[Senate Report 104-71]
[From the U.S. Government Publishing Office]



                                                        Calendar No. 94
104th Congress                                                   Report
                                 SENATE

 1st Session                                                     104-71
_______________________________________________________________________


 
    EXTENSION OF COMMENCEMENT OF CONSTRUCTION DEADLINE FOR CERTAIN 
      HYDROELECTRIC PROJECTS LOCATED IN THE STATE OF WEST VIRGINIA

                                _______


   April 27 (legislative day, April 24), 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. 359]
    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 359) to provide for the extension of 
certain hydroelectric projects located in the State of West 
Virginia, having considered the same, reports favorably thereon 
with amendments and recommends that the bill as amended do 
pass.
    1. On page 2, line 1, following ``section,'' insert 
``and''.
    2. On page 2, line 2, strike ``and the procedure specified 
in that section,''.

                         purpose of the measure

    The purpose of S. 359 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 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. 359 would extend the time required to begin construction 
to October 3, 1999 for two hydroelectric projects (Projects 
Nos. 6901 and 6902) at New Cumberland and Willow Island on the 
Ohio River.

                          legislative history

    S. 359 was introduced by Senator Byrd (for himself and Mr. 
Rockefeller) on February 6, 1995. Last Congress, these 
provisions were included in S. 2384 as passed by the Senate on 
October 5, 1994.

           committee recommendations and tabulation of votes

    The Senate Committee on Energy and Natural Resources, in 
open business session on March 15, 1995, by a majority vote of 
a quorum present, recommends that the Senate pass the bill as 
described herein.
    The rollcall vote on reporting the measure was 18 yeas, 0 
nays, as follows:
        YEAS                          NAYS
Mr. Murkowski
Mr. Hatfield \1\
Mr. Domenici
Mr. Nickles \1\
Mr. Craig
Mr. Thomas
Mr. Kyl \1\
Mr. Grams
Mr. Jeffords \1\
Mr. Burns
Mr. Campbell
Mr. Johnston
Mr. Bumpers
Mr. Ford
Mr. Bradley
Mr. Bingaman \1\
Mr. Akaka
Mr. Wellstone

    \1\ Indicates vote by proxy.
                   cost and budgeting 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, April 26, 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. 359, a bill to provide for the extension of certain 
hydroelectric projects located in the State of West Virginia, 
as ordered reported by the Senate Committee on Energy and 
Natural Resources on March 15, 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). 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.
                      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:

                      Federal Energy Regulatory Commission,
                                    Washington, DC, March 14, 1995.
Hon. Frank H. Murkowski,
Chairman, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Mr. Chairman: Thank you for your letters of February 
27 and March 2, 1995, and Committee staff's inquiries of March 
13 and 14, requesting my comments on a number of bills to allow 
for the extension of the construction deadlines applicable to 
nine hydroelectric projects licensed by the Federal Energy 
Regulatory Commission. Because it is my understanding that the 
Committee is scheduled to mark all these bills on March 15, I 
have combined my comments on these bills in one letter.
    This letter also responds to your March 2, 1995 request for 
comments on S. 225, a bill to remove the Commission's 
jurisdiction to license projects on fresh waters in the State 
of Hawaii; and to Committee staff's March 13 request for 
comments on S. 522, a bill to exempt from Part I the Federal 
Power Act the primary transmission line for a project in New 
Mexico. The bills fall into four general categories. Each bill 
is discussed below.
    1. Extension of Statutory Deadline to Commence 
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.
    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 
license 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 
definitely whether a project is economically viable and to sign 
a power purchase agreement. If a licensee cannot meet such a 
deadline, I believe the site should be made available to 
potential competitors.
    I do not have specific objections to the proposed 
legislation, except with respect to the ten year maximum time 
period to begin construction. Suggestions on how to conform the 
legislation to that principle are noted.
          * * * * * * *

                                 s. 359

    S. 359 would require the Commission to extend until October 
3, 1999, the deadline for commencement of construction of 
Project Nos. 6901 and 6902.
    The two projects in question were both licensed to the City 
of New Martinsville, West Virginia, on September 27, 1989. The 
Commission issued licenses to construct and operate the 37-
megawatt New Cumberland Project No. 6901 at an existing Corps 
of Engineers dam on the Ohio River, in Hancock County, West 
Virginia; and the 35-megawatt Willow Island Lock and Dam 
Project No. 6902 at an existing Corps of Engineers dam on the 
Ohio River, in Pleasant County, West Virginia, and Washington 
County, Ohio.
    The original deadline for commencement of construction of 
each project was September 26, 1991. The Commission rescinded 
the license for Project No. 6901 for lack of issuance or waiver 
of state water quality certification for the project, and 
subsequently reissued the license once state water quality 
certification was issued. This resulted in a new deadline of 
October 3, 1993, to commence construction of the project. This 
deadline was subsequently extended to October 3, 1995, because 
the licensee needed additional time to secure project 
financing.
    The Commission stayed, pending judicial review, most of the 
requirements of Project No. 6902 including the construction 
deadline) from March 28, 1991, to April 16, 1992, which 
resulted in a new construction deadline of October 15, 1992. 
This deadline was subsequently extended to October 15, 1994, to 
allow the licensee the additional time requested to secure 
project financing.
    For Project No. 6901, construction entails building a 600-
foot-long intake channel, a powerhouse, and a 649-foot-long 
tailrace, and adding a primary transmission line and related 
facilities. For Project No. 6902, construction entails building 
a 980-foot-long approach channel, a powerhouse, and an 865-
foot-long exit channel, and adding a 1.5-mile-long transmission 
line and related facilities.
          * * * * * * *
    Thank you for offering me an opportunity to comment on 
bills affecting the Commission's hydropower program. If I can 
be of further assistance to you in this or any other Commission 
matter, please let me know.
    With best wishes,
            Sincerely,
                                         Elizabeth A. Moler, Chair.

                        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. 359, as ordered 
reported.