Chapter 4 - Deregulation and Project Related Lands Sales: Implications for Shoreline Protection

Energy deregulation has significantly changed the landscape for land protection for many projects. Though FERC views 200 feet as an appropriate boundary to review for land protection during relicensing, in many cases the project boundary is only the high water mark with the Licensee possibly owning some or all of the shorefront lands. In theory relicensing is an opportunity to review the project boundary and possibly expand it to protect identified resource values. Knowing this, utilities with greater frequency are transferring their land ownership prior to the sale to a non-generating business entity. The utility in turn may claim they no longer own the lands around a project and could not afford to purchase them for shoreland protection. FERC and the states have been reticent to stop this "shell-game" practice. A number of NGOs have contended that the Licensee still has the obligation to protect shorefronts, especially when they sold these lands knowing their upcoming legal obligations. To date, there are no case studies that shed light or offer precedence over this practice. Following are some examples of land transfers in anticipation of potential licensing obligations. At this juncture, treat such lands as a viable and cost effective option for the Licensee to use to meet any shoreline protection obligations.