Proposed 2028 Parker-Davis Project Power Marketing Plan

AGENCY:

Western Area Power Administration, Department of Energy (DOE).

ACTION:

Notice of proposed plan.

SUMMARY:

The Department of Energy (DOE), Western Area Power Administration (WAPA), Desert Southwest Region (DSW) has developed a Proposed 2028 Parker-Davis Project (P-DP) Power Marketing Plan (Proposed 2028 Plan). The Proposed 2028 Plan provides for marketing power from P-DP from October 1, 2028, through September 30, 2048. WAPA currently markets 259,206 kilowatts (kW) of capacity and associated energy from P-DP in the summer and 198,337 kW in the winter, under long-term contracts to 35 customers located in Arizona, California, and Nevada. On September 30, 2028, WAPA's existing long-term sales contracts for P-DP power will expire, and the Proposed 2028 Plan would take effect October 1, 2028. WAPA developed the Proposed 2028 Plan to define the products and services to be offered, along with Eligibility and Allocation Criteria that will lead to allocations of P-DP power to contractors. This Federal Register notice initiates the formal public process for the Proposed 2028 Plan. As part of the process, WAPA requests public comment.

DATES:

A consultation and comment period begins today and will end August 19, 2024. WAPA will present a detailed explanation of the Proposed 2028 Plan during a public information forum that will be held June 20, 2024 from 1 p.m. to no later than 4 p.m. Mountain Standard Time (MST). WAPA will host a public comment forum that will be held July 19, 2024 from 1 p.m. to no later than 4 p.m. MST, or until the last comment is received. The public information and public comment forums will be conducted as hybrid meetings with both in-person and virtual options. Information and instructions for participating in the forums will be posted on DSW's website at least 14 days prior to these events at: https://www.wapa.gov/about-wapa/regions/dsw/pdpremarketing.

Oral and written comments may be presented at the public comment forum. A transcript of oral comments made at this forum will be available from the court reporter or on DSW's website identified above. WAPA will accept written comments at any time during the consultation and comment period. To ensure consideration, written comments on the Proposed 2028 Plan must be received or postmarked by August 19, 2024. WAPA reserves the right not to consider any comments received or postmarked after the close of the comment period.

The record, including all documents sent to WAPA by the public for the purpose of developing the new marketing plan, will be available on DSW's website. Program information and the existing P-DP marketing plan documents are also available on the website.

After all public comments have been considered, WAPA will publish a Final 2028 Power Marketing Plan (Final 2028 Plan) in the Federal Register .

ADDRESSES:

Written comments regarding the Proposed 2028 Plan may be submitted to: Jack D. Murray, Regional Manager, Desert Southwest Region, Western Area Power Administration, P.O. Box 6457, Phoenix, AZ 85005-6457, fax (602) 605-4663, or email: pdp-remarketing@wapa.gov.

The public information and public comment forums will be held at WAPA's DSW office, located at 615 South 43rd Avenue, Phoenix, Arizona 85009. As access to WAPA facilities is controlled, any U.S. citizen wishing to attend a forum in person must present an official form of picture identification (ID), such as a U.S. driver's license, U.S. passport, U.S. government ID, or U.S. military ID. Foreign nationals should contact Cheryl Cruz at (602) 605-2664 or email: dswpwrmrk@wapa.gov, in advance of the forum to obtain the necessary form for admittance.

FOR FURTHER INFORMATION CONTACT:

Jennifer Henn, Power Markets Advisor, Desert Southwest Region, Western Area Power Administration, (602) 605-2572 or email: pdp-remarketing@wapa.gov.

