In the wake of a January 2019 court ruling holding that the states and applicants for water quality certifications cannot indefinitely stall federal time limits for state action by repeatedly withdrawing and resubmitting their applications, federal energy regulators are being asked to rule that states have waived their rights to issue water quality certifications.
On January 25, 2019, the United States Court of Appeals for the District of Columbia Circuit issued an opinion in Hoopa Valley Tribe v. Federal Energy Regulatory Commission. The court’s basic holding addresses language in Section 401 of the Clean Water Act providing that a state’s water quality certification requirements shall be waived with respect to a federally jurisdictional application if the state “fails or refuses to act on a request for certification, within a reasonable period of time (which shall not exceed one year) after receipt of such request.” In its recent ruling, the court strictly construed the one year limit for state action, saying it couldn’t be gamed by repeatedly withdrawing and refiling the application, because that would usurp the federal regulatory scheme.
At issue in Hoopa Valley Tribe are PacifiCorp’s Klamath River hydropower facilities in California and Oregon. PacifiCorp applied for relicensing in 2004, and met all milestones except state water quality certification. A 2010 settlement agreement with a consortium of stakeholders included an agreement between the states and the licensee “to defer the one-year statutory limit for Section 401 approval by annually withdrawing-and-resubmitting the water quality certification requests that serve as a pre-requisite to FERC’s overarching review.” A Native American tribe (which was not a signatory to the settlement agreement) petitioned FERC for a declaratory order that California and Oregon had waived their Section 401 authority and that PacifiCorp had correspondingly failed to diligently prosecute its licensing application for the Project. FERC rejected the tribe’s petition.
On appeal, the DC Circuit said the issue was whether a state waives its Section 401 authority when, pursuant to an agreement between the state and applicant, an applicant repeatedly withdraws-and-resubmits its request for water quality certification over a period of time greater than one year. The court then said determining the effectiveness of this scheme was “an undemanding inquiry” given the statutory language which sets a maximum of one year for states to consider the certification request. The court says that each resubmitted request wasn’t really a “new” request, so FERC acted arbitrarily and capriciously in finding that the states hadn’t failed to act. The opinion offers strong language saying states’ “deliberate and contractual idleness” cannot be used to “usurp FERC’s control over whether and when a federal license will issue.” The court remanded the case to FERC with a directive to proceed with its review of, and licensing determination for, the project.
Now, parties are invoking the Hoopa Valley Tribe ruling in requests to the Commission for orders finding that states have waived their certification rights through the withdrawal-and-resubmission process. On February 28, 2019, Exelon Generation Company, LLC requested a declaratory order that Maryland has waived its authority to issue a water quality certification for Exelon's Conowingo Hydroelectric Project, by failing to timely act on Exelon's request for certification.
Similarly, in February, Dan Dinges, president and CEO of Cabot Oil & Gas Corporation, filed a letter with the Commission, urging prompt approval of the Constitution natural gas pipeline. Dinges described dhe Constitution Pipeline, of which Cabot is one of the developers, as having been blocked by the state of New York, and noted that the DC Circuit had held in abeyance a case relating to the Constitution pipeline’s certification pending action on the Hoopa Valley Tribe case because they raised “common questions of law.”
In his letter, Dinges cites the Commission’s failure to act on the Vineyard Wind capacity auction waiver request, points to New England’s constrained pipelines and fuel security concerns, and argues that “the gamesmanship of the State of New York has never been more suspect” in the wake of the Hoopa Valley Tribe ruling. He urged the Commission to act on the Constitution Pipeline. Subsequently, the Commission posted notice allowing parties to the Constitution Pipeline case an opportunity to comment on the impact of the ruling on that case.
Showing posts with label licensing. Show all posts
Showing posts with label licensing. Show all posts
FERC licensing post-Hoopa Valley Tribe ruling
Wednesday, March 20, 2019
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FERC solicits panel members to resolve hydropower licensing study disputes
Monday, October 29, 2018
U.S. hydropower regulators have asked for volunteers interested in serving as panel members to assist in resolving disputes related to the scope of studies required for hydropower licensing.
Under federal law, the Federal Energy Regulatory Commission is tasked with processing applications for licenses for most hydropower projects located in the U.S. To process any given application, the Commission typically uses one of three different licensing processes. Since 2005, the Commission's "Integrated Licensing Process" or ILP has been the default choice.
Under the ILP, the applicant seeking a license files a proposed study plan describing the studies it intends to conduct to inform the Commission's review of its application. Studies might cover the project's impact on a variety of types of resources and issues, such as aquatic, terrestrial, cultural, recreational, geological, land management, engineering and socioeconomic topics. After a 90-day period of consultation with stakeholders and Commission staff, the applicant may file a revised study plan for Commission approval. Ultimately, the director of the Commission's Office of Energy Projects will issue a study determination approving the study plan with any modifications based on the record. Whatever studies are required by the Commission-approved study plan must be conducted by the applicant or its consultants.
The nature and extent of the studies required can be controversial. Stakeholders have opportunities to comment on the applicant's original study plan, to participate in consultation, and to comment to the Commission on the revised study plan.
