DELAWARE RIVER BASIN COMMISSION

PROPOSED

NOTICE OF PROPOSED RULEMAKING

The Delaware River Basin Commission (“Commission”) is a federal-state regional agency charged with managing the water resources of the Basin without regard to political boundaries. Its members are the governors of the four Basin states B New Jersey, New York, Pennsylvania and Delaware B and a Federal representative appointed by the President of the United States. The Commission is not subject to the requirements of 29 Delaware Code Chapter 101. This notice is published by the Commission for informational purposes

Proposed Amendments to the Comprehensive Plan and the Water Code Relating to the Operation of Lake Wallenpaupack During Drought Watch, Drought Warning and Drought Conditions

Summary: The Commission will hold a public hearing to receive comments on proposed amendments to its Comprehensive Plan and Water Code to incorporate a revised drought operating plan for the Lake Wallenpaupack Reservoir and Hydroelectric Facility, currently owned and operated by PPL Holtwood, LLC (“PPL”). The proposed rulemaking would increase by 12,500 acre-feet or 4.1 billion gallons the amount of Lake Wallenpaupack water available to the Commission for flow augmentation in the main stem Delaware River during drought watch, drought warning and drought emergency conditions, as defined in Section 2.5.3 of the Water Code and Docket D-77-20 CP (Revision 4), dated April 28, 1999. The minimum lake elevation to be maintained during drought conditions B the target elevation for December 1 B would decrease from 1170.0 feet to 1167.5 feet. The right to use as much as 4.1 billion gallons of Lake Wallenpaupack water to augment Delaware River flows during drought would be deemed to satisfy up to 10,000 acre-feet of the Commission=s consumptive use replacement requirement for the Martins Creek and Lower Mount Bethel generating facilities and future facilities that PPL (or its successors in interest) might construct. That is, under the proposed drought plan, the Commission would release PPL (and its successors) from the requirement that it provide up to 10,000 acre-feet or 3.3 billion gallons of dedicated storage to replace, gallon for gallon, water consumptively used by the entity=s existing and future generating facilities when the basin is in drought watch, warning or drought operations.

Dates: The public hearing will be held on Wednesday, October 16, 2002 during the Commission=s regular business meeting, which will begin at 1:30 p.m. Persons wishing to testify are asked to register in advance with the Commission Secretary by phoning 609-883-9500 ext. 203. Written comments will be accepted through Friday, November 15, 2002. Comments must be received, not merely postmarked, by that date.

Addresses: The public hearing will be held at the Commission=s offices, 25 State Police Drive, West Trenton, NJ. Written comments should be addressed to the Commission Secretary at DRBC, P.O. Box 7360, West Trenton, NJ 08628-0360.

Further Information, Contacts: A draft resolution enacting the proposed amendments to Sections 2.5.5 and 2.5.6 of the Water Code and the text of the current Water Code (which is incorporated in the Comprehensive Plan) may be viewed on the Commission=s web site, at http://www.drbc.net. Please contact Pamela M. Bush ext. 203, with questions about the proposed rule change or the rulemaking process.

PAMELA M. BUSH, ESQ.

Commission Secretary

September 18, 2002

Revised 9/11/02

NO. 2002-

A RESOLUTION to amend the Comprehensive Plan and the Water Code relating to the operation of Lake Wallenpaupack during drought, drought warning and drought watch conditions.

WHEREAS, Sections 2.5.3 and 2.5.4 of the Water Code specify criteria defining “basinwide drought” and “basinwide drought warning;” and

WHEREAS, Section 2.5.5 of the Water Code specifies how the Commission may direct operation of Lake Wallenpaupack during basinwide drought, in accordance with Table 2 therein, “Lake Wallenpaupack Elevation Schedule During Drought Conditions” (“Table 2”); and

WHEREAS, Table 2 currently reflects total storage in Lake Wallenpaupack of 29.8 billion gallons (“bg”) available for drought operation; and

WHEREAS, Section 2.5.6 of the Water Code establishes criteria defining “lower basin drought” and “lower basin drought warning,” and specifies how the Commission may direct operation of Lake Wallenpaupack during lower basin drought in accordance with Table 2; and

WHEREAS, in Docket No. D-77-20 CP (Revised), the Commission has temporarily modified the criteria defining basinwide drought warning and has specified criteria defining “basinwide drought watch;” and

WHEREAS, PPL Holtwood, LLC (“PPL”) has proposed to the Commission that the Water Code be revised to reflect the availability of an additional 4.1 bg of storage in Lake Wallenpaupack for basinwide and lower basin drought operation as directed by the Commission, and for use during basinwide drought watch, basinwide drought warning and lower basin drought warning, also as directed by the Commission, which proposal is herein called the “Proposed New Drought Operations Plan for Lake Wallenpaupack” (or “the proposal”); and

