July 5, 2011 - ambitious Mississippi River hydrokinetic projects up close

Tuesday, July 5, 2011

Staking a claim to a site for a hydrokinetic energy project can feel a bit like the wild West.  A recent flap over rights to study and seek licenses for hydrokinetic projects in the lower Mississippi River illustrates the challenges of the race to get a permit, and the changing ways in which regulators evaluate permit applications.

A weathered boathouse on the rocky shore of Islesford, Maine.

I've already noted the significant interest in developing the hydrokinetic resources of the lower Mississippi River.  Developers have filed about 300 preliminary permit applications for Mississippi River hydrokinetic projects, with two developers -- Free Flow Power Corporation and Northland Power -- applying for the vast bulk of the sites.  As of April 2011, Free Flow Power had 24 active permits for the Mississippi River, with applications filed for another 105 river sites.  Northland has applied to the Federal Energy Regulatory Commission for preliminary permits at 40 sites along the same reach, 28 of which Free Flow Power is also pursuing.

This flood of interest in preliminary permits for hydrokinetic projects in the Mississippi River appears to have taken federal regulators by surprise.  Between the applications filed by these two developers, preliminary permits have been sought or awarded for 141 sites covering nearly all of this 850-mile reach of the Mississippi River.  On April 1, 2011, the director of FERC's Office of Energy Projects sent a letter to these two developers, expressing skepticism that two companies could actually develop and file license applications for more than a small fraction of the sites during the short term of the preliminary permit.  (Recall that a preliminary permit just stakes a temporary claim to a site; to build and operate a project, a full project license is generally required.)  The director's letter also expressed concern over letting two applicants tie up so much of the river.  Based on these concerns, the letter noted that Commission staff intended "to decline to issue additional permits on this stretch of the river, and instead allow potential developers to advance their projects through the Commission’s licensing process."

In response, Northland Power pointed out that a Commission policy to deny permits would prevent Northland from studying the sites enough to know if it wanted to file a license application, let alone from promoting competition and developers' reasonable rights to reserve sites.  Free Flow Power noted that the timing and standards of the Commission's Integrated Licensing Process make it "impossible" to file a complete license application within the 3-year term of a preliminary permit.  As a concession to FERC's interest in competition, Free Flow Power also trimmed back its request for permits, withdrawing 58 of the 60 new preliminary permit applications for the Mississippi (representing 419 river miles) and choosing not to seek successive permits for a handful of sites whose preliminary permits had expired. 

This twin-pronged message  -- supporting competition and offering compromise  -- apparently worked.  In letters to the developers dated June 9, 2011, FERC staff noted, "After reviewing all of the resulting filings, staff has determined that it is appropriate to continue processing permit applications on the lower Mississippi River at this time."  

(FERC accepted for processing 43 of Free Flow Power's applications for permits, and incidentally told Northland Power that 40 of its permit applications were deficient for failing to include geographic information about the project and adjacent communities, requesting additional information within 30 days.  As of July 4, 2011, FERC's eLibrary system did not yet show any follow-up from the developer.)

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