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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. Leon Szeptycki
My name is Leon Szeptycki, and I am the Eastern Conservation Director and General Counsel of Trout Unlimited. I am testifying today on behalf of TU's volunteer members around the country. Trout Unlimited ("TU") is a nonprofit organization with more than 125,000 members around the country organized into approximately 450 local chapters. Our mission is to conserve, protect, and restore North America's trout and salmon fisheries and their watersheds. Over the last ten years TU volunteers and staff have participated in numerous hydroelectric relicensings from California to Maine. Numerous TU chapters have as their home waters a river affected by one or more hydroelectric facilities, and the impacts of those facilities are almost always the primary focus of those chapters' volunteer activities. TU agrees that reforms to the hydroelectric relicensing process are needed, but we do not agree that legislative changes to the Federal Power Act are necessary or appropriate to bring about those reforms. The last ten years have seen a major evolution of hydroelectric relicensing under the Federal Power Act. The trend has shifted strongly away from traditional, adversarial relicensings, towards collaborative settlements that serve the interests of all the participants. As that trend continues, we are getting better at reaching settlements more quickly and more efficiently. To further promoted efficient collaborative settlements, FERC is currently working on rules that would make the relicensing process more streamlined and that would further promote collaborative settlement as the preferred mode of relicensing. The hydropower industry and the conservation community are both actively engaged in this rulemaking, and we are very optimistic that the final rule will be one that improves the process and that all sides support. Trout Unlimited opposes H.R. 1013, which has been
incorporated into the discussion draft energy bill as Title III (I will refer to
the proposal throughout as H.R. 1013). H.R. 1013 would create more red
tape and delay and would severely reduce protections for rivers and fisheries
impacted by hydroelectric generation. We also have a deep concern that
H.R. 1013 would derail existing efforts to reform the relicensing process and
cut short the current trend towards collaborative settlements of relicensing
cases. 1) TU has used the
existing process to work cooperatively with some license applicants to improve
dam operation for valuable fisheries. TU has been involved in some of the earliest and largest settlements of relicensing cases. To name just two early examples, our Idaho and Montana councils were at the center of a deal with what is now Avista to relicense a series of dams on the Clark Fork River. In the East, our Maine council played an active role in reaching a deal to relicense dams then owned by Central Maine Power on the Rapid River, one of the state's best brook trout fisheries. In these settlements, along with others we have worked on in the last five years, the applicant was able to work collaboratively with anglers, boaters, local communities, state agencies, and federal resource agencies to obtain their license promptly and cost effectively. The deals reached in those cases preserved the profitability of the projects while at the same time enhancing river health and the opportunities for river recreation. The road has been bumpy at times, and not all collaborative settlements have worked as well as others. However, everyone involved in the process has learned a tremendous amount about how to make collaborative relicensings work better, and are now implementing what they have learned. This body of knowledge is improving ongoing relicensings and influencing the current FERC rulemaking. A common feature of successful settlements has been the willingness of the applicant to sit down early in the process and receive input from all interested parties, including volunteers and community members. The willingness of the licensee to listen to the views of these concerned citizens on preliminary issues, most notably the studies that drive the relicensing process, ultimately paves the way for a smoother relicensing and a faster settlement. These relicensings can only settle if all participants understand, based on the studies done during the process, the impact of a settlement on their particular interest, be it fishing, recreation, or the ecological health of the river. TU has a particular concern about the need to facilitate the participation of volunteer community members in the process. Most of TU's participation in relicensings is driven by concerned volunteers who devote extensive hours to what are for them very intimidating proceedings. Relicensings have generally gone badly - taken
too long or gotten stalled out entirely - when applicants have refused to
listen to the views of stakeholders and take them into consideration.
