|Water - a scarce but valuable resource in the American west.|
The Regional Watershed Supply Project was originally proposed by private developer Million Conservation Resource Group to make new water supply available for use by municipalities, agriculture, and industries in southeastern Wyoming and the Front Range of Colorado. In 2008, the developer applied to the U.S. Army Corps of Engineers for a permit under Section 404 of the Clean Water Act. Under its Section 404 authority, the Army Corps regulates activities involving the discharge of dredged or fill material into waters of the U.S.
In July 2011, based on the record in the case, the Army Corps withdrew the pipeline application, saying in a public notice that the “primary purpose of the project may now change to electrical power generation”, an activity appropriately under the purview of the Federal Energy Regulatory Commission.
Wyco Power and Water Inc., the successor in interest to Million Conservation Resource Group, then applied to the Federal Energy Regulatory Commission for a preliminary permit for its project. By this time, the project concept included seven hydropower projects along the pipeline, including two pumped storage projects and five turbines within the pipeline. In response to the public notice of the permit application, over 200 comments expressly opposing the proposed project were submitted by the Governor of Wyoming, state agencies, counties, municipalities, water conservation districts, utilities, environmental or resource advocacy groups, and individuals.
In February, FERC dismissed Wyco’s request for a preliminary permit (3-page PDF) as premature, noting that the pipeline did not yet exist, nor did the applicant have authorizations for any specific route, nor had a route been substantially identified. FERC also noted that its only role associated with the proposed water supply pipeline would be to authorize the construction and operation of any proposed hydropower projects along the pipeline, not to authorize the siting of the pipeline itself.
Although Wyco asked FERC for a rehearing of its dismissal, yesterday the Commission upheld its earlier decision. In FERC’s order denying request for rehearing and clarification (9-page PDF), FERC reiterated that while it “regularly licenses discrete hydropower developments within substantial water conveyance systems, it has long been the Commission’s practice not to license the entire water conveyance system itself.”
So where does that leave Wyco? With both the Army Corps and FERC finding that the permits sought are premature, a logical next step would be to pin down a specific route and to seek authorizations from the federal, state, and private landowners whose property would be crossed. The developer has suggested that financing the project will be difficult without first obtaining some governmental approvals, and it may be hard to reach deals with landowners without having sufficient financial commitments. Nevertheless, FERC’s decision instructs Wyco that it may come back with a preliminary permit for the hydropower components of its pipeline project once the pipeline is more well-defined.