FERC: Developer of unbuilt 2,000-MW Mount Hope owes $6.6 million

The Federal Energy Regulatory Commission declared June 21 the licensee for the unconstructed 2,000-MW Mount Hope pumped-storage project in New Jersey must pay $6.6 million in deferred annual charges.

FERC dismissed Mt. Hope Waterpower Project LLP’s appeal of a debt collection notice seeking payment of annual charges obligations totaling $6,619,847.17 in principal and interest. It also denied a request to waive administrative annual charges.

The assessment covers the period from issuance of the license in 1992 until March 14, 1995, when the commission established a policy that administrative annual charges would no longer be assessed until a project starts construction.

The project was not built. Mt. Hope Waterpower Project LLP was unable to begin project construction before a final deadline of Aug. 3, 2002, and FERC rescinded the license Dec. 15, 2005.

In ruling the collection notice stands, FERC noted Mt. Hope did not dispute the existence or amount of debt. FERC also was not persuaded to waive the debt by Mt. Hope’s argument that having to pay part or all of its debt would preclude it from pursuing its ongoing plans to develop the abandoned mine site.

Mt. Hope recently renewed plans to develop the project, but scaled back capacity to 1,000 MW. (HNN 5/3/07) Its preliminary permit application for the new project (No. 12784) is pending.

In the application, Mt. Hope Waterpower Project L.P. proposes to use water from the Mt. Hope Mine Complex in Rockaway Township of Morris County, N.J. The project would consist of four 250-MW developments, each with a powerhouse and an upper and lower reservoir. The project would be built in four stages.

FERC said if it were to waive the debt, the commission would have to recover the waived amount by adding it to the current year’s program costs and allocating it among other licensees. Mt. Hope owes $4.1 million in principal, which if waived would result in a 7 percent increase in annual charges assessments to other entities, it added.

Mt. Hope asserted that any attempt to collect the debt would be futile because its assets are limited to heavily mortgaged property interests in the project site. However, the commission responded that such assertions are best considered in the context of the Treasury Department’s collection process.

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