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                                                       Calendar No. 273
112th Congress                                                   Report
                                 SENATE
 2d Session                                                     112-111

======================================================================



 
               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 S. 500]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 500) 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 with amendments and recommends that 
the bill, as amended, do pass.
    The amendments are as follows:
  1. On page 4, lines 1 and 2, strike ``pursuant to the 
provisions of this Act'' and insert ``as soon as practicable 
after the date of enactment of this Act and in accordance with 
applicable law,''.
  2. On page 6, line 23, strike ``but shall'' and all that 
follows through page 7, line 3, and insert ``including the 
transaction of April 7, 1986, between the Strawberry Water 
Users Association and the Strawberry Electric Service 
District''.
  3. On page 7, lines 6 and 7, strike ``24 months after the 
date of the enactment of this Act'' and insert ``1 year after 
the date of enactment of this Act, not later than 30 days after 
that date''.

                                PURPOSE

    The purpose of S. 500, as ordered reported, 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

    Senator Hatch introduced S. 500 on March 7, 2011. The bill 
is co-sponsored by Senator Lee. The Subcommittee on Water and 
Power held a hearing on S. 500 on June 23, 2011 (S. Hrg. 112-
129). A similar bill, H.R. 461, was introduced by 
Representatives Chaffetz and Bishop on January 26, 2011. H.R. 
461 was reported as amended by the House Committee on Natural 
Resources on September 23, 2011 (H. Rept. 112-217). H.R. 461, 
as amended, passed the House of Representatives on October 24, 
2011. The Committee on Energy and Natural Resources ordered 
reported both S. 500, as to conform to H.R. 461 as passed by 
the House, and H.R. 461, without amendment, at its business 
meeting on November 10, 2011.
    During the 111th Congress, similar legislation was 
introduced by Senator Hatch in the Senate, S. 3917, and 
Representative Chaffetz in the House, H.R. 6271. 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 S. 500, if 
amended as described herein.

                          COMMITTEE AMENDMENTS

    During its consideration of S. 500, the Committee adopted 
three amendments. The first clarifies the Secretary's duty to 
convey the electric distribution system to the South Utah 
Valley Electric Service District as soon as practicable after 
the date of enactment of S. 500 and in accordance with 
applicable law. The second clarifies that the United States is 
not liable for damages arising from the sale of the electric 
distribution system by the Strawberry Water Users Association 
to the South Utah Valley Electric District on April 7, 1986. 
The third provides that if the conveyance is not completed 
within 1 year (instead of 24 months) after the date of 
enactment of S. 500, the Secretary must submit a report to 
Congress within 30 days after the one-year anniversary of the 
date of enactment.

                      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 the 
conveyance to 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 S. 500 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 the 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 S. 500, the 
Secretary of the Interior shall submit a report to Congress 
that describes the status 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:

S. 500--South Utah Valley Electric Conveyance Act

    S. 500 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 bill would have no significant net impact on the 
federal budget. Enacting S. 500 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 spun off the South 
Utah Valley Electric Service District and the Bureau of 
Reclamation transferred financial responsibility for the 
operation and maintenance of the electric distribution system 
to the district. Under current law, the bureau oversees those 
operation and maintenance activities.
    Under the bill, 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 S. 500, the Bureau of Reclamation would discontinue 
oversight of the facilities. In addition, the bureau would no 
longer collect licensing fees from utilities seeking easements 
to cross those federal lands. 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. The two pieces of legislation and CBO's cost 
estimates are the same.
    S. 500 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 S. 500.
    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 S. 500, as ordered reported.

                   CONGRESSIONALLY DIRECTED SPENDING

    S. 500, 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, 
Subcommittee hearing on S. 500 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 S. 500, as ordered 
reported.