Under the ILP, certain federal or state agencies or tribes also have the ability to request that a study dispute be referred to a dispute resolution panel. The three-member panel would consist of FERC staff, the agency or tribal representative referring the dispute, and an independent third person selected by the other two panelists from a list of subject-matter experts. The panel members make a finding with respect to each disputed study request, on the extent to which each study criteria set forth in the regulations is or is not met, and why. The panel then makes a recommendation to the Director of the Office of Energy Projects based on its findings.
On October 22, 2018, the Commission issued a notice requesting applications from those interested in being listed as potential panel members. The Commission previously compiled lists in 2004, 2010, and 2015. For the latest round, the Commission has requested applications by January 31, 2019.
Under federal law, the Federal Energy Regulatory Commission is tasked with processing applications for licenses for most hydropower projects located in the U.S. To process any given application, the Commission typically uses one of three different licensing processes. Since 2005, the Commission's "Integrated Licensing Process" or ILP has been the default choice.
Under the ILP, the applicant seeking a license files a proposed study plan describing the studies it intends to conduct to inform the Commission's review of its application. Studies might cover the project's impact on a variety of types of resources and issues, such as aquatic, terrestrial, cultural, recreational, geological, land management, engineering and socioeconomic topics. After a 90-day period of consultation with stakeholders and Commission staff, the applicant may file a revised study plan for Commission approval. Ultimately, the director of the Commission's Office of Energy Projects will issue a study determination approving the study plan with any modifications based on the record. Whatever studies are required by the Commission-approved study plan must be conducted by the applicant or its consultants.
The nature and extent of the studies required can be controversial. Stakeholders have opportunities to comment on the applicant's original study plan, to participate in consultation, and to comment to the Commission on the revised study plan.
Under the ILP, certain federal or state agencies or tribes also have the ability to request that a study dispute be referred to a dispute resolution panel. The three-member panel would consist of FERC staff, the agency or tribal representative referring the dispute, and an independent third person selected by the other two panelists from a list of subject-matter experts. The panel members make a finding with respect to each disputed study request, on the extent to which each study criteria set forth in the regulations is or is not met, and why. The panel then makes a recommendation to the Director of the Office of Energy Projects based on its findings.
On October 22, 2018, the Commission issued a notice requesting applications from those interested in being listed as potential panel members. The Commission previously compiled lists in 2004, 2010, and 2015. For the latest round, the Commission has requested applications by January 31, 2019.
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Oroville Dam evacuation and relicensing
Tuesday, February 14, 2017
A California dam in the midst of a federal relicensing process has experienced flooding and storm-related damage, prompting the evacuation of over 180,000 people. Evacuation orders and a reservoir drawdown represent the most rapid responses to the Oroville Dam incident -- but future discussions of engineering, dam safety, and public policy are likely to continue after the emergency has been resolved.
Oroville Dam is the tallest dam in the U.S.: a 770-foot high earthfill embankment dam on the Feather River in northern California. The dam was built from 1961-1968 by the California Department of Water Resources, as part of the State Water Project. The resulting impoundment, Lake Oroville, can store over 3.5 million acre-feet of water, making it California's second largest man-made lake.
The Oroville project is subject to licensing by the Federal Energy Regulatory Commission under the Federal Power Act. Its first license was issued on February 11, 1957, for a 50-year term which expired on January 31, 2007. The Department of Water Resources filed an application for a new license for the project, which remains pending in Docket No. P-2100, although a settlement agreement was also filed. In the meantime, the project continues to operate under a series of annual licenses issued by the Commission. According to a DWR website, it "anticipates that FERC will issue a new license order in 2017 pending issuance of the aquatic biological opinion from the National Marine Fisheries Service."
According to state documents, California was hit by three major storms during January and February 2017, with major rain and runoff. As Lake Oroville reached its full capacity, operators opened a spillway to allow excess water through the dam. But on February 7, the spillway began to erode. Four days later, operators opened the auxiliary emergency spillway, but eventually determined that this too was "in danger of failing." Since a failure could cause widespread and severe flooding, officials called for evacuations downstream in the Feather River Valley. On February 12, Governor Edmund G. Brown Jr. issued an emergency order strengthening the state's response.
Focus for now remains on safely resolving the risks that the Oroville Dam or its spillways might fail in a way that releases damaging waters. The Commission could investigate what happened under its authority over the project through its existing license. It could also raise issues relating to the incident in the context of the project's relicensing. That case has been pending for roughly a decade, with a settlement agreement having been reached years ago. But it is possible that the 2017 Oroville Dam incident could have consequences in the relicensing context, such as revised spillway designs or operating plans that could be reflected as conditions in a new license.
Oroville Dam is the tallest dam in the U.S.: a 770-foot high earthfill embankment dam on the Feather River in northern California. The dam was built from 1961-1968 by the California Department of Water Resources, as part of the State Water Project. The resulting impoundment, Lake Oroville, can store over 3.5 million acre-feet of water, making it California's second largest man-made lake.
