Notice of Final 2025 Olmsted Power Marketing Plan

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Published

March 21, 2023

Issuing agencies

Energy DepartmentWestern Area Power Administration

Abstract

Western Area Power Administration (WAPA), a Federal Power Marketing Administration of the Department of Energy (DOE), announces its Final 2025 Olmsted Power Marketing Plan (Marketing Plan) for the Colorado River Storage Project (CRSP) Management Center (MC). On September 30, 2024, all of Olmsted Power Plant Replacement Project (Olmsted Project) energy sales contracts (Contracts) will expire. This notice responds to comments received on the Proposed 2025 Olmsted Power Marketing Plan (Proposed Plan) published in the Federal Register June 1, 2022, and sets forth the Marketing Plan. The Marketing Plan specifies the terms and conditions under which WAPA will market energy from the Olmsted Project beginning October 1, 2024, through September 30, 2054. This Marketing Plan supersedes the previous Olmsted Project marketing plan. WAPA will offer new Contracts for the sale of energy to existing customers (Customers) as more fully described in the Marketing Plan. The Marketing Plan also establishes one resource pool (2034 Resource Pool) of up to 3 percent of the marketable resource under contract at the time of reallocation to be available for eligible new preference entities or Customers. The 2034 Resource Pool will be under Contract by October 1, 2034. WAPA will publish the application procedures for the 2034 Resource Pool in a separate Federal Register notice.

Full Text

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[Federal Register Volume 88, Number 54 (Tuesday, March 21, 2023)]
[Notices]
[Pages 16970-16976]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-05736]

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DEPARTMENT OF ENERGY

Western Area Power Administration

Notice of Final 2025 Olmsted Power Marketing Plan

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of final 2025 Olmsted Power Marketing Plan.

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SUMMARY: Western Area Power Administration (WAPA), a Federal Power
Marketing Administration of the Department of Energy (DOE), announces
its Final 2025 Olmsted Power Marketing Plan (Marketing Plan) for the
Colorado River Storage Project (CRSP) Management Center (MC). On
September 30, 2024, all of Olmsted Power Plant Replacement Project
(Olmsted Project) energy sales contracts (Contracts) will expire. This
notice responds to comments received on the Proposed 2025 Olmsted Power
Marketing Plan (Proposed Plan) published in the Federal Register June
1, 2022, and sets forth the Marketing Plan. The Marketing Plan
specifies the terms and conditions under which WAPA will market energy
from the Olmsted Project beginning October 1, 2024, through September
30, 2054. This Marketing Plan supersedes the previous Olmsted Project
marketing plan. WAPA will offer new Contracts for the sale of energy to
existing customers (Customers) as more fully described in the Marketing
Plan. The Marketing Plan also establishes one resource pool (2034
Resource Pool) of up to 3 percent of the marketable resource under
contract at the time of reallocation to be available for eligible new
preference entities or Customers. The 2034 Resource Pool will be under
Contract by October 1, 2034. WAPA will publish the application
procedures for the 2034 Resource Pool in a separate Federal Register
notice.

DATES: The Marketing Plan will become applicable April 20, 2023 in
order to make power allocations and complete the other processes
necessary to begin providing services on October 1, 2024.

FOR FURTHER INFORMATION CONTACT: Mr. Rodney G. Bailey, CRSP Manager,
CRSP MC, Western Area Power Administration, 1800 South Rio Grande
Avenue, Montrose, CO 81401, by email at <a href="/cdn-cgi/l/email-protection#b5fad9d8c6c1d0d198f8d4c7ded0c1dcdbd2f5c2d4c5d49bd2dac3"><span class="__cf_email__" data-cfemail="97d8fbfae4e3f2f3badaf6e5fcf2e3fef9f0d7e0f6e7f6b9f0f8e1">[email&#160;protected]</span></a>, by
telephone at 970-252-3000, or by fax at 970-240-6282. Information on
development of the Marketing Plan can be found at <a href="https://www.wapa.gov/regions/CRSP/PowerMarketing/Pages/power-marketing.aspx">https://www.wapa.gov/regions/CRSP/PowerMarketing/Pages/power-marketing.aspx</a>.

SUPPLEMENTARY INFORMATION:

Background

The Olmsted Project is located at the mouth of Provo Canyon in
northern Utah and is part of the Central Utah Project, a participating
project of CRSP. In 1987, the United States Department of the Interior,
Bureau of Reclamation (Reclamation) secured ownership of the Olmsted
Flowline, located in northern Utah, from PacifiCorp (formerly known as
Utah Power and Light), and the associated water rights as an essential
part of the Central Utah Project. In a related 1990 Settlement
Agreement, the Olmsted generation facilities were acquired in
condemnation proceedings by the United States to better secure and
develop water rights for the Central Utah Project. As part of the
condemnation proceedings, PacifiCorp continued generating power at
Olmsted until September 22, 2015. Power generation at the site ceased
on that date, and Reclamation assumed responsibility for operating the
Olmsted Project.
A comprehensive evaluation of the existing 100-year-old Olmsted
facilities determined it had greatly exceeded its operational life, and
a replacement hydroelectric facility was necessary. On February 4,
2015, an Implementation Agreement (Agreement) for the Olmsted Project
was signed by the Central Utah Water Conservancy District (District),
Reclamation, DOE, and WAPA (Participants) to set forth the
responsibilities of the participants and how the Olmsted Project would
be funded. During the second quarter of calendar year 2016, pursuant to
the Agreement, the District began constructing the 12-megawatt, $42
million replacement hydroelectric facility and new power transmission
line to the nearby Provo Power system. Olmsted Powerplant construction
was completed in July 2018 and started commercial power production in
October 2018. The Olmsted Project is a Federal facility operated and
maintained by the District in connection with its Central Utah Project
operations. The Olmsted Project is a ``run-of-the-river'' plant
producing power only when water demands from downstream users
necessitate water deliveries.
The Marketing Plan, herein, describes how CRSP Management Center
will market Federal energy from the Olmsted Project beginning October
1, 2024, through September 30, 2054. As part of the Marketing Plan,
WAPA will establish one 2034 Resource Pool of 3 percent of the net
marketable resource (minus the District's allocation) under contract at
the time of each reallocation to be available for eligible new

[[Page 16971]]

preference entities and Customers. The 2034 Resource Pool will be
allocated and under contract by October 1, 2034. WAPA will publish the
application procedures for the 2034 Resource Pool in a separate Federal
Register notice sometime in the 2030 calendar year timeframe. WAPA, at
its discretion, will allocate a percentage of the 2034 Resource Pool to
selected new applicant(s) that meet the Eligibility Criteria defined in
the Marketing Plan, herein. This allocation percentage will be
multiplied by the 2034 Resource Pool percentage to determine an
applicant's percentage of the resource pool. WAPA will publish a notice
in the Federal Register once those proposed allocations have been
determined (Proposed Allocations). The public will have an opportunity
to comment on the Proposed Allocations. After reviewing the comments,
WAPA will publish a notice of Proposed Allocations in the Federal
Register. Once the final 2034 Resource Pool allocations have been
published, WAPA will work with Customers to amend the existing
Contracts and execute Contracts with any new allottees pursuant to the
General Contract Principles as described in this notice.

Response to Comments on the Proposed 2025 Olmsted Power Marketing Plan

During the public consultation and comment period, WAPA received
four letters commenting on the Proposed Plan. In addition, WAPA
received two comments during the June 28, 2022, Public Comment Forum.
In preparing the Marketing Plan, WAPA reviewed and considered all
comments received during the public consultation and comment period.
The following is a summary of the comments received during the
consultation and comment period, and WAPA's responses to those
comments. Comments are grouped by subject and paraphrased for brevity
when it was possible to do so without affecting the meaning of the
statements.

A. Marketing Area Responses

Comment: One commenter stated the District will likely operate
features within both the Provo River Delta Restoration Project (PRDRP)
and the June Sucker Recovery Implementation Program (JSRIP). The
features will make up part of the growing new loads in operations for
which the District is responsible (see agreement dated November 24,
2020 between the District and the Utah Reclamation Mitigation and
Conservation Commission (URMCC) showing current scope of work related
to some of these efforts).
Response: WAPA appreciates this comment and acknowledges the broad
authorities the District has under Central Utah Project Completion Act
(CUPCA). Therefore, if the District is required to serve electrical
loads resulting from implementation of CUPCA that are beyond the
marketing area boundaries defined in this notice, those loads may be
service with Olmsted Project energy as long as the electrical loads are
100 percent CUPCA related.
Comment: One commenter stated that WAPA did include Juab County in
the Proposed 2025 Marketing Plan. But the Proposed 2025 Marketing Plan
continues to exclude Duchesne and Uintah counties that are also within
similar proximity to the Olmsted Project. Furthermore, several counties
in the current marketing plan did not and do not contribute significant
funding for the Olmsted Project.
Response: During the previous marketing plan public process in
2016, WAPA unintentionally excluded Juab County in the proposed
marketing plan Federal Register notice (81 FR 87035) published on
December 02, 2016, and the final Olmsted Marketing Plan published in
the Federal Register notice (82 FR 47201) on October 11, 2017. WAPA is
correcting that error by including Juab County in the final 2025
Olmsted Power Marketing Plan. However, because of the small amount of
energy available from the Olmsted Project, the marketing area will
continue to be limited to the Utah counties in the vicinity of the
powerplant to ensure that entities receiving an allocation would
benefit from the energy while at the same time creating a marketing
area sufficiently large enough to ensure wide-spread use of the Federal
resource.
Comment: One commenter emphasized the importance of the District in
supporting the Olmsted Project by highlighting that the District used
property taxes from residents of the 8-county area that contributed
almost 50 percent of the funding for construction of the Olmsted
Project. The commenter further emphasized that the District is
responsible for the long-term operation, maintenance and replacement of
the project.
Response: Thank you for this comment. WAPA recognizes the
significant contributions of the District and the tax payers in the
surrounding 8-county area, and as such the District will continue to
receive ``priority'' status for an allocation of power under the
Marketing Plan.
Comment: Two commenters stated that WAPA needs to adhere to the
basic definition and logic of describing the marketing area as ``close
proximity to the Olmsted facility.'' They recommended that the
marketing area be defined as the two counties within the Provo River
drainage--Utah and Wasatch counties.
Response: Other than adding Juab County to this Marketing Plan,
WAPA will not be adding or subtracting any other counties.
Comment: One commenter stated that they acknowledge the benefit of
adding Juab County to the Proposed 2025 Marketing Plan. It is a good
step in the redrawing the boundary lines by similar proximity to the
Olmsted Project.
Response: Thank you for this comment.