People are unwilling to settle when they do not trust the information produced
by the process or when the information simply does not give them a basis to make
a sound judgment. 2) Collaborative
settlements are becoming more efficient, and are becoming the preferred mode of
hydropower relicensings. The use of collaborative settlement is increasing, and is producing positive results for applicants and for river health. In one of the first significant collaborative processes, parties were able to reach a settlement with Washington Water Power (now Avista) to resolve licensing issues for a multiple dam project on the Clark Fork River in Idaho. The settlement will allow the projects to function profitably and will provide a host of benefits for watersheds affected by the project. Most notably, over the life of the license more than $20 million will be spent to improve habitat in the basin for bull trout, cutthroat trout, and other species. Just last month, and at the other end of the spectrum in terms of magnitude, Pacificorp announced a settlement in a relicensing of a project on the American Fork River in Utah. The settlement, which included TU, the National Park Service, and the U.S. Fish and Wildlife Service, will allow the very small (one megawatt) American Fork project to operate until 2006, at which time it will be decommissioned. The agreement will restore river habitat on the American Fork for Bonneville cutthroat trout, recreational opportunities in the American Fork canyon, and opportunities for the public to enjoy the Timpanogos Cave National Monument. The collaborative licensing process is flourishing. Around the country licensees are reaching settlements that allow them to continue to function profitably and that bring significant benefits to the rivers that drive their turbines. In some cases, these settlements are reopening long closed-off spawning for habitat migratory fish such as salmon and steelhead trout. Other examples of successful settlements over the last several years include settlements with PGE on the Sandy River in Oregon, with PacifiCorp on the White Salmon River in Washington, with the City of Tacoma on the Cowlitz River in Washington, with Florida Power and Light on the Upper Kennebec River in Maine, and with New England Power and Gas on the upper Connecticut River in New Hampshire. Further evidence of the growing success of collaborative settlements comes from California. California is currently faced
with a flood of relicensings. Over the next 15 years hydroelectric
licenses for approximately 150 dams will expire in that state. The
California relicensings are overwhelmingly being done as collaborative
settlements. Applicants are pursuing collaborative relicensings, with the
goal of settlement, on the Pit 3, 4, 5 Project (Project No. 233), the Klamath
Project (Project No. 2082), the Stanislaus-Spring Gap Projects (Projects No.
2130, 2005, and 2067), and the Big Creek Projects in the Upper San Joaquin Basin
(extensive project numbers), to name just four. Moreover, two California
projects that were among the most protracted relicensings on FERC's books
recently reached settlements through collaborative negotiations. Both the
Rock Creek Cresta project and the Mokelumne project recently used the
collaborative licensing process to break logjams that had made those licenses
more than ten years overdue. 3) FERC has proposed new rules to improve the relicensing process, and H.R. 1013 would undermine that rulemaking and the trend towards negotiated relicensings. To further the momentum of these successful collaboratives, FERC is currently engaged in a rulemaking to improve the relicensing process. On February 20, FERC issued a draft rule that would create a new, default relicensing process know as the "Integrated Licensing Process," or ILP. The ILP incorporates many of the practices that have driven the most successful settlements, including early consultation between FERC, the applicant, resource agencies, and other parties; early, prefiling input from stakeholders and resource agencies on studies; better integration of NEPA analysis, the licensing process, and federal conditioning; and strict timetables. TU is particularly pleased that the new rules would appear to facilitate the early participation of citizen's groups in the relicensing process. While comments on the rule are not due for a month, and we do not yet know how various relicensing participants will react to all parts of the proposed rule, the proposal has great promise to accelerate the current momentum towards a more streamlined and collaborative process. In this context legislation is simply not needed.
The hydropower relicensing process is being reformed by its primary
participants, and H.R. 1013 would impede the progress towards reform. Currently
the balance of interests struck by the Federal Power Act drive license
applicants, the conservation community, recreational interests, and resource
agencies to negotiate because of the risks to all parties posed by the
traditional relicensing process and the benefits of the collaborative process.
H.R. 1013 would profoundly disturb this balance, and a would create a process so
favorable to project owners, and so unfavorable to the health of fisheries, that
applicants would have far less incentive to negotiate and to take the steps
early in the licensing process needed for meaningful settlement negotiations.