The Oroville project is subject to licensing by the Federal Energy Regulatory Commission under the Federal Power Act. Its first license was issued on February 11, 1957, for a 50-year term which expired on January 31, 2007. The Department of Water Resources filed an application for a new license for the project, which remains pending in Docket No. P-2100, although a settlement agreement was also filed. In the meantime, the project continues to operate under a series of annual licenses issued by the Commission. According to a DWR website, it "anticipates that FERC will issue a new license order in 2017 pending issuance of the aquatic biological opinion from the National Marine Fisheries Service."
According to state documents, California was hit by three major storms during January and February 2017, with major rain and runoff. As Lake Oroville reached its full capacity, operators opened a spillway to allow excess water through the dam. But on February 7, the spillway began to erode. Four days later, operators opened the auxiliary emergency spillway, but eventually determined that this too was "in danger of failing." Since a failure could cause widespread and severe flooding, officials called for evacuations downstream in the Feather River Valley. On February 12, Governor Edmund G. Brown Jr. issued an emergency order strengthening the state's response.
Focus for now remains on safely resolving the risks that the Oroville Dam or its spillways might fail in a way that releases damaging waters. The Commission could investigate what happened under its authority over the project through its existing license. It could also raise issues relating to the incident in the context of the project's relicensing. That case has been pending for roughly a decade, with a settlement agreement having been reached years ago. But it is possible that the 2017 Oroville Dam incident could have consequences in the relicensing context, such as revised spillway designs or operating plans that could be reflected as conditions in a new license.
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Adding micro-hydro to licensed hydropower project
Wednesday, November 16, 2016
What happens when a FERC hydropower licensee applies for a preliminary permit to study the feasibility of developing a micro-hydro project, where the new project will be sited at an existing project's dam? In a recent case involving the city of Aspen, Colorado, Commission staff dismissed the preliminary permit application, instead suggesting that the licensee apply to amend its existing license to include the proposed new capacity and facilities. Because many other existing dams may be candidates for the installation of new hydropower facilities, the Aspen Micro Hydro Project case illustrates important dynamics of hydropower licensing under the Federal Power Act.
The case centers on a March 4, 2015 application by the City of Aspen for a preliminary permit, pursuant to section 4(f) of the Federal Power Act, to study the feasibility of developing the Aspen Micro Hydro Project. Most grid-connected hydropower in the U.S. is regulated under the Federal Power Act, and requires approvals by the Federal Energy Regulatory Commission. As described in Commission documents, the proposed Aspen project would include an existing concrete diversion dam and intake structure, plus proposed new equipment including a draft tube, 10- to 20-kilowatt turbine-generator unit, and associated facilities interconnected to an existing utility transmission line. The application describes project values including energy production, protection of the city's water rights, and instream flow protection for environmental benefit. As noted in the application, "Renewable projects such as the Aspen Micro Hydro Project will permit the City of Aspen to reduce its reliance on coal-fired energy and comports with the City’s goal of reducing its energy-related greenhouse gas emissions. A local facility also will provide tangible evidence to residents and visitors of Aspen’s commitment to renewable energy."
Crucially, as noted by the Commission, the dam proposed for use in the Aspen micro-hydro project is currently licensed as part of another hydropower project: the City of Aspen's Maroon Creek Project. Commission staff have noted that "for licensed projects, such as the Maroon Creek Project, section 6 of the [Federal Power Act] prohibits the alteration of licensed project works without the mutual consent of the licensee and the Commission." On April 16, 2015, Commission staff sent the city a letter explaining that because the proposed micro-hydro project would be sited within the existing project boundary of the city’s Maroon Creek Project, any application for a permit or license within the project boundary would be denied. For this reason, Commission staff concluded that "a preliminary permit for the Aspen Project would serve no purpose." Instead, Commission staff informed the city "that it could instead file an application to amend its existing license to add the Aspen Project’s proposed capacity and related facilities to the Maroon Creek Project."
Over a year later, the city filed a status report describing its intention to "enter into a business relationship with T-Lazy Seven Ranch (T-Lazy), a Colorado ranching company, for joint development of the Aspen Project." The status report describes plans to form a new limited liability company, and ultimately to amend the permit application to replace the city as applicant with the new company.
In a November 15, 2016 Order Dismissing Preliminary Permit Application, Commission staff noted that the purpose of a preliminary permit is "to encourage hydroelectric development by affording its holder priority of application (i.e., guaranteed first-to-file status) with respect to the filing of development applications for the affected site." The order also notes that the prohibition in section 6 of the Federal Power Act against the alteration of licensed project works without the mutual consent of the licensee and the Commission applies, no matter whether it is the existing licensee or the new entity who seeks to pursue additional development within the project boundary of the Maroon Creek Project. The Commission's consent to alter licensed project works would presumably come in the form of an order amending the Maroon Creek Project's license -- a consent not formally requested int the Aspen Project's docket.
Continuing to find that a preliminary permit for the Aspen Project would serve no purpose for these reasons, the order dismissed the city's permit application. The order leaves the door open for the licensee to seek to amend the Maroon Creek Project's license, potentially in concert with an application to transfer the licensee to a new licensee or co-licensee.
