FERC 2-year licensing pilot workshop

The regulatory process for Federal Energy Regulatory Commission licensing of hydropower projects can take many years and significant expense -- but can it be improved following a two-year pilot process ordered by Congress?  After running a pilot process for one license application, the Commission has scheduled a workshop to discuss lessons learned from its pilot licensing process.

Under the Federal Power Act, the Commission is responsible for licensing most non-federal hydropower development in the U.S.  Concerned over the duration and expense of the regulatory process, Congress enacted the Hydropower Regulatory Efficiency Act of 2013, section 6 of which directed the Commission to investigate the feasibility of a two-year licensing process, develop criteria for identifying projects that may be appropriate for the process, and develop and implement pilot projects to test the process.

After a January 6, 2014 solicitation for pilot projects, the Commission selected Free Flow Power Project 92, LLC's (FFP) proposed 5-megawatt project at the Kentucky River Authority's existing Lock & Dam No. 11 on the Kentucky River.  The January notice set minimum criteria and a process plan for projects that may be appropriate for licensing within a two-year process, including:

• The project must cause little to no change to existing surface and groundwater flows and uses;
• The project must not adversely affect federally listed threatened and endangered species;
• If the project is proposed to be located at or use a federal dam, the request to use the two-year process must include a letter from the dam owner saying the plan is feasible;
• If the project would use any public park, recreation area, or wildlife refuge, the request to use the two-year process must include a letter from the managing entity giving its approval to use the site; and
• For a closed-loop pumped storage project, the project must not be continuously connected to a naturally flowing water feature.

After trying a two-year pilot to abbreviate its hydropower project licensing process, the Commission has scheduled a workshop to discuss the pilot's effectiveness.

Alta, snowmaking pipes and conduit hydro power

Federal energy regulators have issued Alta Ski Area a written determination that its proposed micro-hydropower project will not be required to be licensed under the Federal Power Act.  If developed, Alta's project would be one of the first to generate electricity from a snowmaking water supply pipeline.

Most grid-connected hydropower projects in the U.S. fall under the Federal Power Act, and generally require a license or exemption from the Federal Energy Regulatory Commission.  The process of securing an original license or exemption for a new project can take years and have high costs.  But under a 2013 law, some so-called "conduit" hydro projects -- using pipelines and other existing manmade water conveyances -- can be developed and operated without a license or exemption.  The Hydropower Regulatory Efficiency Act of 2013 defined criteria for the Commission to declare a project to be a "qualifying conduit hydropower facility," and provided that such facilities are not required to be licensed or exempted from licensing under the Federal Power Act.  Key factors include the use of a non-federally owned, 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.  If the Commission determines that a project qualifies, it can be built and maintained without a FERC license or exemption.

Under the Commission's process for evaluating conduit hydro projects, the developer must file a notice of intent to construct a qualifying conduit hydropower facility.  If the developer's filing demonstrates that the project meets the statutory criteria, the Commission will issue a notice of its preliminary decision that the project qualifies.  Following a 45-day period within which others may contest the determination, assuming no adverse facts are uncovered, the Commission issues a letter constituting its written determination that the proposed project meets the qualifying conduit hydropower facility criteria.

Alta's course before the Federal Energy Regulatory Commission followed this trail.  In May 2016, Alta filed its notice of intent to construct the Alta Micro-Hydro Project.  That notice and a supplemental filing described a project to tap the existing underground 6-inch-diameter snowmaking water supply pipeline delivering water from Cecret Lake to the Wildcat Pump House.  Parallel to that pipeline, Alta would add a new powerhouse with a 75-kilowatt turbine/generating unit.  Later that month, Commission staff issued a public notice that preliminarily determined that the project met the statutory criteria.  After the 45-day contest period, during which no interventions or comments were filed, in July the Commission issued Alta a written determination that the Alta Micro-Hydro Project meets the qualifying criteria under section 30(a) of the Federal Power Act, and is not required to be licensed under Part I of that law.

