[Senate Report 112-130]
[From the U.S. Government Publishing Office]
Calendar No. 291
112th Congress Report
SENATE
2d Session 112-130
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SOUTH UTAH VALLEY ELECTRIC CONVEYANCE ACT
_______
January 13, 2012.--Ordered to be printed
Filed, under authority of the order of the Senate of December 17, 2011
_______
Mr. Bingaman, from the Committee on Energy and Natural Resources,
submitted the following
R E P O R T
[To accompany H.R. 461]
The Committee on Energy and Natural Resources, to which was
referred the Act (H.R. 461) to direct the Secretary of the
Interior to convey certain Federal features of the electric
distribution system to the South Utah Valley Electric Service
District, and for other purposes, having considered the same,
reports favorably thereon without amendment and recommends that
the Act do pass.
PURPOSE
The purpose of H.R. 461 is to direct the Secretary of the
Interior to convey certain Federal features of the electric
distribution system to the South Utah Valley Electric Service
District.
BACKGROUND AND NEED
The Strawberry Valley Project in Utah was initiated by the
Bureau of Reclamation in 1906 and currently includes the
Strawberry Dam and Reservoir, diversion dams, canals, several
power plants, and an electric transmission and distribution
system. The Strawberry Valley Project is connected to the
Bonneville Unit of the Central Utah Project and comprises about
45,000 irrigable acres in the area of Spanish Fork, Utah. The
Strawberry Water Users Association operates and maintains the
project and is responsible for generation and transmission of
power on the project. Two of the power plants were constructed
by the water users association and later transferred to the
Bureau of Reclamation. Approximately 1,550 kilowatts of power
are developed in three power plants on the project. All three
power plants are operated by the Strawberry Water Users
Association. In 1986, the association conveyed its interest in
the electric distribution system fixtures, lands, and power
poles to the South Utah Valley Electric Service District. The
purpose of this legislation is to clarify certain issues that
were not sufficiently resolved in connection with the prior
transfer.
LEGISLATIVE HISTORY
Representatives Chaffetz and Bishop introduced H.R. 461 on
January 26, 2011. The Subcommittee on Water and Power of the
House Committee on Natural Resources held a hearing on H.R. 461
on June 23, 2011. The Committee on Natural Resources ordered
H.R. 461 favorably reported, as amended, at its business
meeting on September 23, 2011 (H. Rept. 112-217). H.R. 461, as
amended, passed the House of Representatives on October 24,
2011. A similar bill, S. 500, was introduced by Senator Hatch
on March 7, 2011. S. 500 was co-sponsored by Senator Lee. The
Committee on Energy and Natural Resources ordered reported both
S. 500, as amended to conform to H.R. 461 as passed by the
House, and H.R. 461, without amendment, at its business meeting
on November 11, 2011.
During the 111th Congress, similar legislation was
introduced by Representative Chaffetz in the House, H.R. 6271,
and Senator Hatch in the Senate, S. 3917. No further actions
were taken.
COMMITTEE RECOMMENDATION
The Senate Committee on Energy and Natural Resources, in
open business session on November 10, 2011, by a voice vote of
a quorum present, recommends that the Senate pass H.R. 461.
SECTION-BY-SECTION ANALYSIS
Section 1 identifies the short title of the bill as the
``South Utah Valley Electric Conveyance Act''.
Section 2 defines key terms used in the bill.
Section 3(a) directs the Secretary of the Interior to
convey all right, title, and interest currently owned by the
United States to the District. Subsection (b) requires that the
conveyance of land shall comply with all applicable
environmental laws, including the National Environmental Policy
Act of 1969 (42 U.S.C. 4321 et seq.) and the Endangered Species
Act of 1973 (16 U.S.C. 1531 et seq.). Subsection (c) excludes
the Strawberry Valley Project power generation system and the
Federally-owned portions of the 46 kilovolt transmission
system, except for uses granted by license in Shared Power
Poles described under section 3(a)(2), from being conveyed to
the District.
Section 4 specifies that the land and facilities conveyed
by H.R. 461 shall no longer be part of a Federal reclamation
project, that the District shall not be entitled to any future
Bureau of Reclamation benefits for the conveyed land and
facilities, and that the United States shall not be liable for
damages related to the land and facilities, including the 1986
transaction between Strawberry Water Users Association and the
South Utah Valley Electric Service District.
