[Senate Report 104-76]
[From the U.S. Government Publishing Office]



                                                        Calendar No. 99
104th Congress                                                   Report
                                 SENATE

 1st Session                                                     104-76
_______________________________________________________________________


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

                                _______


   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. 549]
    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 549) to extend the deadline under the 
Federal Power Act applicable to the construction of three 
hydroelectric projects in the State of Arkansas, having 
considered the same, reports favorably thereon without 
amendment and recommends that the bill do pass.

                         purpose of the measure

    The purpose of S. 549 is to extend the deadline contained 
in the Federal Power Act for the commencement of construction 
of three FERC-licensed hydroelectric projects located in the 
State of Arkansas.

                          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. 549 would extend the time required to begin construction 
for a maximum of three consecutive two-year periods for the 
White River Hydroelectric Project's Lock and Dam Nos. 1, 2, and 
3 (Projects Nos. 4204, 4660, and 4659) on the White River in 
north central Arkansas.

                          legislative history

    S. 549 was introduced by Senator Bumpers on March 14, 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. 549, a bill to extend the deadline under the 
Federal Power Act applicable to the construction of three 
hydroelectric projects in the State of Arkansas, 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 extensions of deadlines for 
construction of three 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 provision 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, April 5, 1995.
Hon. Frank H. Murkowski,
Chairman, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Mr. Chairman: Thank you for your request for comments 
on eight bills affecting twelve hydroelectric projects licensed 
by the Federal Energy Regulatory Commission.
    My detailed comments are enclosed. 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.
 comments on pending hydroelectric legislation by elizabeth a. moler, 
chair, federal energy regulatory commission: s. 283, s. 468, s. 543, s. 
                547, s. 549, s. 552, s. 595, and s. 611


    Six of the bills would extend the statutory deadline for 
the start of construction of ten licensed projects. The seventh 
bill would extend for one licensed project the non-statutory 
deadline for completion of project construction. The eighth 
bill would partially waive annual charges assessed for one 
licensed project's occupancy of federal land. I will address 
each subject matter in turn.
A. Extending deadlines to commence project construction
            Overview
    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 ten 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 eighteen and one-half months, 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.
    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. Appropriate amendments to the bills that 
would provide a construction commencement deadline exceeding 
ten years are suggested below.
          * * * * * * *
            S. 549 (Senator Bumpers)
    S. 549 would authorize the Commission to extend for up to 
six years (16 years after licensing) the deadline for 
commencement of construction of Project Nos. 4204, 4659, and 
4660.
            Project No. 4204
    On February 28, 1986, the Commission issued a license to 
the City of Batesville, Arkansas, to construct and operate the 
6,825-kilowatt White River Lock and Dam No. 1 Project No. 4204, 
to be located at the licensee's existing dam on the White River 
in Independence County, Arkansas. The deadline for the 
commencement of project construction, originally February 27, 
1988, was extended to February 27, 1990. Under Pub. L. No. 101-
155, 103 Stat. 935 (1989), this deadline was extended three 
more times (each time for two years), to February 27, 1996, 
because the licensee had not obtained a power sales contract.
    Construction of the project entails adding an intake 
structure, a powerhouse, a 280-foot-long tailrace, a 10,000-
foot-long transmission line, and related project facilities.
            Project No. 4659
    On February 28, 1986, the Commission issued a license to 
Independence County, Arkansas, to construct and operate the 
10.5-megawatt White River Lock and Dam No. 3 Hydroelectric 
Project No. 4659, to be located at an existing Corps dam on the 
White River in Stone County, Arkansas. The original deadline 
for the commencement of project construction was February 27, 
1988. By order issued March 16, 1987, this deadline was 
extended to February 27, 1990. Under Pub. L. No. 101-155, 103 
Stat. 935 (1989), this deadline was extended three more times 
(each time for two years), to February 27, 1996.
    Construction of the project entails adding an intake 
structure, a powerhouse, a tailrace, a 7-mile-long transmission 
line, and related project facilities.
            Project No. 4660
    On November 8, 1985, the Commission issued a license to 
Independence County to construct and operate the 7,080-kilowatt 
White River Lock and Dam No. 2 Project No. 4660, to be located 
at an existing privately owned dam on the White River in 
Independence County, Arkansas. The deadline for the 
commencement of project construction, originally November 7, 
1987, was extended to November 7, 1989. Under Pub. L. No. 101-
155, 103 Stat. 935 (1989), this deadline was extended three 
more times (each time for two years), to November 7, 1995, 
because the licensee had not obtained a power sales contract.
    Construction of the project entails adding an intake 
structure, a powerhouse, a 120-foot-long tailrace, a 6.5-mile-
long transmission line, and related project facilities.
    The legislation should be amended to provide a maximum of 
ten years to begin construction. The new deadlines would thus 
be February 27, 1996 for Project No. 4204; February 27, 1996 
for Project No. 4659; and November 7, 1995 for Project No. 
4660.
          * * * * * * *
                        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. 549, as ordered 
reported.