Beyond the City of Aspen's interests in hydropower, the case has regulatory implications for other proposals to develop micro-hydro or new generating capacity at dams or other structures already part of FERC-licensed projects. A Department of Energy report released earlier this year found significant national potential to increase hydropower capacity, including by adding power at existing dams and canals. Where the existing assets are part of a FERC-licensed project, developers will be wise to be mindful of how the Commission interprets the Federal Power Act.
The case centers on a March 4, 2015 application by the City of Aspen for a preliminary permit, pursuant to section 4(f) of the Federal Power Act, to study the feasibility of developing the Aspen Micro Hydro Project. Most grid-connected hydropower in the U.S. is regulated under the Federal Power Act, and requires approvals by the Federal Energy Regulatory Commission. As described in Commission documents, the proposed Aspen project would include an existing concrete diversion dam and intake structure, plus proposed new equipment including a draft tube, 10- to 20-kilowatt turbine-generator unit, and associated facilities interconnected to an existing utility transmission line. The application describes project values including energy production, protection of the city's water rights, and instream flow protection for environmental benefit. As noted in the application, "Renewable projects such as the Aspen Micro Hydro Project will permit the City of Aspen to reduce its reliance on coal-fired energy and comports with the City’s goal of reducing its energy-related greenhouse gas emissions. A local facility also will provide tangible evidence to residents and visitors of Aspen’s commitment to renewable energy."
Crucially, as noted by the Commission, the dam proposed for use in the Aspen micro-hydro project is currently licensed as part of another hydropower project: the City of Aspen's Maroon Creek Project. Commission staff have noted that "for licensed projects, such as the Maroon Creek Project, section 6 of the [Federal Power Act] prohibits the alteration of licensed project works without the mutual consent of the licensee and the Commission." On April 16, 2015, Commission staff sent the city a letter explaining that because the proposed micro-hydro project would be sited within the existing project boundary of the city’s Maroon Creek Project, any application for a permit or license within the project boundary would be denied. For this reason, Commission staff concluded that "a preliminary permit for the Aspen Project would serve no purpose." Instead, Commission staff informed the city "that it could instead file an application to amend its existing license to add the Aspen Project’s proposed capacity and related facilities to the Maroon Creek Project."
Over a year later, the city filed a status report describing its intention to "enter into a business relationship with T-Lazy Seven Ranch (T-Lazy), a Colorado ranching company, for joint development of the Aspen Project." The status report describes plans to form a new limited liability company, and ultimately to amend the permit application to replace the city as applicant with the new company.
In a November 15, 2016 Order Dismissing Preliminary Permit Application, Commission staff noted that the purpose of a preliminary permit is "to encourage hydroelectric development by affording its holder priority of application (i.e., guaranteed first-to-file status) with respect to the filing of development applications for the affected site." The order also notes that the prohibition in section 6 of the Federal Power Act against the alteration of licensed project works without the mutual consent of the licensee and the Commission applies, no matter whether it is the existing licensee or the new entity who seeks to pursue additional development within the project boundary of the Maroon Creek Project. The Commission's consent to alter licensed project works would presumably come in the form of an order amending the Maroon Creek Project's license -- a consent not formally requested int the Aspen Project's docket.
Continuing to find that a preliminary permit for the Aspen Project would serve no purpose for these reasons, the order dismissed the city's permit application. The order leaves the door open for the licensee to seek to amend the Maroon Creek Project's license, potentially in concert with an application to transfer the licensee to a new licensee or co-licensee.
Beyond the City of Aspen's interests in hydropower, the case has regulatory implications for other proposals to develop micro-hydro or new generating capacity at dams or other structures already part of FERC-licensed projects. A Department of Energy report released earlier this year found significant national potential to increase hydropower capacity, including by adding power at existing dams and canals. Where the existing assets are part of a FERC-licensed project, developers will be wise to be mindful of how the Commission interprets the Federal Power Act.
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Kauai small conduit hydro exemption terminated
Wednesday, September 14, 2016
U.S. hydropower regulators have terminated an exemption from licensing for a small conduit hydroelectric facility proposed for development in Hawaii.
The case concerns the 5.3-megawatt Puu Lua Hydropower Project No. 14069. Proposed by Konohiki Hydro Power, LLC, the project would have been located on the Kōkeʻe Ditch Irrigation System on state-owned land on the island of Kauai. As authorized by the Federal Energy Regulatory Commission in its 2012 order granting the Puu Lua project an exemption from the licensing requirements of Part I of the Federal Power Act, the project would have included two developments with powerhouses.
In granting the Puu Lua project's exemption, the Commission included provisions allowing it to terminate the exemption if certain conditions are not satisfied. Article 8 of the exemption states the Commission may terminate the exemption if actual construction of any project works has not begun within two years or has not been completed within four years from the issuance date of the exemption. In 2014, the exemptee successfully won a two-year extension to commence project construction, until April 12, 2016. But according to the Commission's August 31, 2016 Order Terminating Exemption (Conduit), the developer failed to commence construction of the Puu Lua Hydropower Project prior to the deadline.