SUPPLEMENTARY INFORMATION:

Background

P-DP, initially authorized by Congress in 1935, is a large power and water system of the Lower Colorado River Basin located in Arizona, California, and Nevada. In the original 1935 authorization for the Parker Dam, Congress defined the purposes of the Project as follows: (1) controlling floods; (2) improving navigation; (3) regulating the flow of the streams of the United States; (4) providing for storage and delivery of water; (5) the reclamation of public lands and Indian reservations; (6) other beneficial uses; and (7) for the generation of electric energy as a means of financially aiding and assisting such undertakings. The Davis Dam was authorized by the Secretary of Interior in 1941 pursuant to his authority under the Reclamation Project Act of 1939. In 1954, Congress consolidated operations of the Parker and Davis Dams into a single project, now known as P-DP, for the purpose of “effecting economies” and increased efficiency in the construction, operation, maintenance, and accounting thereof.

P-DP power facilities include Davis Dam, with its total operating capacity of 255,000 kW for P-DP, and Parker Dam, with 60,000 kW of operating capacity allotted to P-DP and 60,000 kW allotted to Metropolitan Water District of Southern California. Both dams are operated and owned by the Bureau of Reclamation (Reclamation). WAPA owns and operates approximately 1,500 miles of high voltage transmission lines and 45 substations throughout Arizona, California, and Nevada to facilitate delivery of P-DP power in those three states.

History of Parker-Davis Project Power Allocations

WAPA allocates power not reserved for project purposes to preference power customers in accordance with its authority under Reclamation law and the Department of Energy Organization Act of 1977, which transferred Reclamation's power marketing functions to the DOE, acting by and through WAPA.

On December 28, 1984, following an extensive public process, litigation, and congressional action, WAPA published the Conformed General Consolidated Power Marketing Criteria or Regulations for Boulder City Area Projects (hereinafter referred to as the “Conformed Criteria,” 49 FR 50582). The Conformed Criteria established general marketing principles for the Federal projects within the jurisdiction of the then-existing Boulder City Area Office of WAPA, which included P-DP, Boulder Canyon Project (Hoover), and Central Arizona Project (Navajo) (49 FR 50582, 50584). The Conformed Criteria also set forth marketing criteria specific to P-DP once contracts expired on May 31, 1987, reserved power for existing P-DP contractors upon application and made available additional power to new and current contractors in excess of that power reserved by existing contractors and reserved for priority use ( Id. at 49 FR 50584-50587). As part of a separate public process and consistent with the Conformed Criteria, WAPA issued final allocation criteria and allocations of capacity and energy from P-DP for the period beginning June 1, 1987 (52 FR 28333).

In 2002, WAPA initiated a public process to remarket P-DP power when the existing contracts were set to expire on September 30, 2008 ( See67 FR 51580). On May 5, 2003, WAPA published a decision to: (1) apply the Power Marketing Initiative (PMI), 10 CFR 905.30 through 905.37, to the P-DP remarketing effort; (2) increase the summer and winter marketable capacity; (3) increase capacity available to existing P-DP contractors as of October 1, 2008; (4) round up allocations of less than one mega-watt (MW) to an even one MW in summer and winter, and allocations of less than two MW to an even two MW in summer only; (5) extend for 20 years 93 percent of existing contractors' adjusted allocations; and (6) use the remaining 7 percent of adjusted allocations for a resource pool (68 FR 23709). In subsequent, separate public processes, WAPA issued decisions on resource pool eligibility and allocation criteria and final allocations for the 2008-2028 marketing period (70 FR 74805; 71 FR 70380). WAPA's decisions for the 2008-2028 period did not otherwise alter marketing criteria applicable to the 1987-2008 marketing period, including the energy allocation methodology and minimum scheduling requirements set forth in the Conformed Criteria ( See49 FR 50582, 50585, 50587).

Development of the Proposed 2028 Plan

WAPA developed the Proposed 2028 Plan: (1) to define the products and services WAPA will offer, and (2) to determine the criteria for marketing and allocating power from October 1, 2028, through September 30, 2048. In the Proposed 2028 Plan, WAPA proposes to offer a resource extension to existing contractors and to offer a portion of the resource to new allottees.

