Adopted in 2003,1 the Integrated Licensing Process (ILP) integrates the development of license application and environmental review, and it coordinates FERC and other regulatory agencies that undertake such environmental review. A licensee may voluntarily use the ILP now. After July 23, 2005, the ILP will be the default process and a licensee will be required to request authorization to use the TLP or ALP at the same time it files its Notice of Intent.2 After that date, FERC will grant a request to use the TLP or ALP only if the licensee shows “good cause.”3
Why Develop a New Licensing Process?
Hydropower regulation before the ILP was relatively efficient, by comparison to other federal regulatory programs for energy and other goods and services in interstate commerce. FERC now tends to make relicensing decisions on time, relatively few such decisions are appealed to court, and most participants believe that FERC today is doing a reasonably fair job of balancing energy and environmental quality. So why did FERC adopt the ILP, and why will the ILP become the default process?
FPA Part I mandates minimum steps for a licensing proceeding. Nonetheless, the statute leaves considerable discretion regarding how FERC, licensee and other participants contribute to the development of the record of project impact necessary for a licensing decision. The TLP and even ALP have tended to suffer from recurring process inefficiencies, including running disputes between FERC and other agencies over the boundaries between their respective jurisdictions. As a result, certain participants, including the HRC and the National Hydropower Association, formed the National Review Group (1998-2002), which developed joint recommendations for administrative reform. Federal agencies formed the Interagency Task Force (1999-2001) for the same purpose. FERC initiated the ILP rulemaking in response to these recommendations. The ILP implements solutions recommended by the HRC and other participants to correct five routine inefficiencies of the ALP and TLP.
First, under the ILP, the Notice of Intent will include a Pre-Application Document that compiles existing information about project impacts on hydrology and other natural resources. The licensee today does not publish such information when it files the NOI and instead fully discloses it in the license application published nearly three years later. So, prior to such application and when the study plan is being developed, other participants may not know what existing information is available and thus may demand studies that the licensee considers to be unnecessary.4
Second, the Office of Energy Projects will start NEPA scoping within 60 days of the NOI in order to assure the consistency of the study plan and the environmental review. Today, FERC tends to start scoping for environmental review after the submittal of the license application - years after the development and implementation of the study plan. This creates a substantial risk that issues that may prove to be material to the licensing decision have not been adequately studied by the licensee.
Third, under the ILP, FERC and other agencies will deliberately explore and implement arrangements for cooperation in the preparation of the environmental document. Such cooperation will begin before the study plan is drafted. FERC and other regulatory agencies rarely cooperate today in the preparation of the environmental document that serves as the basis for their respective decisions in a given proceeding. As discussed above, FERC interprets its ex parte rule to provide that another agency may formally cooperate only if it foregoes its right to participate as a party. As a result, other agencies generally decline that status, limit themselves to comments on the draft prepared by OEP, and in turn do not prepare their own document due to budgetary constraints. FERC and the agencies tend to have a running dispute whether FERC's environmental document provides the record necessary for their decisions in that proceeding.
Fourth, the ILP establishes specific criteria for each study request and the licensee's response, including nexus to project impacts and cost-effectiveness compared to an alternative study method. It establishes a mandatory procedure to resolve any study dispute between the licensee and any agency with mandatory conditioning authority. A panel of three members (OEP, disputing agency, and a neutral) will undertake a peer review whether a particular study complies with the stated criteria. Under the TLP or ALP, the licensee may reject a study request that it considers not to be “reasonably necessary” for the licensing decision. The dispute resolution procedure (namely, referral to the OEP Director) is both voluntary and non-binding, and is rarely used. As a result, unresolved disputes about the study plan are carried forward in the form of challenges to the adequacy of the license application or environmental document.
Finally, under the ILP, FERC will publish draft license articles in any draft environmental document, in order to permit early analysis of whether its articles and other draft conditions are consistent. While the license application today contains the licensee's recommended mitigation and enhancement measures and other participants submit theirs in response to the REA notice before the publication of the environmental document, FERC does not disclose its license articles until the final licensing decision. As a result, FERC and other agencies tend to recognize conflicts between their respective conditions only when it is too late, namely, when rehearing preparatory to judicial review is underway.
Structure of ILP Process
The ILP has five functional stages: Notice of Intent (Section 4.1), Study Plan Development and NEPA Scoping (Section 4.2), Implementation of Study Plan (Section 4.3), Preliminary Licensing Proposal and Application (Section 4.4), and Review of Application and Final Decision (Section 4.5). These stages consist of 24 discrete steps as shown in the diagram below. The steps are shown in the attached diagram.
