[Federal Register Volume 74, Number 92 (Thursday, May 14, 2009)]
[Notices]
[Pages 22732-22738]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-11299]
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DEPARTMENT OF ENERGY
Western Area Power Administration
Transmission Infrastructure Program
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of Program.
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SUMMARY: The Western Area Power Administration (Western) hereby
announces its Transmission Infrastructure Program (Program). The
Program implements section 402 of the American Recovery and
Reinvestment Act of 2009 (Recovery Act) for the purpose of
constructing, financing, facilitating, planning, operating,
maintaining, or studying construction of new or upgraded electric power
transmission lines and related facilities with at least one terminus
within the area served by Western, and for delivering or facilitating
the delivery of power generated by renewable energy resources
constructed or reasonably expected to be constructed after the date
this section was enacted. The Program will use authority granted under
this section to borrow funds from the U.S. Treasury Department to
accomplish these purposes.
DATES: The Program is effective upon May 14, 2009.
FOR FURTHER INFORMATION CONTACT: Please contact Transmission
Infrastructure Program, Western Area Power Administration, P.O. Box
281213, Lakewood, CO 80228-8213, e-mail [email protected]. The Program
is also available on Western's Web site at http://www.wapa.gov/recovery.
SUPPLEMENTARY INFORMATION:
Background
Western markets and transmits wholesale hydroelectric power
generated at Federal dams across the western United States. This power
is sold to customers in accordance with Federal law. Western's
transmission system was developed to deliver the Federal hydro-power to
those customers. Western owns and operates an integrated 17,000
circuit-mile, high-voltage transmission system and markets power across
15 western states and a 1.3 million square-mile service area. Western's
service area encompasses all of the following states: Arizona,
California, Colorado, Nebraska, Nevada, New Mexico, North Dakota, South
Dakota, Utah, and Wyoming; as well as parts of Iowa, Kansas, Montana,
Minnesota, and Texas. Today, Western makes capacity on its transmission
system excess to that needed to serve its preference customers
available through the policies and procedures outlined in its Open
Access Transmission Tariff (OATT). Western offers nondiscriminatory
access to its transmission system, including requests to interconnect
new generating resources to that transmission system under its OATT on
file with the Federal Energy Regulatory Commission (FERC).
Western sought public comment on the proposed principles, policies
and practices it will use to implement its new Recovery Act authority
in a 30-day consultation and comment period as announced in a March 4,
2009, Federal Register notice (74 FR 9391). A formal public comment
forum was held in Lakewood, Colorado, on March 23, 2009, and a
transcript and meeting video were made available through Western's
external Web site at http://www.wapa.gov/recovery. Western received
comments from 40 customers and other stakeholders. All comments were
reviewed and, where appropriate, incorporated into the Program. The
Discussion of Comments section provides Western's response to the
comments. Where possible, comments and related responses were
consolidated. In defining the proposed Program, Western identified a
series of principles to provide overarching guidance. Western further
identified a series of policies and practices it will follow in
implementing the Program. Those principles, policies and practices are
set forth in this notice.
With this notice, Western is making its Program effective upon
publication in the Federal Register. The procedures and statements of
policies set forth in Western's Program are consistent with the
Recovery Act and other statutes, and the Program does not include
additional substantive requirements. Therefore, Western's program is
not subject to the Administrative Procedure Act's delayed effective
date provision (5 U.S.C. 553(d)).
Discussion of Comments
Western received 40 submittals related to its proposed Program. To
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facilitate presentation and discussion of the comments, Western
categorized the comments into four general categories: (1) Comments on
set-up, operation, and management of the Program; (2) comments on
project identification, evaluation, selection, and certification
criteria; (3) comments on project funding, financing, and repayment
criteria; and (4) other comments.
1. Comments on Set-Up, Operation, and Management of the Program
a. Time and Information Comments
Summary Comment: Western received numerous comments regarding
extending the comment period, sequencing of the Request for Information
and the Program comment periods, and overall need to spend more time
developing Program procedures and criteria.
Response: The comment period will not be extended. The purpose of
the Recovery Act, which authorized this Program, is to stimulate job
creation in the near term.
The Program also supports the Obama Administration's goal of rapid
development of infrastructure to deliver renewable resources.