As explained in the DATES section of this notice, WAPA will hold public information and public comment forums on the Proposed 2028 Plan. After considering all public comments, WAPA will publish a notice of the Final 2028 Plan in the Federal Register . As part of that notice, WAPA will announce its decisions regarding power resource extensions to existing contractors and resource allocations to new allottees. If WAPA determines to issue resource allocations to new allottees in the Final 2028 Plan, it will include in the same Federal Register notice a call for applications from preference entities interested in receiving an allocation of Federal power from P-DP (Call for Resource Pool Applications). The deadline for receipt of applications will be set forth in the notice. WAPA then would evaluate the applications, determine which applications meet the requirements of the Final 2028 Plan, and exercise its discretion, provided by law, to allocate power to certain eligible applicants. Proposed and final allocations subsequently will be published in the Federal Register .

The Proposed 2028 Plan incorporates the intent of the Energy Planning and Management Program (EPAMP) (10 CFR part 905), published by WAPA on October 20, 1995 (herein referred to as the “Final Rule,” 60 FR 54151). EPAMP implements Section 114 of the Energy Policy Act of 1992, and requires WAPA's customers to prepare Integrated Resource Plans. The PMI (10 CFR 905.30 through 905.37) provides a framework for extending power allocations to existing contractors and establishing project-specific resource pools.

The PMI calls for extending a major portion of the resources currently under contract to existing long-term firm power customers for a period beyond the expiration date of their current contracts (10 CFR 905.30(a)). The PMI provides, “[t]he remaining unextended power will be used to establish project-specific resource pools” which will be made available to new eligible customers (10 CFR 905.32(a)). In addition, the PMI states, “at two 5-year intervals after the effective date of the extension to existing customers, [WAPA] shall create a project-specific resource pool increment of up to an additional 1 percent of the long-term marketable resource under contract at the time. The size of the additional resource pool increment shall be determined by [WAPA] based on consideration of the actual fair-share needs of eligible new customers and other appropriate purposes” (10 CFR 905.32(b)). The Final Rule adopting EPAMP noted specific terms and conditions associated with allocations out of each resource pool would be determined during future, project-specific public processes (60 FR 54151, 54163). The Final Rule further stated, “[o]ne of [WAPA]'s goals in the PMI is to achieve widespread use of [WAPA]'s resources. Reservation of a modest percentage of resources to create a resource pool is consistent with a policy of encouraging widespread use of Federal hydroelectric power” ( Id.).

Proposed 2028 Plan

The Proposed 2028 Plan will provide new power marketing criteria for P-DP. The Proposed 2028 Plan addresses: (1) the power to be marketed after September 30, 2028, which is the termination date for all P-DP electric service contracts; (2) the general terms and conditions under which the power will be marketed starting on October 1, 2028, and going through September 30, 2048; and (3) the criteria to determine eligibility for allocations from the proposed resource pool.

Within broad statutory guidelines and operational constraints of P-DP, WAPA has wide discretion as to whom and under what terms it will contract for the sale of Federal power, if preference is accorded to statutorily defined entities. WAPA markets power in a manner that will encourage the most widespread use at the lowest possible rates consistent with sound business principles.

I. Marketable Power Resource

The primary purpose of P-DP is water control and delivery. The water control system consists of storage reservoirs that provide daily, seasonal, and annual flow regulation. Power generated from these resources depends on hydrology and water operation requirements.

Some of the power generated by P-DP is reserved for priority use by the United States (herein referred to as “Priority Use Power” or “PUP”). PUP is capacity and energy required for the development and operation of Reclamation projects as required by legislation (Reclamation project use power), and irrigation pumping on certain Indian lands. Reclamation project use power is defined to mean that capacity and energy for Reclamation projects in the Lower Colorado River Basin. The following is a list of facilities and projects for which Reclamation project use power is reserved: relift and drainage pumps; construction campsites; the Yuma-Mesa Irrigation and Drainage District; Gila Project drainage pumps; Wellton-Mohawk Irrigation and Drainage District Plant Nos. 1, 2, and 3; and the Colorado River Front Work and Levee System. Power for irrigation pumping on certain Indian lands is defined to mean capacity and energy for use in irrigation pumping on Indian irrigation projects which are adjacent to the Lower Colorado River south of Davis Dam and north of the border between the United States and Mexico.