In addition to the construction deadlines, the exemption also included an article providing that the Commission may terminate the exemption "if, at any time, the exemptee does not hold sufficient property rights in the land or project works necessary to develop, maintain, and operate the project." This too proved problematic, as in November 2015 the State of Hawaii notified the Commission that the exemptee’s rights to use the property were cancelled effective January 1, 2015. After the exemptee did not respond to a Commission request for documentation of its rights, Commission staff issued a notice of probable termination of the exemption for failure to commence project construction by the April 12, 2016 deadline, and for failure to possess sufficient property rights.
Ultimately, on August 31, 2016, the Commission issued its order terminating the project's exemption, "for failure to commence construction and maintain sufficient property rights."
The case concerns the 5.3-megawatt Puu Lua Hydropower Project No. 14069. Proposed by Konohiki Hydro Power, LLC, the project would have been located on the Kōkeʻe Ditch Irrigation System on state-owned land on the island of Kauai. As authorized by the Federal Energy Regulatory Commission in its 2012 order granting the Puu Lua project an exemption from the licensing requirements of Part I of the Federal Power Act, the project would have included two developments with powerhouses.
In granting the Puu Lua project's exemption, the Commission included provisions allowing it to terminate the exemption if certain conditions are not satisfied. Article 8 of the exemption states the Commission may terminate the exemption if actual construction of any project works has not begun within two years or has not been completed within four years from the issuance date of the exemption. In 2014, the exemptee successfully won a two-year extension to commence project construction, until April 12, 2016. But according to the Commission's August 31, 2016 Order Terminating Exemption (Conduit), the developer failed to commence construction of the Puu Lua Hydropower Project prior to the deadline.
In addition to the construction deadlines, the exemption also included an article providing that the Commission may terminate the exemption "if, at any time, the exemptee does not hold sufficient property rights in the land or project works necessary to develop, maintain, and operate the project." This too proved problematic, as in November 2015 the State of Hawaii notified the Commission that the exemptee’s rights to use the property were cancelled effective January 1, 2015. After the exemptee did not respond to a Commission request for documentation of its rights, Commission staff issued a notice of probable termination of the exemption for failure to commence project construction by the April 12, 2016 deadline, and for failure to possess sufficient property rights.
Ultimately, on August 31, 2016, the Commission issued its order terminating the project's exemption, "for failure to commence construction and maintain sufficient property rights."
Federal dams, nonfederal hydro, and preliminary permits
Tuesday, September 6, 2016
Can a hydropower developer obtain a preliminary permit from the Federal Energy Regulatory Commission for a project to be located at a federal dam, where the federal entity owning the dam says it opposes the project? In a series of recent decisions, the Commission has denied preliminary permits in these circumstances, saying there is no purpose in issuing a preliminary permit.
U.S. federal law generally encourages the development of hydropower at existing dams. Under sections 4(e) and 4(f) of the Federal Power Act, the Commission has general authority to issue preliminary permits and licenses for hydropower projects located at federal dams and facilities. There are limits on this jurisdiction, such as if federal development of hydropower generation at the site is authorized, or if Congress otherwise unambiguously withdraws the Commission’s jurisdiction over its development.
The Commission also has discretion to deny a preliminary permit application, so long as it articulates a rational basis for its decision. Through recent precedent, one basis the Commission has developed for denying applications is if the project would rely on modifications to federal facilities, but the federal entity says it would not approve those modifications or opposes the project.
For example, on April 25, 2016, Loxbridge Partners, LLC applied to the Commission for a preliminary permit to study the feasibility of the proposed McNary Second Powerhouse Project No. 14777. The project would be located at the U.S. Army Corps of Engineers’ McNary Lock and Dam facility on the Columbia River in Oregon. On May 16, 2016, Commission staff asked the Corps for its opinion on whether non-federal development is authorized at McNary Dam, and if so, whether Loxbridge’s proposal would interfere with existing dam operations or improvement plans. The Corps responded that it believed the Commission does not have jurisdiction to issue a preliminary permit or license for the site, and that the Corps opposed Loxbridge's proposed project on the ground that it would interfere with the Corps’ operation of McNary Dam. The Corps asked the Commission to reject the permit application.
On September 2, 2016, the Commission denied Loxbridge's preliminary permit application. It cited recent decisions in which "the Commission has denied preliminary permits for projects at federal facilities after the federal entities indicated that no purpose would be served in issuing a permit because the federal entity would not approve modifications to its federal facilities." One of these decisions cited, Advanced Hydropower, Inc., 155 FERC ¶ 61,007 (2016), even relates to a different proposal for non-federal hydropower development at the McNary Dam. The Commission also noted that "because the Corps, which owns the McNary Lock and Dam facility and whose permission would be needed for the development of any project at that facility, has stated that it opposes the project, there is no purpose in issuing a preliminary permit."