H.R. 1013 as now drafted would produce relicensings that take longer, cost more,
and fail to protect our nation's rivers and their fisheries. 4) Specific Problems with H.R. 1013. H.R. 1013 has three critical flaws. First, it creates additional procedures that will make relicensings lengthier and more cumbersome. Second, those additional procedures severely reduce the amount of environmental protections currently afforded rivers under the Federal Power Act. Third, the processes created by the bill are heavily weighted in favor of applicants and would tend to cut the public out of key parts of the conditioning process. a. H.R. 1013 would create delay and unneeded red tape. H.R. 1013 would add three significant steps to the process of federal conditioning under both section 4(e) and section 18 of the Federal Power Act. First, any applicant who proposes an alternative condition is entitled to a trial type hearing before the federal agency. This type of hearing would potentially consume huge amounts of time and resources. Second, the conditioning agency would be required to submit to FERC a written statement explaining the basis for its decision and demonstrating that the agency gave equal consideration to a variety of factors, including energy supply, cost, navigation, and flood control. This provision would create duplicative and wasteful effort, as FERC already spends a great deal of time in each relicensing examining these factors. Requiring the resource agencies to look at these factors also sets them up for failure, as they simply do not have the expertise or the resources to devote to these issues. Third, if the resource agency fails to adopt the applicant's proposed conditions, FERC can refer the matter to its Dispute Resolution Service, which must issue an advisory opinion within 90 days. Again, this simply would add more time and expense to the process, and is unnecessary in light of the strides that are currently being made towards negotiated settlements of these issues. To make it clear, I do not mean to suggest that the section 4(e) and section 18 conditioning process is not in need of improvement. For example, TU would have no objection to requiring a better administrative record and allowing all parties access to a streamlined appeal process. The procedures outlined in H.R. 1013 simply go to far. TU is particularly concerned about this aspect of the bill, because so much of our participation in hydropower relicensings is handled by volunteer members with limited time and, except in very rare cases, no money. Effectively run collaborative negotiations provide a real opportunity for input from volunteer citizens and the local community. Trial type hearings, cumbersome appeals, and FERC-run dispute resolutions tend to shut out these critical voices. b. H.R. 1013
reduces the environmental protections provided by sections 4(e) and 18. H.R. 1013 would substantially reduce the environmental protections current law provides for rivers affected by hydropower, and would result in a long term barrier to the health of those rivers. Sport fisheries, recreational opportunities, and aquatic health would all suffer. Section 4(e) and section 18 currently function to set the basic, minimum level of environmental protection that must be in place at hydropower projects. Section 4(e) requires conditions that are "necessary for the adequate protection and utilization" of the federal lands impacted by a project. Section 18 requires the construction, maintenance, and operation of fishways required by the Departments of Interior or Commerce. When it passed these provisions, Congress made the correct judgment that federal lands, rivers, and fisheries are public resources, and that federally licensed hydropower dams should include a minimum level of mandatory protection for those public resources. The core licensing provisions of the Federal Power Act require the balancing of power generation with other values. It is entirely appropriate, however, that this balancing be buttressed by certain basic levels of environmental protection. Ensuring that no dam degrade the core purpose of federal lands and requiring that every dam include some measure to allow fish to migrate should remain basic minimum safeguards. The issue of fish passage is one that is particularly important to the more than 125,000 trout and salmon anglers that belong to TU. Throughout the country countless fisheries have been impaired or even extirpated because of hydroelectric dams with inadequate fish passage. In New England, for example, power generating dams utterly destroyed the region's runs of Atlantic salmon, shad, and sturgeon. Maine once supported a robust commercial fishery for Atlantic salmon; now, even sport fishing for the tiny remnant population of this fish is forbidden. The single most significant cause of this decline are the hundreds of dams that impede fish passage on the state's rivers. Section 18 of the Federal Power Act is absolutely critical to restoring depleted fisheries and preserving those migratory fisheries that remain. The improvement of fish passage has created some of the most exciting conservation successes we have seen in recent years. On the Sandy River in Oregon, the Cowlitz and White Salmon rivers in Washington, the Kennebec River in Maine, and others, improved fish passage is making possible the restoration of entire watersheds and