WAPA proposes that P-DP power in surplus to that reserved for PUP shall be reserved for allocation to existing contractors and a resource pool shall be offered to potential new contractors, consistent with applicable law and the terms and conditions provided herein. Power that is reserved as PUP, but not presently needed, also may be marketed to contractors as withdrawable power. Withdrawable power is power that can be withdrawn for Reclamation project use power and power for irrigation pumping on Indian lands, which shall have equal priority. When PUP is requested, WAPA will confirm that the power to be withdrawn will be used for the above specified purposes, and then will withdraw the necessary amount of PUP upon a two-year advance notice. Withdrawals of power will be made as requested and confirmed until the total amount of power reserved for priority use purposes is in use.

II. Products and Services

WAPA proposes to market a fixed amount of capacity, referred to as Contract Rate of Delivery (CROD), for the summer and winter seasons. As described in further detail in Part III, WAPA proposes to have at least 259,206 kW of marketable capacity in the summer and at least 198,337 kW of marketable capacity in the winter, beginning October 1, 2028. The summer season for any calendar year is the seven-month period beginning the first day of P-DP's March billing period and continuing through the last day of its September billing period. The winter season is the five-month period beginning the first day of P-DP's October billing period and continuing through the last day of its February billing period in the next succeeding calendar year.

Under the existing P-DP marketing plan, energy allocations are a fixed seasonal amount for the length of customers' contracts and are equal to 3,441 kWh/kW, a 67 percent capacity factor, in the summer season, and 1,703 kWh/kW, a 47 percent capacity factor, in the winter season (49 FR 50582, 50587; 68 FR 23709, 23709). Due to challenging hydrological conditions in the Colorado River Basin, this methodology has imposed increasing financial burdens on contractors during the current marketing period, as WAPA has been required to purchase significant amounts of power to meet contractors' firm energy requirements. Accordingly, WAPA proposes to eliminate this methodology and instead offer energy amounts for three-month periods (“Quarterly Energy”) based on Reclamation's 24-month generation projection studies (“24-Month Study”), which are released every month. The Quarterly Energy would be published for contractors by no later than the last day of August for October through December, the last day of November for January through March, the last day of February for April through June, and the last day of May for July through September, of each year during the marketing period. This would allow for energy deliveries to be more aligned with actual generation, thereby decreasing the amount of power WAPA would have to purchase and reducing financial burdens on contractors. Under the Proposed 2028 Plan, available generation, less PUP (which would continue to be fixed on the same terms as under the existing marketing plan), would be published for contractors in the form of Quarterly Energy based on a pro rata share of their seasonal CROD.

WAPA is also proposing to purchase energy on behalf of contractors to supplement projected hydropower generation (“Optional Energy”), if requested. Contractors must elect to purchase Optional Energy from WAPA no later than the day before prescheduling takes place. The amount of Optional Energy requested, combined with the contractor's monthly energy entitlement pursuant to its Quarterly Energy, must not exceed the contractor's CROD scheduled at a hundred percent capacity factor (contractor's CROD multiplied by twenty-four hours multiplied by the number of days in the month). An estimated monthly price for Optional Energy will be published by WAPA at least quarterly but may be revised and re-published as conditions dictate. The actual costs associated with Optional Energy purchased by WAPA will be passed through to the contractor who elects to receive it.

