[Senate Report 105-112]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 217
105th Congress                                                   Report
                                 SENATE

 1st Session                                                    105-112
_______________________________________________________________________


 
   FERC LICENSING OF HYDROELECTRIC PROJECTS ON FRESH WATERS IN HAWAII

                                _______
                                

                 Oct. 15, 1997.--Ordered to be printed

    Filed under authority of the order of the Senate of Oct. 9, 1997

  Mr. Murkowski, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 846]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 846) to amend the Federal Power Act to 
remove the jurisdiction of the Federal Energy Regulatory 
Commission to license projects on fresh waters in the State of 
Hawaii, having considered the same, reports favorably thereon 
without amendment and recommends that the bill do pass.

                         Purpose of the Measure

    S. 846 precludes the voluntary licensing of hydroelectric 
projects on fresh waters in the State of Hawaii.

                          Background and Need

    Part I of the Federal Power Act was enacted in 1920 to 
establish a ``complete scheme of national regulation which 
would promote the comprehensive development of the water 
resources of the Nation.'' First Iowa Hydro-Electric Coop, v. 
FPC, 328 U.S. 152, 180 (1946). Section 4(e) of the Federal 
Power Act authorizes the Federal Energy Regulatory Commission 
(FERC) to issue licenses for hydroelectric projects that (1) 
are located on waters over which Congress has jurisdiction 
under the Commerce Clause, (2) are located on public land or a 
Federal reservation, or (3) use surplus water or power from a 
Federal dam. Section 23(b) of the Act requires anyone building 
or operating a hydroelectric project to obtain a FERC license 
if the project (1) is located on navigable water, (2) is 
located on public land or a Federal reservation, (3) uses 
surplus water or power from a Federal dam, or (4) is located on 
a body of water over which Congress has jurisdiction under the 
Commerce Clause, was built after 1935, and affects interstate 
or foreign commerce.
    Although Congress' power regulate interstate and foreign 
commerce includes the power to regulate navigation, Gibbons v. 
Ogden, 22 U.S. (9 Wheat.) 1, 189 (1824), Federal Commerce 
Clause jurisdiction is broader than the concept of 
navigability. United States v. Appalachian Power Co., 311 U.S. 
377, 426-427 (1940). Thus, the circumstances in which the FERC 
may issue licenses under section 4(e) of the Federal Power Act 
are broader than the circumstances in which developers of 
hydroelectric projects must obtain a FERC license. As a result, 
the FERC has the power to issue a license for a hydroelectric 
project in response to a voluntary application under section 
4(e) of the Federal Power Act, even though the applicant is not 
required to obtain a license under section 23(b) of the Act. 
Cooley v. FERC, 843 F.2d 1464, 1469 (D.C. Cir. 1988).
    The State of Hawaii has made a case for a limited exemption 
from FERC licensing based on Hawaii's unique circumstances. 
Hawaii's streams are isolated on individual islands and run 
quickly down steep volcanic slopes. There are no interestate 
rivers in Hawaii, few if any streams crossing Federal land, and 
no Federal dams. Hawaii's streams are generally not navigable. 
Hawaii has a unique body of water law that has evolved from 
Native Hawaiian custom and a comprehensive regulatory program 
that protects water resources.
    In short, none of the bases for FERC's licensing 
jurisdiction under section 23(b) of the Federal Power Act 
appear to exist in Hawaii. Indeed, FERC has never licensed a 
hydroelectric project in Hawaii and has no applications to 
license one pending.
    Nonetheless, as explained above, section 4(e) of the 
Federal Power Act gives FERC the discretion to license 
hydroelectric projects in response to voluntary applications 
even though the project is not required to be licensed under 
section 23(b) of the Act. The Attorney General of Hawaii has 
testified that FERC's voluntary licensing authority ``can lead 
to: (1) Claim jumping by business competitors; and (2) attempts 
to use FERC's claimed preemptive authority to override state 
stream regulation'' to the detriment of Hawaii's waters. S. 
Hrg. 103-924, p. 14 (1994).
    In 1991, the Committee on Energy and Natural Resources 
favorably reported legislation to eliminate the FERC's 
voluntary licensing authority over hydroelectric projects on 
fresh waters in Hawaii as part of its energy policy bill (S. 
1220) in the 102nd Congress. S. Rept. 102-72, p. 245. the 
Senate passed an energy bill (S. 2166) with the Hawaiian 
exemption in it in 1992, but the provision was substantially 
rewritten in conference. As ultimately enacted, the provision 
did not eliminate the FERC's voluntary licensing authority over 
projects in Hawaii, though it did direct the FERC to study 
hydroelectric licensing in Hawaii and report to Congress on 
whether projects in Hawaii should be exempt from FERC 
licensing.
    The FERC submitted its report in 1994. The report did not 
reach any overall conclusion as to whether the Federal Power 
Act should be amended to exempt projects on the fresh waters of 
Hawaii from the FERC's jurisdiction, though it did note that 
the FERC had never licensed a hydroelectric project in Hawaii.

