Cheaper FERC land use charges could lead to more hydro in Alaska

A proposal from the Federal Energy Regulatory Commission could decrease land use charges for most the 21 hydroelectric projects located on Alaska’s federal lands by as much as 25 percent.

FERC’s Notice of Proposed Rulemaking — one of the first issued since quorum was reestablished earlier this month — would change land use fees to be assessed on the statewide average per-acre land value instead of a regional per-acre land value.

This would, according to the office of Sen. Lisa Murkowski (R) reduce fees paid by “most” of the 21 hydropower projects located on Alaskan federal lands, affecting 13 of 15 state utilities that operate these facilities.

“FERC’s proposal is a step in the right direction for Alaskans served by utilities that generate clean hydroelectric power,” Murkowski said. “This new methodology recognizes the uniqueness of land valuation in Alaska, and will help ensure reasonable rates while removing a growing impediment to development in our state.”

The impetus for FERC’s reevaluation comes after what Murkowski’s office calls an “unjustified” increase in land use fees — some of which have skyrocketed by as much as 680% in the past decade — and consideration for Alaska’s size and lack of development.

FERC’s current methodology for calculating rental rates for hydro projects on federal lands uses a formula put in place in 2013. Licensees are required to pay for the use of federal lands via payment of an annual charge, which is then distributed to the U.S. Treasury and states in which the projects are located.

The full notice is available for viewing via FERC’s website here and open for public comment for a 60-day period.

What it means

Data from the Alaska Center for Energy and Power estimates that the state’s untapped hydropower is high, with Alaska accounting for 40% of the U.S.’s river-based potential and 90% of its marine energy potential.

Already, hydro sources account for about a quarter of Alaska’s total electricity, per the U.S. Department of Energy, with much of that output coming from the small just projects that dot the state’s expanse. Small hydro is particularly attractive for many Alaskan utilities given it can remove the expense and difficulty of transporting fossil fuels to what are often remote locations.

Small hydropower would also support the state’s aggressive renewable standards, which say Alaskan generators must produce at least half of their power from renewable sources by 2025.

Murkowski has championed avenues to expedite the exploitation of the nation’s hydropower potential throughout her tenure in the Senate. During the last congressional session, she introduced S.724, or A Bill to Amend the Federal Power Act to Modernize Authorizations for Necessary Hydropower Approvals, and she was also instrumental in the passage of 2013’s Hydropower Regulatory Efficiency Act.

Also at FERC this week

Recently-appointed chairman Neil Chatterjee announced that Anthony Pugliese has been named FERC Chief of Staff.

Pugliese served as the Senior White House Advisor at the U.S. Department of Transportation since January, where he aided in the planning and development of President Donald Trump’s infrastructure package.

Before his time at USDOT, he was a consultant on energy issues involving solar, oil and natural gas at Pugliese Associates. He also served a stint as Director of Legislative Affairs for former Pennsylvania Gov. Thomas Corbett, and as a member of the Pennsylvania Marcellus Shale Commission.

 

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Michael Harris formerly was Editor for HydroWorld.com.

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