Hydro relicensing and intervention timing

The Federal Energy Regulatory Commission issues hydropower licenses for terms of up to 50 years.  At least 5 years before license expiration, the licensee is required to notify the Commission and the public whether it intends to apply for a new license for the project, and what licensing process it requests.  Any license application might not come for years after the filing of that notice of intent.  But as a recent Commission order shows, the opportunity for a third party to intervene in the relicensing case is triggered not by the notice of intent, but only after an application for a new license is actually filed and notice is published.

That recent order involved New York State Electric & Gas Corporation (NYSEG), the licensee for the Upper Mechanicville Hydroelectric Project, FERC No. 2934.  The Upper Mechanicville project is located on the Hudson River in upstate New York, and has an authorized capacity of 18.5 megawatts.  Its original license, issued in 1981 for a 40-year term, expires on March 31, 2021.

On March 30, 2016, NYSEG filed a Notice of Intent to relicense the project, under the Commission's Integrated Licensing Process or ILP, along with a Pre-Application Document.

On April 13, 2016, the New York State Council of Trout Unlimited filed a motion to intervene in the docket, citing Rule 214 of the Commission's Rules of Practice and Procedure.  But on May 24, the Commission issued a notice dismissing that motion.

The notice first points to Rule 214(a)(3) of its procedural order, any person may seek to intervene and become a party in a proceeding by filing a motion to intervene that complies with the content requirements of Rule 214(b).  But the notice states that because NYSEG has not yet filed an application for a new license, there is no proceeding in which to intervene.  It therefore dismissed the motion to intervene as premature.

The notice does offer the Trout Unlimited group two other approaches to involvement.  First, it suggests that interested persons can register and eSubscribe to the docket.  Second, it notes that should NYSEG file an application for a new license for its project, notice of the application will be published, and interested entities "will have an opportunity to intervene and present views concerning the project as proposed in the license application."

Federal dams and preliminary permits

U.S. federal entities own dams with untapped hydropower potential that could be developed by private parties -- but a recent regulatory decision highlights the difficulty of winning key approvals when the federal dam owner opposes the project.  The Federal Energy Regulatory Commission's April 5, 2016 denial of an application for a preliminary permit for the McNary Lock and Dam Project illustrates this dynamic.

The U.S. Army Corps of Engineers owns and operates a 980-megawatt hydroelectric project at the McNary Lock and Dam on the Columbia River in Oregon and Washington. The project was authorized by the River and Harbor Act of 1945, and all its power units have been in operation since 1957.

But perhaps there may be untapped hydropower potential at the site that could be developed.  In 2015, a company called Advanced Hydropower, Inc. applied to the Federal Energy Regulatory Commission for a preliminary permit, pursuant to section 4(f) of the Federal Power Act, to study the feasibility of the proposed McNary Dam Advanced Hydropower Project No. 14697.  That project would utilize the existing McNary Dam, plus new facilities including a 34-megawatt turbine.

But by an order dated April 5, 2016, the Commission denied Advanced Hydropower's application.  In doing so, the Commission cited judicial precedent that it "is not required to grant a preliminary permit application, so long as it articulates a rational basis for not doing so."  It then cited recent Commission decision denying preliminary permits for projects at federal facilities after receiving comments from the relevant federal entities indicating that no purpose would be served in issuing a permit because the federal entity would not approve modifications to its federal facilities.

Notably, in the McNary Lock and Dam case, the Corps filed timely motions to intervene and comments opposing the project.  In its order denying Advanced Hydropower's application, the Commission noted:

Here, 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, we find there is no purpose in issuing a preliminary permit here.

Based on the Corps' opposition to the project, the Commission thus denied Advanced Hydropower's application for a preliminary permit for the McNary Lock and Dam project.