FERC grants appeal, reduces annual charges bills $1.3 million

The Federal Energy Regulatory Commission has granted most of the appeal of a group of seven hydropower licensees and agreed to reduce 2013 annual charges bills by $1.3 million.

Recipients of special benefits from federal activities — such as hydropower licenses — must pay user annual charges to cover the government’s costs of providing those benefits. FERC bills licensees to cover its own costs, plus the costs of other federal agencies that participate in licensing.

FERC is required to determine the reasonableness of costs incurred by the other agencies. It requires other federal agencies to submit their costs on a specific form by Dec. 31 of each year. It then allows licensees to review and comment on costs, holds a technical conference, and then issues bills that divide the total costs among all licensees.

The appeal, led by the city of Idaho Falls, Idaho, challenged annual charges costs submitted by the National Marine Fisheries Service for participation in the hydro licensing process.

“In their appeal, petitioners state that the commission has failed in some instances, detailed below, to adhere by its statutory responsibilities to reasonably recover costs incurred by the United States in administering Part I of the Federal Power Act,” FERC said July 2. “Specifically, they argue that the commission staff erred in accepting the entire Other Federal Agency cost submitted by the National Marine Fisheries Service.”

The petitioners, represented by the law firm Van Ness Feldman, argued that FERC should not accept any of NMFS’ cost submissions arguing that the agency’s certification is false and that if the commission does not reject all NMFS costs, it should at least reject submittals from three NMFS offices, the Office of General Counsel, Office of Habitat Conservation and the Southwest Region.

FERC refused to reject all NMFS submittals, saying with the exception of the three offices mentioned, NMFS demonstrated a system and process substantiated with financial system reports that FERC deemed reasonable. However it agreed to reject the costs of the three designated offices because they did not segregate costs between municipally owned and non-municipally owned hydro projects.

Petitioners also argued FERC should deny costs of the Office of General Counsel, Office of Habitat Conservation and NMFS’ Greater Atlantic Regional Fisheries Office because they did not provide backup data for their costs. FERC noted it already rejected costs of the first two offices and agreed to reject the costs of the fisheries office.

Petitioners also asked FERC to reject NMFS costs that were inaccurately coded or unrelated to Part I of the Federal Power Act. FERC agreed to reject more than $8,000 for costs to attend three events unrelated to FERC hydro regulation. It retained another $8,000 in expenses that were miscoded but related to FERC-licensed projects.

FERC reduced the total $10.2 million in other agency costs by $1.3 million to $8.8 million and credited the petitioners’ accounts accordingly. The total amount of annual charges costs are divided among all licensees.

In addition to the city of Idaho Falls, appellants include the city of Seattle, Wash.; Chelan County, Wash., Public Utility District; Sacramento Municipal Utility District; New York Power Authority; Consumers Energy Co.; and Louisville Gas & Electric Co.

FERC held a technical conference in March to review Other Federal Agencies’ fiscal year 2014 costs. Van Ness Feldman reported the other federal agencies listed about $7.5 million in costs for FY 2014, a reduction of about 9 percent from FY 2013, which FERC staff attributed to sequestration and other cuts in federal funding. The law firm said FERC staff preliminarily accepted $6.7 million of the costs to be passed through to licensees in the current year’s annual charges bills.

FERC proposed new rules in May that would change the start date for assessment of annual charges on private hydropower licensees to two years from the date of license issuance.

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