H.R. 4349: Hoover Power Allocation Act

H.R. 4349

Hoover Power Allocation Act

Sponsor
Rep. Grace F. Napolitano

Date
June 8, 2010 (111th Congress, 2nd Session)

Staff Contact
Communications

Floor Situation

H.R. 4349 is being considered on the floor on Tuesday, June 8, 2010, under a motion to suspend the rules requiring a two-thirds majority vote. This legislation was introduced by Rep. Grace Napolitano (D-CA) on December 12, 2010, and referred to the Committee on Natural Resources, which reported the bill on May 5, 2010, by voice vote.

Bill Summary

H.R. 4349 would extend the federal government's authority to allocate power generated by the Hoover Dam for 50 years, from 2017 through 2067. In addition, the bill would adjust three existing power distribution schedules (A, B, and C) and create a fourth schedule (D) and provide federal authority to distribute energy to a new pool of recipients including Indian tribes and other eligible entities.

Specifically, the bill would increase schedule A and B contingent capacities, based on the maximum dependable operating capacity and decrease the summer and winter power capacity for Schedule A and B entities by 5 percent. The 5 percent reduction of power capacity would be used by the Department of Energy to create a new allocation pool, Schedule D, beginning in 2017. Schedule D would include Indian tribes, municipalities, rural electric cooperatives and irrigation districts that do not currently receive power from the dam.

Background

Signed into law in 1964, the Boulder Canyon Project Act of 1928 authorized the construction of the Hoover Dam.  When it was completed in 1936, the Hoover Dam was both the largest producer of hydroelectricity in the world as well as the largest concrete structure ever created.  Under the Boulder Canyon Project Act, power produced by the Hoover Dam was distributed to costumers in Arizona, Nevada, and California through a series of 50 year contracts which were initiated in 1937.

As the original Hoover Dam power distribution contracts were set to expire, Congress passed the Hoover Power Plant Act of 1984 (HPPA), which allocated power to the original recipients and new customers in the region.  Power was allocated through the establishment of three different power allocation schedules.  Schedule A included original recipients while Schedule B was made up of new companies receiving power.  Finally, Schedule C is made up of any power allocations in excess of schedules A and B and negotiated between the federal government and recipient states.  HPPA took effect in 1987 and allocated energy from the Hoover Dam for 30 years, through FY 2017. The underlying legislation would adjust current allocation allotments, reauthorize the statutory power to allot power for fifty years, and create a new schedule for distributing power from the Hoover Dam.

Cost

According to CBO, H.R. 4349 would have a "negligible effect on net direct spending and spending subject to appropriation." CBO states that, in the absence of legislation, the Western Area Power Administration would allocate the energy subject to regulations that would have a "negligible effect on offsetting receipts (an offset to direct spending) from electricity sales because the agency is required by law to keep electric rates as low as possible while recovering all costs of generation and marketing over time." Thus, CBO estimates that H.R. 4349 would have a net deficit effect of zero.