The Commission's letter reminds Alta that qualifying conduit hydropower facilities remain subject to other applicable federal, state, and local laws and regulations.  But the ability to develop a conduit hydropower project without requiring a license from the FERC will ease the project's regulatory path.  So far, most projects that have qualified for the conduit hydropower program have been proposed by water districts.  But as ski areas seek to align their operations with sustainability goals, adding low-impact renewable electricity generation may make sense for some.  If Alta's micro-hydro project is successful, other ski areas with existing snowmaking or other water infrastructure over a sufficient vertical drop may follow suit by developing their own conduit hydropower projects.

Alta Ski Area conduit micro-hydro project

Alta Ski Area has proposed developing a micro-hydropower project along an existing pipeline, and hopes to benefit from a streamlined regulatory process.  Federal regulators have made a preliminary determination that the proposed Alta Micro-Hydro Project, in Alta, Utah, satisfies the requirements to be treated as a "qualifying conduit hydropower facility," which would not require licensing under the Federal Power Act.

Alta's proposed project would include a new powerhouse to be built along the existing underground 6-inch-diameter snowmaking water supply pipeline delivering water from Cecret Lake to the Wildcat Pump House, a new turbine/generating unit with an installed capacity of 75 kilowatts, intake and discharge pipes, and appurtenant facilities.  The unit is estimated to generate between 115 and 225 megawatt-hours annually.  There is no dam associated with the project.  Alta presented its micro-hydro project as part of a 2012 request to update its master plan, which the U.S. Forest Service accepted.

Ski areas with snowmaking capacity typically have existing pipelines and water infrastructure, coupled with significant vertical relief.  This can create opportunities to generate electricity using energy harvested from water flowing downhill through a pipeline, particularly if reducing system pressure (like a pressure relief valve) is otherwise needed. 

A 2013 law was designed to help small conduit-based hydropower projects by eliminating their need for a license or exemption from licensing issued by the Federal Energy Regulatory Commission.  Section 4 of the Hydropower Regulatory Efficiency Act of 2013 amended Section 30 of the Federal Power Act.  Section 30 now provides that 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.

The Federal Energy Regulatory Commission administers this statute.  To start the regulatory process, on May 16, 2016, Alta filed a notice of intent to construct a qualifying conduit hydropower facility.  Alta supplemented its notice on May 20 to clarify that the project "will only operate when there is excess capacity available in the pipeline and when water is hydrologically available", generally after the winter snowmaking season, during spring runoff.  Alta also restated that the pipeline's main purpose will continue to be snowmaking.

Yesterday the FERC issued its notice of preliminary determination of a qualifying conduit hydropower facility for Alta's project.  That notice examines the project relative to each of the four statutory criteria, and then provides the Commission's preliminary determination:

The proposed addition of the hydroelectric project along the existing water supply pipeline will not alter its primary consumptive purpose. Therefore, based upon the above criteria, Commission staff preliminarily determines that the proposal satisfies the requirements for a qualifying conduit hydropower facility, which is not required to be licensed or exempted from licensing.

The notice also sets a 30-day deadline for filing motions to intervene, and a 45-day deadline for filing comments contesting whether the facility meets the qualifying criteria and providing an evidentiary basis.

Other recently proposed conduit hydro projects have been determined to be qualifying conduit hydropower facilities, including a Colorado project using an existing "ditch drop," a Castle Valley, Utah water treatment project, a California wholesale water agency conduit project, and a New Hampshire water works.

Utah conduit hydropower project qualifies

Federal energy regulators have issued a letter determining that a proposed Utah hydropower project meets criteria for development without needing a hydropower license.  Castle Valley Special Service District's proposed Ferron Water Treatment Plant Project would generate electricity using the pressure of water in an existing conduit entering a drinking water treatment plant.  As a result of a determination by the Federal Energy Regulatory Commission, the project can be developed without a FERC hydropower license.

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.