FERC rejects BOST1 preliminary permit application

If the holder of a preliminary permit under section 4(f) of the Federal Power Act to study the feasibility of a proposed hydropower project is denied a successive permit to study the same project at the same site, will the Federal Energy Regulatory Commission accept a new application for a preliminary permit for the same applicant and project?

In a recent case, Commission staff said no, dismissing the new permit application.  That case involved a March 7, 2016 application by BOST1 Hydroelectric LLC proposing to study the feasibility of the Coon Rapids Dam Hydroelectric Project No. 13458, to be located at the existing Coon Rapids Dam on the Mississippi River in Minnesota.

Under the Federal Power Act, a developer interested in exploring the feasibility of a proposed hydropower project may apply for a preliminary permit, issued for up to three years.  A preliminary permit is not a development approval; it does not authorize construction.  Rather, it gives the holder the guaranteed right to have first priority to file a timely development application.

But this wasn't the first preliminary permit application FERC had received from BOST1 for this project.  In 2009, BOST1 applied for a preliminary permit for the Coon Rapids Project, which the Commission granted on October 7, 2010.  BOST1 was selected following a random drawing against a competing application filed by the Three Rivers Park District, which had previously held a preliminary permit for the site under Project No. 12618-000.  BOST1 was then granted a two-year extension of the permit term on September 6, 2013.

That permit expired on September 30, 2015.  BOST1 undertook predevelopment activity and made filings with the Commission, but did not file a final license application before the permit expired.

On October 1, 2015, BOST1 filed a successive permit application.  But Commission staff denied that application on January 20, 2016, because BOST1 had "failed to show that extraordinary circumstances or factors outside of its control prevented it from filing a development application."  The Commission requires a developer holding a preliminary permit to demonstrate diligent action under that permit, if the developer wishes to receive a successive permit.

The applicant then took two actions.  On February 19, 2016, it filed a request for rehearing, which remains pending.  Then, weeks later, it filed a new application for a preliminary permit for the project.

In a May 4, 2016 order, Commission staff dismissed that new application.  The order describes the new permit application as "nearly identical to its successive permit application," which the Commission denied this part January.  In the order's words, "To justify a permit in either case, BOST1, which has already had five years to prepare a development application, needed to demonstrate that extraordinary circumstances or factors outside of its control prevented it from filing a license application.  It failed to do so."

Commission staff therefore ordered that the applicant's March 7, 2016 application is denied.  BOST1's request for rehearing, relating to the January successive permit denial, remains pending.