject Assessment Year to

ensure that the CVP Power Contractor's total annual Restoration Payment

amount is equal to the amount the CVP Power Contractor would have paid

if billing would have been based on actual capacity and energy amounts

delivered by or scheduled with Western. Any balances remaining on the

CVP Power

[[Page 18008]]

Contractor's Restoration Fund Bill(s) must be paid in full by the

thirtieth (30th) of September for each Assessment Year.

All other deviations, in the amounts collected or assessed relative

to the annual Power Restoration Payment Obligation, will be rolled into

the following Assessment Year. The rolled over amount will be added or

subtracted from the Power Restoration Payment Obligation amount to be

assessed in that year.

Review Process

Western will review the procedures for the assessment and

collection of the Restoration Payments from CVP Power Contractors every

5 years, or if one of the following occurs: (1) If there is a

significant change to or suspension of the legislation; (2) if a

material issue arises; or (3) if an apparent inequity in the procedures

is discovered.

Availability of Information

All brochures, studies, comments, letters, memoranda, or other

documents made or kept by Western for developing the proposed

procedures, are and will be made available for inspection and copying

at the Sierra Nevada Regional Office, located at 114 Parkshore Drive,

Folsom, California.

Regulatory Flexibility Analysis

The Regulatory Flexibility Act of 1980 (5 U.S.C. 601, et seq.)

requires Federal agencies to perform a regulatory flexibility analysis

if a proposed rule is likely to have a significant economic impact on a

substantial number of small entities. Western has determined that this

action relates to rates or services offered by Western and, therefore,

is not a rule within the purview of the Act.

Environmental Compliance

Western will conduct an environmental evaluation and develop the

appropriate level of environmental documentation pursuant to the

National Environmental Policy Act (NEPA) of 1969 (42 U.S.C. 4321, et

seq.); the Council on Environmental Quality Regulations for

implementing NEPA (40 CFR parts 1500 through 1508); and the DOE NEPA

Implementing Procedures and Guidelines (10 CFR part 1021).

Review Under Paperwork Reduction Act

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

3501, et seq.), Western has received approval from the Office of

Management and Budget for the collection of customer information in

this rule, under control number 1910-0100.

Determination Under Executive Order 12866

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.

Dated: April 1, 1998.

Michael S. Hacskaylo,

Acting Administrator.

[FR Doc. 98-9658 Filed 4-10-98; 8:45 am]

BILLING CODE 6450-01-P