October 11, 2010 - permitting small and low-impact hydropower projects

Monday, October 11, 2010

As states and the federal government implement policies to promote both renewable power production and greater energy independence, small and low-impact hydropower projects provide a relatively accessible way to participate and benefit from these favorable policies. Today we'll take a walk through three different paths to getting approval from the Federal Energy Regulatory Commission (FERC) for a small hydro project.

First, a quick review of FERC's general licensing procedures. FERC has three licensing processes for hydro projects, all with similar names: the Traditional Licensing Process (TLP), the Alternative Licensing Process (ALP), and the Integrated Licensing Process (ILP).

The TLP is the longest-standing process, with origins dating back to 1935 and Part I of the Federal Power Act. In a TLP, the licensee engages in a three-stage pre-filing consultation process. Once a final application is filed, FERC issues public notice of the application, and solicits comments and intervention by other stakeholders. After further process including an environmental assessment or environmental impact statement, FERC is ready to issue (or deny) the requested license.

While applicants have traditionally used the TLP (hence its name), effective July 23, 2005, the Integrated Licensing Process (ILP) is the default process for filing an application for an original, new, or subsequent license. In fact, Commission approval is now needed to use either the Traditional or the Alternative Licensing Process for larger projects.

The ALP allowed for somewhat more flexibility in the process. For example, in an ALP, an applicant can modify the pre-filing consultation process depending on the circumstances. The ALP allows applicants to streamline the pre-filing consultation process and environmental review processes under the National Environmental Policy Act and other laws. This is achieved in part through a collaborative workgroup to study and resolve issues. Finally, the ALP allows the applicant to prepare a preliminary draft environmental assessment, or allows an environmental impact statement to be drafted by a FERC-selected contractor at the applicant's expense. This allows scoping of environmental issues to occur prior to the application being filed with the Commission. However, the ALP has proved cumbersome in some instances, with a lengthy total process time.

The ILP combines some of the features of both the traditional and alternative processes, including a more formal study development process than under the TLP. This five-year process was adopted by FERC in 2003.

So what about small and low-impact hydropower projects? The Traditional Licensing Process is still used to prepare applications for small projects that qualify for either of two exemptions from FERC's licensing provisions under the Federal Power Act: the "conduit" exemption and the 5-MW exemption.

The conduit exemption operates to simplify the process for a hydropower project on an existing conduit (for example an irrigation canal). Conduit exemptions are authorized for generating capacities 15 megawatts or less for non-municipal and 40 megawatts or less for a municipal project. The conduit has to have been constructed primarily for purposes other than power production and be located entirely on non-federal lands.

Another exemption applies to small hydropower projects, which are 5 megawatts or less, that will be built at an existing dam, or projects that utilize a natural water feature for head or an existing project that has a capacity of 5 megawatts or less and proposes to increase capacity.

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