U.S. appeals court overturns FERC relicense of 49.8-MW School Street

A federal appeals court has overturned the Federal Energy Regulatory Commission’s relicensing of the 49.8-MW School Street hydroelectric project and ordered the panel to reconsider whether it should have entertained a rival proposal for a 100-MW Cohoes Falls project on the Mohawk River in upstate New York.

FERC issued a 40-year relicense in 2007 to Erie Boulevard Hydropower L.P. for the upgrade and continued operation of School Street, which diverts water from upstream of Cohoes Falls, bypassing 4,500 feet of riverbed, including the falls, New York’s second tallest. (HydroWorld 2/16/07)

The School Street relicense (No. 2539) allowed installation of 11 MW of increased capacity at the 38.8-MW plant through the addition of a “fish friendly” advanced hydropower turbine by Erie Boulevard owner Brookfield Renewable Power. (Hydro Review, May 2009)

In relicensing the project, FERC rejected several attempts by Green Island Power Authority to propose development of the competing Cohoes Falls project in lieu of renewing School Street. FERC rejected a preliminary permit application by Green Island (No. 12522), noting the Cohoes Falls project only could be developed if School Street — which has generated power since 1916 — were decommissioned and removed.

FERC also rejected a 2004 motion by Green Island to intervene in the School Street relicensing, finding the motion was filed 13 years late in the relicense proceeding, which began in 1991.

In 2005, Erie Boulevard filed a School Street relicensing settlement agreement that included installation of the 11-MW turbine, replacing a proposed 21-MW turbine addition. As a result, Green Island renewed its motion to intervene, saying the settlement constituted a “material amendment” to the relicense application, permitting new intervenors to offer alternative proposals such as the Cohoes Falls project.

FERC rejected that motion, saying it was an “attempt to place Green Island’s untimely competitive proposal before the Commission.” FERC said the settlement agreement was made to satisfy requests of resource agencies and did not constitute a material amendment requiring FERC to reopen the proceeding to new intervenors.

Court: Failure to allow intervention ‘arbitrary, capricious’

Responding to Green Island’s appeal of the relicense order, the 2nd U.S. Circuit Court of Appeals disagreed with FERC, saying that in a relicense proceeding such a settlement agreement can be a material amendment and could warrant a call by FERC for comments and interventions.

“FERC’s decision not to solicit motions to intervene following the March 2005 offer of settlement … was arbitrary and capricious,” the court said Aug. 10, 2009.

“FERC has a statutory duty when conducting relicensing proceedings to consider feasible alternatives to the project under consideration, even if it ultimately cannot license those alternatives,” the court said. “Consequently, if Green Island is permitted to intervene upon remand, then FERC is statutorily obligated to consider its evidence regarding the Cohoes Falls project,” the judges added.

The appeals court remanded the case to FERC to consider first whether the settlement agreement was a material amendment and, if so, to consider whether Green Island’s motion to intervene is proper and, if so, to consider the Cohoes Falls project proposal.

Sen. Charles Schumer, D-N.Y., who previously backed the Cohoes Falls project proposal, issued a statement urging FERC not to appeal the court ruling.

“I strongly urge FERC to heed the court’s decision and end its opposition to the intervention requests of GIPA and other interested parties and also to properly consider available alternatives that are better adapted to development of the public resource,” Schumer wrote Aug. 24.

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