[Senate Report 104-110]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 143
104th Congress                                                   Report
                                 SENATE

 1st Session                                                    104-110
_______________________________________________________________________


 
 EXTENDING THE DEADLINE UNDER THE FEDERAL POWER ACT APPLICABLE TO THE 
       CONSTRUCTION OF 2 HYDROELECTRIC PROJECTS IN NORTH CAROLINA

                                _______


    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. 801]
    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 801) to extend the deadline under the 
Federal Power Act applicable to the construction of 2 
hydroelectric projects in North Carolina, 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. 801 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 North Carolina.

                         background and purpose

    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. 801 would extend the time required to begin construction 
of hydroelectric projects numbered 10812 and 6879 for five 
consecutive two-year periods.

                          legislative history

    S. 801 was introduced by Senator Helms on May 15, 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 a 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 following estimate of costs of this measure has been 
provided by the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 28, 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. 801, a bill to extend the deadlines under the 
Federal Power Act applicable to 2 hydroelectric licenses in 
North Carolina, and for other purposes, as ordered reported by 
the Senate Committee on Energy and Natural Resources on June 
28, 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 two 
hydroelectric projects 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,
                                              James L. Blum
                                             (For 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 and 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. 801 (sen. helms)


    S. 801 would authorize the Commission to extend for up to 
ten years (14 years after licensing) the deadline for 
commencement of construction of Project Nos. 6879 and 10812.


                            project no. 6879


    On February 27, 1985, the Commission issued a license to 
Southwestern Hydro-Power, Inc., to construct and operate the 
4,850-kilowatt W. Kerr Scott Hydropower Project, to be located 
at an existing Corps dam on the Yadkin River in Wilkes County, 
North Carolina. On March 29, 1985, the Commission stayed the 
effectiveness of the license, pending a review of its issuance. 
On March 21, 1991, the Commission lifted the stay and 
established the effective date of the license as of that date, 
in essence reissuing the license. Consequently, the deadline 
for the commencement of project construction was originally 
March 20, 1993. The deadline was subsequently extended to March 
20, 1995. Construction was not timely commenced. An order 
terminating the license has not yet been issued.
    On February 28, 1993, the licensee filed an application to 
amend the license. On March 8, 1995, the licensee filed a 
request for stay of the project license asking that the license 
be stayed until six months after the Commission act on the 
project amendment and an additional amendment application filed 
contemporaneously with the stay request. The Commission issued 
an order on April 19, 1995, denying the request for stay and 
giving 30 days notice of probable termination of the license. 
An order terminating the license has not yet been issued.
    Construction of the project entails building a new 
powerhouse, a one-mile-long transmission line, and related 
project facilities.


                           project no. 10812


    On October 29, 1990, the Commission issued a license to 
Daniel Nelson Evans, Jr., to construct and operate the 815-
kilowatt Henrietta Mills Project No. 10812, to be located at an 
existing privately-owned dam on the Second Broad River in 
Rutherford County, North Carolina. The deadline for 
commencement of project construction, originally October 28, 
1992, was extended to October 28, 1994. Construction was not 
timely commenced. An order terminating the license has not yet 
been issued.
    Construction of the project entails modifying the dam by 
adding two 88-foot-long siphon pipes extending over the crest 
of the dam, two generating units, and related project 
facilities.
    The legislation should be amended to provide a maximum of 
ten years from licensing to begin construction. The new 
deadlines would thus be March 20, 2001, for Project No. 6879, 
and October 28, 2000, for Project No. 10812.
                        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. 801, as ordered 
reported.