There may be instances, after Quarterly Energy has been published, that Reclamation makes significant reductions to generation projections. For example, sustained periods of precipitation and/or run off from water sources other than the Colorado River can result in water being stored in Lake Mead for later use, thereby reducing P-DP generation. To minimize power purchases resulting from these situations, WAPA proposes to revise contractors' monthly energy entitlements when significant generation reductions occur after Quarterly Energy has been published. A significant reduction in generation would occur when dollars associated with projected purchase power requirements needed to maintain the Quarterly Energy for a particular month exceed dollars associated with that month's portion of WAPA's Annual Purchase Power Projection. The Annual Purchase Power Projection is an annual estimate of what power WAPA will purchase in the upcoming fiscal year, from October 1 through September 30. Currently, WAPA's Annual Purchase Power Projection is used as a component of the P-DP firm electric service (FES) rate. When such significant reductions occur, WAPA would publish contractors' revised energy for the month using the reduced generation projections. Revised energy would continue to be based on a pro rata share of contractors' CROD and would be effective no later than one day prior to prescheduling. Contractors could request that WAPA purchase Optional Energy on their behalf per the terms described above to obtain energy following a revision.

WAPA also proposes to designate the portion of projected annual generation exceeding a kWh calculation of all projected marketable capacity (including PUP) multiplied by a 67 percent capacity factor in the summer season and 47 percent capacity factor in the winter season as “Excess Energy.” If the current 24-Month Study generation projection for a year exceeds the result of the capacity factor calculation described above, energy exceeding that calculation (Excess Energy) would be distributed to all contractors and PUP recipients based on a pro rata share of their seasonal CROD. Excess Energy will be distributed to contractors monthly and included as an addition to each contractor's Quarterly Energy. Excess Energy would be subject to the same rate and payment requirements as other available P-DP hydropower. The 24-Month Study yearly projections could show Excess Energy at the beginning of a year, but such Excess Energy may not remain at originally projected levels for the full year. Excess Energy distributed in part of a year may be subject to adjustment in subsequent months if the 24-Month Study yearly generation projection drops below the Excess Energy threshold later that year. WAPA would establish procedures for designating and adjusting Excess Energy in Metering and Scheduling Instructions (MSI), which would be incorporated into the electric service contracts, to minimize subsequent energy adjustments as much as possible.

WAPA also is proposing an option that would allow contractors to use transmission capacity, reserved for delivery of their P-DP FES allocation, for contractor-owned or -purchased resources. Transmission capacity used for such energy could not exceed a contractor's CROD.

III. Proposed Resource Extensions and Resource Pool Allocations

On September 30, 2028, WAPA's long-term sales contracts for P-DP power will expire. As part of its Proposed 2028 Plan, WAPA proposes to apply the principles of the PMI (10 CFR 905.30 through 905.37) to P-DP for the forthcoming marketing period. This includes a proposal to extend 98 percent of P-DP contractors' existing CROD, as of September 30, 2028, for an additional 20 years, from October 1, 2028, through September 30, 2048. The existing CROD for PUP contractors will remain unchanged. WAPA proposes that a resource pool of two percent of available P-DP capacity (CROD) be established for new allottees. Energy associated with the new resource pool would be based on a pro rata share of the allottee's seasonal CROD and published in the form of Quarterly Energy. WAPA proposes creation of a single, one-time resource pool of a definite size, given the small size of the P-DP resource relative to those of other WAPA projects and the substantial costs and effort associated with creation of incremental resource pools. Specific terms and conditions governing the extensions and resource pool are described below.

A. Extension for Existing Contractors

WAPA proposes to have at least 259,206 kW or marketable capacity in the summer and at least 198,337 kW of marketable capacity in the winter, beginning October 1, 2028. WAPA expects the addition of 3,750 kW of capacity resulting from the rewind of Davis Dam Unit 5, anticipated to be available in July 2025 or earlier. With the addition of 3,750 kW, WAPA would have 262,956 kW of marketable capacity in the summer and 202,087 kW of marketable capacity in the winter. The actual marketable capacity for the forthcoming marketing period will be identified in the Final 2028 Plan. Consistent with 10 CFR 905.32(e)(2), WAPA intends to retain the capacity increase associated with the Davis Dam rewind effort through the end of the current marketing period to enhance operational flexibility.

