Request for Proposals for New or Upgraded Transmission Line Projects Under Section 1222 of the Energy Policy Act of 2005

AGENCY:

Southwestern Power Administration and Western Area Power Administration, Department of Energy.

ACTION:

Request for Project Proposals.

SUMMARY:

The Department of Energy (DOE or Department), acting through the Southwestern Power Administration (Southwestern) and the Western Area Power Administration (Western), both power marketing administrations (PMAs) within the Department, is seeking Project Proposals from entities that are interested in providing contributed funds under section 1222 of the Energy Policy Act of 2005 (EPAct) for Southwestern or Western's participation in the upgrade of existing transmission facilities owned by either PMA, or the construction of new transmission lines in the states in which either PMA operates.

DATES:

Project Proposals will be accepted beginning on June 10, 2010 and continuing until September 30, 2015, or until DOE accepts $100,000,000 in contributed funds under section 1222, whichever comes sooner. Due to the $100,000,000 statutory limitation on the amount of contributed funds DOE may accept under section 1222 through the end of fiscal year 2015, interested entities are encouraged to submit Project Proposals by July 26, 2010, when DOE will begin considering submitted Project Proposals. Project Proposals submitted after July 26, 2010 will be accepted and considered on a rolling basis, subject to the $100,000,000 limitation in contributed funds under section 1222 through 2015.

ADDRESSES:

Project Proposals should be mailed or e-mailed to DOE, with an additional copy mailed or e-mailed to the relevant PMA. All Project Proposals should be mailed or e-mailed to: Mr. Steven Porter, Assistant General Counsel for Electricity & Fossil Energy, Department of Energy, 1000 Independence Avenue, SW., Washington, DC 20585; or steven.porter@hq.doe.gov.

An additional copy of any Project Proposal involving Southwestern should be mailed or e-mailed to: Mr. James K. McDonald, Assistant Administrator, Office of Corporate Operations, Southwestern Power Administration, One West Third Street, Tulsa, OK 74103; or jim.mcdonald@swpa.gov.

An additional copy of any Project Proposal involving Western should be mailed or e-mailed to: Craig Knoell, Transmission Infrastructure Program Manager, P.O. Box 281213, Lakewood, CO 80228-8213; or Knoell@wapa.gov.

FOR FURTHER INFORMATION CONTACT:

For further information concerning Project Proposals, contact Mr. Steven Porter, Assistant General Counsel for Electricity & Fossil Energy, Department of Energy, 1000 Independence Avenue, SW., Washington, DC 20585; or steven.porter@hq.doe.gov. For specific details about Southwestern's system in regard to Project Proposals involving Southwestern, contact Mr. James K. McDonald, Assistant Administrator, Office of Corporate Operations, Southwestern Power Administration, One West Third Street, Tulsa, OK 74103; or jim.mcdonald@swpa.gov. For specific details about Western's system in regard to Project Proposals involving Western, contact Craig Knoell, Transmission Infrastructure Program Manager, P.O. Box 281213, Lakewood, CO 80228-8213; or Knoell@wapa.gov.

SUPPLEMENTARY INFORMATION:

Southwestern is an agency within DOE authorized under Section 5 of the Flood Control Act of 1944 (16 U.S.C. 825s) to market and transmit wholesale electrical power from 24 multipurpose reservoir projects operated by the U.S. Army Corps of Engineers to cooperatives, government agencies, and municipalities in several states. Southwestern operates and maintains 1,380 miles of high voltage transmission lines in Arkansas, Missouri, and Oklahoma. Southwestern also markets power in Arkansas, Kansas, Louisiana, Missouri, Oklahoma, and Texas.

Western is an agency within DOE and operates under the authority of federal reclamation laws, in particular section 9(c) of the Reclamation Project Act of 1939 (43 U.S.C. 485h(c)), and consistent with section 5 of the Flood Control Act of 1944 (16 U.S.C. 825s). Western markets power in Arizona, California, Colorado, Iowa, Kansas, Minnesota, Montana, Nebraska, Nevada, New Mexico, North Dakota, South Dakota, Texas, Utah, and Wyoming. Western's 17,000-mile high-voltage transmission system carries electricity from 57 power plants encompassing 14 multi-purpose water resource projects operated primarily by the Bureau of Reclamation, the U.S. Army Corps of Engineers, and the International Boundary and Water Commission.

