The FERC staff issued a draft Environmental Assessment (DEA) today for the 207.3 MW Saluda hydroelectric project on the Saluda River in Lexington, Richland, Newberry, and Saluda counties, South Carolina.
In this paper, I discuss how we on the Commission staff use economic principles to evaluate relicense proposals and how we use the results of our economic and environmental studies to choose the option that we think gives the greatest benefit to the public. I'll describe the two kinds of project changes applicants often propose--environmental enhancements and power improvements. And I'll talk about how we decide among the applicants' proposals and alternative proposals that we, the agencies, and the interveners make: the baseline we use to compare them, how many alternatives we consider, and the three methods we use. After this, I'll give you two examples of choosing among relicense proposals: this way, you'll see how we apply the method we use the most and what difficulties we face in making these choice. This paper is and outline instead of a detailed manual. It's intended both for us and for those of you outside the Commission. When we evaluate relicense applications, this paper will help us organize our studies. If you are involved in relicensing outside the Commission, I think this paper will help you in two ways: you'll understand better how we look at relicense proposals and you'll be able to make a better case for the proposal you think gives the greatest benefit to the public.