Therefore, Western is moving expeditiously, while following the intent
and purpose of the law and balancing the need of stakeholders for
substantive and procedural input. Western will implement the Program as
defined in this notice. However, Western is committed to continually
evaluating the Program and is open to the possibility of making further
changes as appropriate through open and transparent public processes.
b. Process Comments
Summary Comment: Western received numerous comments on the need for
an open, transparent, fair, and meaningful process to allow
stakeholders to assist Western in identifying, prioritizing, selecting,
and funding projects, either for further study or for implementation,
and to determine these projects' repayment methodology. Several
commenters asked for more public meetings. Commenters also expressed
interest in serving on an advisory board to assist Western in managing
the Program.
Response: Western has a long history of partnering with other
entities in developing new additions to the transmission system, and
will continue this business model in implementing the Program. In fact,
Western is adopting a principle of ensuring the Program provides an
opportunity, where appropriate, for the participation of other entities
in constructing, financing, owning, facilitating, planning, operating,
maintaining, or studying construction of new or upgraded electric power
transmission lines. The Federal Register notices titled ``Notice of
Availability of Request for Interest'' and ``Notice of Proposed Program
and Request for Public Comments'' published on March 4, 2009, provided
interested parties opportunities to suggest projects for Western's
consideration and to comment on the practices and policies of the
Program. Where appropriate, Western intends to open projects to
additional participation so other entities can contribute meaningfully.
Public meetings, and opportunities for public comment, will be
scheduled for specific project proposals during each project's National
Environmental Policy Act compliance process. Commenters' interest in
serving on a Program advisory board is noted; however, Western believes
its long history of ad hoc collaborative engagement with stakeholders
will adequately meet the needs of the Program.
c. Laws/Rules Comments
Summary Comment: Numerous comments were received asking for the
Program to not impact the statutory obligations of Western. Additional
comments requested that the Program comply with all applicable Federal
laws, regulations, policies, and state laws.
Response: It is Western's intention to fully comply with all of its
statutory obligations, including its Reclamation Law obligations and
those contained in the new Recovery Act statute. In particular,
Western's Program activities will be implemented to assure compliance
with all applicable National Environmental Policy Act requirements.
Summary Comment: Several commenters asked that all transmission
capacity excess to Western's needs be posted and made available on a
non-discriminatory basis.
Response: Available transfer capability surplus to Western's needs
will continue to be made available in a nondiscriminatory manner
consistent with FERC open access transmission rules, Federal statute,
and Western policies.
Summary Comment: Some commenters recommended that Western should
give priority to projects already in its interconnection and/or
transmission queues when conflicts exist between the Program's projects
and projects in the queues. Other commenters suggested that the
Program's projects be handled separately from projects in Western's
queues.
Response: Where possible, Western will pursue projects that
simultaneously satisfy queue requests and meet the requirements of the
Program. However, where that is not possible, Western will give
priority to projects developed under section 402 of the Recovery Act.
2. Comments on Project Identification, Evaluation, Selection, and
Certification Criteria.
a. Renewable Comments
Summary Comment: Western received comments indicating that the
Program should assist in bringing renewable energy sources on line and
delivering those resources to market, and that encouraged Western to
consider a diverse range of renewable generation resources.
Response: Western agrees with these comments. As the statute
indicates, transmission projects that Western participates in under the
Program will facilitate the development of renewable energy resources,
and the delivery of those resources to market. Western is not focused
on any particular source of renewable energy, and will consider
transmission projects that meet the Program's criteria from all sources
of renewable energy generation. By statute, these renewable energy
resources must be constructed or reasonably expected to be constructed
after the statute's enactment date.
Summary Comment: Some commenters asked that Western remain flexible
and willing to consider the development of new products and services to
assist the integration of renewables into the existing transmission
system.
Response: Western will remain open to the development of new
products and services that assist in integrating renewables into the
existing transmission system that do not conflict with statutory
requirements.
b. Public Interest Comments
Summary Comment: Western received comments indicating that the
Program, and the projects selected by the Program, should serve the
public interest, and asked for clarification on how Western will
determine what is in the public interest.
Response: Western agrees the Program and the projects selected
under the Program should serve the public interest. Although the
Recovery Act specifically does not define what constitutes ``public
interest'', when selecting projects, Western believes that it has
discretion to balance the merits of
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each proposed project on a case-by-case basis and on the circumstances
of each situation.
