FERC requires licensure of Alaska hydropower project

What happens when federal hydropower regulators discover an unlicensed project subject to their jurisdiction?  A recent case involving a dam at a remote Alaskan fish hatchery ended with an order requiring the project owner to pursue licensure.

At issue is the Hidden Falls Lake Project, located within the Tongass National Forest on Kasnyku Bay on the eastern shore of Baranof Island near Sitka, Alaska.  The project is owned by the Alaska Department of Fish and Game, who installed a 250-kilowatt generator and related equipment in 1982 to power its Hidden Falls fish hatchery.  (A nearby larger Kasnyku Lake project contemplated by the federal government in 1969 never came to fruition.)

Most non-federal hydropower projects in the U.S. must be licensed by the Federal Energy Regulatory Commission.  Under section 23(b)(1) of the Federal Power Act, a non-federal hydroelectric project without a still-valid pre-1920 federal permit must be licensed if it:

(a) is located on a navigable water of the United States;
(b) occupies lands or reservations of the United States;
(c) utilizes surplus water or waterpower from a government dam; or
(d) is located on a stream over which Congress has Commerce Clause jurisdiction, is constructed or modified on or after August 26, 1935, and affects the interests of interstate or foreign commerce.

Part of the Hidden Falls Lake project -- the intake, penstock, 250-kW hydroelectric generator, powerhouse, and distribution lines -- are located on U.S. Forest Service lands. The Forest Service’s documentation states that a minor license application for the Hidden Falls Lake Project was filed with the Commission in 1981, but the Commission said it did not have any records of this application or of any subsequent Commission jurisdictional determination for this project.

But FERC did apparently know about the project.  In 1989, seven years after the project's generator was installed, the Commission initiated an investigation into the jurisdictional status of the project, suggesting it was "unlicensed" or "unauthorized."  Yet that unlicensed hydropower project investigation docket then went dormant until 2015.  Last year, the Forest Service informed the Commission that it had identified the project while conducting environmental reviews in support of a renewal of the Alaska agency's special use permit for the hatchery.  Thus the investigation resumed.

The Commission issued its final order in the case on January 28, 2016.  Because the project intake, penstock, hydroelectric generator, powerhouse, and distribution lines occupy public lands of the United States, the Commission concluded that the Alaska agency must obtain a license for construction, maintenance, and continued operation of the Hidden Falls Lake Project.  The Commission ordered the Alaska agency to file within 90 days a schedule for submitting a license application within 36 months.

If a small hydropower project on a remote Alaskan island is subject to FERC licensure, how many other unlicensed hydropower projects might be out there?  How many other unlicensed hydropower projects might there be on Forest Service or other federal lands?  While FERC investigations of unlicensed hydropower projects are relatively rare, with most years seeing only a handful of public active investigations, could there be other existing projects like the Hidden Falls Lake Project?

US Department of Interior features energy as a priority

The United States Department of the Interior has updated its regulatory priorities for the coming six months, with energy issues featured prominently.  The nation's principal steward of federal public lands and resources, the Department manages more than 500 million acres of Federal lands, including 401 park units, 560 wildlife refuges, and approximately 1.7 billion of submerged offshore acres on the Outer Continental Shelf.  These lands and waters are home to significant energy and mineral resources, including renewable energy sources such as solar, wind, and hydropower, as well as oil, gas, coal, and minerals such as uranium.  The Interior Department's recently-announced priorities highlight the importance of energy issues in its regulatory agenda for 2014.

The Parker River National Wildlife Refuge, managed by the Department of the Interior's U.S. Fish and Wildlife Service.

Energy issues are not new to the Interior Department.  Its mission statement, captioned, "Protecting America’s Great Outdoors and Powering Our Future", reads:

The U.S. Department of the Interior protects America’s natural resources and heritage, honors our cultures and tribal communities, and supplies the energy to power our future.

Twice a year, the Interior Department publishes a statement of its regulatory priorities.  The most recent statement, issued November 26, features several initiatives designed to promote the development of renewable resources on public lands.

As noted in the Department's statement, under the Obama Administration, the Department has focused on renewable energy issues and has established priorities for environmentally responsible development of renewable energy on public lands and the Outer Continental Shelf.  Energy producers and developers are investing in the development of wind farms off the Atlantic seacoast and solar, wind, and geothermal energy facilities throughout the West.  The Department announced its intent to continue its intra- and inter-departmental efforts to move forward with the environmentally responsible review and permitting of renewable energy projects on public lands, and to streamline regulatory processes to facilitate the responsible development of these resources.

Like most federal agencies, the Interior Department is organized as a collection of bureaus and offices.  These agencies include the Bureau of Land Management, which manages the 245-million-acre National System of Public Lands, located primarily in the western States, including Alaska, and the 700-million-acre subsurface mineral estate located throughout the nation.  The Bureau of Land Management's regulatory priorities include creating a competitive process for offering lands for solar and wind energy development.  Specifically, the Bureau is proposing competitive bidding for lands within designated solar and wind energy development leasing areas.  The proposed rule is designed to enhance BLM's ability to capture fair market value for the use of public lands, ensure fair access to leasing opportunities for renewable energy development, and foster the growth and development of the renewable energy sector of the economy.

If the Bureau of Ocean Energy Management's recent auctions for offshore wind sites on the Outer Continental Shelf are any example, the Bureau of Land Management may soon be holding competitive auctions for land-based renewable energy sites.  These auctions will likely seek to balance support for responsible resource development against conservation, as the Department also includes conservation-oriented agencies such as the U.S. Fish and Wildlife Service and the National Park Service.

Yet how these regulatory priorities translate into regulatory action -- and how that regulatory action affects the development of renewable resources -- remains to be seen.