Law firm: Re-establish FERC authority over small hydro licensing

A law firm experienced in hydropower licensing is urging the Federal Energy Regulatory Commission to re-establish itself as the final authority in small hydro licensing, either by agreement with resource agencies or by seeking legislation from Congress.

Spiegel & McDiarmid LLP of Washington filed comments on FERC’s program for granting licenses to small hydro projects, exemptions to projects of 5 MW or less, and exemptions to hydro plants on water conduits. FERC took comments until Feb. 4, 2010, under Docket AD09-9 following a technical conference. (HydroWorld 1/12/10)

In the Dec. 2, 2009, technical conference, hydropower industry officials urged the commission to take several steps to simplify the process to obtain small hydropower licenses and exemptions. Spiegel & McDiarmid said the firm is not optimistic that the necessary consensus with resource agencies can be reached to authorize many small hydro projects.

“Should the risk or one small project of less than 5 MW wreaking environmental havoc prevent the development of a potential 60,000 MW of untapped generation potential?” the law firm asked. “And who should make that benefit-cost analysis? Even more important, where are the facts that would support such a ‘Katy, Bar the Door’ approach? None of these were discussed in the course of the conference.”

The law firm’s comments, signed by lawyers Frances E. Francis and William S. Huang, said the current system for authorizing small hydro projects does not work and is counter to federal policy encouraging renewable energy development. The firm said the process must be expedited and its costs reduced, which it said requires a change in the way that final authorizations are issued.

“A legacy of incremental legislation now precludes FERC from exercising the final balancing function as to whether a case-by-case exemption should issue,” the firm said. “Instead, after the regulatory process, developers are faced with the choice of accepting all the resource agencies’ requirements or foregoing authorization — a situation that effectively gives a veto power to the state and federal resource agencies, whose mission is quite different from that of the commission.

“It is not the resource agencies’ role to advocate for small hydro, or to consider the benefits of small hydro development at all. This imbalance makes the system unworkable, if the intent is to encourage development.”

“Process prefers no development to any development”

Spiegel & McDiarmid said real progress in small hydro development will only occur if the law is changed to give FERC final authority to use its balancing authority to issue small hydro exemptions, or the commission and resource agencies are able to work together to change a “deeply rooted regulatory culture and process that prefers no development to any development in virtually every situation.”

“The key to a satisfactory resolution is that one agency — the commission — must be authorized to make the final decision on the applicable terms and conditions of development, and no single agency (other than the commission, in the exercise of its expert judgment) should be allowed to effectively blackball proposals, whether by category or by individual site,” the firm said.

The law firm said in many cases the economic benefit of small hydro projects is overwhelmed by the cost of hiring outside consultants or counsel for studies or to assist in the regulatory process. In addition, owners of conduits, irrigation systems, and other existing facilities to which hydropower could be added are afraid that FERC and resource agencies would use a hydro license or exemption to extend their control over existing water infrastructure that currently is not within their jurisdictions.

Spiegel & McDiarmid proposed that FERC seek resource agencies’ agreement to simplify the process by regulation. If it fails to do so after six months, FERC should push for legislation from Congress, the law firm said.

The firm proposed a fast-track application process for small projects in which projects that meet specific criteria of a screening checklist would be able to receive a license or exemption within 30 days if there are no negative comments.

“To make the screening checklist and fast-track processes work, there will have to be movement away from a regulatory attitude and policies that have the effect of virtually barring all such projects on the basis of a very small risk that something awful will happen in one instance, and toward a process of sorting out the risks and then allowing those who pass a sensible test to move along quickly,” the firm said.

Spiegel & Mcdiarmid proposed that small projects failing to pass the screening checklist criteria could apply for a pilot license similar to those FERC approved for experimental hydrokinetic projects. (HydroWorld 12/4/07) The ten-year licenses would let resource agencies monitor actual conditions, provide a revenue stream to the project during the review process, and allow for removal of the project if it fails to meet requirements.

Previous articleCorps to issue seepage barrier tender for 135-MW Center Hill
Next articleNational park resources benefit from Glen Canyon Dam high-flow experiment, study shows

No posts to display