B. Resource Extensions and 2034 Resource Pool Allocations Responses

Comment: One commenter stated they appreciate WAPA providing the
District with ``priority'' status due to its role in construction,
financing, operating, maintaining, and replacing responsibilities with
the Olmsted Project.
Response: Thank you for this comment.
Comment: One commenter believed the District's current allocation
falls proportionately short of the significant contributions they have
made to the Olmsted Project.
Response: WAPA appreciates this comment and plans to continue to
give ``priority'' status to the District. Furthermore, WAPA encourages
the District to apply for an additional allocation during the 2034
Resource Pool Allocation process.
Comment: Three commenters stated that any loads of facilities
directly required by the CUPCA, including those for the ``June Sucker''
fish restoration efforts, be met first from the CRSP Project Use power
and not from the Olmsted Project resources. The Commenters cited CUPCA
102-575 and Chapter 5 of the Power Appendix of the October 2004
Supplement to the 1988 Definite Plan Report for the Bonneville Unit to
support this position.
Response: WAPA concurs with these comments. Any power needed for
the ``June Sucker'' fish restoration efforts will be provided from CRSP
Project Use energy allocations.
Comment: One commenter stated the District is authorized under
CUPCA to assist the Utah Reclamation Mitigation and Conservation
Commission and the U.S. Department of Interior to plan, design,
construct and operate features of the CUP, including significant roles
and responsibilities of the PRDRP and the JSRIP.

[[Page 16972]]

Response: WAPA appreciates this comment and acknowledges the broad
authorities the District has under CUPCA.
Comment: One commenter stated that if WAPA plans to use the
Resource Pool from Olmsted instead of CRSP for the electricity needs of
the ``June Sucker'' fish, that WAPA should consider increasing their
allocation by the entire 5 percent set aside for the Resource Pool.
Response: WAPA has determined that CRSP power will be used for any
electricity loads required by the ``June Sucker'' fish restoration
efforts.
Comment: Several commenters expressed concerns that current
allocations from the Olmsted Project only supply energy to partially
meet current loads within their respective service areas. Furthermore,
these loads will continue to grow substantially over the next 10-years
within the counties covered by the Marketing Plan.
Response: WAPA appreciates these comments and understands the
challenges of meeting load-growth with diminishing amounts of power
supply. In response to these concerns, WAPA will not change current
allocations for Customers over the next 10-years; and thereafter
withdraw only 3 percent for the 2034 Resource Pool beginning October 1,
2034.
Comment: One commenter stated they value the Olmsted Project
allocation of renewable, clean energy operated by the District. The
Contracts with WAPA for Federal power are critical in serving the
electric consumers in their power communities.
Response: Thank you for this comment.
Comment: One commenter stated they support WAPA's proposal to
provide 95 percent of Olmsted Project available energy to existing
Customers; and that the 5 percent set aside (Resource Pool) for new
customers will not impact the District (dimmish their current
allocation).
Response: WAPA appreciates this comment. WAPA plans to reduce 2034
Resource Pool from 5 percent to 3 percent, which generally aligns with
other marketing plans for other WAPA projects and regions.
Comment: One commenter stated the Olmsted Project contracts should
be renewed and continued beyond 2024 at the same allocation percentages
because they have concerns about any changes to the project or
allocations and how that could influence future allocations of Federal
energy.
Response: WAPA will extend the Olmsted Project resource to
Customers with no changes to existing allocations through September 1,
2034. At which time, all existing contracts will be modified to reflect
a 3 percent 2034 Resource Pool for new eligible preference entities and
existing Customers.

C. Eligible Applicants Responses

Comment: One commenter stated if new allocations are to be given,
they should be to those with significant load growth
Response: WAPA recognizes that meeting load growth is a concern for
many utilities. WAPA allocates power to eligible preference entities
based on current loads rather than anticipated loads. Further, existing
Customers will have an opportunity to apply for a percentage of the
2034 Resource Pool.

D. Preference Entities Responses