A Federal Energy Regulatory Commission official expressed support for a hydropower improvement bill but told a Senate committee he had some concerns about ways the bill proposes to change the FERC hydropower licensing process.
Director Jeff Wright of FERC’s Office of Energy Projects testified in a March 31 hearing of the Senate Energy and Natural Resources Committee, which is considering the proposed Hydropower Improvement Act (S.629), the proposed Marine and Hydrokinetic Renewable Energy Promotion Act (S.630), and a portion of the American Clean Energy Leadership Act of 2009, which was passed by the previous Congress.
“There is a great deal of potential for the development of additional hydropower projects throughout the country, including small projects and marine and hydrokinetic projects,” Wright testified. “Working within the authority given it by Congress, the commission continues to adapt its existing, flexible procedures to facilitate the review and, where appropriate, the approval of such projects.”
While he concluded S.629 would help realize the potential of additional hydropower, he addressed specific concerns of the bill as they would affect FERC licensing.
Proposed two-year licensing process questioned
In the face of criticism that the FERC licensing process sometimes can drag on for years, Section 7 of the bill proposes that FERC investigate the feasibility of implementing a two-year licensing process, in particular, for hydropower development at existing, non-powered dams, and for closed-loop pumped-storage projects.
“I support the goal of an expedited licensing process,” Wright said. “Indeed, as I have discussed, it is commission staff’s goal to act on all license applications as quickly as possible, and the commission has established processes that allow for great flexibility and efficiency. I am thus not certain whether an additional licensing process is necessary.”
Wright noted in recent years the commission has been able to issue some licenses within a few months where the project applicant “selected a site wisely,” stakeholders agreed on information needs, and state and federal resource agencies performed their responsibilities quickly. He added that FERC operates under significant constraints of the Federal Power Act, the Clean Water Act, Coastal Zone Management Act, Endangered Species Act, and National Historic Preservation Act.
“In the absence of the ability to waive sections of the FPA and other acts, or to set enforceable schedules in licensing proceedings, it is not clear that the commission, under its existing authorities, can mandate a shortened process,” he said.
Concern expressed at new land agency mandatory conditioning
The director said he supported Section 8 of the bill, which would establish various measures to promote conduit and small hydropower projects, including language that would allow conduit projects to be located on federal lands.
However, he noted that language also would give mandatory conditioning authority to federal land management agencies. Wright said such agencies already have ability to impose conditions on projects through requirements for special use authorizations under the Federal Land Management and Policy Act.
“As a general matter, however, I do have some concern that authorizing additional mandatory conditioning authority may slow down the licensing process and result in increased potential bars to hydropower development,” he said.
Longer preliminary permit terms supported
Wright said he supported Section 9 of the bill, which would allow the commission to extend three-year hydropower preliminary permits one time for up to two more years. As an alternative, he said Congress might consider simply authorizing FERC to issue permits for up to five years.
“Preliminary permits grant the permittee a ‘first-to-file’ preference with respect to license applications for projects being studied under a permit,” Wright said.
“Commission staff has heard anecdotally that developers are concerned that the need for environmental studies in some instances makes it difficult to complete a license application with the current maximum three-year term of the permit, with the result that the developer which has invested substantial time and money studying a project may face the possibility of losing its project based on competition from other entities — particularly those with statutorily granted municipal preference — if it needs to seek a subsequent permit.”
FERC, Reclamation eye hydro at Reclamation projects
Section 10 of the bill would require the Bureau of Reclamation, in consultation with FERC, to study barriers to non-federal hydropower development at Reclamation water projects and to adopt a memorandum of understanding to advance such development. Wright said FERC and Reclamation already are working on the matter.
Reclamation’s parent, the Department of Interior, issued study results in March showing hydropower could be added to 70 of its facilities to power more than 85,000 households.
Wright’s prepared testimony before the Senate Energy Committee may be obtained from the committee’s Internet site under http://energy.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=de0ddb23-e7e1-4378-9c84-dbf42094df75. Testimony also is available from other participants, Reclamation Commissioner Michael Connor, Acting Deputy Assistant Energy Secretary Steven Chalk, American Rivers’ Hydropower Reform Initiative Director John Seebach, National Hydropower Association President Andrew Munro, Ocean Renewable Energy Coalition President Sean O’Neill, and Michael Webber, co-director of the Clean Energy Incubator at the University of Texas at Austin.
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