[Senate Report 104-74]
[From the U.S. Government Publishing Office]



                                                        Calendar No. 97
104th Congress                                                   Report
                                 SENATE

 1st Session                                                     104-74
_______________________________________________________________________


 
      LIMITED EXEMPTION TO HYDROELECTRIC LICENSING PROVISIONS FOR 
   TRANSMISSION FACILITIES ASSOCIATED WITH THE EL VADO HYDROELECTRIC 
                                PROJECT

                                _______


   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. 522]
    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 522) to provide for a limited exemption 
to the hydroelectric licensing provisions of part I of the 
Federal Power Act for certain transmission facilities 
associated with the El Vado Hydroelectric Project in New 
Mexico, having considered the same, reports favorably thereon 
without amendment and recommends that the bill do pass.

                         purpose of the measure

    The purpose of S. 522 is to provide an exemption from the 
Federal Power Act's requirement to license primary transmission 
facilities associated with the FERC-licensed El Vado 
hydroelectric project located in New Mexico.

                          background and need

    S. 522 would amend the hydroelectric licensing provisions 
of Part I of the Federal Power Act to permit a limited 
exemption for a 12-mile transmission line in Rio Arriba County, 
New Mexico.
    In 1985, the FERC granted the County of Los Alamos, New 
Mexico (Los Alamos) a major license under the FPA. The license 
authorized the construction, operation and maintenance of the 
El Vado Hydroelectric Power Project (El Vado Project) on the 
Rio Chama in Rio Arriba County, New Mexico. The principal 
project features include a 175-foot-high, 1,325-foot-long 
gravel fill dam; a 3,310-acre reservoir; outlet works; a 
powerhouse with one 8-megawatt generating unit; and a 12-mile-
long transmission line.
    The transmission line is a three phase 12-mile-long, 69-
kilovolt (KV) power line supported on single wooden pole 
structures located in a 50-foot-wide right-of-way. The line 
begins at the El Vado Project's switchyard and connects to a 
69-KV switching station that is owned and operated by the 
Northern Rio Arriba Electric Cooperative Inc. (NORA). NORA is a 
Rural Electric Administration (REA) financed rural electric 
cooperative whose distribution system serves the rural area in 
which the El Vado Project is located.
    During the construction phase of the project, it was 
determined that the project would be better served if NORA 
would own and operate the transmission line. In 1984, NORA 
entered into a two-part agreement with Los Alamos. Los Alamos 
would contribute the capital for construction of the 
transmission line and appurtenant facilities. NORA would 
utilize its system as expanded by the transmission line to 
assist in the delivery of the project's power output to Los 
Alamos and provide station services to the project during 
periods of nongeneration.
    Through subsequent audits of the project, the FERC's Office 
of Hydropower Licensing (OHL) discovered NORA's ownership of 
the transmission line. In May of 1993, OHL ordered Los Alamos 
to modify the transmission line ownership structure to be 
consistent with its license. At the time the transmission line 
agreement was executed until the OHL order, Los Alamos did not 
know that allowing NORA to own and operate the transmission 
line was inconsistent with the provisions of its FERC license.
    This title would exempt from the licensing provisions of 
the FPA only the 12-mile, 69-KV transmission line of the El 
Vado Project. NORA would continue to own and operate the 
transmission line; however, it would be made consistent with 
the project's license. The Committee notes that the United 
States would not forfeit its FPA jurisdiction over the entire 
El Vado Project. The exemption applies only to FERC regulatory 
oversight of the project's transmission line.
    The United States would retain a certain amount of control 
over the transmission line. The line would remain subject to a 
contract (Contract No. 7-LM-53-01197, dated October 9, 1987) 
with the Bureau of Reclamation for construction, operation and 
maintenance of the power line. Also, as the property of NORA, 
the transmission line would be pledged against NORA's REA loan.
                          legislative history

    S. 522 was introduced by Senator Domenici (for himself and 
Mr. Bingaman) on March 9, 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. 522, a bill to provide for a limited exemption to 
the hydroelectric licensing provisions of part I of the Federal 
Power Act for certain transmission facilities associated with 
the El Vado Hydroelectric Project in New Mexico, 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 provide an exemption for certain features 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 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.
          * * * * * * *

4. El Vado Project transmission line

    S. 522 would exempt from regulation under Part I of the 
Federal Power Act a 12-mile transmission line which is a 
project work of the licensed El Vado Hydroelectric Project No. 
5226.
    In 1985, the Commission issued a license to the County of 
Los Alamos, New Mexico, for the 8-megawatt El Vado 
Hydroelectric Project, on the Rio Chama, a tributary of the Rio 
Grande, in Rio Arriba County, New Mexico. The licensed project 
includes a 12-mile-long 69-kilovolt primary transmission line, 
which is necessary to the operation of the project. The 
transmission line is, however, owned and operated by a separate 
entity, Arriba Electric Cooperative. The license gave Los 
Alamos five years to acquire the necessary title or contractual 
operational control over the transmission line. Alternatively, 
the Cooperative could have joined Los Alamos as co-licensee, or 
could have obtained a separate license for the transmission 
line. The Cooperative did not wish to pursue either course. Ten 
years after the license was issued, the licensee had still 
failed to comply with the requirement that it obtain necessary 
property rights over the line, despite repeated letters and 
compliance orders from the Commission staff.
    The transmission line has been constructed and is in 
operation, and the Commission is not aware of any problems 
associated with it. The Commission is also not aware of any 
aspect of this particular primary transmission line that would 
distinguish it from other hydroelectric project primary 
transmission lines. Finally, this licensee's years-long lack of 
compliance with a fundamental license requirement is a 
troubling factor.
    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. 522, as ordered 
reported.