WAPA proposes to extend existing contractors' allocations using the formula contained in the PMI: “Customer Contract Rate of Delivery (CROD) today/total project CROD under contract today × project-specific percentage × marketable resource determined to be available at the time future resource extensions begin = CROD extended” (10 CFR 905.33(a)). After adjusting each contractor's CROD by applying the increase in marketable capacity and then reducing the adjusted CROD by two percent (the amount of the proposed resource pool), the net effect to each contractor's current CROD would be a reduction of approximately 0.6 percent in the summer and 0.2 percent in the winter. Reductions would be mitigated if additional capacity gains are achieved prior to October 1, 2028. The creation of a resource pool would not affect PUP customers' CROD.

In the event any existing contractors forfeit or express an intention not to extend some or all of their allocations prior to October 1, 2028, such resources will be returned to the other existing contractors on a pro rata basis.

B. Resource Pool Allocations

WAPA proposes to establish a resource pool by reserving a portion of the power available during the forthcoming marketing period for allocation to new, eligible preference entities, or returned to existing contractors if enough new preference customers are not found. Allocations for the resource pool would be determined through a separate public process.

The 2028 resource pool would consist of two percent of the power resources available beginning October 1, 2028. The two-percent reduction to the adjusted allocations of existing contractors (described in Part III.A) would create a resource pool of approximately 5,259 kW of summer capacity and 4,041 kW of winter capacity. The new resource pool would include approximately 748 kW of summer withdrawable capacity and 146 kW of winter withdrawable capacity.

When reducing existing allocations to create the resource pool, WAPA would first take energy from existing contractors' withdrawable allocations up to the total reduction, when available. The remaining reductions would come from nonwithdrawable energy.

C. Eligibility Criteria for Resource Pool Allocations

WAPA proposes to apply the following Eligibility Criteria to all applicants seeking a resource pool allocation under the new marketing plan.

1. Qualified applicants must meet the preference requirements under Section 9(c) of the Reclamation Project Act of 1939 (43 U.S.C. 485(c)), as amended and supplemented.

2. Qualified applicants will be located within the P-DP marketing area that includes: (1) all of the drainage area considered tributary to the Colorado River below a point one mile downstream from the mouth of the Paria River (Lees Ferry); (2) the State of Arizona, excluding that portion lying in the Upper Colorado River Basin; (3) that portion of the State of New Mexico lying in the Lower Colorado River Basin and the independent Quemada Basin lying north of the San Francisco River drainage area; (4) those portions of the State of California lying in the Lower Colorado River Basin and in drainage basins of all streams draining into the Pacific Ocean south of Calleguas Creek; and (5) those parts of the States of California and Nevada in the Lahontan Basin including and lying south of the drainages of Mono Lake, Adobe Meadows, Owens Lake, Amargosa River, Dry Lakes, and all closed independent basins or other areas in southern Arizona not tributary to the Colorado River.

3. Qualified applicants must not have an existing allocation of Federal power or be a member of a parent entity that has an allocation of Federal power.

4. Qualified applicants, except Native American tribes, must be ready, willing, and able to receive and distribute or use power from WAPA. Ready, willing, and able means that the potential allottee has the facilities needed for the receipt of power or has made the necessary arrangements for transmission and/or distribution service; and the potential allottee's power supply contracts with third parties permit the delivery of WAPA power.

5. Qualified applicants that desire to purchase power from WAPA for resale to consumers, including cooperatives, public utility districts, public power districts and municipalities, must achieve electric utility status and have necessary arrangements for transmission and/or distribution service in place by January 31, 2028. Native American tribes are not subject to this requirement. Electric utility status means the applicant has responsibility to meet load growth, has a distribution system, and is ready, willing, and able to purchase P-DP Federal power from WAPA on a wholesale basis for resale to retail customers.