their fisheries. H.R. 1013 would alter the fundamental requirements of section 4(e) and section 18. The current statute requires agencies to set conditions that protect the core purposes of federal reservations and provide for fish passage. H.R. 1013 would require those agencies to demonstrate that they have given "equal consideration" to a host of other factors. This language, included in the amendments to both sections 4(e) and 18, represents a straightforward roll back of the protections of these important provisions. In addition, as discussed previously, the procedural burdens imposed by H.R. 1013 would fundamentally alter the balance of power in negotiations and the licensing process generally. The notion that cost, power generation, and these other factors play no role in the current conditioning process is simply not true. In the numerous licensings that are now being handled through multi-party collaborative processes, the cost concerns of license applicants, as well as the other concerns enumerated in H.R. 1013, shape the fishway requirements and other conditions on the license that become part of the settlement signed and supported by all the parties. This is the best and most efficient way of dealing with these issues and balancing the various demands place on the river. Dramatic legislative intervention in the way this process is evolving risks placing a club in the hands of license applicants, use of which may suddenly seem more attractive than negotiating a settlement. The committee should also be skeptical of the claim that fishway requirements and section 4(e) prescriptions are dramatically reducing available power by closing down otherwise profitable projects. Certainly, good fish passage costs money, and can affect the operations of a project. Although there have been cases where the need for fish passage has contributed to making a project unprofitable, that has only happened in cases where the projects have generated small amounts of power and been economically marginal to begin with. The most celebrated example of recent dam removal is an excellent illustration of this. The Edwards dam in Maine was a small, uneconomical project that had blocked passage upriver for more than 100 years. It was clear that fish passage was needed at the dam, and it was equally clear that, for such an economically questionable project it was cheaper to remove the dam than put in fish passage and keep generating. All the parties reached a negotiated settlement that opened up 18 miles of river to salmon, shad, stripers, alewives, and sturgeon, effectively bringing a major stretch of river back to life. Economical projects that generate meaningful amounts of electricity are simply not being compromised by sections 4(e) and 18. The proposed changes to section 18 would dramatically increase the chance that potentially major and economically valuable fisheries would be sacrificed to keep small, marginal projects operational. c. H.R. 1013
would cut the public out of key parts of the licensing process. All of the processes created by H.R. 1013 dramatically favor the applicant, and tend to cut the public out of critical phases of the relicensing process. H.R. 1013 would allow applicants to propose alternative conditions, which in turn would trigger the series of additional administrative processes discussed above. While other parties are not prohibited from proposing alternative conditions, only conditions proposed by the applicant are entitled to any procedural protections. Under H.R. 1013 the federal agency would not even be required to read conditions proposed by a citizens group or local community. This fundamental disparity is exacerbated by the nature of the various new procedures created by H.R. 1013. The statute does not provide for the participation of other parties in any of the additional procedures - the "trial type" hearing on the alternative conditions, the written statement to FERC, or the participation of the FERC Dispute Resolution Service. Even if public participation was a requirement, the time, expense, and required expertise for these proceedings (particularly given the demands of the existing process) would tend to exclude nonprofessional citizens groups, local residents, and communities. Even state agency professionals, given limited resources available for the states, will almost certainly not be able to participate. 5) Conclusion. H.R. 1013 could not have been introduced at a more inopportune time. Collaborative settlements are flourishing. FERC has just proposed a significant new rule that will both streamline the relicensing process and allow for more meaningful public participation. H.R. 1013 would derail these processes and produce more difficult, adversarial, and burdensome relicensing processes. Using rivers to generated power has had a negative impact on the health of this nation's rivers for over one hundred years. Anglers, boaters, and others around the country are denied countless opportunities to recreate because of hydropower facilities. In light of this historical and ongoing impact to public resources, sections 4(e) and 18 of the Federal Power Act provide perfectly reasonable and wise basic minimum protections for our nation's rivers. Congress should reject any effort to water down these important provisions of the Federal Power Act.
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