State challenges FERC issuance of conditional kinetic license

The state of Washington is appealing the nation’s first hydrokinetic project license, arguing the Federal Energy Regulatory Commission may not issue a �conditional� license before obtaining state permits and authorizations.

FERC issued a conditioned license in December 2007 to Finavera Renewables Ocean Energy Ltd. for the 1-MW Makah Bay Offshore Pilot Project (No. 12751) in Washington.

Unlike standard hydropower licenses, which cannot be issued until all permits and authorizations are submitted by state and federal resource agencies, FERC plans to issue conditional hydrokinetic project licenses quickly, without waiting for other agency authorizations. However, the hydrokinetic licenses are to be conditioned to prevent a licensee from actually starting construction until it obtains those authorizations.

In March, FERC denied rehearing requests by the Washington Department of Ecology, the Washington Department of Natural Resources, and the Makah Tribe. (HNN 3/21/08) FERC responded that it had the authority and that the challenge was moot, because the state had issued necessary permits in February.

Ecology filed an appeal May 15 with the U.S. Court of Appeals for the District of Columbia. The agency said it seeks to protect the state’s role in federal licensing procedures for energy projects. The petition asks the court to clarify federal law regarding FERC’s Makah Bay decision.

Ecology argues federal law does not allow FERC to offer a conditioned license in advance of obtaining input and consideration from the other agencies with a regulatory role in the licensing process.

�One of Ecology’s concerns is providing a straightforward process of licensing and ensuring applicants are not given false expectations that their projects have all the approvals to move forward when they do not,� Ecology Program Manager Gordon White said. �This new policy by FERC has the strong potential to confuse and even lengthen the process for applicants.

FERC said a conditioned license does not authorize construction or installation, and expressly stated that no such authority would be granted until Finavera obtained all necessary authorizations, which it now has obtained.

Earlier this year, the state of Oregon and FERC signed a memorandum of understanding to coordinate procedures and schedules for reviewing wave energy projects in state waters. (HNN 3/28/08)

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