6. Qualified Native American applicants must be a Native American tribe as defined in the Indian Self Determination Act of 1975 (25 U.S.C. 5301 et seq., as amended or supplemented).

7. Qualified applicants must apply in response to the Call for Resource Pool Applications issued by WAPA in a separate Federal Register notice. The notice will include the deadline for receipt of those applications.

D. Allocation Criteria for Resource Pool Allocations

WAPA proposes to apply the following Allocation Criteria to all applicants seeking a resource pool allocation under the new marketing plan.

1. Allocations will be made in amounts as determined solely by WAPA in exercise of its discretion consistent with its governing authorities and considered to be in the best interest of the United States.

2. Allocations will be based on the applicant's load during the calendar year prior to the Call for Resource Pool Applications or the amount requested, whichever is less.

3. WAPA will base allocations made to Native American tribes on the actual load experienced during the calendar year prior to the Call for Resource Pool Applications or the amount requested, whichever is less. WAPA may use estimated load values if actual load data is not available. WAPA will review and adjust, where necessary, inaccurate estimates received during the allocation process.

4. WAPA will consider allocations below 1,000 kW. As part of the 2008 resource pool, WAPA set forth a 1,000 kW minimum for new allocations given operational constraints in scheduling. However, with rounding tools now available, WAPA will be able to ensure that CROD is not exceeded.

5. Qualified applicants seeking an allocation as an aggregated group must demonstrate to WAPA's satisfaction the existence of a contractual aggregation arrangement prior to WAPA's notice of final allocations. Members of an aggregated group must individually and collectively meet preference status and all other eligibility requirements. Qualified applicants aggregating their loads will be required to enter into a single firm power contract with WAPA, with the aggregated group entity as the contracting Party.

6. An allottee will have the right to purchase power from WAPA only upon execution of an electric service contract between WAPA and the allottee, and satisfaction of all conditions in that contract.

IV. General Criteria and Contract Principles

WAPA proposes to apply the following criteria and contract principles to all contracts executed under the new marketing plan:

A. Electric service contracts shall be executed no later than May 31, 2028, unless otherwise agreed to in writing by WAPA.

B. Contracts will include clauses specifying criteria that contractors must meet on a continuous basis to be eligible to receive electric service from WAPA.

C. All power supplied by WAPA will be delivered pursuant to MSI, which will be part of contractors' electric service contracts.

D. Contracts shall provide for WAPA to furnish electric service effective October 1, 2028, through September 30, 2048.

E. Contracts shall incorporate WAPA's standard provisions for electric service contracts, integrated resource plans, and General Power Contract Provisions, as determined by WAPA.

F. WAPA proposes a new minimum scheduling requirement that aligns with Reclamation's generation schedule and how energy is scheduled within the Western Interconnection. WAPA intends for contractors to receive the maximum benefit of their resource allocations while accommodating the following goals: meeting Reclamation's water requirements; reducing purchase power and wheeling costs; and minimizing sales of energy in low load hours. WAPA would develop a tool that uses Reclamation's 24-Month Study data, the status of generators, water volumes and elevation, reduced water releases, hourly pricing and projected hourly load, and other relevant information to model and produce an optimized monthly capacity and monthly minimum energy requirement for each contractor. During the public process and prior to the execution of contracts for the 2028-2048 marketing period, WAPA would provide examples of methods being considered, seek feedback from existing contractors and potential new allottees, and select which option provides the greatest flexibility and achieves the goals identified in this notice. Minimum scheduling requirements will be included in the MSI.

G. WAPA may, as it deems reasonable and necessary, enter into other agreements such as: transmission service agreements, interchange agreements, reserve agreements, load regulation agreements, exchange agreements, maintenance and emergency service agreements, power pooling agreements, or other transactions.

H. P-DP will remain operationally integrated with the Boulder Canyon Project, subject to applicable operational restraints of the Bureau of Reclamation, applicable laws, and the other requirements of the marketing plan.

