Not less than five years before expiration, an existing licensee for a project must notify FERC of its intent whether to seek a new license. FERC has four options for its final decision in the resulting proceeding: a new license, non-power license, decommissioning, or federal takeover.
FERC attempts to make a final decision in a relicensing proceeding before expiration of the current license. Its new policy, in plain English, is that “the train will run on time.” If FERC does not timely make such a decision, an annual license issues from year to year.1 An annual license is a non-discretionary stopgap in that circumstance.2 The annual license incorporates the conditions of the now-expired license and for that reason is not subject to water quality certification under CWA section 401(a)(1),3 although FERC has the discretion to adopt interim measures in the circumstance where the original conditions are plainly inadequate.4
See FPA § 15(a)(1), 16 U.S.C. § 808(a)(1).
See Platte River Whooping Crane Critical Habitat Maintenance Trust v. FERC (Platte I), 876 F.2d 109, 114 (D.C. Cir. 1989).
See California Trout, Inc. v. FERC, 313 F.3d 1131, 1137 (9th Cir. 2002), cert. denied, 124 S. Ct. 85 (2003).
See Platte I 876 F.2d 109, 118. (“FERC can and presumably should promote the environmental objectives of the ECPA by amending annual licenses to include protective conditions.”).
FERC may issue a new license to the existing licensee or a competing applicant whose application is demonstrably superior.1 In the relicensing proceeding, FERC does not assume that a new license will issue. Rather, FERC must determine anew whether the project is best adapted to a comprehensive plan of development of the affected river. If issued, a new license must comply with applicable laws at this time. In other words, a licensee cannot expect its current license to be reissued without modification.2 FERC may also reject a license application, in which event the project will be decommissioned.
See 18 C.F.R. §§ 4.37; 5.29(i).
See 16 U.S.C. § 816.
A non-power license is a temporary license for a project that is in transition from power generation to other uses outside of FERC's jurisdiction. It is temporary, continuing only until the area occupied by the project has been restored or until another governmental agency has agreed to assume jurisdiction over the project works for nonpower uses.1 FERC may issue a nonpower license to restore environmental quality, or even operate for a nonpower purpose such as recreation or water supply,2 if it finds that the continued generation is not “in conformity with a comprehensive plan for improving or developing a waterway or waterways for beneficial public uses....”3 While any person or entity may submit an application for such a nonpower license, it will be issued only on the above finding and the further finding that the applicant has the capacity to perform the resulting duties.4 Commission.” Id.
] FERC has issued such licenses twice.5 We understand a nonpower license to be a conditional form of license surrender, discussed next.
See16 U.S.C. § 808(f).
Id.
See id.
See id. FERC is authorized to issue a nonpower license on its own motion or upon the application “of any licensee, person, State, municipality, or State [utility
See Wisconsin Electric Power Co., 94 FERC ¶ 61,038 (2001) (order on offer of settlement and notice of intent to issue and grant surrender of non-power license); 96 FERC ¶ 61,009 (2001) (order issuing non-power license and approving decommissioning plan); and New York State Electric & Gas Corp., 105 FERC ¶ 61,381 (2003) (order issuing non-power license); 106 FERC 61,326 (2004) (order granting NYSE& G's request for rehearing to clarify license articles in part).
Under a 1994 policy, FERC may issue an order denying a new license and requiring the licensee to decommission the project, in whole or part.1 Decommissioning may take many forms. These include: removing the project, or abandoning it in place in a non-functional form (e.g., filling the flowline with sand). Pursuant to that policy, FERC has approved the decommissioning of approximately 15 projects on the basis of voluntary applications, including Edwards Dam in Maine.2 Its authority to require decommissioning in a contested proceeding is disputed by the hydropower industry and has not been tested in any appellate case.
You should generally ask FERC to include a “No Project Alternative” as an action alternative in its NEPA analysis. Since the status quo, including the original license for a project, is the environmental baseline for such analysis (see American Rivers v. FERC, 201 F.3d 1186, 1195 (9th Cir. 1999)), this action alternative permits FERC and the parties to evaluate future conditions without the project. This assists to segregate the project from other facilities and activities which affect natural resource values in the watershed. Where you have no actual interest in pursuing decommissioning as the licensing decision, you should clearly state that your request for the action alternative is solely intended to assure that FERC understands the project's contribution to existing conditions, so that mitigation is proportional to that contribution. Clarity about your intent is very important, since FERC and the licensee otherwise will view this request as a camel's nose in the tent (namely, as your effort to compel them to develop the record for decommissioning as the actual relicensing decision).
You may decide to advocate some form of decommissioning as the relicensing decision, in circumstances where you believe the resulting restoration of natural resource values is the best or only method to comply with Section 10(a) and other applicable law, bearing in mind that it will also result in loss of generation capacity. This is a fight that you should not start unless you have a very substantial basis in evidence and law - for example, because the project has marginal economic value for the licensee, or where the project cannot comply with water quality standards no matter what the mitigation. Bear in mind that a request for decommissioning as the relicensing decision will start a fight not just with an unwilling licensee, but also with the owners of any residential or commercial facilities around the reservoir. For more information about dam removal and strategies for achieving removal, go to http://www.americanrivers.org/.
See “Policy Statement on Project Decommissioning at Relicensing,” 60 Fed. Reg. 340 n.1 (Jan. 4, 1995) (referenced in 18 C.F.R. § 2.24).
See HRC, “Policy on Dam Decommissioning in the FERC Relicensing Process” (1999), available at www.amrivers.org/index.php?module=HyperContent& func=display& cid=1938.
A project may be transferred to federal ownership if the U.S. provides notice two years before license expiration and if the licensee is paid fair market value1 and any damages.2 Upon such takeover, the project exits FERC's jurisdiction, which is limited to non-federal licensees, even if the project continues to be operated for generation. Such takeover has occurred once.3
16 U.S.C. § 807(a).
Id.; see In re Pacific Power and Light, 23 FERC ¶ 63,037 (April 28, 1983); In re Escondido Mutual Water Co., 9 FERC ¶ 61,189 (Feb. 26, 1979). Severance damages are relatively inconsequential.
The James River Corporation and Daishowa Corporation built the Elwha and Glines Canyon Projects, in 1910 and 1926 respectively, on the Elwha River to power to a paper mill on Lake Mills. When the projects began relicensing in the 1970s, FERC was urged by conservation groups, NMFS, and the Elwha Tribe to deny a new license and instead require decommissioning, due to blocked passage for salmon runs and degraded riparian vegetation and wildlife habitat downstream. The 1991 DEIS concluded that decommissioning was feasible and was the only option that would completely restore the degraded Elwha River. In 1992, Congress enacted the Elwha River Ecosystem and Fisheries Restoration Act, 102 P.L. 495 (1992), which removed FERC's jurisdiction to process the applications in these dockets, but left residual jurisdiction to preserve the status quo. In 2000, the National Park Service and the Bureau of Reclamation purchased the projects from the licensee, Fort James Corporation, for $29.5 million. On March 10, 2000, following the transfer of title, FERC announced that its jurisdiction over these projects was fully extinguished. See “Notice Terminating Proceedings,”90 FERC ¶ 61,235 (Mar. 20,2000). The federal agencies now operate the projects and will continue to do so until decommissioning begins in 2007. For further information, see http://www.nps.gov/olym/parknews/elwha-restoration-project-update.htm.