SMUD urges 50-year term to relicense 648-MW Upper American River

Sacramento Municipal Utility District is urging the Federal Energy Regulatory Commission to grant it the maximum 50-year relicense term for its 647.726-MW Upper American River project, regardless of whether SMUD proceeds with a proposed 400-MW pumped-storage addition to the project.

SMUD made the argument in a statement filed with FERC Feb. 1, describing a settlement agreement for relicensing the project (No. 2101), on the American River near Placerville, Calif.

The settlement builds upon an agreement in principle reached in November 2006 that would allow SMUD to add the 400-MW Iowa Hill pumped-storage plant to the project. (HNN 11/20/06) The two agreements essentially are the same, although detail has been added and some provisions will be handled separately, outside of the relicense, a lawyer familiar with the case said.

SMUD said a 50-year license term should be granted, independent of FERC’s final determination whether to allow construction of the $520 million Iowa Hill. Even without Iowa Hill, SMUD said the extensive protection, mitigation, and enhancement measures included in the settlement are deserving of a 50-year license term. The utility said approval of a 50-year term, independent of Iowa Hill, would provide certainty to SMUD, and avoid a need to revisit the license term at a future date.

�Although SMUD currently forecasts a need for Iowa Hill and intends on pursuing this project expansion, it is possible that SMUD’s capacity needs could change in the years following license issuance or that another capacity resource could prove more cost-effective,� the utility said in a statement filed with the settlement agreement. �In the unlikely event that SMUD would, in the future, have to seek a license amendment to remove Iowa Hill from the license, SMUD does not believe it would make sense to have to revisit the question of license term.�

SMUD’s original 50-year license for Upper American River expires in July. Its relicense application is expected to be ready for a FERC decision in December.

Iowa Hill would join eight existing powerhouses, 11 reservoirs

The project has eight powerhouses and 11 reservoirs, and generates enough power to meet 20 percent of SMUD’s customer demand. The relicense application would add Iowa Hill’s new upper reservoir with a storage capacity of about 6,400-acre-feet, and water conduits extending from the upper reservoir to an underground powerhouse.

SMUD filed the settlement on behalf of itself, federal and state agencies, and other stakeholders involved in relicense proceedings. The parties intend for the settlement to resolve all issues, except those that might arise under the Endangered Species Act. The settlement also establishes SMUD’s obligations for the protection, mitigation, and enhancement of resources affected by the project.

SMUD also asked FERC to convene a technical conference to enable the utility and other parties an opportunity to answer commission staff questions.

SMUD said a technical conference would prevent misunderstanding about proposed license articles, the relationship between the Upper American River project and Pacific Gas &Electric Co.’s 7-MW Chili Bar project (No. 2155), and the treatment of each project under the settlement. PG&E is expected to file the settlement as an offer of settlement in relicensing proceedings for Chili Bar.

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