WHEREAS, the Commission has developed a daily flow computer model called OASIS, which PPL has modified to include Lake Wallenpaupack as an operating reservoir; and

WHEREAS, PPL submitted to the Commission the report “Analysis of a New Drought Operations Plan for Lake Wallenpaupack – Final Report,” dated January 2002 (“Final Report”), which presents the results of PPL’s analysis of the Proposed New Drought Operations Plan for Lake Wallenpaupack using the OASIS model and demonstrates the benefits of the proposal to the basin; and

WHEREAS, the benefits to the basin set forth in the Final Report include: reduced drought frequency and intensity, reduced incidence of cutbacks in conservation, directed and thermal releases, and reduced incidence of cutbacks in diversions of Delaware Basin water to New York City and the State of New Jersey; and

WHEREAS, Lake Wallenpaupack is a component of PPL’s Lake Wallenpaupack Hydroelectric Project licensed by the Federal Energy Regulatory Commission (“FERC”); and

WHEREAS, the FERC license for the Lake Wallenpaupack Hydroelectric Project expires in September 2004, and PPL is preparing an application to the FERC for a new license, which application must be submitted to FERC no later than September 30, 2002; and

WHEREAS, PPL’s Martins Creek and Lower Mount Bethel generating stations and unidentified PPL potential future generating facilities in the basin may require a combined dedicated water supply of up to 10,000 acre feet (approximately 3.3 bg) per year to satisfy the Commission’s consumptive water use compensation requirement; and

WHEREAS, PPL proposes to satisfy the Commission’s consumptive water use compensation requirement for PPL's existing and potential future generating facilities in the basin through the Proposed New Drought Operations Plan for Lake Wallenpaupack for a credit of up to 10,000 acre feet of water per year toward satisfaction of the requirement; and

WHEREAS, the Proposed New Drought Operations Plan for Lake Wallenpaupack would:

• preserve lake elevations for recreation;

• accommodate project operation to enhance conditions in the Lackawaxen River;

• sustain the project’s capability to produce peaking and emergency electricity;

• assure refill of the lake by June 1^st in most years;

• make additional storage in Lake Wallenpaupack available to satisfy the Montague flow objective during drought watch, drought warning and drought conditions; and

• allow for the conservation of storage in the three New York City Delaware Basin reservoirs; and

WHEREAS, under some conditions, the proposal would increase the quantity of water from the New York City Delaware Basin reservoirs required to meet temperature objectives in the reservoir tailwaters, but these releases would be offset by the availability of increased storage in the reservoirs; and

WHEREAS, an interim minimum flow target established for the West Branch Delaware River by the parties to the 1954 Supreme Court Decree will remain in effect nothwithstanding any increase in releases from Lake Wallenpaupack under the proposal; and

WHEREAS, PPL has performed a comparison of its proposal with the alternative of gallon for gallon replacement by Lake Wallenpaupack of depletive use by its generating units and has demonstrated that gallon for gallon replacement results in comparatively greater use of storage in the Upper Basin and increased incidence of basinwide drought conditions; and

WHEREAS, the Commission’s Flow Management Technical Advisory Committee has reviewed the results of PPL’s analysis of the Proposed New Drought Operations Plan for Lake Wallenpaupack and has recommended, with the concurrence of New York City, that the Commission accept PPL’s Proposed New Drought Operations Plan and grant to PPL its proposed consumptive water use compensation credit, and that the Comprehensive Plan and the Water Code be amended accordingly; now therefore,

BE IT RESOLVED by the Delaware River Basin Commission:

1. The Comprehensive Plan and Article 2, Sections 2.5.5 and 2.5.6 of the Water Code of the Delaware River Basin are amended as indicated in paragraphs 1.A through 1.F, below, to permit the Commission to direct operation of Lake Wallenpaupack during all drought operations, in accordance with Table 2 of Section 2.5.5 as hereby revised. It is understood that any and all provisions pertaining to the operation of Lake Wallenpaupack during basinwide drought warning also apply to basinwide drought watch as temporarily defined by the Commission in Docket No. D-77-20 CP (Revised); reference to “drought watch” is noted in brackets “[ ]” for clarity herein but is not to be included in the amended Water Code at this time.

A. The following sentence is added at the end of the first paragraph of Section 2.5.5:

Lake Wallenpaupack also may be utilized to complement the drought management operations of the New York City reservoirs during “drought warning” [and drought watch] conditions as defined by Figure 1 in Section 2.5.3A.

