Specific regulations guiding implementation of the Federal Power Act can be found in the Code of Federal Regulations (CFR) Title 18 parts 1-399. Regulations may be changed by FERC following due process, so review the latest version of the CFRs. Not surprisingly, variable interpretation of the regulations by FERC has created an inconsistent history on how shoreline management and protection related regulations are implemented. How it will be interpreted in your case depends on how prepared and aggressive you are in the process. The more pertinent regulations that permit FERC to require a licensee to acquire or protect lands around a hydro project follow:

2.2.a Lands for Recreation -18 CFR 2.7 This regulation states that: "reasonable expenditures by a licensee for public recreational development pursuant to an approved plan, including the purchase of land, will be included as part of the project cost? The Commission expects the licensee to assume the following responsibilities: (a) To acquire in fee and include within the project boundary enough land to assure optimum development of the recreational resources afforded by the project." The key here is to understand that FERC can require the license applicant to either provide its own land or to include "reasonable" expenditures for purchasing sufficient land to assure optimum development of recreational resources. It is not mandatory for FERC to require a Licensee to prepare a shoreline management plan or actually protect certain lands. But FERC has an obligation if the proper evidence exists.

• Make sure that development of a shoreline management plan becomes a requirement of the license.

Be prepared to show how, why and where reasonable shoreline protection can be accomplished on reservoir and downstream river land that are directly related to the project, such as a tailrace fishery or boat take-out for a trip that originates at the dam. For economic reasons, most opportune and germane are lands owned by the Licensee or its subsidiaries. Do not be mislead by the frequent falsehood that recreational resources are limited to boat launch or picnic table sites. The ambience and opportunities offered by an undeveloped shoreline can and frequently are a project "recreational resource."

2.2.b Other Agency Consultation - 18 CFR 4.38 or 16.8 These regulations outline the requirements for applicants to consult with federal and state resource management and planning agencies and affected Indian tribes regarding the project's compliance with applicable comprehensive management plans. If FERC approved comprehensive plans exist that outline the need for shoreline protection relevant to the Project, make sure both you and the agencies bring them to the forefront in the process. If at all possible get the agencies to revise these plans in advance of relicensing to include project related shoreline protection needs. Also bring forth relevant local plans that may exist.

• Ensure that other agencies' plans, guidance, and rules relevant to shoreline protection are included in the process.

2.2.c Project Boundary - 18 CFR 4.41(h)(2) and 4.51(h)(2) These regulations require applicants to submit a map showing the project boundary enclosing all project works and other related features. Regulations 4.41(h)(2)(i)(B) and 4.51(h)(2)(i)(B) state that the project boundary around impoundments and reservoirs must be located no more than 200 feet from the normal maximum surface elevation except where additional lands may be required for public recreation, shoreline control, or protection of environmental resources. You should request a copy of a map showing the project boundary and shorefront land ownership at the beginning of the process in the ?Initial Consultation Document.? This map should also be part of the Licensee?s application submitted as Exhibit G later in the process and provide the following information: "(2) Project boundary. The map must show a project boundary enclosing all of the principal project works and other features? The boundary must enclose only those lands necessary for operation and maintenance of the project and for other project purposes, such as recreation, shoreline control, or protection of environmental resources (see paragraph (f) of this section (Exhibit E)). Existing residential, commercial, or other structures may be included within the boundary only to the extent that underlying lands are needed for project purposes (e.g., for flowage, public recreation, shoreline control, or protection of environmental resources)..." This information should show you where the Licensee's lands are currently located. It provides guidance on what lands are in current project boundaries that may need additional protective mechanisms or those outside that should be protected. Use this information to develop site-specific land protection needs based on recreation and protection of environmental resource needs. Develop your case for shoreline protection to be multi-faceted, not single issue, whenever the facts permit.

2.2.d Environmental Report - 18 CFR 4.41(f) and 4.51(f) These regulations require applicants of new and existing projects (respectively) to include an environmental report, Exhibit E, in the license application. Exhibit E must include descriptions of fish, wildlife, and botanical resources, historic and archeological resources, recreational resources and a report on land use. The report must also describe the impacts the project will have on these resources and any mitigation measures proposed. Applicants for new or major modified projects must include with the Exhibit E-

"A provision for a shoreline buffer zone that must be within the project boundary, above the normal maximum surface elevation of the project reservoir, and of sufficient width to allow public access to project lands and waters and to protect the scenic, public recreational, cultural, and other environmental values of the reservoir shoreline" 18CFR4.41(f)(7)(iii).

Applicants for existing hydropower projects must include-

"A statement including an analysis of costs and other constraints, of the applicant's ability to provide a buffer zone around all or any part of the impoundment, for the purpose of ensuring public access to project lands and waters and protecting the recreational and aesthetic values of the impoundment and its shoreline" 18CFR4.51(f)(6)(iv).

Relevant parts of Exhibit E studies and possible questions to pursue when developing a case for shoreline protection include:

• Water Use and Quality: Do the project waters meet state water quality standards that apply to the project, and if not, do activities on reservoir shoreline either contribute to the problem directly or cumulatively? Would further development of the shoreline increase an existing water quality problem or create one? For example are low dissolved oxygen levels or eutrophication an identified water quality problem in the reservoir?

