FERC relicenses Poe hydro project

The Federal Energy Regulatory Commission has issued an order issuing a new hydropower license to utility Pacific Gas & Electric Company for its Poe Hydroelectric Project.

The 143-megawatt project is located on the North Fork Feather River in northern California, and includes land within the Plumas National Forest. Originally licensed in 1953, the project includes two dams impounding reservoirs, a 33,000-foot-long pressure tunnel bypassing about 7.6 miles of the river, and a powerhouse with two turbines.

The Commission issued a new 40-year license for the Poe project to PG&E on December 17, 2018. In relicensing proceedings, the Commission considers a number of public interest factors, including the economic benefits of project power. In general, the Commission evaluates the economics of a hydropower project by comparing the current costs of the project to likely alternative power, without considering forecasts concerning potential future inflation, escalation, or deflation beyond the license issuance date. The Commission says the basic purpose of its economic analysis is to provide a general estimate of the potential power benefits and the costs of a project, and of reasonable alternatives to project power.

In the Poe project's case, the Commission noted that after considering mandatory conditions and other measures suggested by Commission staff, PG&E's annual cost of operating the project would be about $9,590,000. Assuming that the project would generate an average of 498,113 megawatt-hours of energy annually, this works out to $19.3 per megawatt-hour. By comparison, the Commission found that the project's the corresponding alternative energy cost plus the value of its dependable capacity gave this power a value of $50,800,000, or $102 per megawatt-hour in the first year of operation, the project would cost $41,210,000 or $82.7 per megawatt-hour less than the likely alternative cost of power.