B. The second paragraph of Section 2.5.5 (beginning “Lake Wallenpaupack and the Mongaup reservoirs …”) is revised as follows, beginning with the third sentence:

During “drought” and “drought warning” [and drought watch] conditions, as defined in Figure 1 of Section 2.5.3.A of the Water Code, the power companies shall release water only in accordance with Commission direction. The Lake Wallenpaupack elevation schedules during normal, drought warning, [drought watch,] and drought conditions are set forth in Table 2. The lake elevations in Table 2 have been established to preserve the recreation values and other operational benefits of the lake while also providing water storage to be utilized at the direction of the Commission during the Commission’s drought operations as set forth in this section and in Section 2.5.6. The utilization of Lake Wallenpaupack at the direction of the Commission during the Commission’s drought operations shall be conditioned upon the following:

1. Utilization of Lake Wallenpaupack during drought warning [and watch] shall be consistent with PPL’s FERC license and power generation requirements as well as with lake and downstream needs.

2. During drought, PPL may, at the Commission’s direction, operate for power production when the lake elevation is above the following first-of-month “normal elevation” as defined in Table 2.

3. During a declared power emergency, PPL may operate for power production regardless of lake elevation.

4. Subject to the concurrence of the Commission, in response to changing electrical demand patterns, PPL may revise the lake elevations for “normal conditions” shown in Table 2.

C. Table 2 of Section 2.5.5 is revised in its entirety, as follows:

TABLE 2. LAKE WALLENPAUPACK ELEVATION SCHEDULES

Day	Normal Conditions	Drought Warning [and Watch]	Drought
June 1	1187.0	1187.0	1187.0
July 1	1185.0	1185.0	1185.0
August 1	1183.01	1183.01	1183.01
September 1	1181.0	1180.0	1179.0
October 1	1179.0	1176.0	1175.0
November 1	1181.0	1172.0	1171.0
December 1	1182.0	1167.5	1167.5
January 1	1183.0	1170.1	1170.1
February 1	1181.5	1173.3	1173.3
March 1	1180.0	1175.6	1175.6
April 1	1182.3	1182.3	1182.3
May 1	1185.6	1185.6	1185.6

¹ The existing FERC license for the Lake Wallenpaupack Hydroelectric Project requires that, except when flood waters are being stored, the maximum elevation of the lake shall be limited to elevation 1182.0 between August 1 and November 15 of each year (Article 41). In its application to the FERC for a new license, PPL will seek to include the drought condition lake elevation schedules in Table 2 on a permanent basis, including a lake elevation of 1183.0 on August 1. In the interim, until the FERC issues a new license, PPL will request annual approval from the FERC to operate the lake in accordance with Table 2 during the August 1-November 15 period. PPL will notify the Commission of the FERC's response to each annual request.

D. Subsection C.3.c is added to Section 2.5.6, as follows:

c. The Commission may direct releases from Lake Wallenpaupack subject to the same conditions as applied to operation during lower basin drought in D.3.e, except that utilization of Lake Wallenpaupack during lower basin drought warning shall be consistent with PPL’s FERC license and power generation requirements as well as with lake and downstream needs.

E. At Subsection D.3.b.iv of Section 2.5.6, the volume of storage assigned to Lake Wallenpaupack is revised to 33.9 bg from 29.81 bg.

F. A second sentence is added to Subsection D.3.e.i of Section 2.5.6 as follows:

During drought, PPL may, at the Commission’s direction, operate for power production when the lake elevation is above the following first-of-month “normal elevation” as defined in Table 2 and during a declared power emergency regardless of lake elevation.

2. The Commission hereby grants PPL a credit to satisfy the Commission's consumptive use compensation requirement for PPL's existing and potential future generating facilities in the basin. During any period from June 1 to the following May 31, the credit shall be equal to the amount of consumptive water use compensation otherwise required by PPL’s generating facilities but in no event shall the credit exceed 10,000 acre feet (approximately 3.3 bg).

3. Any adverse impact on the New York State reservoir releases program for recreational uses of the river that is attributable to the proposed operation of Lake Wallenpaupack will be ameliorated by releases from the New York City Delaware Basin reservoirs. Water saved in the New York City Delaware Basin reservoirs as a result of operations in accordance with this resolution shall be available for such uses as may be approved from time to time by the parties to the 1954 Supreme Court Decree.

BY THE COMMISSION

ADOPTED:

6 DE Reg. 476 (10/01/02) (Prop.)