[Senate Report 104-103]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 136
104th Congress                                                   Report
                                 SENATE

 1st Session                                                    104-103
_______________________________________________________________________


 
  EXTEND THE DEADLINES UNDER THE FEDERAL POWER ACT APPLICABLE TO TWO 
                 HYDROELECTRIC PROJECTS IN PENNSYLVANIA

                                _______


    July 11 (legislative day, July 10), 1995.--Ordered to be printed

_______________________________________________________________________


  Mr. Murkowski, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 283 ]
    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 283) to extend the deadlines under the 
Federal Power Act applicable to two hydroelectric projects in 
Pennsylvania, and for other purposes, having considered the 
same, reports favorably thereon without amendment and 
recommends that the bill do pass.

                         purpose of the measure

    The purpose of S. 283 is to extend the deadline contained 
in the Federal Power Act for the commencement of construction 
of two FERC-licensed hydroelectric projects located in the 
State of Pennsylvania.

                          background and need

    Section 13 of the Federal Power Act requires a licensee to 
commence the construction of a hydroelectric project within two 
years of the date of the issuance of the license. That deadline 
can be extended by the FERC one time for as much as two 
additional years. If construction has not commenced at the end 
of the time period, the license is terminated by the FERC. 
Thus, in the absence of this legislation, the FERC would 
terminate the license at the end of the time period authorized 
under the Federal Power Act for commencement of construction.
    S. 283 would extend the time required to begin construction 
of hydroelectric projects numbered 4474 and 7041 to April 15, 
2001. Project 4474 is located on the Allegheny River in 
Pennsylvania. Project 7041 is located on the Ohio River in 
Pennsylvania.
                          legislative history

    S. 283 was introduced by Senator Specter (for himself and 
Senator Santorum) on January 26, 1995. A hearing was held on 
May 18, 1995.

            committee recommendation and tabulation of votes

    The Senate Committee on Energy and Natural Resources, in 
open business session on June 28, 1995, by an unanimous vote 
with a quorum present, recommends that the Senate pass the bill 
as described herein. The rollcall vote on reporting the measure 
was 20 yeas, 0 nays, as follows:
        YEAS                          NAYS
Mr. Murkowski
Mr. Hatfield \1\
Mr. Domenici
Mr. Nickles\1\
Mr. Craig
Mr. Campbell
Mr. Thomas
Mr. Kyl
Mr. Grams
Mr. Jeffords
Mr. Burns
Mr. Johnston\1\
Mr. Bumpers
Mr. Ford \1\
Mr. Bradley
Mr. Bingaman\1\
Mr. Akaka
Mr. Wellstone
Mr. Heflin
Mr. Dorgan
    \1\ Indicates vote by proxy.

                   cost and budgetary considerations

    The Congressional Budget Office estimate of the costs of 
this measure has been requested but was not received at the 
time the report was filed. When the report is available, the 
Chairman will request it to be printed in the Congressional 
Record for the advice of the Senate.

                      regulatory impact evaluation

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out this measure.
    The bill is not a regulatory measure in the sense of 
imposing Government-established standards or significant 
economic responsibilities on private individuals and 
businesses.
    No personal information would be collected in administering 
the provisions of the bill. Therefore, there would be no impact 
on personal privacy.
    Little, if any additional paperwork would result from the 
enactment of this measure.

                        executive communications

    The pertinent communications received by the Committee from 
the Federal Energy Regulatory Commission setting forth 
Executive agency relating to this measure are set forth below:
   Statement By Elizabeth A. Moler, Chair Federal Energy Regulatory 
                               Commission

    Mr. Chairman and members of the committee, thank you for 
the opportunity to be here today to comment on nine bills 
affecting 14 hydroelectric projects licensed by the Federal 
Energy Regulatory Commission.
    Seven of the bills would extend the statutory deadline for 
the start of construction of twelve licensed projects. The 
eighth bill would extend the non-statutory deadline for 
completion of project construction for one licensed project. 
The ninth bill would partially waive annual charges assessed 
for one licensed project's occupancy of federal land. I will 
address each subject matter in turn. Detailed information about 
each bill is included in an appendix to my testimony.


 s. 283, s. 468, s. 547, s. 549, s. 595, s. 611, and s. 801: extending 
               deadlines to commence project construction


