Maine comments on international dam jurisdiction

The State of Maine has sponsored a study supporting its position that federal regulators can relinquish jurisdiction over a dam spanning the St. Croix River and the U.S.-Canada border, based on the argument that the Forest City Dam can be operated such that it makes only an insignificant contribution to downstream hydropower generation.

At issue is the Forest City Dam, which is part of a hydropower project licensed by the Federal Energy Regulatory Commission as Project No. 2660. Because the dam is located on the East Branch of the St. Croix River which forms the international boundary, the project operates under conditions set by the International Joint Commission (IJC) pursuant to the Boundary Waters Treaty of 1909. The Forest City Dam has also been licensed by the U.S. Federal Energy Regulatory Commission, most recently receiving a 30-year license by order dated November 23, 2015, even though the project does not include any generating facilities, because it forms part of a headwater storage system for downstream power generation.

In 2016, the licensee applied to surrender the license, citing conditions imposed in the 2015 license order as rendering project operations "uneconomical." That surrender application remains pending as of mid-May 2020. Meanwhile, in 2017, then-Governor Paul LePage proposed authorizing a Maine state agency to assume ownership of the Forest City Project, but the legislation did not lead to that outcome. The same day, the licensee requested a ruling that no licensure would be required if the licensee transferred ownership of the U.S. portion of the project to the Maine Department of Inland Fisheries and Wildlife -- a ruling the Federal Energy Regulatory Commission ultimately declined to give, finding instead that the Forest City project requires licensure because it contributes to downstream electricity generation.

In October 2019, Maine Governor Janet Mills and New Brunswick Premier Blaine Higgs co-signed a letter filed with the Commission, noting that their respective governments "are discussing alternative models for ownership and management of the dam, which would support the long-term plan for preserving the natural, historical heritage and recreation and fishing interests of East Grand and the St. Croix system." In that letter, the leaders proposed a path forward involving third-party ownership of the dam, project operations consistent with applicable water quality standards and policy concerns, and development of an operations plan to ensure "reducing the facility's contribution to generation to an insignificant level".

Now, Governor Mills has sent a follow-up letter to the Commission, presenting a report commissioned by the state and prepared by a hydropower consulting firm. According to the letter dated May 13, 2020, the report supports the position that the Forest City project's contribution to downstream power generation "should be analyzed as a separate stand-alone project rather than in the aggregate with other St. Croix drainage projects", and moreover that its contribution is "insigificant for purposes of FERC jurisdiction and licensing."

The May 13 letter also highlights "other new information for FERC's consideration", including the exploration by Maine and New Brunswick of options for new third-party ownership and management as well as alternative operational regimes. It also expresses a desire to address concerns that removing the project from the FERC regulatory licensing process would reduce oversight or public involvement with respect to future operations, noting that the project would remain subject to regulation by the International Joint Commission and Maine Department of Environmental Protection, as well as a commitment to cross-boundary collaboration with New Brunswick.

The letter suggests that this report and information "should be adequate for FERC to reconsider its jurisdiction and licensing requirement", and expresses Maine's willingness to collaborate with the federal agency "for a positive outcome to preserve the heritage of the St. Croix International Waterway."