Pursuant to section 1222 of EPAct (42 U.S.C. 16421), the Secretary of Energy (Secretary), acting through the Administrator of Southwestern or Western, has the authority to design, develop, construct, operate, own, or participate with other entities in designing, developing, constructing, operating, maintaining, or owning two types of Projects: (1) Electric power transmission facilities and related facilities needed to upgrade existing transmission facilities owned by Southwestern or Western (42 U.S.C. 16421(a)), or (2) New electric power transmission facilities and related facilities located within any State in which Southwestern or Western operates (42 U.S.C. 16421(b)). In carrying out either type of Project, the Secretary may accept and use funds contributed by another entity for the purpose of executing the Project (42 U.S.C. 16421(c)). For the period encompassing fiscal years 2006 through 2015, the Secretary may not accept or use more than $100,000,000 in contributed funds under section 1222. As of the date of this Notice, the Secretary has not accepted any contributed funds for section 1222 Projects.

In order to exercise the authority to engage in these activities under section 1222, the Secretary, in consultation with the applicable PMA Administrator, must first determine that a proposed Project satisfies certain statutory criteria. Accordingly, the Secretary requests that any entity interested in providing contributed funds for upgraded or new transmission facilities under section 1222 submit a Project Proposal that, at a minimum, contains all of the following:

1. The name and a general description of the entity submitting the Project Proposal;

2. A Project description which provides:

a. An overview of the proposed Project, including the Project location, proposed routing, and minimum transfer capability;

b. (For Proposals for Projects for non-DOE entities to participate with Southwestern or Western in designing, developing, constructing, operating maintaining or owning an electric power transmission facility and related facilities needed to upgrade existing transmission facilities owned by Southwestern or Western): A statement, supported by the best available data, demonstrating how the proposed Project meets all of the following three eligibility criteria:

i. The proposed Project must be either:

(A) Located in a national interest electric transmission corridor designated under section 216(a) of the Federal Power Act (16 U.S.C. 824p(a)) and will reduce congestion of electric transmission in interstate commerce; or

(B) Necessary to accommodate an actual or projected increase in demand for electric transmission capacity;

ii. The proposed Project must be consistent with both:

(A) Transmission needs identified, in a transmission expansion plan or otherwise, by the appropriate Transmission Organization (as defined in the Federal Power Act, 16 U.S.C. 791a et seq.), if any, or approved regional reliability organization; and

(B) Efficient and reliable operation of the transmission grid;

iii. The proposed Project must be operated in conformance with prudent utility practice.

c. (For Proposals for Projects for non-DOE entities to participate with Southwestern or Western in designing, developing, constructing, operating, maintaining, or owning a new electric power transmission facility and related facilities located within any State in which Southwestern or Western operates) A statement, supported by the best available data, demonstrating how the proposed Project meets all of the following five eligibility criteria:

i. The proposed Project must be either:

(A) Located in an area designated under section 216(a) of the Federal Power Act (16 U.S.C. 824p(a) and will reduce congestion of electric transmission in interstate commerce; or

(B) Necessary to accommodate an actual or projected increase in demand for electric transmission capacity;

ii. The proposed Project must be consistent with both:

(A) Transmission needs identified, in a transmission expansion plan or otherwise, by the appropriate Transmission Organization (as defined in the Federal Power Act, 16 U.S.C. 791a et seq.) if any, or approved regional reliability organization; and

(B) Efficient and reliable operation of the transmission grid;

iii. The proposed Project will be operated in conformance with prudent utility practice;

iv. The proposed Project will be operated by, or in conformance with the rules of, the appropriate Transmission Organization, if any; or if such an organization does not exist, regional reliability organization;

v. The proposed Project will not duplicate the functions of existing transmission facilities or proposed facilities which are the subject of ongoing or approved siting and related permitting proceedings;

3. A financing statement, detailing the amount of funds the submitting entity would contribute to DOE for purposes of carrying out the Project, including the expected Project costs for which those contributed funds would be used, and the fiscal year(s) in which any contributed funds would be provided to DOE.