    Section 13 of the Federal Power Act requires that 
construction of a licensed project be commenced within two 
years of issuance of the license. Section 13 authorizes the 
Commission to extend this deadline once, for a maximum 
additional two years. If project construction has not commenced 
by this deadline, Section 13 requires the Commission to 
terminate the license.
    All 12 of the projects in question have received the 
maximum four years for commencement of construction. S. 611 
would authorize the Commission to extend one project's 
construction deadline by an additional three years, for a total 
of seven years. S. 468, S. 547, and S. 595 would authorize or 
require the Commission to extend the deadline for four projects 
by an additional six years, for a total of ten years.
    S. 283 would authorize the Commission to extend the 
deadline for two projects by an additional seven and one-half 
years, for a total of a little over eleven and one-half years. 
S. 549 would authorize an extension of up to six years for 
three projects which have already been given ten years--four 
years under Section 13 and six years under special legislation 
passed in 1989--for a total of 16 years. S. 801 would authorize 
extensions of up to ten years for two projects, for a total of 
14 years.
    As a general principle, I do not support the enactment of 
bills authorizing or requiring construction extensions for 
individual projects. However, if such extensions are to be 
authorized, as a matter of policy I would object to granting a 
licensee more than ten years from the issuance date of the 
license to commence construction. In my view, ten years is a 
more than reasonable period for a licensee to determine 
definitively whether a project is economically viable and to 
sign a power purchase agreement. If a licensee cannot meet such 
a deadline, I believe the license should be terminated pursuant 
to Section 13, so that the site is once again available for 
whatever uses current circumstances may warrant.
    I recognize that sometimes project licenses, such as those 
which are the subject of S. 283, are stayed by the Commission 
pending judicial review. However, I believe that a ten-year 
period in which to commence construction is sufficient to 
accommodate judicial review, and indeed should be sufficient 
for all but the most extraordinary circumstances. On the other 
hand, one of the projects which is the subject of S. 801 was 
stayed within days of its issuance while the Commission 
completed related proceedings, and was in essence reissued six 
years later. In those circumstances, I would count the ten 
years from the reissuance date.
    I therefore recommend that S. 283, S. 549, and S. 801 be 
amended to authorize the Commission to extend the construction 
deadline until no more than ten years from issuance of the 
project licenses involved.
    I would not support legislation to amend Section 13 of the 
Federal Power Act to extend the four-year statutory deadline. 
Holding a license without commencing construction constitutes 
``site banking,'' which in the long-held view of the 
Commission, as affirmed on judicial review, is contrary to the 
intent of the Act. Nearly all failures to commence timely 
project constructions have been due to the lack of a power 
purchase contract. If the project power cannot find a market 
within four years, then the site should be made available for 
other uses.
    If there are regulatory delays beyond the licensee's 
control, such as a protracted proceeding on the licensee's 
application for a required dredge and fill permit from the 
Corps of Engineers under Section 404 of the Clean Water Act, 
then the Commission can issue, and has issued, an order staying 
the license until such matters are resolved.
    Except with respect to the ten-year maximum time period to 
begin construction, I do not have specific objections to the 
proposed legislation.
          * * * * * * *
  Appendix to Testimony of Elizabeth A. Moler, Chair, Federal Energy 
                         Regulatory Commission

    S. 283 (Sen. Specter and Sen. Santorum)
    S. 283 would authorize the Commission to extend until April 
15, 2001 (11 and \1/2\ years after licensing), the deadline for 
commencement of construction of Project Nos. 4474 and 7041.
    Project Nos. 4474 and 7041.
    On September 27, 1989, the Commission issued a license to 
the Borough of Cheswick, Pennsylvania, and the Allegheny Valley 
North Council of Governments to construct and operate the 12-
megawatt Allegheny Lock and Dam No. 3 Project No. 4474 at an 
existing U.S. Army Corps of Engineers (Corps) dam on the 
Allegheny River, in Allegheny County, Pennsylvania. The 
Commission issued a license to Potter Township, Pennsylvania, 
to construct and operate the 20-megawatt Emsworth Hydro Project 
No. 7041 at an existing Corps dam on the Ohio River, in 
Allegheny County. In 1994, the Commission approved the transfer 
of the project license to the Potter Township Hydroelectric 
Authority.
    The original deadline for commencement of construction of 
each project was September 26, 1991. The Commission stayed, 
pending judicial review, most of the requirements of each 
license (including the construction deadlines) from September 
27, 1990, to April 16, 1992, which resulted in a new 
construction deadline of April 15, 1993, for each project. This 
deadline was subsequently extended to April 15, 1995, for each 
project because the licensees needed additional time to consult 
with the Corps regarding site access and project design and 
construction, and to obtain power sales contracts. Construction 
was not timely commenced for either project. Orders terminating 
the licenses have not yet been issued.
    For Project No. 4474, construction entails removing a 135-
foot-long section of the existing dam to accommodate a headrace 
channel, and adding crest gates, a powerhouse, a 142-foot-long 
side-channel spillway, a one-mile-long transmission line, and 
related project facilities. For Project No. 7041, construction 
entails building a 1,800-foot-long dike for the forebay, a 250-
foot-long open-channel intake, and a powerhouse.
    The legislation should be amended to provide a maximum of 
ten years from licensing to begin construction. The new 
deadline would thus be September 26, 1999.
                        changes in existing law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee notes that no 
changes in existing law are made by S. 283, as ordered 
reported.