[Senate Report 104-108]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 141
104th Congress                                                   Report
                                 SENATE

 1st Session                                                    104-108
_______________________________________________________________________


 
   EXTENSION OF A HYDROELECTRIC PROJECT LOCATED IN THE STATE OF WEST 
                                VIRGINIA

                                _______


    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. 595]
    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 595) to provide for the extension of a 
hydroelectric project located in the State of West Virginia, 
having considered the same, reports favorably thereon without 
amendment and recommends that the bill do pass.

                         purpose of the measure

    The purpose of S. 595 is to extend the deadline contained 
in the Federal Power Act for the commencement of construction 
of a FERC-licensed hydroelectric project located in the State 
of West Virginia.

                          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. 595 would extend the time required to begin construction 
of hydroelectric project numbered 7307 to September 26, 1999.

                          legislative history

    S. 595 was introduced by Senator Byrd (for himself and Mr. 
Rockefeller) on March 22, 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 14, 1995, by a unanimous voice 
vote with a quorum present, recommends that the Senate pass the 
bill as described herein.

                   cost and budgetary considerations

    The following estimate of costs of this measure has been 
provided by the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 19, 1995.
Hon. Frank H. Murkowski,
Chairman, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed S. 595, a bill to provide for the extension of a 
hydroelectric project located in the State of West Virginia, as 
ordered reported by the Senate Committee on Energy and Natural 
Resources on June 14, 1995. CBO estimates that enacting the 
bill would have no net effect on the federal budget.
    The bill would 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 estimates, we will be 
pleased to provide them. The CBO staff contact is Kim Cawley.
            Sincerely,
                                                   June E. O'Neill.

                      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: extend- ing 
               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 construction 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. 595 (sen. byrd and sen. rockefeller)


    S. 595 would require the Commission to extend until 
September 26, 1999 (10 years after licensing), the deadline for 
commencement of construction of Project No. 7307.


                            project no. 7307


    On September 27, 1989, the Commission issued a license to 
the City of Grafton, West Virginia, to construct and operate 
the Tygart Dam Project No. 7307, to be located at an existing 
Corps dam on the Tygart River in Taylor County, West Virginia. 
The original deadline for the commencement of project 
construction was September 26, 1991. The Commission stayed, 
pending judicial review, most of the license (including the 
construction deadlines) from September 27, 1990, to April 16, 
1992, which resulted in a new deadline of April 15, 1993, to 
commence construction. This deadline was subsequently extended 
to April 15, 1995, because the licensee needed additional time 
to consult with the Corps regarding access to the site and 
project design and construction, and to obtain a power sales 
contract. Construction was not timely commenced. An order 
terminating the license has not yet been issued.
    Construction of the project entails the addition of an 
intake structure, a 350-foot-long penstock, a powerhouse, a 1-
mile-long transmission line, and related project facilities.
          * * * * * * *
                        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. 595, as ordered 
reported.