Summary Comment: Some commenters stated that adding transmission
lines does not serve the public interest.
Response: Section 402 of the Recovery Act clearly indicates that
Congress desires Western to build transmission projects to facilitate
the delivery of renewable energy. Western intends to carry out its
Program to fulfill this Congressional direction.
c. System Impact Comments
Summary Comment: Western received numerous comments that it should
develop evaluation criteria so that projects selected for
implementation will not result in the creation of any negative
reliability, operational, or financial impacts to neighboring
transmission systems, but also protect against the diminution of any
rights and obligations of existing transmission users.
Response: Additions, modifications, and/or upgrades to the nation's
electric transmission infrastructure will be coordinated so that the
interests of the affected parties are represented. As proposed projects
are considered for possible implementation under the Program, Western
intends to seek input from the appropriate stakeholders, including
regional planning forums and/or processes on a case-by-case basis, to
ensure that the relevant interests and issues are identified,
represented, and appropriately considered.
Summary Comment: Western received a comment that it should select
projects for implementation that enhance reliability.
Response: Western will not limit itself to just projects that
enhance reliability. The Recovery Act allows Western to build projects
as long as they will not adversely impact system reliability or
operations. Whenever additions, modifications, and/or upgrades to the
nation's electric transmission infrastructure are undertaken, they are
coordinated through regional planning forums and/or processes where all
stakeholders have the opportunity to have their issues and concerns
raised and discussed. Western intends to seek input from the
appropriate stakeholders, including regional planning forums and/or
processes on a case-by-case basis, to ensure that the relevant interest
and issues are identified, represented, and appropriately considered as
projects are considered for possible implementation.
d. Project Priority Comments
Summary Comment: Western received several comments indicating that,
when considering projects for implementation, Western should give a
higher priority to those projects that upgrade and modernize the
existing transmission infrastructure to increase its capacity for
integrating more renewables into the grid; promote more public/private
partnerships; are further along in their developmental prerequisites;
confront less financial, technological, and regulatory hurdles; or can
be quickly constructed.
Response: Western always appreciates suggestions from stakeholders
which enhance the effective and efficient management of its programs.
The Program anticipates a combination of new transmission construction
and upgrades to existing infrastructure, and will use public/private
partnerships to the extent practicable in order to meet the objectives
of the Recovery Act to create jobs in the near term and rapidly develop
infrastructure to deliver renewable resources.
e. Criteria Comments
Summary Comments: Western received numerous comments regarding
project evaluation criteria. Suggestions included the development of a
comprehensive list to include consideration of the creditworthiness of
any potential partner; not funding projects that are fundamentally
unsound; job creation and the long-term economic benefits of any
project; and other project eligibility criteria.
Response: Western's expectation is that unsound projects will be
screened out through a rigorous evaluation process. Prior to committing
borrowed funds to any selected project, as mandated, the Administrator
must certify that the project is in the public interest; it will not
adversely impact system reliability or operations, or other statutory
obligations; and it is reasonable to expect that revenue from the
project will be adequate to repay the project loan, expenses for
ancillary services and the ongoing operation and maintenance costs of
the project. In addition to these criteria, Western will also assess
the technical merits and feasibility of a project; its ability to
deliver power generated by renewable resources; the financial stability
and capability of all potential project partners; project readiness
(e.g., permitting, local, state and/or regional approvals); and the
economic developmental benefits of the project. The Program's project
evaluation criteria will be applied to provide the basis for the
Administrator's certification.
Summary Comment: Western received several comments requesting that
it allow participation in transmission projects through long-term
contracts, including an open season period, e.g., Bonneville Power
Administration's (BPA) open season.
Response: Western is open to considering the concept of allowing
participation in transmission projects through long-term contracts,
including the use of an open season period to select counterparties to
those contracts, similar to that used by BPA.
Summary Comment: Western received a comment that it should not
consider refinancing as a part of the original feasibility analyses of
the new projects.
Response: The Recovery Act authorizes Western to refinance loans
taken pursuant to section 402. Refinancing would not be part of the
original feasibility analyses of new projects, but will be considered
during the useful life of projects and will be used when it makes good
business sense.
f. Coordination Comments
Summary Comment: Western received numerous comments advising it to
take advantage of studies and work (previous, current, future) on
potential transmission projects, coordinate the Program's projects
through regional planning forums and processes, possibly lead regional
planning efforts, and consider coordination of regional grid operations
to integrate renewable resources.