The Commission has issued similar denials with respect to Rivertec Partners LLC's proposed Clearwater Hydroelectric Project No. 14753 to be located at the Corps' Dworshak Dam in Idaho, Owyhee Hydro, LLC's proposed Anderson Ranch Pumped Storage Hydroelectric Project No. 14648 to be located at a Bureau of Reclamation dam in Idaho, and Symphony Hydro LLC's proposed Project No. 14627 to be located at the Corps' Upper St. Anthony Falls Lock and Dam on the Mississippi River near Minneapolis.
The policy highlights the importance for project developers of cultivating good relations with federal agencies owning dams and other facilities with hydropower development potential.
U.S. federal law generally encourages the development of hydropower at existing dams. Under sections 4(e) and 4(f) of the Federal Power Act, the Commission has general authority to issue preliminary permits and licenses for hydropower projects located at federal dams and facilities. There are limits on this jurisdiction, such as if federal development of hydropower generation at the site is authorized, or if Congress otherwise unambiguously withdraws the Commission’s jurisdiction over its development.
The Commission also has discretion to deny a preliminary permit application, so long as it articulates a rational basis for its decision. Through recent precedent, one basis the Commission has developed for denying applications is if the project would rely on modifications to federal facilities, but the federal entity says it would not approve those modifications or opposes the project.
For example, on April 25, 2016, Loxbridge Partners, LLC applied to the Commission for a preliminary permit to study the feasibility of the proposed McNary Second Powerhouse Project No. 14777. The project would be located at the U.S. Army Corps of Engineers’ McNary Lock and Dam facility on the Columbia River in Oregon. On May 16, 2016, Commission staff asked the Corps for its opinion on whether non-federal development is authorized at McNary Dam, and if so, whether Loxbridge’s proposal would interfere with existing dam operations or improvement plans. The Corps responded that it believed the Commission does not have jurisdiction to issue a preliminary permit or license for the site, and that the Corps opposed Loxbridge's proposed project on the ground that it would interfere with the Corps’ operation of McNary Dam. The Corps asked the Commission to reject the permit application.
On September 2, 2016, the Commission denied Loxbridge's preliminary permit application. It cited recent decisions in which "the Commission has denied preliminary permits for projects at federal facilities after the federal entities indicated that no purpose would be served in issuing a permit because the federal entity would not approve modifications to its federal facilities." One of these decisions cited, Advanced Hydropower, Inc., 155 FERC ¶ 61,007 (2016), even relates to a different proposal for non-federal hydropower development at the McNary Dam. The Commission also noted that "because the Corps, which owns the McNary Lock and Dam facility and whose permission would be needed for the development of any project at that facility, has stated that it opposes the project, there is no purpose in issuing a preliminary permit."
The Commission has issued similar denials with respect to Rivertec Partners LLC's proposed Clearwater Hydroelectric Project No. 14753 to be located at the Corps' Dworshak Dam in Idaho, Owyhee Hydro, LLC's proposed Anderson Ranch Pumped Storage Hydroelectric Project No. 14648 to be located at a Bureau of Reclamation dam in Idaho, and Symphony Hydro LLC's proposed Project No. 14627 to be located at the Corps' Upper St. Anthony Falls Lock and Dam on the Mississippi River near Minneapolis.
The policy highlights the importance for project developers of cultivating good relations with federal agencies owning dams and other facilities with hydropower development potential.
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Alta, snowmaking pipes and conduit hydro power
Thursday, July 14, 2016
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.
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.
Labels:
conduit,
exemption,
FERC,
FPA,
HREA,
licensing,
micro hydro,
Part I,
pipeline,
qualifying conduit hydropower facility,
skiing,
snowmaking,
turbine,
water
Whitestone hydrokinetic license surrendered
Wednesday, June 29, 2016
Despite efforts to offer a streamlined regulatory path for some demonstration hydropower projects, earlier this year the holder of a hydrokinetic pilot project license for a project proposed for the Tanana River in Alaska surrendered its license due to an inability to find financing. The case of the Whitestone Poncelet River-In-Stream-Energy-Conversion (RISEC) Pilot Project No. 13305 illustrates the Federal Energy Regulatory Commission’s hydrokinetic pilot project licensing process, the difficulties of testing and developing new hydropower technologies, and how the Commission handles pilot license surrender.
Whitestone Power and Communications, an assumed name of the Whitestone Community Association, had proposed the project as a 100-kilowatt demonstration of its proprietary hydrokinetic prototype technology. It was to be located on the Tanana River at its confluence with the Delta River, about 90 miles southeast of Fairbanks. A Poncelet undershot waterwheel and generator unit mounted on a floating platform, seasonally installed and moored to a cliff. Power produced would be supplied to the Golden Valley Electric Association grid.
The Federal Energy Regulatory Commission granted WPC a five-year pilot project license on October 19, 2012. In processing WPC’s application, the Commission used a hydrokinetic pilot project licensing process derived from from its Integrated Licensing Process. According to the Commission, the hydrokinetic pilot project licensing process was designed “to meet the needs of entities, such as Whitestone, who are interested in testing new hydropower technologies while minimizing the risk of adverse environmental impacts.” The Commission describes the goal of the pilot licensing process as “to allow developers to test new hydrokinetic technologies, to determine appropriate sites for these technologies, and to confirm the technology’s environmental and other effects without compromising the Commission’s oversight of the projects and limiting agency and stakeholder input.”
