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Prepared Witness Testimony The House Committee on Energy and Commerce
Comprehensive National Energy Policy
Subcommittee on Energy and Air Quality
Mr. J. Mark Robinson
Summary of Testimony The Commission currently regulates over 1,600 hydropower projects at over 2,000 dams pursuant to Part I of the Federal Power Act (FPA). Those projects represent more than half of the Nation's approximately 100 gigawatts of hydroelectric capacity and over five percent of all electric generating capacity in the United States. Hydropower is an essential part of the Nation's energy mix and offers the benefits of an emission-free, renewable energy source. The Commission is in the midst of or will be processing the 218 relicense applications being filed this decade. These projects include many large capacity and complex projects, and have a combined capacity of about 22 gigawatts, or 20 percent of the Nation's installed hydroelectric capacity. The Commission is faced with the challenge of licensing these projects in a reasonable time frame, while complying with statutory requirements under the jurisdiction of a host of federal and state agencies. Dependable and affordable hydroelectric energy requires a licensing process that is efficient and fair. As the Commission begins 2003, its hydropower staff is focused on pursuing various initiatives to meet current challenges, including a comprehensive rulemaking to reform the overall licensing process. The proposed rulemaking introduces a new streamlined process that will increase the efficiency and timeliness of licensing hydroelectric projects under its jurisdiction, while balancing stakeholder interests and improving the quality of decision-making. Title III of Chairman Barton's legislative discussion draft would amend Sections 4(e) and 18 of the FPA to provide applicants for hydroelectric licenses the opportunity to propose alternatives to mandatory conditions and fishway prescriptions. I believe that greater interaction between the resource agencies and the licensees in the development of environmental measures, which this legislation would encourage, will improve outcomes. Testimony Mr. Chairman and Members of the Committee: My name is Mark Robinson and I am the Director of the Office of Energy Projects at the Federal Energy Regulatory Commission (Commission). I appreciate the opportunity to appear before you to discuss Title III of Chairman Barton's legislative discussion draft relating to the Commission's hydropower licensing program. As a member of the Commission's staff, the views I express in this testimony are my own, and not those of the Commission or of any individual Commissioner. The Commission currently regulates over 1,600 hydroelectric projects at over 2,000 dams pursuant to Part I of the Federal Power Act (FPA). Together, these projects represent 57 gigawatts of hydroelectric capacity, more than half of all hydropower in the U.S., and over five percent of all electric generating capacity in the United States. Hydropower is an essential part of the Nation's energy mix and offers the benefits of an emission-free, renewable energy source. The Commission's hydropower activities generally fall into three categories. First, the Commission licenses and relicenses hydroelectric projects. Relicensing involves projects that originally were licensed 30 to 50 years ago. The Commission's second role is to manage hydropower projects during their license term. This post-licensing workload has grown in significance as new licenses are issued and as environmental standards become more demanding. Finally, the Commission oversees the safety of licensed hydropower dams. This program is widely recognized for its leadership in dam safety. My testimony today will provide brief overviews of the current hydroelectric licensing activity and the licensing process. I will then focus on Title III, Section 3001, of the proposed legislative draft. I. Current Hydroelectric Licensing Activity The Commission will process 218 relicense applications this decade. These projects include many large capacity and complex projects, and have a combined capacity of about 22 gigawatts, or 20 percent of the Nation's installed hydroelectric capacity. New opportunities to balance competing resources Relicensing of projects, upon expiration of the current license, is of particular significance because it involves projects that originally were licensed up to 50 years ago. In the intervening years, enactment of numerous environmental, land use, and other laws, as well as judicial interpretation of those laws, has greatly affected the Commission's ability to control the timing and conditions of the licensing process. Under the standards of the FPA, projects can be authorized if, in the Commission's judgment, they are "best adapted to a comprehensive plan" for improving or developing a waterway for beneficial public purposes, including power generation, irrigation, flood control, navigation, fish and wildlife, municipal water supply, and recreation. The Electric Consumers Protection Act of 1986 (ECPA) amended the FPA to require the Commission to give "equal consideration" to developmental and non-developmental values. Integrating need for power and stakeholder concerns The Commission integrates, and weighs the concerns of, the licensee, resource agencies, non-governmental organizations (NGOs), tribes and other members of the public in its licensing process to ensure that relicensed projects are consistent with the public interest. Toward this end, the Commission also considers the need for sustainable power provided by these projects. While the Commission's responsibility under the FPA is to strike an appropriate balance among the many competing developmental and environmental