[Senate Report 104-72]
[From the U.S. Government Publishing Office]



                                                        Calendar No. 95
104th Congress                                                   Report
                                 SENATE

 1st Session                                                     104-72
_______________________________________________________________________


 
 EXTENSION OF COMMENCEMENT OF CONSTRUCTION DEADLINE FOR A HYDROELECTRIC 
                PROJECT LOCATED IN THE STATE OF KENTUCKY

                                _______


   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. 421]
    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 421) to extend the deadline under the 
Federal Power Act applicable to the construction of a 
hydroelectric project in Kentucky, 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. 359 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 Kentucky.

                          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. 421 would extend the time required to begin construction 
for a maximum of three consecutive two-year periods for the 
Cannelton Hydropower Project (Project No. 10228) on the Ohio 
River in Hancock County, Kentucky.

                          legislative history

    S. 421 was introduced by Senator Ford on February 15, 1995. 
Last Congress, these provisions were included in S. 2384 as 
passed by the Senate on October 5, 1994.

            committee recommendation 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 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, March 30, 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. 421, a bill to extend the deadline under the 
Federal Power Act applicable to the construction of a 
hydroelectric project in Kentucky, and for other purposes, 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 commencement of construction 
deadline for 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, 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 
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 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. 421

    S. 421 would authorize the Commission to extend by up to 
six years the construction deadline for commencement of 
construction of Project No. 10228.
    The Commission issued a license on June 21, 1991, to WV 
Hydro, Inc. to construct and operate the 80-megawatt Cannelton 
Hydroelectric Project, to be located at an existing Corps of 
Engineers dam on the Ohio River, in Hancock County, Kentucky. 
In 1994, the Commission approved the transfer of the project 
license to the Cannelton Hydroelectric Project, L.P. The 
original deadline for the commencement of project construction 
was June 20, 1993. This deadline was subsequently extended to 
June 20, 1995, because the licensee had not obtained project 
financing.
    Project construction entails building a 500-foot-long 
intake channel, a 700-foot-long tailrace channel, and a new 
powerhouse, and adding a 700-foot-long transmission line, a 
recreation area, 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. 421, as ordered 
reported.