[House Report 105-510]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     105-510
_______________________________________________________________________


 
                    HYDROELECTRIC PROJECT EXTENSION

                                _______
                                

  May 6, 1998.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

_______________________________________________________________________


  Mr. Bliley, from the Committee on Commerce, submitted the following

                              R E P O R T

                        [To accompany H.R. 2841]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Commerce, to whom was referred the bill 
(H.R. 2841) to extend the time required for the construction of 
a hydroelectric project, having considered the same, report 
favorably thereon without amendment and recommend that the bill 
do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     1
Background and Need for Legislation..............................     2
Hearings.........................................................     2
Committee Consideration..........................................     3
Rollcall Votes...................................................     3
Committee Oversight Findings.....................................     3
Committee on Government Reform and Oversight.....................     3
New Budget Authority, Entitlement Authority, and Tax Expenditures     3
Committee Cost Estimate..........................................     3
Congressional Budget Office Estimate.............................     3
Federal Mandates Statement.......................................     4
Advisory Committee Statement.....................................     4
Constitutional Authority Statement...............................     4
Applicability to Legislative Branch..............................     5
Section-by-Section Analysis of the Legislation...................     5
Changes in Existing Law Made by the Bill, as Reported............     5

                          Purpose and Summary

    The purpose of H.R. 2841 is to extend the deadline for the 
commencement of construction of a hydroelectric project in the 
State of Kentucky licensed by the Federal Energy Regulatory 
Commission (FERC).

                  Background and Need for Legislation

    Section 13 of the Federal Power Act (16 U.S.C. Sec. 806 
(1988)) establishes time limits for commencement of 
construction of a hydroelectric project once FERC has issued a 
license. The licensee must begin construction not more than two 
years from the date the license is issued, unless FERC extends 
the initial deadline. However, section 13 permits FERC to grant 
only one extension of that deadline for ``not longer than two 
additional years * * * when not incompatible with the public 
interests.'' Accordingly, FERC lacks authority to extend the 
deadline beyond a maximum of two years from the original 
deadline for commencement of construction. Therefore, a license 
is subject to termination if a licensee fails to begin 
construction within four years of the date the license is 
issued.
    Lack of a power sales contract can delay the commencement 
of construction of licensed hydroelectric projects. It is very 
difficult for a hydroelectric project sponsor to secure 
financing until it has a power sales contract, and generally a 
licensee cannot secure a contract until it has been granted a 
license. However, the construction deadline begins to toll once 
the license is granted. There are other obstacles to 
commencement of construction, such as protracted proceedings on 
a licensee's application for a dredge and fill permit from the 
Army Corps of Engineers under section 404 of the Clean Water 
Act. FERC has testified that in such cases it has issued orders 
staying the license until matters are resolved, suggesting 
extension legislation is not needed in order to address delays 
beyond the control of the licensee.
    H.R. 2841 would extend the deadline for the commencement of 
construction for a 35 megawatt hydroelectric project (Project 
No. 10395) in Bracken County, Kentucky, for up to three 
additional two-year periods. This would extend the deadline to 
up to ten years after the date the license was issued. 
According to the project sponsor, construction has not 
commenced for lack of a power purchase agreement. The deadline 
for the commencement of construction of this project expires on 
July 31, 1999. H.R. 2841 does not ease the requirements of a 
hydroelectric license, but merely extends the period for 
commencement of project construction.
    The legislation provides for up to three consecutive two-
year extensions, instead of a six-year extension, to assure 
that the licensee must continue to meet the section 13 
requirement that it prosecute construction ``in good faith and 
with due diligence'' before obtaining each two-year extension. 
If FERC determines the licensee is not prosecuting construction 
in good faith and with due diligence, the Committee expects the 
agency will refuse to grant a request for an additional two-
year extension, terminate the license, and make the site 
available for other uses.

                                Hearings

    The Committee on Commerce has not held hearings on the 
legislation.

                        Committee Consideration

    On April 22, 1998, the Subcommittee on Energy and Power met 
in open markup session and approved H.R. 2841 for Full 
Committee consideration, without amendment, by a voice vote. 
The Full Committee met in open markup session on April 29, 
1998, and ordered H.R. 2841 reported to the House, without 
amendment, by a voice vote.

                             Rollcall Votes

    Clause 2(l)(2)(B) of rule XI of the Rules of the House 
requires the Committee to list the recorded votes on the motion 
to report legislation and amendments thereto. There were no 
recorded votes taken in connection with ordering H.R. 2841 
reported. A motion by Mr. Bliley to order H.R. 2841 reported to 
the House, without amendment, was agreed to by a voice vote, a 
quorum being present.

                      Committee Oversight Findings

    Pursuant to clause 2(l)(3)(A) of rule XI of the Rules of 
the House of Representatives, the Committee did not hold 
oversight or legislative hearings on this legislation.

              Committee on Government Reform and Oversight

    Pursuant to clause 2(l)(3)(D) of rule XI of the Rules of 
the House of Representatives, no oversight findings have been 
submitted to the Committee by the Committee on Government 
Reform and Oversight.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 2(l)(3)(B) of Rule XI of the 
Rules of the House of Representatives, the Committee finds that 
H.R. 2841 would result in no new or increased budget authority, 
entitlement authority, or tax expenditures or revenues.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 2(l)(3)(C) of rule XI of the Rules of 
the House of Representatives, the following is the cost 
estimate provided by the Congressional Budget Office pursuant 
to section 402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, April 30, 1998.
Hon. Tom Bliley,
Chairman, Committee on Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2841, a bill to 
extend the time required for construction of a hydroelectric 
project.
    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.
    Enclosure.

H.R. 2841--A bill to extend the time required for the construction of a 
        hydroelectric project

    CBO estimates that enacting H.R. 2841 would have no net 
effect on the federal budget. The legislation contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act of 1995 and would not affect the 
budgets of state, local, or tribal governments.
    H.R. 2841 would extend for up to six years the deadline for 
construction of a hydroelectric project currently subject to 
licensing by the Federal Energy Regulatory Commission (FERC). 
The proposed extension is for FERC project number 10395. 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.
    The CBO staff contact for this estimate is Kim Cawley. This 
estimate was approved by Robert A. Sunshine, Deputy Assistant 
Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                   Constitutional Authority Statement

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional authority for this legislation is provided in 
Article I, section 8, clause 3, which grants Congress the power 
to regulate commerce with foreign nations, among the several 
States, and with the Indian tribes.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation

Section 1. Extension of period to commence construction

    Subsection (a) directs the Federal Energy Regulatory 
Commission (FERC), upon the request of the licensee for Project 
No. 10395, and in accordance with the good faith, due 
diligence, and public interest requirements of section 13 of 
the Federal Power Act and FERC's procedures under such section, 
to extend the time required for the commencement of 
construction for such project for up to three additional two-
year periods. Subsection (b) provides that such extension will 
take effect upon the expiration of the extension previously 
granted by FERC.

         Changes in Existing Law Made by the Bill, as Reported

    H.R. 2841 does not amend any existing Federal statute.

                                
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