FERC issues notices for America's Water Infrastructure Act of 2018 implementation

Federal hydropower regulators have issued a pair of notices framing the implementation of recently enacted legislation designed to streamline the processes for licensing some hydroelectric projects.

On October 23, 2018, President Trump signed the America's Water Infrastructure Act of 2018. The new law amends several portions of the Federal Power Act which govern how the Federal Energy Regulatory Commission issues preliminary permits, hydropower licenses, and approvals for qualifying conduit hydropower facilities. It also directs the Commission to:

• Issue a rule within 180 days establishing an expedited process for issuing and amending licenses for qualifying facilities at existing nonpowered dams that will seek to ensure a final decision by the Commission on an application for a license no later than two years after receipt of a completed application;
• Issue a rule within 180 days establishing an expedited process for issuing and amending licenses for closed-loop pumped storage projects that will seek to ensure a final decision by the Commission on an application for a license no later than two years after receipt of a completed application;
• Along with the Secretaries of the Army, Interior, and Agriculture, jointly develop a list of existing nonpowered federal dams that the Commission and the Secretaries agree have the greatest potential for non-federal hydropower development, to be published within 12 months; and
• Hold a workshop within 6 months to explore potential opportunities for development of closed-loop pumped storage projects at abandoned mine sites, and issue guidance within one year to assist applicants for licenses or preliminary permits for closed-loop pumped storage projects at abandoned mine sites.

On November 13, 2018, the Commission established three dockets in order to implement the requirements of the Act: RM19-6-000 (Licensing Regulations under America’s Water Infrastructure Act of 2018); AD19-7-000 (Nonpowered Dams List); and AD19-8-000 (Closed-loop Pumped Storage Projects at Abandoned Mines Guidance). The Commission's notice establishes a schedule with abbreviated deadlines for the development of these materials, with notices of proposed rulemaking for the expedited licensing processes expected in January or February 2019.

As part of the provisions calling for new expedited processes for issuing and amending licenses for qualifying facilities at existing nonpowered dams and closed-loop pumped storage projects, the new law also requires the Commission to convene an interagency task force, including appropriate federal and state agencies and Indian tribes, to coordinate the regulatory processes required to construct and operate these projects. Also on November 13, the Commission published a notice inviting these groups to request participation in the interagency task force. Federal and state agencies and Indian tribes who wish to participate on the interagency task force must file a statement of interest with the Commission by November 29, 2018.

New law eases some hydro licensing processes

A recently-enacted federal law will make it easier for hydroelectric project developers to secure a license for new hydroelectric facilities at existing non-powered dams.

U.S. rivers are home to thousands of dams, most of which impound water but don't generate electricity. A 2013 report suggested only 3% of the nation's 80,000 dams were used to produce hydroelectric power. In an effort to facilitate the development of hydroelectric facilities at some of these non-powered dams, Congress recently enacted the America's Water Infrastructure Act of 2018.

Title III of the Act relates to energy matters. One section of the Act extends the default term of preliminary permits for hydropower development from three to four years. The Act authorizes the Federal Energy Regulatory Commission to extend the period of a preliminary permit for up to four additional years, and to issue an additional permit under "extraordinary circumstances."

Another section of the Act speeds up the process through which the Commission evaluates proposals to develop "qualifying conduit hydropower facilities" and increases such a project's maximum installed capacity from 5 megawatts to 40 megawatts.

A third section of the Act requires the Commission to, within 180 days, issue a rule establishing an expedited process for issuing and amending licenses for hydroelectric facilities meeting defined criteria. These criteria require the "qualifying facilities" to be associated with an existing dam or other barrier operated for the control, release, or distribution of water for agricultural, municipal, navigational, industrial, commercial, environmental, recreational, aesthetic, drinking water, or flood control purposes, which as of the date of the Act's enactment was not generating electricity with Commission-licensed or exempted hydropower generating works. The Act also requires that the operation of these facilities must not result in any material change to the storage, release, or flow operations of the associated qualifying nonpowered dam.

The Act also includes provisions creating an establishing an expedited process for issuing and amending licenses for closed-loop pumped storage projects, and prescribing the considerations for setting the terms of new licenses for existing projects through the relicensing process.

The Act, which was introduced in the Senate as S.3021, was signed by President Trump on October 23, 2018, and became law the same day. The Commission has until April 2019 to issue the rules required by the Act.