Response: Western is involved in many regional and subregional
transmission planning groups, collaborating with transmission entities
on proposed transmission additions to coordinate and efficiently plan
for transmission line development. For example, Western is a member of
the WestConnect transmission planning group, which provides an annual
10-year regional transmission plan, coordinating all transmission plans
across the WestConnect planning area. Western also participates in the
Mid-Continent Area Power Pool (MAPP) Regional Plan that integrates the
transmission plans developed by individual MAPP members through the
MAPP's Transmission Planning Subcommittee and by sub-regional planning
groups, in order to meet the transmission needs in the MAPP Region of
Members and interested parties. Western will continue to be involved in
these and other transmission planning groups to coordinate projects,
and will
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use existing and future studies and analyses to enhance its decision
process.
g. Ancillary Services Comments
Summary Comment: Western received several comments related to the
provision of ancillary services. Some commenters felt Western should
use Federal hydro-power resources to provide ancillary services to the
Program projects; others were equally opposed. Other commenters
suggested that any customers using the Program projects should be fully
responsible for any ancillary services required in conjunction with
that transmission service. Also, some commenters were unsure of what
Principle 5 meant when Western stated that each Program project ``[h]as
the necessary capabilities to provide generation related ancillary
services.'' (Emphasis added.)
Response: Nothing in the provisions of the Recovery Act ``confers
on the Administrator any additional authority or obligation to provide
ancillary services to users of transmission facilities developed under
this section.'' Under normal industry operation procedures, it is the
responsibility of the recipient of the transmission service to
undertake the necessary arrangements to secure the provisioning of the
required ancillary services. Under the Recovery Act, and as part of the
Administrator's certification responsibilities, the Administrator must
also ensure a proposed new Program project does not conflict with his
responsibilities to existing transmission and preference power
customers of the Federal power system.
In order to clarify any misunderstanding that stakeholders may
have, Western has changed Principle 5 to use the words ``obtain and
deliver'' rather than ``provide'' to clarify that a Program project
must have the ability to obtain and deliver ancillary services.
3. Comments on Project Funding, Financing, and Repayment Criteria
a. Use of Funds Comments
Summary Comment: Several commenters requested that Western be
flexible and open to alternative financing options to leverage its
borrowing authority to gain the most benefit.
Response: Western is open to considering alternative financing
options on a case-by-case basis in order to maximize utilization of its
new borrowing authority.
Summary Comment: Western received several comments regarding the
funding of studies and environmental analyses, including setting the
criteria for the repayment of those costs when a project does not get
completed.
Response: Western welcomes proposals from any entity who may seek
funding through Western to undertake the necessary planning and
environmental studies to determine the feasibility of a project.
However, in order to assure the public that its funds are being used
prudently, Western will evaluate the probability of each proposal
leading to a successful outcome on a case-by-case basis before making
any commitment to advance funds. Funds expended to study projects that
are not constructed shall be handled in accordance with provisions of
the Recovery Act.
Summary Comment: Western received some comments regarding the need
to set the terms and conditions of funds borrowed in conjunction with
the selection of the projects to be able to fully analyze the repayment
ability of the project.
Response: Western has executed a Memorandum of Understanding with
the U.S. Treasury Department that establishes the terms and conditions
under which Western can borrow funds. Thus, Western will have access to
adequate financing information when analyzing the repayment terms of
each Program project.
b. Recovery of Costs Comments
Summary Comment: Western received numerous comments that selected
projects must generate sufficient revenues to assure repayment of its
costs, as required by the Recovery Act, including the suggestion of a
policy that project beneficiaries pay for all project costs.
Response: Western plans to develop a repayment program that
complies with the Recovery Act. Western's Administrator stated in his
testimony before the Subcommittee on Water and Power, Committee on
Natural Resources, and U.S. House of Representatives, on March 10,
2009, that ``Western will * * * use revenues from project beneficiaries
as the only source of repayment of all associated project costs, and *
* * All selected projects, including upgrades to Western's existing
transmission lines, must meet the requirement that there is a
reasonable likelihood that it will generate enough transmission service
revenue to repay the principal investment, all operating costs and the
accrued interest.'' Pursuant to the Recovery Act, Western will evaluate
each project and, if selected, the Administrator will certify that it
is reasonable to expect that the proceeds from the project shall be
adequate to repay the loan. In addition, Western will modify its
Program-related Principles to ensure that project beneficiaries repay
project costs.
