FERC again rejects licensee attempt to avoid jurisdiction as small conduit hydro

The Federal Energy Regulatory Commission rejected a rehearing request by the licensee of the 400-kW Brighton hydroelectric project, saying Brighton could not escape FERC jurisdiction as a small conduit project because it uses an 80-foot-tall, 995-foot-long dam.

FERC last year rejected an application from KC Brighton LLC, licensee of the 400-kW Brighton project (P-3633) on the Patuxent River in Maryland. KC Brighton had applied to surrender the hydropower license it received from FERC in 1984 and be designated a qualifying conduit project (No. CD14-9) that would be excluded from FERC jurisdiction.

The Hydropower Regulatory Efficiency Act, passed last year, removes entirely from FERC jurisdiction those new “qualifying conduit hydropower facilities” under 5 MW that are on water conduits. Prior to HREA, FERC could issue “conduit exemptions” from hydropower licensing to hydroelectric facilities under 15 MW (for non-municipalities) and 40 MW (for municipalities) using a man-made conduit operated primarily for non-hydroelectric purposes. While exempt from more stringent FERC hydro licensing, exempted projects are still subject to lesser FERC regulation.

FERC determined that projects seeking complete exclusion from FERC jurisdiction under HREA as “qualifying conduit hydropower facilities” must use a tunnel, canal, pipeline, aqueduct, flume, ditch, or similar manmade water conveyance that is operated for the distribution of water for agricultural, municipal, or industrial consumption and not primarily for the generation of electricity. Further, the power project must not exceed 5 MW and must use only the hydroelectric potential of a non-federally owned conduit. Additionally, the project must not have been issued a hydro license or exemption prior to Aug. 9, 2013, the effective date of the HREA.

In its original Nov. 14 letter to KC Brighton, FERC soundly rejected the Brighton project application, saying the project failed to qualify under the HREA because it includes an 80-foot-tall, 995-foot-long dam, and it was already licensed prior to passage of the HREA on Aug. 9, 2013.

“On rehearing, KC Brighton argues, for the first time, that the Brighton Dam is ancillary to, and not needed for, the Brighton Dam Project,” FERC said Feb. 20. “Thus, KC Brighton reasons, its project is a qualifying conduit because, without the dam and reservoir, the project is a new development, i.e., one that was not previously licensed.”

FERC said, as an initial matter, the HREA limits qualifying conduit status to those projects, and project works, that were not licensed or exempted before Aug. 9. Although the dam is leased from the owner, Washington Suburban Sanitary Commission, it has been licensed since 1984.

“Though KC Brighton argues that the Brighton Dam is not needed for the project, the project’s powerhouse is integral to the dam, and the dam provides nearly all of the head for the project’s electric generation,” FERC said. “The Brighton Dam therefore is part of the project’s complete unit of development and therefore, KC Brighton may not simply delete the dam from its project in an attempt to meet the qualifying conduit facility criteria.”

While KC Brighton argued HREA was intended to reduce “costly and redundant” dam safety oversight of small hydro developers, FERC said, to the contrary, Congress stated the law was intended to foster development of new, untapped hydropower resources.

FERC has created a web page under Hydropower Regulatory Efficiency Act of 2013, http://www.ferc.gov/industries/hydropower/indus-act/efficiency-act.asp, providing guidance to developers on filing a notice of intent to build a qualifying conduit facility, an application for small hydropower exemption, and an application to amend preliminary permit terms.

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