FERC proposes new start date for hydro license annual charges

The Federal Energy Regulatory Commission proposes new rules that would change the start date for assessment of annual charges on private hydropower licensees to two years from the date of license issuance.

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 under the Federal Power Act.

Current rules provide that private hydropower licensees must begin paying annual charges upon commencement of project construction, while licensees or exemptees that are state or municipal governments are assessed annual charges when project operation commences.

In a notice of proposed rulemaking (RM15-18) issued May 14, FERC noted that private licensees now are required to notify FERC when project construction starts for the purpose of assessing annual charges. The annual charges assessment date therefore is uncertain, based on the licensee’s ability to begin construction, or upon occasion, to request an extension in the two-year construction start deadline.

The proposed rulemaking would simply require assessment of annual charges two years from the effective date of the license order, exemption, or amendment authorizing additional capacity.

“The commission anticipates the proposed rule will provide administrative efficiency and foster certainty among licensees, exemptees and commission staff as to when annual charges will commence,” FERC said. “Licensees and exemptees will no longer need to notify the commission when project construction starts for the purpose of assessing annual charges and, in turn, the commission will not have to contact the licensee or exemptee for this purpose.”

Based on previous experience, FERC estimated an average of 5.2 licensees or exemptees per year would begin paying annual charges before starting construction.

The notice of proposed rulemaking may be obtained from the FERC Internet site under http://www.ferc.gov/whats-new/comm-meet/2015/051415/H-3.pdf. The agency invites comments until 60 days after publication of the rulemaking in the Federal Register.

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