Summary Comment: Western received some comments that selected
projects use generally accepted accounting principles for financial
accounting and reporting so beneficiaries know their repayment
obligations.
Response: To elaborate on a statement in the Federal Register
notice, published on March 4, 2009, in Section III.C.1., Program
Funding--Policies and Practices, Western will use current business
practices and accounting policies (based on generally accepted
accounting principles) to record and track all expenses and revenues
and other financial transactions for each project selected.
Summary Comment: Western received numerous comments that rates for
selected projects are kept separate and not financially integrated for
the purposes of repayment with any existing or potential future
transmission system so that there is no impact to existing users.
Response: To comply with the Recovery Act, and as stated in the
Principles section of the Federal Register notice published on March 4,
2009, Western will isolate the accounting transactions of the new
projects in Western's existing financial management system. In response
to a question submitted for the record of the hearing before the
Subcommittee on Water & Power, Committee on Natural Resources, U.S.
House of Representatives, on March 10, 2009, Western stated, ``Section
402 of the Recovery Act clearly requires, for repayment purposes,
Western to treat each project funded with Treasury borrowings as
separate and distinct from all other Western transmission facilities *
* *''
Summary Comment: Western received comments that it needs to have a
strategy for interconnection-wide cost-sharing for projects designed to
achieve national renewable energy goals.
Response: Interconnection-wide cost-sharing is not a requirement of
the Recovery Act or the Program. Western may consider interconnection-
wide cost-sharing, as well as other cost-sharing concepts, if
appropriate, as it evaluates project proposals on a case-by-case basis.
If national renewable energy goals are established and changes to
Program processes and procedures are required, they will be modified as
appropriate.
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Summary Comment: Western received a comment that it should adopt
rate setting methodologies consistent with Department of Energy (DOE)
Order RA6120.2 (RA6120.2).
Response: RA6120.2 establishes financial reporting requirements for
Power Marketing Administrations. RA6120.2 was developed primarily for
financial reporting of hydroelectric power projects using Federal
appropriations. This Program is for transmission projects funded using
treasury borrowing and transmission service revenue. Even though these
differences exist, they tend to be minor and Western believes that it
can comply with the applicable portions of RA6120.2.
Summary Comment: Western received a comment that the specific
provisions of the Recovery Act related to ``participation'' do not
provide how a third-party participant will recover its costs.
Response: Rates and repayment for projects funded through the
Program will be determined on a case-by-case basis. Western anticipates
that its rates and repayment methods will apply only to those portions
of a project that are under Western's operational control. For projects
that are not under Western's operational control, Western will use
contract provisions with the third-party participant to require that
rates be established to assure a sufficient revenue stream to repay
project costs. In addition, one of Westerns objectives is to encourage
nonfederal participation to leverage Westerns borrowing authority.
Depending upon the roles and responsibilities agreed to by the parties,
the transmission rates charged by another entity may be subject to FERC
rate jurisdiction, or that of a public utility commission or other rate
setting body.
Summary Comment: Western received several comments regarding the
acceptability of the pancaking of transmission rates. Conversely,
several commenters were opposed to pancaking of transmission rates.
Response: Western has noted these comments. The Program's policies
and procedures are flexible and may provide for either ``pancaking'' or
``non-pancaking'' of rates as the situation requires. Rate design for
transmission capacity that Western markets will be determined using
Western's appropriate rate setting processes.
Summary Comment: Western received a comment that after Federal loan
obligations are paid off, right holders can migrate to a common tariff
charge as a part of a larger network.
Response: Western has noted this comment. Nothing in the Recovery
Act or the Program policies and procedures precludes migration to a
common tariff charge as a part of a larger network.
Summary Comment: Some commenters requested that Western clarify
when the forgiveness of loan balances will be used and that firm power
customers will not be liable for any unforgiven loan balance.
Response: The Recovery Act clearly states that balances owed to
Treasury at the end of the useful life of a project, or funds expended
to study projects that are not constructed, shall be forgiven. It
further states that revenue from the use of the project shall be the
only source of funds for repayment of project loans and payment of
ancillary services and operation and maintenance costs.
