What happens when an individual person dies holding a Federal Energy Regulatory Commission license for a hydroelectric project? While their will may specify an heir for the dam and project works, the process of inheriting a licensed dam can involve both state estate law and a license transfer through FERC.
The Federal Energy Regulatory Commission licenses hydroelectric projects under Part I of the Federal Power Act. The Commission's most recent list shows over 1,000 projects with licenses. While most are held by corporate or public entities, about 25 licenses are held directly by named individuals. Most of these projects licensed to individuals have relatively small authorized generating capacities, but once licensed their operation and transfer are governed by federal processes.
State law usually controls what happens to property owned by an individual upon his or her death. Suppose the licensee's will provides that the licensed hydroelectric project is transferred to another person. That provision may be valid as a matter of state law, but as a matter of federal law the license only transfers if the Commission approves the transfer.
Practically speaking, this can mean that the estate of the licensee needs to file an application to FERC for the transfer of the project license. A recent application relating to the Pine Creek Hydroelectric Project in Montana illustrates this process.
The Commission initially issued a 50-year license for the Pine Creek project to Howard and Mildred Carter, on July 25, 1986, with a present authorized generating capacity of 373 kW. After Howard Carter's death, Mildred Carter was the surviving licensee on the project. After Mildred Carter's subsequent death, a Montana state court started the probate process through which the project would transfer to Mrs. Carter's son Allen. In October 2015, the Carter estate applied to the FERC for transfer of the license to Allen. The Commission issued a public notice of the application for transfer of license and solicited comments, motions to intervene, and protests, none of which were filed.
The Commission approved the Pine Creek project license transfer on January 8, 2016. The order includes a finding that transfer of the license for this project is consistent with the Commission's regulations and is in the public interest. Its approval of the transfer was contingent upon: (1) transfer of title of the properties under license, transfer of all project files including all dam safety related documents, and delivery of all license instruments to the inheriting licensee, which shall be subject to the terms and conditions of the license as though it were the original licensee; and (2) the heir acknowledging acceptance of the order and its terms and conditions by signing and returning an acceptance sheet. The license transfer order required the new licensee to submit certified copies of all instruments of conveyance and the signed acceptance sheet within 60 days.
While direct inheritance of FERC-licensed hydroelectric projects is relatively rare, similar issues can arise when corporate entities holding FERC licenses dissolve or otherwise "die." Depending on the specific facts, more common changes in ownership of an entity holding a FERC license may also require some activity to remain in compliance with federal law.
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Showing posts with label conditions. Show all posts
Showing posts with label conditions. Show all posts
FERC approves Maryland LNG project
Tuesday, September 30, 2014
A proposed Maryland natural gas liquefaction facility won a key federal approval yesterday, as the Federal Energy Regulatory Commission authorized Dominion Cove Point LNG, LP to build the Cove Point Liquefaction Project in Calvert County, Maryland, and related facilities
at an existing compressor station and at metering and regulating sites
in Virginia.
Natural gas is an important fuel used globally for electric power generation and heating. While pipelines offer the most efficient way to transport large volumes of natural gas, liquefied natural gas or LNG can more easily be transported by ship to distant markets. As US natural gas production has increased in recent years, so too has interest in building facilities to liquefy gas for export or other use.
Under Section 3 of the Natural Gas Act, the Federal Energy Regulatory Commission or FERC authorizes the siting and construction of onshore and near-shore LNG import or export facilities. Section 7 of the Natural Gas Act authorizes FERC to issue certificates of public convenience and necessity for LNG facilities engaged in interstate natural gas transportation by pipeline.
On April 1, 2013, Dominion applied to the FERC for approval under Section 3 of the Natural Gas Act to site, construct, and operate the Cove Point Liquefaction Project for the liquefaction and export of domestically-produced natural gas at Dominion’s existing LNG import terminal in Calvert County, Maryland. Dominion also requested authority under section 7(c) of the Natural Gas Act to construct and operate facilities at its existing compressor station and metering and regulating sites in Virginia. Collectively, the project will enable Dominion to transport up to 860,000 dekatherms per day of natural gas form existing pipeline interconnects near the west end of the Cove Point Pipeline to the Cove Point terminal for the export of up to 5.75 metric tons of liquefied natural gas per year.
Dominion's requests triggered a case that stretched for over two years of consideration. During this time, the FERC heard from more than 140 speakers at three public meetings related to an assessment of the project's environmental impacts, and received more than 650 comments from the public and federal, state and local agencies on the application. In the end, the FERC determined that Dominion’s proposal, as approved with 79 specific conditions required by the Commission’sauthorization, will minimize potential adverse impacts on landowners and the environment.
According to the FERC, Dominion proposes to complete construction of the liquefaction project so that facilities may start service in June 2017. Notably, the U.S. Department of Energy has already approved Dominion Cove Point’s export of gas to both Free Trade Agreement and non-Free Trade Agreement countries.
The same economic forces motivating the Dominion project support other proposed LNG export projects. Indeed, FERC has approved three other LNG export projects, all in the Gulf of Mexico -- the Sabine Pass Liquefaction Project, the Freeport LNG Project, and the Cameron LNG Project -- and 14 more LNG export proposals remain pending.
Natural gas is an important fuel used globally for electric power generation and heating. While pipelines offer the most efficient way to transport large volumes of natural gas, liquefied natural gas or LNG can more easily be transported by ship to distant markets. As US natural gas production has increased in recent years, so too has interest in building facilities to liquefy gas for export or other use.
Under Section 3 of the Natural Gas Act, the Federal Energy Regulatory Commission or FERC authorizes the siting and construction of onshore and near-shore LNG import or export facilities. Section 7 of the Natural Gas Act authorizes FERC to issue certificates of public convenience and necessity for LNG facilities engaged in interstate natural gas transportation by pipeline.
On April 1, 2013, Dominion applied to the FERC for approval under Section 3 of the Natural Gas Act to site, construct, and operate the Cove Point Liquefaction Project for the liquefaction and export of domestically-produced natural gas at Dominion’s existing LNG import terminal in Calvert County, Maryland. Dominion also requested authority under section 7(c) of the Natural Gas Act to construct and operate facilities at its existing compressor station and metering and regulating sites in Virginia. Collectively, the project will enable Dominion to transport up to 860,000 dekatherms per day of natural gas form existing pipeline interconnects near the west end of the Cove Point Pipeline to the Cove Point terminal for the export of up to 5.75 metric tons of liquefied natural gas per year.
Dominion's requests triggered a case that stretched for over two years of consideration. During this time, the FERC heard from more than 140 speakers at three public meetings related to an assessment of the project's environmental impacts, and received more than 650 comments from the public and federal, state and local agencies on the application. In the end, the FERC determined that Dominion’s proposal, as approved with 79 specific conditions required by the Commission’sauthorization, will minimize potential adverse impacts on landowners and the environment.
According to the FERC, Dominion proposes to complete construction of the liquefaction project so that facilities may start service in June 2017. Notably, the U.S. Department of Energy has already approved Dominion Cove Point’s export of gas to both Free Trade Agreement and non-Free Trade Agreement countries.
The same economic forces motivating the Dominion project support other proposed LNG export projects. Indeed, FERC has approved three other LNG export projects, all in the Gulf of Mexico -- the Sabine Pass Liquefaction Project, the Freeport LNG Project, and the Cameron LNG Project -- and 14 more LNG export proposals remain pending.
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