[House Report 104-320]
[From the U.S. Government Publishing Office]



104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    104-320
_______________________________________________________________________


 
          CONSTRUCTION OF A HYDROELECTRIC PROJECT IN OREGON
                                _______


November 7, 1995.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

_______________________________________________________________________


  Mr. Bliley, from the Committee on Commerce, submitted the following

                              R E P O R T

                        [To accompany H.R. 1290]

    The Committee on Commerce, to whom was referred the bill 
(H.R. 1290) to reinstate the permit for, and extend the 
deadline under the Federal Power Act applicable to the 
construction of, a hydroelectric project in Oregon, and for 
other purposes, having considered the same, report favorably 
thereon with an amendment and recommend that the bill as 
amended do pass.

                                CONTENTS

                                                                   Page
The Amendment....................................................     1
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................     3
Committee Consideration..........................................     3
Rollcall Votes...................................................     3
Committee Oversight Findings.....................................     3
Committee on Government Reform and Oversight.....................     3
New Budget Authority and Tax Expenditures........................     3
Committee Cost Estimate..........................................     3
Congressional Budget Office Estimate.............................     4
Inflationary Impact Statement....................................     4
Advisory Committee Statement.....................................     4
Section-by-Section Analysis and Discussion.......................     4
Changes in Existing Law Made by the Bill, as Reported............     5

                               amendment

    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. REINSTATEMENT OF PERMIT EXTENSION DEADLINE.

    Notwithstanding the expiration of the permit and notwithstanding 
the time period specified in section 13 of the Federal Power Act (16 
U.S.C. 806) that would otherwise apply to the Federal Energy Regulatory 
Commission project numbered 7829, the Commission shall, at the request 
of the licensee for the project, reinstate the permit effective May 23, 
1993, and extend the time period during which the licensee is required 
to commence the construction of the project so as to terminate on May 
25, 1999.

                          Purpose and Summary

    The purpose of H.R. 1290 is to extend the deadline for the 
commencement of construction of a hydroelectric project in 
Oregon licensed by the Federal Energy Regulatory Commission 
(FERC) until May 25, 1999.

                  Background and Need for Legislation

    Section 13 of the Federal Power Act (16 U.S.C. Sec. 806 
(1988)) establishes time limits for commencement of 
construction of a hydroelectric project once FERC has issued a 
license. The licensee must begin construction not more than two 
years from the date the license is issued, unless FERC extends 
the initial deadline. However, section 13 permits FERC to grant 
only one extension of that deadline for not longer than two 
additional years . . . when not incompatible with the public 
interests. Accordingly, FERC lacks authority to extend the 
deadline beyond a maximum of two years from the original 
deadline for commencement of construction. Therefore, a license 
is subject to termination if a licensee fails to begin 
construction within four years of the date the license is 
issued.
    H.R. 1290 would extend the deadline for the commencement of 
construction for a 1.8 megawatt hydroelectric project (Project 
No. 7829) until May 25, 1999, which is ten years after the date 
the license was issued. The license for Project No. 7829 was 
terminated by order of FERC on September 21, 1993 for failure 
to commence construction. According to the project sponsors, 
construction has not commenced for lack of a power purchase 
agreement. H.R. 1290 does not ease the requirements of a 
hydroelectric license, but merely extends the period for 
commencement of project construction.
    Lack of a power sales contract is the main reason 
construction of licensed hydroelectric projects has not 
commenced. It is very difficult for a hydroelectric project 
sponsor to secure financing until it has been granted a 
license, and once it has been granted a license the 
construction deadline begins to run. Without a power sales 
contract, a project generally cannot be financed. There are 
other obstacles to commencement of construction, such as 
protracted proceedings on a licensees application for a dredge 
and fill permit from the Army Corps of Engineers under section 
404 of the Clean Water Act. FERC has testified that in such 
cases it has issued orders staying the license until matters 
are resolved, suggesting that extension legislation is not 
needed in order to address delays beyond the control of the 
licensee. However, this does not apply to delays that are 
subject to the control of the licensee, such as lack of a power 
sales contract.
    One reason it is difficult for project sponsors to obtain 
power sales contracts is the changing nature of the electric 
industry in the United States. As the industry has become more 
exposed to competition, utilities are seeking to lower their 
costs and increase their flexibility. The term of power sales 
contracts that finance hydroelectric projects range up to 25 to 
30 years, and utilities are trying to avoid purchase agreements 
with long terms. In addition, the generating cost of these 
projects may not be as favorable as other alternatives.

