FERC tests 2-year hydropower licensing process

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Licensing some new hydropower projects in the United States -- traditionally a lengthy process -- may soon become easier, as federal regulators have approved an experimental two-year process that may soon be used to license some projects.

Water spills over a small, non-powered dam in Maine.

The Federal Energy Regulatory Commission regulates most hydropower development in the United States.  Under Part I of the Federal Power Act, the Commission considers applications for hydropower project licenses.  While the traditional licensure process has resulted in the issuance of thousands of licenses, winning a license for a project can take many years -- and some licensure proceedings have stretched toward a decade.
In response to concerns that lengthy licensing procedures stifle hydropower development, last year Congress enacted the Hydropower Regulatory Efficiency Act of 2013.  That law directed the Commission to investigate the feasibility of a two-year licensing process for certain projects, develop criteria for identifying projects that may be appropriate for the process, and develop and implement pilot projects to test the process.
In January 2014, the Commission solicited pilot projects to test a two-year process.  Two kinds of projects were eligible: hydropower development at existing non-powered dams and closed-loop pumped storage projects.  In the notice soliciting pilot projects, the Commission articulated additional criteria for eligibility including:
  • The project must cause little to no change to existing surface and groundwater flows and uses;

  • The project must not adversely affect federally listed threatened and endangered species;

  • If the project is proposed to be located at or use a federal dam, the request to use the two-year process must include a letter from the dam owner saying the plan is feasible;

  • If the project would use any public park, recreation area, or wildlife refuge, the request to use the two-year process must include a letter from the managing entity giving its approval to use the site; and

  • For a closed-loop pumped storage project, the project must not be continuously connected to a naturally flowing water feature. 

Ultimately, the Commission selected a project proposed by Free Flow Power Project 92, LLC: a 5-megawatt project at the Kentucky River Authority's existing Lock & Dam No. 11 on the Kentucky River in Estill and Madison counties, Kentucky.  Lock and Dam 11 were originally built from 1904-1906 and support a twenty mile long pool of water 201 miles above the mouth of the Ohio River, but have not previously supported a FERC-licensed hydropower project.

The Free Flow Power applicant's request to use the 2-year licensing process was filed on May 5, 2014, so the two years runs through May 5, 2016.  The Commission staff has issued a process plan and schedule with interim milestones through February 2016.  Compared to a traditional licensure process, the proposed schedule is accelerated -- but will this pilot case remain on schedule?  Will the accelerated process satisfy the various stakeholders, including the developer, regulator, neighbors, and public?

Topics:  Energy Projects, Federal Power Act, FERC, Hydropower, Licenses, Licensing Rules

Published In: Energy & Utilities Updates, Zoning, Planning & Land Use Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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