Summary Comment: Western received a comment that before projects
are implemented, Western should ensure that contracts with customers
for renewables are executed.
Response: Western acknowledges this comment and will endeavor to
ensure, where appropriate, that renewable energy generators have
executed the necessary contracts with their customers.
4. Other Comments Received
Summary Comment: Western received a number of other miscellaneous
comments which requested clarification on a number of items as well as
providing suggestions on the overall management and operation of the
Program.
Response: Western always appreciates suggestions from stakeholders
which enhance the effective and efficient management of its programs.
Western will consider each of the comments provided under this section
and as appropriate, integrate them into its management and operation of
the Program. In addition, should there be any changes that require
further notification of stakeholders, Western will communicate those
changes in a timely manner.
Summary Comment: Western received a comment that access to all
information submitted for project information should be available
without using the Freedom of Information Act (FOIA).
Response: Formal FOIA procedures need not necessarily be followed
in order to request project information. A functional request can be
submitted that does not invoke FOIA. However, Western does not
generally have the ability, nor does the Recovery Act specifically
grant Western ability, to waive protections afforded to parties under
``Exemption 4'' of FOIA. Exemption 4 provides protections for trade
secrets or commercial or financial information submitted on a
privileged or confidential basis. In this regard, Western has also
received comments asking for greater confidentiality protections for
project information. FOIA and Exemption 4 provide an adequate
framework, and balancing of interests, by which Western will treat
requests for both disclosure and nondisclosure.
Summary Comment: Western received several comments that it needs to
provide more detail to ensure how confidential information will be
protected.
Response: In protecting confidential information, Western will look
to the law related to FOIA, and in particular to Exemption 4.
Summary Comment: Western received some comments that all potential
conflicts of interest of project participants shall be disclosed and
reported to Western.
Response: Western appreciates the fact that if it contracts for
support in evaluating projects that these contractors may have worked
for one or more project proponents in the past. Western is also
concerned with conflicts of interest, and therefore will use its
current acquisition practices to retain contractors based on specific
requirements in the Federal Acquisition Regulations (FAR) to address
any organizational conflicts of interest or ``OCIs.''
Summary Comment: Western received a comment that the term
``entity'' is too narrowly defined and may exclude public power.
Response: Western includes public power in its definition of
``entity.''
Summary of Changes From Proposed Program
Western has revised the proposed Program in response to public
comments to the Federal Register notice (FRN) published on March 4,
2009. The more significant changes made to the Program include:
All references to the ``proposed'' Program were deleted, and now
refer to the ``Program.'' The Definition section was revised to refine
the definition of entity as ``any individual or organization that seeks
to participate with Western under the Program's authority.'' The
section was expanded to include a definition of ``beneficiary'' as any
individual or organization that receives an economic, financial,
operational, or physical benefit from the construction and/or operation
of a project funded by the Program.
[[Page 22737]]
The Program elements of Project Development and Project Operations
and Maintenance were combined. In addition, Western added a Principles
section as part of the Program to evaluate potential projects.
Specifically, Principles are categorized as being either project- or
Program-related.
Initially, nine Principles (six project-related, three Program-
related) were previously identified in the Background section of the
FRN. Principles were expanded to ten. A fourth Program principle was
added and reads: ``Ensures that project beneficiaries re-pay project
costs.'' The inclusion of this project Principle and related definition
will clarify repayment responsibility for individual Program project
costs. In addition, the fifth project Principle was revised as follows:
``Has the necessary capabilities to obtain and deliver generation-
related ancillary services.'' The Principle as previously worded
required the project provide generation-related ancillary services. All
references in the Program criteria to ``provide . . . ancillary
services'' were subsequently changed to ``obtain and deliver . . .
ancillary services.'' The Project Funding section was changed to
reflect revision of the definition of Applicability as follows: ``All
projects selected for funding under this authority will be governed by
the principles, policies, and practices outlined in this notice.''
Also, the Criteria element was deleted.
The Project Funding Policies and Practices element was expanded to
incorporate a third component to read: ``Western will look for public-
private partnerships to maximize the leveraging of funds.''