FIGURE 1
INTEGRATED LICENSING PROCESS (ILP)
The ILP runs on a strict clock. All of the steps are subject to deadlines established by the rule, unless modified with FERC's permission. The first step, the Notice of Intent initiates the process and must occur sometime between 5.5 and 5 years prior to the expiration of the existing license. Each subsequent step is relative to the prior step. Deadlines for the entire process will therefore be determined once the NOI is issued. Below, we show below the timing for each step, relative to the prior step.
TABLE 2
TIMING OF ILP STEPS
| Step Number | Step Description | Time (Relative To Prior Step, Unless Otherwise Indicated) |
| Step 1 | Notice of Intent (NOI) and Pre-Application Document (PAD), Request to use TLP or ALP | 5-5.5 years before license expiration |
| Step 2a | Initial Tribal Consultation | 30 days after Step 1 |
| Step 2b | Comments on Request to use TLP or ALP, if requested | 30 days after Step 1 |
| Step 3 | Notice of Commencement (NOC) and Scoping Document 1 (SD1), Commission Decision on use of TLP or ALP | 60 days after Step 1 |
| Step 4 | Scoping meeting/Site visit | 30 days after Step 3 |
| Step 5 | Comments on PAD and SD1, Study Requests | 60 days after Step 3 |
| Step 6 | Proposed Study Plan, Commission Issues Scoping Document 2 (SD2), if necessary | 45 days after Step 5 |
| Step 7 | Study Plan Meeting | 30 days after Step 6 |
| Step 8 | Comments on Study Plan | 90 days after Step 6 |
| Step 9a | Revised Study Plan for Commission Approval | 30 days after Step 8 |
| Step 9b | Agency Comments on Revised Study Plan | 15 days after Step 9a |
| Step 10 | Study Plan Determination | 30 days after Step 9a |
| Step 11a | No disputes are filed or Notice of Study Dispute is file | Proceed to Step 14 within 20 days |
| Step 11b | Mandatory Conditioning Agencies File Notice of Study Disputes | 20 days after Step 10 |
| Step 12a | Study Dispute Resolution Process Initiated | |
| Step 12b | Selection of Study Dispute Panel | 20 days after Step 11b |
| Step 12c | Dispute Resolution/Panel Recommendation | 50 days after Step 11b |
| Step 13 | Determination on Study Dispute | 70 days after Step 11b |
| Step 14a | First Season Studies; Initial Study Report | pursuant to approved study plan, or no later than one year after study plan approved |
| Step 14b | Study Meeting | 15 days |
| Step 14c | Meeting Summary | 15 days |
| Step 14d | Disagreement with Meeting Summary | 30 days |
| Step 14e | Responses to Disagreements with Meeting Summary | 30 days |
| Step 14f | FERC Resolution of Disagreement; Amendment of Study Plan if appropriate | 30 days |
| Step 15 | Second Season of Studies, and Updated Study Report | pursuant to approved study plan, or no later than two years after study plan approved |
| Step 16 | Applicant's Preliminary Licensing Proposal | no later than 150 days before application |
| Step 17 | Comments on Applicant's Preliminary Licensing Proposal; Additional Study Requests | 90 days |
| Step 18 (post-filing activity) | License Application | no later than two years before expiration of applicant's license |
| Step 19a | Public Notice of Application | 14 days |
| Step 19b | FERC Decision on Outstanding Requests for Additional Information (AIR) | 30 days after Step 18 |
| Step 19c | Satisfaction of AIR | 90 days after Step 18 |
| Step 20 | Notice of Acceptance and Ready for Environmental Analysis (REA) | 60 days after Step 19a after satisfaction of AIR, etc. (30 days after License Application, or longer) |
| Step 21a | Comments on REA; Interventions; Preliminary Terms and Conditions; Applicant files for Water Quality Certification | 60 days |
| Step 21b | Reply to Comments on REA | 45 days |
| Step 22a | FERC issues non-draft Environmental Assessment (EA) | 120 days after Step 21a |
| Step 22b | FERC Issues draft EA or draft EIS | 180 days after Step 21a |
| Step 23a | Comments on non-draft EA | 30-45 days after Step 22a |
| Step 23b | Comments on draft EA or draft EIS | 30-60 days after Step 22b |
| Step 24 | Modified Terms and Conditions | 60 days after Step 23a or 23b |
| Step 25 | Commission Issues Final EA or EIS | 90 days |
| Step 26 | Final License Order | upon completion of all previous Steps |
See 104 FERC ¶ 61,109 (2003).
See 18 C.F.R. § 5.3(a)-(b). The contents for a request for authorization are provided in sections 5.3(b)-(f).
See 18 C.F.R. § 5.3(e).
As of July 23, 2005, the PAD will also be required of any subsequent TLP or ALP.
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