FERC refuses to extend PG&E permit to study up to 1,200-MW Mokelumne Pumped-Storage

The Federal Energy Regulatory Commission has rejected a request by Pacific Gas & Electric Co. to extend by two years the utility’s second preliminary permit to study development of a 300- to 1,200-MW Mokelumne Pumped-Storage project in California’s Amador and Calaveras counties.

FERC issued an initial three-year preliminary permit (No. 13221) in 2008 under which PG&E proposed to study three possible designs for the pumped-storage project. FERC found that the utility pursued the project in good faith with reasonable diligence during the first permit, which expired in 2011.

PG&E requested and received a successive three-year permit for the project in 2011, with FERC saying it would be expected to conduct agency consultation and perform studies leading to possible development of a license application. On Oct. 30, 2014, PG&E asked for a two-year extension of the second permit under a 2013 law in which Congress said such extensions could be granted if the permittee carried out activities in good faith and with reasonable diligence.

“In its Oct. 30 request for extension, PG&E states that a two-year extension of its permit is needed in order to secure additional funding for the project and to continue to study the project’s feasibility,” FERC said in a Dec. 10 order. “While PG&E has filed timely progress reports under standard Article 4 of the permit, there is no evidence of extraordinary circumstances or factors outside of its control over the duration of its permit preventing it from preparing a development application.”

FERC said the progress reports do not contain evidence of agency consultation, studies performed or other specific information showing progress toward development of a license application.

“Although PG&E states in its extension request that it wants to preserve the option to develop the Mokelumne project, allowing PG&E to reserve the Mokelumne project site an additional two years beyond its already six years of study would contribute to site banking,” the commission said. “The essence of the commission’s policy against site banking is that an entity that is unwilling or unable to develop a site should not be permitted to maintain the exclusive right to develop it.”

FERC gave notice in 2010 that, due to increased interest in new hydro sites, it would be more vigilant to ensure that permit holders are actually studying sites, rather than site banking for possible future development.

Although FERC’s action allowed the PG&E permit to expire, the utility can continue to study the site. Lack of a preliminary permit simply means PG&E no longer has priority over competitors in filing a license application for the site.

As described in the preliminary permit, PG&E’s proposal featured Lower Bear River Reservoir, with a surface area of 746 acres, storage capacity of 49,079 acre-feet, and a normal water surface elevation of 5,822 feet, as the upper reservoir with possible heightening of the dam to increase capacity; a 16,000-foot-long power tunnel, including intake structure and penstock; the existing Salt Springs Reservoir, with a surface area of 960 acres, storage capacity of 141,817 acre-feet, and a normal water surface elevation of 3,959 feet, as the lower reservoir; a powerhouse with total installed capacity of between 300 and 1,200 MW; and a 230- or 500-kilovolt transmission line.

The proposed project would be expected to generate annually between 396 and 1,584 GWh.

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