Under Project Evaluation, Applicability was changed to read: ``All
Projects to be considered for funding under this authority will be
evaluated against minimum criteria outlined below.'' Criteria were
changed significantly, expanded to include six additional criteria and
the revision of two. Policies and Practices was changed to include
narrative on Western's adherence to the Federal Acquisition Regulation
in addressing potential organizational conflicts of interest when
contracting for outside expertise to assist in evaluating proposed
projects seeking funding under the Program.
The Project Development and Operations and Maintenance, Policies
and Practices was revised. Specifically, Western will give priority to
projects that satisfy OATT or related requests. This has been moved to
Project Evaluation criteria. In addition, narrative referencing
applicable Federal laws, regulations and policies was expanded to
include: ``* * * the National Environmental Policy Act, the FAR, and
other applicable provisions of the Recovery Act.''
The Project Rates and Repayment, Policies and Practices section now
contains an expanded definition of Program project costs to include
overhead. In addition, the development of Program project transmission
rates for transmission capacity was changed from Western owns and
controls to simply controls. Western will adopt applicable requirements
contained in DOE Order RA6120.2 as part of its repayment and reporting
processes.
Western's Transmission Infrastructure Program
Western's Transmission Infrastructure Program will implement the
Program authorized in section 402 of the Recovery Act. The Program will
identify, prioritize and participate in the study, facilitation,
financing, planning, operating, maintaining, and construction of new or
upgraded transmission facilities and additions that will help bring
renewable energy resources to market across the West. One objective is
to encourage non-Federal participation so as to leverage Western's
borrowing authority. The Program consists of several major components:
Program Principles; Project Funding, Project Evaluation, Project
Development and Operation and Maintenance, and Project Rates and
Repayment.
Table of Contents
I. Definitions
II. Principles
A. Project-Related Principles
B. Program-Related Principles
III. Project Funding
A. Applicability
B. Policies and Practices
IV. Project Evaluation
A. Applicability
B. Criteria
C. Policies and Practices
V. Project Development and Operations and Maintenance
A. Applicability
B. Policies and Practices
VI. Project Rates and Repayment
A. Applicability
B. Criteria
C. Policies and Practices
I. Definitions
A. The term ``Administrator'' means the Administrator of Western.
B. The term ``entity'' means any individual or organization that
seeks to participate with Western under the Program's authority.
C. The term ``beneficiary'' means any individual or organization
that receives an economic, financial, operational, or physical benefit
from the construction and/or operation of a project funded by the
Program.
II. Principles
In implementing the authority granted to Western in section 402,
Western will use the following principles which provide overarching
guidance:
A. Project-Related Principles:
Western will ensure each project approved for funding using
Treasury borrowing authority:
1. Is in the public interest.
2. Will not adversely impact system reliability or operations, or
other statutory obligations.
3. Offers a reasonable expectation that the proceeds from such
project shall be adequate to meet Western's financial repayment
obligations.
4. Uses a public process when Western sets the rates for any
transmission capacity resulting from new facilities developed from
Western's participation in such projects.
5. Has the necessary capability to obtain and deliver generation-
related ancillary services.
6. Uses the proceeds from the sale of the transmission capacity
from such project for the repayment of the principal and interest of
the loan from the Treasury attributable to that project, after
reserving such funds as Western determines are necessary,
a. to pay for the ancillary services that are obtained and
delivered; and
b. to meet the costs of operating and maintaining the new project.
B. Program-Related Principles:
Western will ensure the Program:
1. Provides an opportunity, where appropriate, for participation by
other entities in constructing, financing, owning, facilitating,
planning, operating, maintaining, or studying construction of new or
upgraded electric power transmission lines under this authority.
2. Uses revenues from projects developed under this authority as
the only source of revenue for,
a. repayment of the associated loan for the project;
b. payment of expenses for ancillary services, and operation and
maintenance; and
c. payments for ancillary services that will be credited to the
existing power system providing these services, when the existing
Federal power system is the source of the ancillary services.
3. Maintains appropriate controls to ensure, for accounting and
repayment purposes, each transmission line and related facility project
in which Western participates under this authority is treated as
separate and distinct from,
a. each other such project; and
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b. all other Western power and transmission facilities.
4. Ensures that project beneficiaries repay project costs.
III. Project Funding
A. Applicability: All projects selected for funding under this
authority will be governed by the principles, policies, and practices
outlined in this notice.
