[Senate Report 104-109]
[From the U.S. Government Publishing Office]
Calendar No. 142
104th Congress Report
SENATE
1st Session 104-109
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EXTENSION OF TIME LIMITATION FOR A FERC-ISSUED HYDROELECTRIC LICENSE
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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. 611]
The Committee on Energy and Natural Resources, to which was
referred the bill (S. 611) to authorize extension of time
limitation for a FERC-issued hydroelectric license, having
considered the same, reports favorably thereon without
amendment and recommends that the bill do pass.
purpose of the measure
The purpose of S. 611 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 New Jersey.
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. 611 would extend the time required to begin construction
of hydroelectric project numbered 9401 to August 3, 1999.
Project 9401 is located in New Jersey.
Legislative History
S. 611 was introduced by Senator Bradley (for himself and
Mr. Lautenberg) on March 24, 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. 611, a bill to authorize extension of time
limitation for a FERC-issued hydroelectric license, 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). This provision 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.
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
had, 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. 611 (sen. bradley and sen. lautenberg)
S. 611 would authorize the Commission to extend until
August 3, 1999 (seven years after licensing), the deadline for
the commencement of construction of Project No. 9401.
project no. 9401
On August 4, 1992, the Commission issued a license to the
Halecrest Company to construct and operate the 2,000-megawatt
Mt. Hope Pumped Storage Project No. 9401, to be located in
Rockaway Township, Morris Country, New Jersey. The deadline for
the commencement of project construction, originally August 3,
1994, was extended to August 3, 1996, because the licensee had
obtained neither financing nor a power sales contract. In 1994,
the Commission approved the addition of Mt. Hope Waterpower
Project, L.P., as co-licensee.
Construction of the project entails excavation of a 57-acre
upper reservoir and an underground lower reservoir, both with a
5,500-acre-foot capacity; installation of a 2,800-foot-long
shaft between the reservoirs bifurcating into five penstocks;
and construction of a four-hundred-foot-long, 120-foot-high
underground powerhouse, two parallel 10.6-mile-long
transmission lines, 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. 611, as ordered
reported.