On January 27, 2016, the Castle Valley Special Service District filed with the Federal Energy Regulatory Commission a notice of intent to construct a 6-kilowatt in-conduit hydroelectric net metered system. The District is a tax exempt municipal government entity that, among other services, provides drinking water to the residents of Ferron City and Clawson Town.
That notice of intent described plans to harness or recover water pressure lost at the inlet to the District's proposed new Ferron Water Treatment Plant. Water from the Millsite Reservoir would be transmitted to the treatment plant in a conduit owned by Ferron City and the District. Excess pressure in the incoming untreated water would flow through a pressure reducing valve and turbine hydropower generator.
Under section 30 of the Federal Power Act (FPA), as amended by section 4 of the Hydropower Regulatory Efficiency Act of 2013 (HREA), a qualifying conduit hydropower facility -- one that is determined or deemed to meet defined criteria -- is not required to be licensed or exempted from licensing under the Federal Power Act. These criteria include:
- The conduit the facility uses a tunnel, canal, pipeline, aqueduct, flume, ditch, or similar manmade water conveyance that is operated for the distribution of water for agricultural, municipal, or industrial consumption and not primarily for the generation of electricity.
- The facility is constructed, operated, or maintained for the generation of electric power and uses for such generation only the hydroelectric potential of a non-federally owned conduit.
- The facility has an installed capacity that does not exceed 5 megawatts.
- On or before August 9, 2013, the facility is not licensed, or exempted from the licensing requirements of Part I of the FPA.
On February 2, 2016, the Federal Energy Regulatory Commission issued its notice of a preliminary determination that "the proposal satisfies the requirements for a qualifying conduit hydropower facility, which is not required to be licensed or exempted from licensing."
Following the expiration of comment and intervention deadlines, on March 28 the Commission issued its "written determination that the Ferron Water Treatment Plant Project meets the qualifying criteria under FPA section 30(a), and is not required to be licensed under Part I of the FPA."
As the FERC determination on the Ferron project notes, "Qualifying conduit hydropower facilities remain subject to other applicable federal, state, and local laws and regulations." But the ability to develop an in-conduit hydropower project without needing a FERC license can give a significant boost to projects with suitable conduit water resources.