Section 5 requires that if the conveyance under section 3
is not completed within one year of enactment of H.R. 461, the
Secretary of the Interior shall submit a report to Congress
that describes the states of the conveyance, any obstacles
preventing completion of the conveyance, and specifies an
anticipated new date for completion of the conveyance.
COST AND BUDGETARY CONSIDERATIONS
The following estimate of costs of this measure has been
provided by the Congressional Budget Office:
H.R. 461--South Utah Valley Electric Conveyance Act
H.R. 461 would direct the Secretary of the Interior, acting
through the Bureau of Reclamation, to transfer the title of the
electric distribution system located in Spanish Fork, Utah, to
the South Utah Valley Electric Service District. Based on
information from the Bureau of Reclamation, CBO estimates that
enacting the legislation would have no significant net impact
on the federal budget. Enacting H.R. 461 would have an
insignificant impact on direct spending; therefore, pay-as-you-
go procedures apply. The legislation would not affect revenues.
The electric distribution system was developed as part of
the Strawberry Valley Project in the 1920s. The Strawberry
Water Users Association (SWUA), the nonfederal sponsor of the
project, satisfied all federal repayment obligations associated
with the project in 1974. In 1986, the SWUA separated from the
South Utah Valley Electric Service District, and the Bureau of
Reclamation transferred financial responsibility for operating
and maintaining the system to the district. Under current law,
the bureau oversees those activities.
Under the act, transfer of the title of the electric
distribution system to the district would include all federally
owned fixtures and the underlying federal land not shared by
other facilities. In instances where the underlying federal
land is also occupied by other facilities and in the case of
shared power poles, permanent access and licensing privileges
would be granted to the district to perform the required
maintenance.
Under H.R. 461, the Bureau of Reclamation would no longer
oversee the facilities or collect licensing fees from utilities
seeking easements. Based on information from the bureau, CBO
estimates that the loss of those collections would have no
significant net impact on the federal budget.
On August 26, 2011, CBO transmitted a cost estimate for
H.R. 461, the South Utah Valley Electric Conveyance Act, as
ordered reported by the House Committee on Natural Resources on
July 20, 2011. On November 29, 2011, CBO transmitted a cost
estimate for S. 500, the South Utah Valley Electric Conveyance
Act, as ordered reported by the Senate Committee on Energy and
Natural Resources on November 10, 2011. All three pieces of
legislation and CBO's cost estimates are the same.
H.R. 461 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would impose no costs on state, local, or tribal governments.
The CBO staff contact for this estimate is Aurora Swanson.
The estimate was approved by Theresa Gullo, Deputy Assistant
Director for Budget Analysis.
REGULATORY IMPACT EVALUATION
In compliance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee makes the following
evaluation of the regulatory impact which would be incurred in
carrying out H.R. 461.
The bill is not a regulatory measure in the sense of
imposing Government-established standards or significant
economic responsibilities on private individuals and
businesses.
No personal information would be collected in administering
the program. Therefore, there would be no impact on personal
privacy.
Little, if any, additional paperwork would result from the
enactment of H.R. 461, as ordered reported.
CONGRESSIONALLY DIRECTED SPENDING
H.R. 461, as reported, does not contain any congressionally
directed spending items, limited tax benefits, or limited
tariff benefits as defined in rule XLIV of the Standing Rules
of the Senate.
EXECUTIVE COMMUNICATIONS
The testimony provided by The U.S. Department of the
Interior, Bureau of Reclamation at the June 23, 2011, Senate
Subcommittee on Water and Power hearing on S. 500, the Senate
companion bill to H.R. 461, follows:
Statement of Grayford F. Payne, Deputy Commissioner for Policy,
Administration and Budget, Bureau of Reclamation, Department of the
Interior
Madam Chairman and Members of the Subcommittee, I am
Grayford Payne, Deputy Commissioner for Policy, Administration
and Budget at the Bureau of Reclamation (Reclamation). I am
pleased to provide the views of the Department of the Interior
(Department) regarding S. 500, legislation authorizing the
transfer of the Federal portion of the Strawberry Valley
Project Electric Distribution System to the South Utah Valley
Electric Service District (District). Reclamation supports the
title transfer contemplated by this bill and recommends
revisions be made to the bill, which I describe below.