                                Hearings

    The Subcommittee on Energy and Power held a hearing on H.R. 
1290 and various other legislative proposals to extend the 
deadline for commencement of construction on October 18, 1995. 
Testimony was received from Ms. Susan Tomasky, General Counsel, 
Federal Energy Regulatory Commission.

                        Committee Consideration

    The Subcommittee on Energy and Power met in open markup 
session on October 18, 1995, and approved H.R. 1290, as 
amended, for Full Committee consideration by a voice vote, a 
quorum being present. The Full Committee met in open markup 
session on October 25, 1995 and ordered H.R. 1290, as amended, 
reported to the House by a voice vote, a quorum being present.

                             Rollcall Votes

    Clause 2(l)(2)(B) of rule XI of the Rules of the House 
requires the Committee to list the recorded votes on the motion 
to report legislation and on amendments thereto. There were no 
recorded votes taken in connection with ordering H.R. 1290, as 
amended, reported. A motion by Mr. Bliley to order H.R. 1290 
reported to the House, as amended, was agreed to by a voice 
vote.

                      Committee Oversight Findings

    Pursuant to clause 2(l)(3)(A) of rule XI of the Rules of 
the House of Representatives, the Subcommittee on Energy and 
Power held legislative hearings and made findings that are 
reflected in this report.

              Committee on Government Reform and Oversight

    Pursuant to clause 2(l)(3)(D) of rule XI of the Rules of 
the House of Representatives, no oversight findings have been 
submitted to the Committee by the Committee on Government 
Reform and Oversight.

               New Budget Authority and Tax Expenditures

    In compliance with clause 2(l)(3)(B) of rule XI of the 
Rules of the House of Representatives, the Committee states 
that H.R. 1290 would result in no new or increased budget 
authority or tax expenditures or revenue.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 403 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 2(l)(3)(C) of rule XI of the Rules of 
the House of Representatives, following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
403 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, October 27, 1995.
Hon. Thomas J. Bliley, Jr.,
Chairman, Committee on Commerce,
House of Representative, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed H.R. 1290, a bill to reinstate the permit for, and 
extend the deadline under the Federal Power Act applicable to 
the construction of, a hydroelectric project in Oregon, and for 
other purposes, as ordered reported by the House Committee on 
Commerce on October 25, 1995. CBO estimates that enacting the 
bill would have no net effect on the federal budget.
    The bill would reinstate the permit for, and extend the 
deadline for construction of a hydroelectric project currently 
subject to licensing by the Federal Energy Regulatory 
Commission (FERC). These provisions may have a minor impact on 
FERC's workload. Because FERC recovers 100 percent of its costs 
through user fees, any change in its administrative costs would 
be offset by an equal change in the fees that the commission 
charges. Hence, the bill's provisions would have no net 
budgetary impact.
    Because FERC's administrative costs are limited in annual 
appropriations, enactment of this bill would not affect direct 
spending or receipts. Therefore, pay-as-you-go procedures would 
not apply to the bill. In addition, CBO estimates that enacting 
the bill would have no significant impact on the budgets of 
state or local governments.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Kim Cawley.
            Sincerely,
                                         June E. O'Neill, Director.

                     Inflationary Impact Statement

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee finds that H.R. 1290 
would have no inflationary impact.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

             Section-by-Section Analysis of the Legislation

Section 1. Reinstatement of permit extension deadline

    This section directs FERC, upon the request of the licensee 
for Project No. 7829, to reinstate the license for the project 
and extend the deadline for commencement of construction until 
May 25, 1999.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3 of rule XIII of the Rules of 
the House of Representatives, the Committee finds that no 
changes in existing law are made by H.R. 1290.

                                
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