I. WAPA, at its discretion and sole determination, reserves the right to adjust the CROD on five years' written notice in response to changes in hydrology and river operations. Such adjustments will take place only after WAPA conducts a public process.

J. Renewable energy certificates associated with P-DP power will be made available to contractors and may be sold or transferred to third parties, provided such sale or transfer is consistent with WAPA policy and documented in electric service contracts.

K. Each entity is ultimately responsible for obtaining its own delivery or other arrangements to its load. Transmission service over the P-DP system will be provided in accordance with Part V of this Proposed 2028 Plan.

L. WAPA may develop rate schedules for services provided under the Proposed 2028 Plan. Such rates will be developed through a separate public process.

M. Contractors must pay all applicable rates and charges in the manner and within the time prescribed in the contract.

N. P-DP will remain financially segregated for the purposes of accounting and project repayment. Beginning June 1, 2005, and until the end of the repayment period for the Central Arizona Project, P-DP provides for surplus revenues by including the equivalent of 4 1/2 mills per kWh in the rates charged to contractors in Arizona and by including the equivalent of 2 1/2 mills per kWh in the rates charged to contractors in California and Nevada. After the repayment period for the Central Arizona Project, the equivalent of 2 1/2 mills per kWh shall be included in the rate charged to all contractors in Arizona, Nevada, and California.

O. Consistent with the current P-DP Advancement of Funds contract, new allottees would be required to reimburse existing contractors for undepreciated replacement advances, to the extent existing contractors' allocations are reduced as a result of creating the resource pool. New allottees who receive an allocation would be required to prepay for service according to the applicable rate schedule and may participate in advance funding of WAPA's and Reclamation's operation and maintenance expenses, consistent with the existing Advancement of Funds contract, or an updated version of the contract that addresses the status of P-DP, as appropriate.

P. Deficits for costs incurred during a previous marketing period would not be passed through to new allottees.

V. Transmission Service

P-DP power will be delivered to designated points of delivery on WAPA's P-DP transmission system. Contractors must secure all necessary transmission service to deliver Federal power beyond WAPA's P-DP transmission system. WAPA may assist new contractors in obtaining third-party transmission arrangements for delivery of firm power allocated during the forthcoming marketing period. WAPA will determine the use of its transmission resources concurrently with further development of the products and services under this Proposed 2028 Plan. A list of designated delivery points will be provided with the Call for Resource Pool Applications. WAPA will market surplus transmission capacity on P-DP under WAPA's Open Access Transmission Tariff and other applicable arrangements.

Legal Authorities

WAPA developed this Proposed 2028 Plan in accordance with its power marketing authorities pursuant to the Department of Energy Organization Act (42 U.S.C. 7101, et seq.); the Reclamation Act of June 17, 1902 (32 Stat. 388), as amended and supplemented by subsequent enactments, particularly section 9(c) of the Reclamation Project Act of 1939 (43 U.S.C. 485(c)); and other acts specifically applicable to P-DP.

Procedural Requirements

Review Under the Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1980 (44 U.S.C. 3501, et seq.), WAPA has received approval from the Office of Management and Budget for the collection of customer information under control number 1910-5136.

Environmental Compliance

WAPA has determined this action fits within the following categorical exclusions listed in appendix B to subpart D of 10 CFR part 1021: B4.1 (Contracts, policies, and marketing and allocation plans for electric power) and B4.4 (Power marketing services and activities). Categorically excluded projects and activities do not require preparation of either an environmental impact statement or an environmental assessment. A copy of the categorical exclusion determination is available on WAPA's website under the 2024 accordion menu at www.wapa.gov/about-wapa/regions/dsw/environment.

Determination Under Executive Order 12866

WAPA has an exemption from centralized regulatory review under Executive Order 12866; accordingly, no clearance of this notice by the Office of Management and Budget is required.

Signing Authority

This document of the Department of Energy was signed on May 13, 2024, by Tracey A. LeBeau, Administrator, Western Area Power Administration. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the Federal Register .