FERC license surrender with facilities in place

Friday, January 12, 2018

When a federally licensed hydropower project is decommissioned, U.S. regulators have authority to accept or prescribe plans for the disposition of the project's dams, reservoirs, and other facilities -- and depending on the case, decommissioning plans could range from removing facilities and restoring the site, to leaving some facilities in place.

Under federal law, most U.S. hydropower projects are licensed by the Federal Energy Regulatory Commission – and a license cannot be surrendered without the Commission’s agreement. By regulation, a licensee applying to surrender its license must identify all project features – dams, reservoirs, power plants, transmission lines, etc. – and how they will be disposed.

According to Commission guidance on hydropower license surrender, surrender applications for constructed projects should include a plan for decommissioning the project. The Commission requires decommissioning plans to address any dam safety or environmental concerns that could remain after the license is surrendered. But the nature and scope of decommissioning activities can vary, from leaving project features in-place for other uses, to removing project features restoring the site. The Commission encourages licensees considering a surrender application to consult with other regulatory agencies and stakeholders, in part to inform the development of a decommissioning plan.

An order issued in 2016 provides an example of a license surrender where facilities were allowed to be left in place. On May 3, 2016, the Commission issued an order accepting the surrender of the license for the 23-kilowatt Burnham Creek Hydroelectric Project in Washington. Originally licensed in 1987 for a 50-year term, the project facilities include a 20-foot-high earthen dam, a 5-acre reservoir, intake, penstock, powerhouse, generating unit, and transmission line. But the Burnham Creek project has not generated electricity since its power line was damaged by a windstorm in 2007.

In 2012, after consulting with various agencies and stakeholder entities, the project licensee filed an application to surrender her license, stating that the cost to repair the power line was too great when weighed against the benefits of the project. In her surrender application, the licensee proposed to leave the project "in place", in its current condition, with no ground-disturbing work, and without removing the dam, powerhouse, generating unit, or transmission line. No entity filed an objection to the proposed surrender.

The Commission issued its order accepting surrender about three years later. Because the licensee did not propose any ground-disturbing activities and would leave all project facilities in place, the Commission concluded that “the proposed surrender would have no effects to geology and soils, water quality, terrestrial resources, or land use.” For similar reasons, the Commission concluded that “surrendering the project would not constitute a major federal action significantly affecting the quality of the human environment,” reducing the environmental analysis required under federal law.

With respect to dam safety, the Commission noted several potential safety issues (including de-pressurizing the penstock, removing turbine or transformer oil from the powerhouse, and removing or securing the downed portion of transmission line), and made the surrender contingent upon the licensee showing that it had taken certain steps to address those concerns. The Commission also noted that the state of Washington would have jurisdiction over the facilities when, and if, the surrender is finalized.

In some cases, a FERC license surrender and decommissioning plan can entail dam removal. But surrender orders like that issued in the Burnham Creek case, or a similar order accepting surrender for the Columbia Dam project in New Jersey, illustrate the potential for surrendering a hydropower license while leaving most of a project’s facilities in place.

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