The Federal Energy Regulatory Commission said it will waive interest charges totaling more than $1.7 million if the licensee for the unconstructed 2,000-MW Mount Hope pumped-storage project in New Jersey pays $4.1 million in deferred annual charges.
FERC said Oct. 18 it would waive interest charges totaling $1,730,908, if the developer, Mt. Hope Waterpower Project LLP, paid the commission the principal amount due of $4,099,295 by Dec. 17. If Mt. Hope does not make the payment by that date, FERC said, then the complete debt of $5,830,204 in principal and interest will be referred to the U.S. Treasury Department for collection.
FERC noted that while it also had the authority to grant a waiver of the principal due, Mt. Hope did not demonstrate good cause for such a waiver. The commission said waiving the principal would result in an increase in annual charge assessments to other entities of about 7 percent, causing a hardship to those entities. Turning to other licensees to collect charges accumulated by Mt. Hope would not be in the public interest, FERC added.
FERC is not required to pass along interest charges if it waives interest. It said it is offering to waive the interest to encourage resolution of the matter, enabling Mt. Hope to meet its obligation in full.
Earlier this year, FERC declared the licensee for the project (No. 9401) must pay $6.6 million in deferred administrative annual charges, including both principal and interest. (HNN 6/22/07) However, in its Oct. 18 order, FERC corrected its previous calculations to reflect a decrease of $789,644 in interest accrued.
The assessment covers the period from issuance of the license in 1992 until March 14, 1995, when FERC established a policy that administrative annual charges would no longer be assessed until a project starts construction.
Mt. Hope Waterpower Project LLP was unable to begin construction before a final deadline of Aug. 3, 2002, and FERC rescinded the license Dec. 15, 2005.
Mt. Hope recently renewed plans to develop the project, but scaled back capacity to 1,000 MW. Its preliminary permit application for the new project (No. 12784) is pending.