• Wildlife and Botanical Resources: Has the applicant included in the Exhibit E a description of the impacts of the project on fish, wildlife, and botanical resources? Does a thorough inventory of wildlife and botanical resources exist? Are there federal or state listed rare and threatened species or exemplary ecological communities thriving on these shorelines? Do current project boundaries and resource management plans actually provide long-term protection of the wildlife and botanical resources identified? If not, how should they be modified to protect these resources? This is an excellent opportunity to provide site-specific information on which and how much land should be protected, since FERC frequently seeks a site-specific rationale for land protection.
• Historical and Archeological Resources: Does the shoreline encompass Native American sites or other historical resources that development could threaten? Is a plan proposed to protect the required lands with an adequate buffer?
• Geology and Soils: Do areas with existing or potential erosion or slope instability influenced by reservoir water level manipulations or discharges exist along the reservoir or in impacted downstream reaches? Would changes in land-use further increase the problem?
• Recreation Resources: This category contains much opportunity for developing a case for shoreline protection. You should ask - is an undeveloped shoreline one of the key regional amenities for recreational pursuits such as boating, canoeing, camping, hiking and other recreation? How rare or threatened are undeveloped shorelines for recreation in the region? Has an adequate case been presented for the value and increasing rarity of recreation on primarily undeveloped shorelines?
• Visual Resources: Is one of the key visual and aesthetic values of the lands surrounding the project reservoirs the undeveloped shoreline? Is this resource identified and protected?
• Land Use and Comprehensive Plans: You should ask: is there an accurate depiction of uses of land and resources adjacent to the project using maps, air photos, and so on, that clearly delineate the land ownership, project boundary, and boundaries of public lands? Is the Licensee presenting clearly what shoreline lands they may own through either direct or indirect subsidiary holdings that are not currently in project boundaries? Has the Licensee not only identified relevant planning and zoning regulations to the shorelines, but also what the potential build out is under current zoning? Has the Licensee included an accurate analysis of costs and other constraints, to provide a buffer zone around all or any part of the impoundment, for the purpose of ensuring public access to project lands and waters and protecting the recreational and aesthetic values of the impoundment and its shoreline? Have they indicated that they cannot purchase additional shoreline to protect identified resources, when in reality their lands are held by another holding company within the same corporation?

2.2.e Overview FERC has regulations under 18 CFR parts 4-125 that prescribe the types of information a licensee must provide in its application. However, FERC commonly accepts minimal information unless resource agencies or interest groups make a case for a more detailed record.

• Make sure a complete, accurate, and proper record is created during the relicensing process for land protection.

This is your opportunity in the process to request that the Licensee develop the appropriate information base that will be part of the license application record. Go to the study identification and design meetings and make your request for relevant information and how it should be collected. Should the licensee fail to create or provide an adequate record, request it during the Additional Information Request stage (See Hydropower Reform Coalition Relicensing Toolkit). Research and present the information you put together. It cannot be emphasized enough to make sure a record evolves that illustrates:

1) How shoreline protection is essential to protect specific natural resource and recreation values; and

2) The development threats that may occur over the term of the license.

Whenever possible show reasonable, cost-effective alternatives to how the Licensee can meet shoreline protection goals. Otherwise, FERC may accept your argument for land protection but then deny your recommendations as being too costly under their "equal consideration" mandate which allows them to consider the cost effectiveness of protecting additional lands. Also, beware of the Licensee suggesting that public monies should be used to purchase needed land protection to meet the Licensee?s shoreline protection obligations. The Licensee should pay a portion of the cost associated with purchasing additional lands. The Licensee should not be paid for their immediate shoreline with public monies.

The following condensed example illustrates the impact a coalition of environmental organizations had on shoreline protection for a project in northern Maine. Recreational and land use data asked for during the Exhibit E process was not provided by the Licensee, but was subsequently provided by several environmental organizations in all relevant filings. FERC utilized much of the environmental organizations' arguments in its Final Environmental Impact Statement and license to justify its requiring the Licensee to develop a conservation easement on all of the undeveloped lands it owned around the whole impoundment. Note the critical elements. The environmental organizations? case quantitatively shows that 1) the Licensee?s argument for existing zoning does not provide sufficient lands protection, 2) considerable shoreline development is a threat, 3) the zoning laws can change over the course of the license, 4) a reasonable and cost effective alternative exists, and 5) that one of the project resources is especially at risk. An excerpt from a submittal by the coalition:

"The reservoir of concern is part of a nationally recognized multi-day backcountry canoe trip used extensively by the public (supporting documentation was provided). The Licensee should document the importance of this recreational resource and the role the impoundment?s undeveloped shoreline provides. Loss of access to the impoundment shoreline through development is the pivotal issue. The Licensee presents the case that the Maine Land Use Regulatory Commission?s (LURC) zoning regulations will protect the shoreline. LURC has provisions for the development of binding Lake Concept Plans developed voluntarily by the landowner (Maine's LURC Amendment of the Comprehensive Land Use Plan - Adopted June 7, 1990). The Licensee has not submitted such a plan. Our calculations (calculations attached)) show 348 new residences under LURC zoning could be built on the owner?s impoundment reservoir lands, and this does not include the fact that LURC Zoning could be changed during the course of the 30 year license to permit further development. This would essentially privatize the shoreline, making it inaccessible to the public, and deter from its unique backcountry recreation value. The Licensee's lands on these reservoirs have been through 3 different owners in the last few years, so the possibility of sell off and development is more than theoretical. A recent Northern Forest Land Council Study (attachment) shows that the majority of subdivisions in the region occur on waterfront. Finally, the Licensee owns the land, therefore the cost of protecting these critical lands is not cost prohibitive."

The environmental organizations' efforts resulted in the project boundary being changed from the high water mark to 200 feet above the high water mark and a conservation easement around the impoundment being granted to the State of Maine.

2.1 Federal Power Act

Page 6 of 26

2.3 License Issuance