The Strawberry Valley Project (Project) is one of
Reclamation's earliest projects, and all Federal obligations
associated with the Project are fully repaid. Reclamation
developed hydropower generation from the beginning because
electricity was required to build the Project. Early in the
Project's history, Reclamation transferred the operation and
maintenance of most of the Project, including the Power System,
to the Strawberry Water Users Association (Association).
The Strawberry Valley Project Power System has three parts:
the powerplants are the Generation System, the high-voltage
lines running from the powerplants to the substations are the
Transmission System, and the low-voltage lines running from the
substations to the customers are the Distribution System.
In 1986, the Association spun off the District--creating an
independent service district with the capability to operate and
maintain the Transmission and Distribution Systems. At the same
time, the Association proposed selling the Distribution System
to the District. Reclamation approved the proposed sale on the
condition that the Association not transfer any Federal
facilities. At the time, Reclamation required that the sale be
limited to those portions of the Distribution System owned by
the Association--those parts that were not completed as part of
the original Strawberry Valley Project; constructed with
Strawberry Valley Project revenues; and constructed on Federal
lands or interests in lands. The District paid approximately
$2.7 million for the non-Federal portions of the Distribution
System. Reclamation approved the sale.
In 1986, Reclamation, the Association, and the District
believed that most of the Distribution System was non-Federal.
Later, it was determined that this was not accurate.
The 1940 Repayment Contract between the United States and
the Association states clearly that all additions to the Power
System are Federal facilities; little or none of the
Distribution System was owned by the Association. The District
is chagrined at having paid the Association for facilities it
did not receive. The purpose of this Act is to convey to the
District what all parties believed the District acquired in
1986.
The Act would likely have little effect on operation of the
Strawberry Valley Project. The District would receive fee
interest in those Federal lands on which the Distribution
System is the only Federal feature. On Federal lands sharing
both Distribution System and other Strawberry Valley Project
facilities, the legislation grants the District an easement for
access to perform maintenance on the Distribution System
fixtures. This provision preserves the interest of the United
States and the public in the other Strawberry Valley Project
facilities. As for the rest of the Project, the organizations
would remain responsible for operating and maintaining the
Generation System and the Transmission System on behalf of the
United States.
Because the Strawberry Valley Project is a paid-out
Reclamation project, there is no outstanding repayment
obligation associated with it. For this reason, the Act does
not require any payment from the District in exchange for title
to the Distribution facilities. In addition, the Act eliminates
Reclamation's obligations to oversee the maintenance of the
Distribution System and to administer the associated lands. The
result may be a slight reduction in Reclamation expenditures.
The change in ownership under the bill will be relatively
invisible to the public. Because the District has been
operating and maintaining the Distribution System for several
years, the public will witness a change in ownership but should
not experience any change in operation. The Act will eliminate
uncertainty about ownership and obligations associated with the
Distribution System--which will likely lead to more efficient
and effective operation of the Distribution System.
The Department recognizes that there are benefits to be
achieved by the proposed title transfer and has worked closely
and cooperatively with the interested parties. Before the
Department can support S. 500, we recommend two revisions:
First, Section 3(a), directing that ``the Secretary . . . shall
convey and assign'' the facilities to be transferred, should be
changed to ``the Secretary . . . is authorized to convey and
assign'', thereby allowing for completion of the necessary
public input and scoping pursuant to the National Environmental
Policy Act (NEPA). And second, language should be added to
state that the District shall hold the United States harmless
for any claim arising from the 1986 sale of the Distribution
System and from actions under this legislation.
In recent days, we have had discussions with the District
about accelerating the NEPA process and making modifications to
the legislation to address the concerns described in this
testimony. As such, I am confident that we can work with the
District, Senator Hatch, Representative Chaffetz, and the
Subcommittee to reach our goal of supporting this legislation
and transferring title to these facilities in a timely manner.
This concludes my written statement. I am pleased to answer
any questions.
CHANGES IN EXISTING LAW
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, the Committee notes that no
changes in existing law are made by H.R. 461, as ordered
reported.