interests, as required by the public interest standards of Sections 4(e) and 10(a) of the FPA, various statutory requirements give other agencies a significant role in licensing cases. Several entities have mandatory authorities that limit the Commission's control of the cost and time investments for licensing. For example, Section 4(e) of the FPA authorizes federal land-administering agencies to provide mandatory conditions for projects located on federal reservations under their jurisdiction. Further, Section 18 of the FPA gives authority to the Secretaries of the Departments of the Interior and Commerce to "prescribe" fishways. And, Section 401(a)(1) of the Clean Water Act precludes the Commission from licensing a hydroelectric project unless the project has first obtained state water quality certification, or a waiver thereof. The Commission also must ensure compliance with other statutes, including the Coastal Zone Management Act, Endangered Species Act (ESA), Federal Land Policy and Management Act, Wild and Scenic Rivers Act, National Historic Preservation Act, and Pacific Northwest Electric Power Planning and Conservation Act, each with its own procedural and substantive requirements. Compliance with all these requirements involves a multitude of different processes ancillary to licensing, which has lengthened the time required to obtain a license. Complexities and regional variation in relicenses Primary issues being addressed at those 218 projects with applications for relicensing filed this decade vary by region, but include power, water use, fish passage, endangered species, recreation, shoreline management, reservoir level fluctuation, and instream flows. Water quality and cultural resources are concerns in all regions. The projects are distributed about equally between the eastern and western United States, but are concentrated in the Northwest and Southeast regions. Many of the projects will involve more than one state, and in a few instances, Canada, in the licensing process. Each governing entity is likely to expand the scope of concerns and regulatory goals that must be considered in licensing. Following is a discussion of the primary complexities in this decade of relicensing, by region. In the Southeast, projects have many large reservoirs with considerable shoreline area. For example, in 2005, Alabama Power Company will be filing applications to relicense nine projects in the Coosa River Basin with a combined capacity of 1,160 MW. These projects have 103,000 acres of reservoir area with 2,000 miles of shoreline. Another example is Duke Power Company's Catawba-Wateree Project with a capacity of 841 MW, whose filing for relicensing is due in 2006. The project has 11 reservoirs and over 1,700 miles of shoreline. Therefore, shoreline management can be expected to be a major issue in relicensing, and numerous waterfront property owners and other water users can be expected to participate in the licensing process. Hydropower issues in the northwestern United States and California often concern federally listed threatened or endangered salmonids (salmon, trout, and char). Most relicensing proceedings in these regions require formal consultation with resource agencies under the ESA. At the beginning of 1996, the National Marine Fisheries Service (NMFS) had listed four strains (geographically distinct groups of a species) of salmonids. Today, there are 33 strains of salmonids listed by NMFS and the U.S. Fish and Wildlife Service (USFWS). There is a significant overlap in the range of the listed salmonid strains and the concentration of hydropower sites in the Northwest and California (e.g., about 130 licensed projects in these regions are located within the geographical boundaries of listed chinook salmon and steelhead trout). Thus, these listings, often requiring formal consultation under the ESA, have added considerable complexity to the processing of relicensing applications. In addition to the complexities associated with listed salmonid species, California has significant issues related to conflicts in water use (e.g., municipal water supply, irrigation, flood control, power, recreation, and fisheries). For example, in 2005, we expect a relicense application for the Oroville Hydroelectric Project. The reservoir for this project, Lake Oroville, is also the principal water storage facility of the State Water Project, which conserves and delivers water to over two-thirds of California's population and almost 1,000,000 acres of farmland. In the northeastern U.S., a variety of issues prevail, ranging from re-establishment of runs of Atlantic salmon and clupeids (i.e., shad and alewife) to water quality issues. Recreation use of project waters and riparian areas is a primary issue in this region. In addition, two large projects on the Canadian border are undergoing relicensing during this decade, the 912 MW St. Lawrence-FDR (filed in 2001) and the 2,755 MW Niagara (to be filed in 2005) Hydroelectric Projects, which complicates the relicensing process in resolving cross border issues like American Eel protection. Measures to efficiently process projects Staff at the Commission has undertaken numerous measures to efficiently process these complex projects. Toward that end, the Commission has held hydropower licensing status workshops to move stalled cases, held licensing workshops with state agencies on integrating state processes, introduced electronic filing, implemented an improved ex parte communications rule, and provided numerous guidance documents for stakeholders on our web page, in addition to proposing a new hydropower licensing process, developed with sister agencies, in a recent rulemaking discussed below. II. The Commission's Licensing Process The traditional licensing process The Commission currently