The Sullivan Creek Project was constructed by the Inland Portland Cement Company in 1909, and was used to generate power until 1956, when the Project’s wood flume was damaged. The Project is located on Sullivan Lake, Outlet Creek and Sullivan Creek, a tributary of the Pend Oreille River. The licensed project has not operated for decades. For the most part, the project is used to modify and control flows on other projects downstream. The license for this project expires in 2008 and in place of an Notice of Intent (NOI) to re-apply, the PUD indicated that it does not intend to relicense the project. Once the two year competition deadline had passed in 2006, the PUD filed a petition to the

asserting non-jurisdiction. American Whitewater, US Forest Service and the Kalispel Tribe weighed in against this petition. Allowing the licensee to just walk away from this project raises a multitude of problems, many of which could set national precedents regarding FERC jurisdiction, their responsibility to require project decommissioning, and to provide a plan for license surrender that doesn't just dump the project and its impacts on the river in the hand's of federal and state agencies. It may also set precedents for other utility developers to just walk away if a project doesn't meet expectations or is no longer wanted. FERC issued its order in late August finding that the licensee can end its license with no further action required. American Whitewater, the US Forest Service and the Washington Department of Fish and Wildlife have all filed petitions for rehearing on these important issues. Attached. AW challenges the Order’s conclusions that (1) the Commission does not have jurisdiction over the Project despite the fact that the Project was constructed and continues to be operated and maintained for the purpose of power generation and is located on federal lands (Colville National Forest); and (2) no further action is required on the part of the Commission or Licensee upon expiration of the existing license in 2008.