1.0 Purpose and Need The Western Area Power Administration (Western), created in 1977 under the Department of Energy (DOE) Organization Act (Public Law 95-91), markets and transmits electric power throughout 15 western states. Western's Sierra Nevada Customer Service Region (Sierra Nevada Region) markets approximately 1,480 megawatts (MW) of power from the Central Valley Project (CVP) and other sources and markets nonfirm energy from the Washoe Project. The Sierra Nevada Region's marketing area is shown in Figure 1.1. Western's mission is to market and transmit electricity that is in excess of CVP Project Use (power required for project operations), which for the Sierra Nevada Region is generated from CVP and Washoe Project powerplants. Western's power marketing responsibility includes managing and maintaining the Federal transmission system to interconnected utility systems. The hydroelectric generation facilities of the CVP are operated by the Bureau of Reclamation (Reclamation). Reclamation manages and releases water in accordance with the various acts authorizing specific projects and with other enabling legislation. Western's capacity and energy sales must be in conformance with the laws that govern its sale of electrical power. Further, hydropower operations at each facility comply with water flows and other constraints set by Reclamation, the U.S. Fish and Wildlife Service (the Service), and other regulatory agencies, acting in accordance with laws, regulations, and policies. 1.1 Proposed Action Existing contracts for the sale of Sierra Nevada Region power resources expire in the year 2004. The Sierra Nevada Region proposes to develop a marketing plan that defines the prod ucts and services to be offered and the eligibility and allocation criteria that will lead to alloca tions of CVP and Washoe Project electric power resources beyond the year 2004. Because determining levels of long-term firm power resources to be marketed and subsequently enter ing into contracts for the delivery of related products and services could be a major Federal action with potentially significant impacts to the human environment, this 2004 Power Market ing Program Final Environmental Impact Statement (2004 EIS) is being prepared in compli ance with the National Environmental Policy Act of 1969 (NEPA), as amended, and associated implementing regulations, particularly Council on Environmental Quality regulations (40 CFR Parts 1500-1508) and DOE regulations (10 CFR Part 1021). This 2004 EIS describes the environmental consequences of the range of reasonable marketing plan alternatives that meet the following needs (Section 1.2) and satisfy the purposes of the proposed 2004 Power Mar keting Plan (2004 Plan) (Section 1.3). Figure 1.1. Sierra Nevada Region Marketing Area The 2004 EIS is intended to support decisions related to the development and adoption of Sierra Nevada Region's 2004 Plan. Resulting power allocations to customers will occur in a separate public process under the Administrative Procedures Act (APA). Because of the com plexity of power marketing, industry changes (restructuring) now underway, and the need to remain economically viable in a highly competitive and rapidly changing marketplace, the 2004 Plan will establish the framework within which Sierra Nevada Region's power marketing decisions will be made. The 2004 Plan will provide the necessary flexibility to allow Western on an ongoing basis to adapt its marketing decisions to changing economic conditions and to the changing demands and needs of its customers. It is important to understand that the 2004 EIS analyses intentionally encompass the more extreme cases to ensure that any specific marketing plan constructed will be within the range of options studied. Where necessary for consideration of non-linear relationships between the extremes, the 2004 EIS also examines selected interior points. The analyses indicated that any specific marketing plan that fits within the ranges studied will not generate significant environ mental impacts if implemented. Establishing the specific provisions of the final 2004 Plan is more appropriately conducted under the APA public process, which can proceed without any need to reassess environmental impacts every time a provision changes or a final value is determined. Within the 2004 EIS, this approach is referred to as a "tent stakes" approach, which is illustrated in Figure 1.2. Figure 1.2. The Tent Stakes Approach for Examining the Limits of the Alternatives The 2004 EIS is not merely intended to support a one-time decision but to support a flexible and adaptive marketing program that will allow decisions to conform to current industry stan dards. Some changes will be made relatively infrequently, such as contract renewals, and some could be made hourly, such as supplemental power purchases. Alternatives are inten tionally not assembled into complete, cohesive power products because such an approach is not necessary to capture the range of anticipated impacts and to provide opportunities for mitiga tion and for avoiding impacts. Some "what if" scenarios, such as removal of allocations to certain customer groups, are included to identify the environmental impact sensitivity of shift ing allocations and to cover the range of available options. However, a preferred alternative has been selected that fits between the extremes. Certain assumptions guided the impact analyses. For river operations at generating and regu lating facilities, the impact analyses assumed water fluctuations will remain within constraints established by the facility design and by flood control, temperature, and environmental param eters that normally govern Reclamation dam and river operations, including anticipated changes that may result from implementation of the Central Valley Project Improvement Act (CVPIA). It was assumed that although many power customers do not own transmission or generating facilities, new open access opportunities through electric utility market restructur ing will make such resources universally available at market rates, so customers' access will be similar to the Sierra Nevada Region's access. Market costs for power in the year 2005 were projected, as were anticipated costs for Sierra Nevada Region's power products. Power rates and rate structure (i.e., the amounts to be charged to Western's customers) will be set through separate public processes and designed to recover power costs. The year 2005 was selected for the EIS analyses because it is the first year beyond expiration of the present power contracts. Future years beyond 2005 were not analyzed because of the increasing difficulty of projecting future conditions, especially in light of the major changes occurring in the utility industry, and because preliminary results of the impact analysis showed only minor environ mental impacts. 1.2 Need for the Proposed Action The Sierra Nevada Region needs to determine the level and character of capacity, energy, and other services that will be marketed beyond 2004. These services would be developed by combining potential hydropower operating approaches with power purchases. The Sierra Nevada Region also needs to establish eligibility and allocation criteria for the allocations of electric power resources to be marketed under contracts that will replace those expiring in 2004. 1.3 Purpose of the Proposed Action In implementing the proposed action, the Sierra Nevada Region plans to achieve a balanced mix of purposes. The purposes of the 2004 Plan are listed below (in no particular order): • to be consistent with Sierra Nevada Region's statutory and other legal constraints • to provide long-term resource and contractual stability for the Sierra Nevada Region and for customers contracting with the Sierra Nevada Region • to provide the greatest practical value of the power resource to the Sierra Nevada Region and to customers contracting with the Sierra Nevada Region • to protect the natural environment • to be responsive to future changes in the CVP, the Washoe Project, and the utility industry. 1.4 Statutory and Other Legal Constraints As noted in the purposes listed above, Western's statutory framework defines the agency's actions and, therefore, the scope of this 2004 EIS with regard to how the Sierra Nevada Region will develop and implement the 2004 Plan. Statutory and other legal guidelines were described in Sierra Nevada Region's Components Relationships Study (CRS) (Western 1995b) and are summarized in Appendix A of this document. 1.5 Public Involvement The Sierra Nevada Region developed and followed a Public Involvement Plan in the EIS proc ess. The Public Involvement Plan was designed to guide the Sierra Nevada Region through a collaborative and systematic decision-making process and provide opportunities for input from the public and interested parties and agencies. The primary purposes of public involvement, as set out in the Public Involvement Plan, were to • inform the public • gather information from the public to identify public concerns and values • develop and maintain credibility that the Sierra Nevada Region will responsibly address environmental and allocation concerns and consider them in decision making. The public participation process for the 2004 EIS has been integrated with the public involve ment needs of developing the marketing plan to ensure issues can be addressed in the appropri ate process. The two separate public processes required by NEPA and the APA have similar coordination needs involving the public. In