uses two different processes in licensing: the "traditional" process and the "alternative" process. Under the traditional process, three to three and one-half years prior to filing an application, license applicants must consult with federal and state resource agencies, affected land managing agencies, Indian tribes, and state water quality certifying agencies to provide these entities with information describing the proposed project. The applicant must also conduct studies necessary for the Commission staff to make an informed decision on the application. Under the Commission's detailed regulations concerning prefiling consultation and processing of filed applications, the formal proceeding does not begin until the license application is filed with the Commission. As a result, the Commission staff does not generally participate in pre-filing consultation under the traditional process. After an application is filed, two years prior to license expiration, the federal agencies with responsibilities under the FPA and other statutes, the states, Indian tribes, and other participants have opportunities to request additional studies and provide comments and recommendations. Federal agencies with mandatory conditioning authority also provide their conditions. The Commission staff may ask for additional information that it needs for its environmental analysis. All of this information is incorporated into the Commission staff's environmental review under the National Environmental Policy Act (NEPA) upon which the Commission bases its licensing decision. Because of the sequential nature of the traditional process and the frequent need to gather further information after the application is filed, the traditional process can be lengthy. The median processing time after application filing is 47 months. The alternative licensing process In an effort to improve the efficiency and the timeliness of the licensing process without sacrificing environmental protection, the Commission embarked on a journey of administrative and regulatory licensing reform. Beginning in 1997, the Commission altered its regulations to provide for an alternative to the traditional licensing process. The alternative licensing process adds efficiency by combining the pre-filing consultation process with the environmental review process under NEPA. Using this process, participants, and in some cases Commission staff, work collaboratively prior to the filing of the application to develop, in most cases, a preliminary draft NEPA document. Participants in the alternative licensing process generally anticipate that their efforts will culminate in a settlement agreement. The alternative process has been successful in reducing the post-filing processing time to a median of 16 months. Integrated licensing process Even in light of successes associated with the use of the alternative licensing process, stakeholders have continued to develop additional procedural modifications to the more formal traditional process that would further improve the efficiency and timing of licensing while maintaining environmental protections. In 2001, senior managers from the Commission staff and the Departments of the Interior, Commerce, and Agriculture formed the Interagency Hydropower Committee. This committee developed a proposal for an integrated licensing process. Another integrated licensing process proposal was developed by the National Review Group (NRG), a multi-stakeholder forum consisting of representatives from the hydropower industry and NGOs. An integrated licensing process would integrate an applicant's prefiling consultation with resource agencies, Indian tribes, and the public into the Commission staff's NEPA scoping process. This approach, however, would differ from the alternative licensing process in several respects, such as ensuring Commission staff involvement at all stages, and better integrating the licensing process with the actions and processes of other federal and state agencies and Indian tribes. The Commission is now engaged in an open rulemaking proceeding whereby the Commission is seeking public input on a new licensing process. Our open proceeding allows for public and tribal input, both before and after the issuance of a Notice of Proposed Rulemaking. This proceeding also allows for joint drafting of rule language by Commission staff and the federal agencies with mandatory conditioning authority under the FPA. This rulemaking proceeding was initiated in September 2002, when the Commission and the federal agencies with mandatory conditioning authority under the FPA issued a notice requesting comments on the need for a new licensing process. The notice also established a series of open regional public and tribal forums to discuss issues and proposals, including proposals for an integrated licensing process. Following the regional forums and submission of written comments in early December 2002, the Commission hosted public drafting sessions in which discussion of the results of the regional forums and comments was followed by a broadly-based collaborative effort to develop consensus recommendations on an integrated licensing process and, where possible, develop preliminary draft regulatory text. Subsequent to the December public drafting sessions, the Commission staff and staff from the federal agencies with mandatory conditioning authority worked together to develop regulatory language for a proposed rule. Based on written and oral comments and the public drafting sessions, the Commission issued a Notice of Proposed Rulemaking on February 20, 2003. In that notice, the Commission circulated for public comment a proposal for an integrated licensing process. The new integrated process would be added to the traditional and alternative processes as an