Project Proposals will be evaluated by the Department of Energy and the relevant PMA to determine whether—based on the best available data provided by the submitter—the Project meets the following eligibility requirements:

1. The Project meets, or will meet by the time the Secretary makes a final decision whether to proceed with the development of the proposed Project, the statutory eligibility criteria specified above in paragraph 2(b) for upgraded transmission facilities, or paragraph 2(c) for new transmission facilities; and

2. DOE, in accepting the amount of funds the submitting entity proposes to contribute, would not exceed the $100,000,000 limit before September 15, 2015.

DOE can at any time reject a Project Proposal, in whole or in part, that does not meet these eligibility requirements.

If a proposed Project meets the eligibility requirements, DOE and the relevant PMA will conduct an initial evaluation of the eligible Project Proposals, considering criteria including, but not limited to, the following:

1. Whether the Project is in the public interest;

2. Whether the Project will facilitate the reliable delivery of power generated by renewable resources;

3. The benefits and impacts of the Project in each state it traverses, including economic and environmental factors;

4. The technical viability of the Project, considering engineering, electrical, and geographic factors; and

5. The financial viability of the Project.

In order for DOE to undertake an initial evaluation of eligible Project Proposals, submitting entities are urged to provide for consideration information in their Project Proposals, as described below. If the information described below is unknown at the time of submission, submitters are invited to provide a timeline estimating when any of the applicable information may become known or available.

1. Public interest. A brief description of how the Project is in the public interest, including, but not limited to, advancing the purposes of EPAct.

2. Resource description. A description of the energy resources (wind, solar, hydro, coal, natural gas, nuclear, etc.) for which the proposed Project would facilitate delivery; the size and location of the resources; schedule for resource development; specific location of load or markets; availability of generation-related ancillary services, including regulation and frequency response and operating reserves; a description of the entity's involvement in the development of the energy resources to be delivered; and/or any commitments to purchase the resulting energy and capacity from the proposed resource.

3. Interconnection request. If the proposed Project involves an interconnection request, a description of the interconnection request, including, but not limited to, the names of the entities involved in the request, such as transmission facility owners, Regional Transmission Organizations, Independent System Operators, or any other relevant entities, and the status of that request, including queue position and estimated date the transmission facility owner(s) expect to be ready to provide transmission service.

4. Transmission Rights and/or Service. Description of transmission rights or long-term service the entity may desire when the Project is completed.

5. Participant roles. Description of the proposed role that the submitting entity, the relevant PMA, the Secretary, and any other Project participants might play in the development, ownership, operation, and maintenance of the Project.

6. Prior experience. A brief description of the submitting entity's prior experience related to constructing, financing, facilitating, or studying construction of upgraded and/or new electric power transmission lines and related facilities for the primary purpose of delivering or facilitating the delivery of power generated by resources constructed or reasonably expected to be constructed.

7. Participation of other entities. A brief description of any steps the entity has taken to seek interest from other entities in participating in developing the proposed Project or in seeking interest in subscribers for the additional transmission capacity resulting from the proposed Project.

8. Financial viability. Verifiable information demonstrating that the entity is in sound financial condition and has the ability to secure the necessary financing to meet the Project's requirements at all relevant phases of the Project.

9. Other information. Any other information that the submitting entity thinks would be useful for consideration as part of its Project Proposal.

During or upon completion of the evaluation of an eligible Project, DOE and the relevant PMA may initiate negotiations and, subject to the advancement of funds by the requesting entity, undertake more detailed analysis—including National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321, et seq.) scoping and environmental impact statement preparation processes—for any eligible Project that meets the evaluation criteria.

Only an Agreement executed between DOE, the relevant PMA, and the submitting entity can contractually obligate the DOE or the relevant PMA to design, develop, construct, operate, maintain, or own, or participate with other entities in designing, developing, constructing, operating, maintaining, or owning, upgraded existing transmission facilities owned by either PMA, or new transmission lines constructed in the states in which either PMA operates.

Environmental Compliance: In compliance with NEPA (42 U.S.C. 4321 et seq.), the Council on Environmental Quality Regulations for implementing NEPA (40 CFR parts 1500-1508), and DOE NEPA Implementing Procedures and Guidelines (10 CFR part 1021), DOE has determined that this action is categorically excluded from further NEPA analysis. Future actions that the Secretary, Southwestern, and/or Western may undertake pursuant to EPAct section 1222 as a result of this request will undergo separate NEPA analysis on a project-by-project basis.