As outlined in a white paper prepared by Commission staff, a hydrokinetic pilot project should be: (1) small; (2) short term; (3) located in environmentally nonsensitive areas; (4) removable and able to be shut down on short notice; (5) removed, with the site restored, before the end of the license term (unless a new license is granted); and (6) initiated by a draft application in a form sufficient to support environmental analysis. After finding the WPC project met these standards, the Commission issued it a license in 2012. Article 301 of the license required the licensee to commence construction of the project works within two years from license issuance, i.e., by October 19, 2014.
Despite winning a license, the project was never built. In 2014, WPC asked for and received a two-year extension of the start-of-construction deadline, “due to unforeseen setbacks in obtaining the necessary financing to begin construction.” But in that order, the Commission reminded the licensee that, pursuant to section 13 of the Federal Power Act, the deadline for starting construction may only be extended once, for a period not exceeding two additional years. Therefore, the Commission noted its inability to grant any further extensions of time for the commencement of project construction.
But in September 2015 WPC applied to the Commission for surrender of its license. In its surrender application, WPC stated that it was unable to obtain the funding necessary to construct the project and had not constructed any project facilities.
In April 2016, the Commission granted WPC's surrender application without condition, citing the facts that the licensee had not commenced construction and that the project site remained unaltered.
The Whitestone project was among the first to use the Commission’s hydrokinetic pilot project licensing process. But despite receiving expedited regulatory treatment in licensing, financing challenges led the licensee to surrender its license before the project could be constructed. Some other proposed hydrokinetic projects have been canceled or put on hold, following licensure; earlier this year, the Commission accepted license surrender for a Washington tidal power project licensed as a 10-year pilot project, after the public utility district proposing it found it economically infeasible. Another project -- an ocean wave energy farm off the Oregon coast -- surrendered its pilot license
in 2014.
Whitestone Power and Communications, an assumed name of the Whitestone Community Association, had proposed the project as a 100-kilowatt demonstration of its proprietary hydrokinetic prototype technology. It was to be located on the Tanana River at its confluence with the Delta River, about 90 miles southeast of Fairbanks. A Poncelet undershot waterwheel and generator unit mounted on a floating platform, seasonally installed and moored to a cliff. Power produced would be supplied to the Golden Valley Electric Association grid.
The Federal Energy Regulatory Commission granted WPC a five-year pilot project license on October 19, 2012. In processing WPC’s application, the Commission used a hydrokinetic pilot project licensing process derived from from its Integrated Licensing Process. According to the Commission, the hydrokinetic pilot project licensing process was designed “to meet the needs of entities, such as Whitestone, who are interested in testing new hydropower technologies while minimizing the risk of adverse environmental impacts.” The Commission describes the goal of the pilot licensing process as “to allow developers to test new hydrokinetic technologies, to determine appropriate sites for these technologies, and to confirm the technology’s environmental and other effects without compromising the Commission’s oversight of the projects and limiting agency and stakeholder input.”
As outlined in a white paper prepared by Commission staff, a hydrokinetic pilot project should be: (1) small; (2) short term; (3) located in environmentally nonsensitive areas; (4) removable and able to be shut down on short notice; (5) removed, with the site restored, before the end of the license term (unless a new license is granted); and (6) initiated by a draft application in a form sufficient to support environmental analysis. After finding the WPC project met these standards, the Commission issued it a license in 2012. Article 301 of the license required the licensee to commence construction of the project works within two years from license issuance, i.e., by October 19, 2014.
Despite winning a license, the project was never built. In 2014, WPC asked for and received a two-year extension of the start-of-construction deadline, “due to unforeseen setbacks in obtaining the necessary financing to begin construction.” But in that order, the Commission reminded the licensee that, pursuant to section 13 of the Federal Power Act, the deadline for starting construction may only be extended once, for a period not exceeding two additional years. Therefore, the Commission noted its inability to grant any further extensions of time for the commencement of project construction.
But in September 2015 WPC applied to the Commission for surrender of its license. In its surrender application, WPC stated that it was unable to obtain the funding necessary to construct the project and had not constructed any project facilities.
In April 2016, the Commission granted WPC's surrender application without condition, citing the facts that the licensee had not commenced construction and that the project site remained unaltered.
The Whitestone project was among the first to use the Commission’s hydrokinetic pilot project licensing process. But despite receiving expedited regulatory treatment in licensing, financing challenges led the licensee to surrender its license before the project could be constructed. Some other proposed hydrokinetic projects have been canceled or put on hold, following licensure; earlier this year, the Commission accepted license surrender for a Washington tidal power project licensed as a 10-year pilot project, after the public utility district proposing it found it economically infeasible. Another project -- an ocean wave energy farm off the Oregon coast -- surrendered its pilot license
in 2014.