option. The integrated process would be the default. The Commission's proposed integrated approach improves both the efficiency and timeliness of the licensing process by merging pre-filing consultation with the Commission's NEPA scoping; enhancing consultation with Indian tribes; improving coordination of processes with federal and state agencies, especially those with mandatory conditioning authority; increasing public participation during pre-filing consultation; and developing a study plan and schedule, including mandatory, binding study dispute resolution. Further, unlike the more sequential traditional licensing process, an integrated process would allow for these multiple federal and state processes to take place simultaneously in a more parallel fashion. With these features, the Commission's proposed process should make it much more likely that the Commission, federal agencies with mandatory conditioning authority, and state agencies or Indian tribes with water quality certification authority obtain all the information they need to carry out their respective statutory responsibilities by the time the application is filed. We believe that the efficiency and timeliness of the proposed integrated licensing process will reduce costs associated with the license application process by minimizing the redundancy and waste caused by the often duplicative information needs of the Commission and the various federal and state agencies associated with the hydroelectric licensing process. To obtain further public input on the proposed rule, we are currently engaged in a series of six regional workshops. These regional workshops, co-hosted by Departments of the Interior, Commerce, and Agriculture, will be geared toward members of the hydropower community, federal and state resource agencies, environmental organizations, Indian tribes, and the general public. As part of the workshops, Commission staff will facilitate a session where workshop participants will be asked to identify and discuss key issues associated with the proposed process. Following conclusion of the regional workshops, the Commission will again host a four-day public drafting session at the end of April to begin developing final rulemaking language. At the conclusion of the public drafting session, Commission staff, with the assistance of the federal agencies with mandatory conditioning authority, will draft the final rule language. I anticipate that the Commission will issue a final rule codifying a new integrated licensing process in July of this year. III. Comments on Title III of the Legislative Discussion Draft Section 3001 would amend Section 4(e) [mandatory conditions] and Section 18 [fishway prescriptions] of the FPA. Section 3001(a) would amend FPA Section 4(e) to provide that, where an applicant for a hydroelectric license proposes an alternative to a mandatory condition proposed by the Secretary with supervision over a reservation on which a hydropower project is located, the Secretary shall accept the alternative condition, if the Secretary determines that the alternative would provide adequate protection of the reservation and will either cost less or result in improved project generation as compared to the original condition. In making the decision, the Secretary must give equal consideration to power and other developmental purposes as well as preservation of environmental quality. Further, if the Secretary does not accept an alternative condition and the Commission finds the Secretary's original condition to be inconsistent with law, the Commission could refer the dispute to the Commission's Dispute Resolution Service for an advisory opinion. The provisions of Section 3001(b), which amends FPA Section 18, basically mirror those for mandatory conditions but provide that the basis for the Secretary of the Interior or Commerce's decision on accepting an alternative fishway prescription is if it would be no less protective of the fish resources than the fishway initially prescribed. As discussed previously, the FPA requires that the Commission can authorize projects that are best adapted to a comprehensive plan for improving or developing a waterway for beneficial public purposes, including power generation, irrigation, flood control, navigation, fish and wildlife, municipal water supply, and recreation, giving equal consideration to developmental and non-developmental values. Aligning the criteria that the agencies must use to more closely parallel the Commission licensing criteria under the FPA should act to minimize conflict between mandatory conditions and the Commission's conditions recommended to reflect the public interest. For example, in the order relicensing the Holyoke Hydroelectric Project (MA), the Commission required measures to enhance fish passage set forth in the water quality certification and fishway prescriptions, even though, in the Commission's judgement, a number of the conditions entail measures that are very costly in light of their benefits, and therefore do not reflect a balancing of developmental and environmental considerations. Presumably, the proposed legislation would help to minimize this type of conflict. I support the idea of greater interaction between the resource agencies and the licensees in the development of environmental measures, which Section 3001 would encourage. I believe that both the language for mandatory conditions and fishway prescriptions would add a degree of accountability that currently does not exist. As Congress considers any legislation, however, it should be careful to ensure that any procedures that could add time or expense to the process are justified by improved outcomes. Thank you. I will be pleased to answer any questions you may have.
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