B. Policies and Practices:
1. Western will use generally accepted accounting principles and
practices in recording and tracking all expenses and revenue
transactions for each project selected.
2. Western will isolate these financial accounting transactions in
its existing financial management system.
3. Western will look for public-private partnerships to maximize
the leveraging of funds.
IV. Project Evaluation
A. Applicability: All projects to be considered for funding under
this authority will be evaluated against the minimum criteria outlined
below.
B. Criteria: Project evaluation includes feasibility of developing
a project that meets the following minimum criteria:
1. Facilitates the delivery to market of power generated by
renewable resources constructed or reasonably expected to be
constructed;
2. is in the public interest;
3. will not adversely impact system reliability or operations, or
other statutory obligations;
4. establishes the reasonable expectation that the project will
generate enough transmission service revenue to repay the principal
investment; all operating costs, including overhead; and the accrued
interest by the end of the project's service life;
5. has at least one terminus located within Western's service
territory;
6. describes the economic developmental benefits of the project,
including an estimate of how many and the type, how fast, and where in
the country jobs are created;
7. gives priority to projects that satisfy Western's Open Access
Transmission Tariff or related requests;
8. addresses the technical merits and feasibility of a project;
9. demonstrates the financial stability and capability of all
potential project partners;
10. describes project readiness (e.g., permitting, local, state
and/or regional approval); and
11. describes all project partners' participation in a region-wide
interconnection-wide planning group or forum.
C. Policies and Practices:
1. Western will establish additional criteria to evaluate proposed
projects as necessary.
2. Western may, at its discretion, use outside expertise to assist
in evaluating proposed projects seeking funding under this authority.
Western will use its current acquisition practices to retain any
contractors to assist in project evaluation and will use the specific
regulations in the FAR to address any organizational conflicts of
interest.
3. Western will treat data submitted by project participants
related to this authority, including project descriptions,
participation and financing arrangements by other parties, as available
to the public through the FOIA. However, participants may request
confidential treatment of all or part of a submitted document under
FOIA's exemption for ``Confidential Business Information.'' Materials
so designated and which meet the criteria stipulated in the FOIA will
be treated as exempt from FOIA inquiries.
V. Project Development and Operations and Maintenance
A. Applicability: All projects funded under this authority.
B. Policies and Practices:
1. For study, facility development, construction and any other
related purposes, where applicable, Western will consider projects that
are constructed pursuant to its authority under section 402 of the
Recovery Act separately from procedures and requirements for arranging
for transmission service or interconnection under its OATT, or related
interconnection agreements. Western will use the appropriate project
management methods to initiate, plan, execute, monitor, control and
close all transmission projects approved for funding under this
authority.
2. Available transfer capability surplus to Western's need will be
made available in a nondiscriminatory manner consistent with FERC open
access transmission rules, Federal statute, and Western policies.
3. Western will comply with all other applicable Federal laws,
regulations and policies, including the National Environmental Policy
Act, the FAR, and other applicable provisions of the Recovery Act.
VI. Project Rates and Repayment
A. Applicability: All projects funded under this authority.
B. Criteria: The repayment requirements and applicable transmission
rates will be designed so that proceeds from the project meet the
repayment obligation.
C. Policies and Practices:
1. Before project development, Western will confirm the reasonable
likelihood that the project will generate enough transmission service
revenue to meet Western's financial repayment obligations including
principal investment, operating costs including overhead, accrued
interest, and other appropriate costs.
2. Transmission rates for transmission capacity Western controls
will be developed in a public process following the applicable
requirements outlined in 10 CFR part 903 and RA6120.2, and set by the
Administrator as specified in relevant DOE orders.
Environmental Compliance
In compliance with the National Environmental Policy Act of 1969
(NEPA) (42 U.S.C. 4321, et seq.), the Council on Environmental Quality
Regulations for implementing NEPA (40 CFR parts 1500-1508) and the DOE
NEPA Implementing Procedures and Guidelines (10 CFR part 1021).
Western has determined that this action is categorically excluded
from further NEPA analysis. Future actions under this authority will
undergo appropriate NEPA analysis.
Dated: April 21, 2009.
Timothy J. Meeks,
Administrator.
[FR Doc. E9-11299 Filed 5-13-09; 8:45 am]
BILLING CODE 6450-01-P