Labels:
Alaska,
demonstration,
FERC,
grid,
hydrokinetic,
ILP,
license,
licensing,
pilot project,
RISEC,
river,
surrender,
test,
Whitestone
Nicatous Lodge proposes off-grid micro-hydro project
Monday, May 30, 2016
A Maine sporting camp has proposed developing an off-grid micro-hydropower project to provide it electricity. Nicatous Lake Lodge and Cabins LLC proposes to develop the micro-hydro project at its remote property near Burlington, Maine. A filing made by the camp earlier this spring has triggered a federal review process to evaluate whether the project will require a license or exemption under the Federal Power Act.
Under federal law, most hydropower projects cannot be constructed, operated, or maintained without licensing under the Federal Power Act. But some projects -- typically off-grid or remote ones -- fall outside the Federal Power Act's jurisdiction. To reduce uncertainty about what regulations might apply, Section 23(b)(1) of the Federal Power Act requires an entity proposing a new project to file with the Federal Energy Regulatory Commission either a hydropower license application, or a Declaration of Intention to determine if the proposed project requires a license.
When a developer files a Declaration of Intention with the Commission, the Federal Power Act requires the Commission to investigate and determine if the project would affect the interests of interstate or foreign commerce. The Commission also determines whether or not the project: (1) would be located on a navigable waterway; (2) would occupy public lands or reservations of the United States; (3) would utilize surplus water or water power from a government dam; or (4) would be located on a non-navigable stream over which Congress has Commerce Clause jurisdiction and would be constructed or enlarged after 1935. Each of these evaluations supports a key jurisdictional finding under the Federal Power Act; collectively, they can determine whether or not licensing is required.
Other recently proposed micro-hydro projects illustrate how the Commission evaluates whether or not a license or exemption will be required. For example, the Commission found that licensing or exemption was required for the Patton Colorado Hydropower Project, which would be grid-tied -- but that no license is required for the Egnaczak Net Zero Hydro Project in Massachusetts, which would have no connection to the interstate electric grid.
This jurisdictional determination is now underway for the Nicatous micro-hydro project. On March 15, 2016, the sporting camp owner submitted a Declaration of Intention to the Federal Energy Regulatory Commission. That Declaration of Intent describes the project site as about 15 miles away from the nearest electric utility grid, where Nicatous Stream leaves Nicatous Lake. The project does not rely on a dam, although the remains of a former dam are located nearby. Instead, an intake in the lake would supply water to a low head (60 inches or less) PowerPal micro-hydroelectric generator, rated at 1,000 watts power. Power from the generator would be fed into the lodge's electric system, not which is not connected to any utility grid.
On May 10, 2016, the Commission issued its notice of the filing, setting a 30-day deadline for filing comments, protests, and motions to intervene. Commission action on the filing could follow later this year.
Under federal law, most hydropower projects cannot be constructed, operated, or maintained without licensing under the Federal Power Act. But some projects -- typically off-grid or remote ones -- fall outside the Federal Power Act's jurisdiction. To reduce uncertainty about what regulations might apply, Section 23(b)(1) of the Federal Power Act requires an entity proposing a new project to file with the Federal Energy Regulatory Commission either a hydropower license application, or a Declaration of Intention to determine if the proposed project requires a license.
When a developer files a Declaration of Intention with the Commission, the Federal Power Act requires the Commission to investigate and determine if the project would affect the interests of interstate or foreign commerce. The Commission also determines whether or not the project: (1) would be located on a navigable waterway; (2) would occupy public lands or reservations of the United States; (3) would utilize surplus water or water power from a government dam; or (4) would be located on a non-navigable stream over which Congress has Commerce Clause jurisdiction and would be constructed or enlarged after 1935. Each of these evaluations supports a key jurisdictional finding under the Federal Power Act; collectively, they can determine whether or not licensing is required.
Other recently proposed micro-hydro projects illustrate how the Commission evaluates whether or not a license or exemption will be required. For example, the Commission found that licensing or exemption was required for the Patton Colorado Hydropower Project, which would be grid-tied -- but that no license is required for the Egnaczak Net Zero Hydro Project in Massachusetts, which would have no connection to the interstate electric grid.
This jurisdictional determination is now underway for the Nicatous micro-hydro project. On March 15, 2016, the sporting camp owner submitted a Declaration of Intention to the Federal Energy Regulatory Commission. That Declaration of Intent describes the project site as about 15 miles away from the nearest electric utility grid, where Nicatous Stream leaves Nicatous Lake. The project does not rely on a dam, although the remains of a former dam are located nearby. Instead, an intake in the lake would supply water to a low head (60 inches or less) PowerPal micro-hydroelectric generator, rated at 1,000 watts power. Power from the generator would be fed into the lodge's electric system, not which is not connected to any utility grid.
On May 10, 2016, the Commission issued its notice of the filing, setting a 30-day deadline for filing comments, protests, and motions to intervene. Commission action on the filing could follow later this year.
Labels:
23(b)(1),
declaration of intent,
exemption,
FPA,
hydro,
jurisdiction,
lake,
licensing,
Maine,
micro hydro,
Nicatous,
off grid,
stream
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