                          Legislative History

    As noted under ``Background and Need,'' the Committee on 
Energy and Natural Resources favorably reported, and the Senate 
passed, legislation to eliminate the FERC's voluntary licensing 
authority over hydroelectric projects on fresh waters in Hawaii 
during the 102nd Congress, though the provision was 
substantially amended in conference to preserve the FERC's 
current licensing authority and require the FERC to conduct a 
study on whether Congress should to exempt Hawaiian projects in 
the future.
    Following receipt of the FERC study, the Committee again 
reported legislation to exempt projects on Hawaii's fresh 
waters from the FERC's voluntary licensing authority in 1994 
(S. 2384, S. Rept. 103-336), 1995 (S. 225, S. Rept. 104-70), 
and 1996 (S. 737, S. Rept. 104-77). The Senate passed two of 
these three measures (S. 2384 in the 103rd Congress and S. 737 
in the 104th Congress), though neither became law.
    S. 846 was introduced by Senator Akaka on June 5, 1997. A 
hearing was held by the Subcommittee on Water and Power on June 
10, 1997. (S. Hrg. 105-145)

           Committee Recommendations and Tabulation of Votes

    The Senate Committee on Energy and Natural Resources, in 
open business session on September 24, 1997, by a voice vote 
with a quorum present, recommends that the Senate pass S. 846 
without amendment.

                      Section-by-Section Analysis

    S. 846 contains only one section. Section 1 eliminates the 
FERC's authority to issue voluntarily requested licenses for 
hydroelectric projects located on fresh waters in the State of 
Hawaii.

                   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, September 30, 1997.
Hon. Frank H. Murkowski,
Chairman, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 846, a bill to amend 
the Federal Power Act to remove the jurisdiction of the Federal 
Energy Regulatory Commission to license projects on fresh 
waters in the state of Hawaii.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts for this 
estimate are Kim Cawley (for federal costs) and Pepper 
Santalucia (for the state and local impact).
            Sincerely,
                                              James L. Blum
                                   (For June E. O'Neill, Director).
    Enclosure.

               congressional budget office, cost estimate

S. 846--A bill to amend the Federal Power Act to remove the 
        jurisdiction of the Federal Energy Regulatory Commission to 
        license projects on fresh waters in the State of Hawaii

    CBO estimates that enacting this bill would have no net 
effect on the federal budget. S. 846 contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act of 1995. The bill would limit 
FERC's authority to issue licenses for hydroelectric projects 
in Hawaii, leaving the state with the authority to license any 
affected projects. Any increase in the state's workload would 
be the result of its own regulatory programs.
    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 contacts for this estimate are Kim Cawley 
(for federal costs), and Pepper Santalucia (for the state and 
local impact). This estimate was approved by Paul N. Van de 
Water, Assistant Director for Budget Analysis.

                      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, the Department of the 
Interior and the Department of Commerce setting forth Executive 
agency comments relating to this measure are set forth below:

 Prepared Statement of Susan Tomasky, General Counsel, Federal Energy 
                         Regulatory Commission

    Mr. Chairman and Members of the Subcommittee:
    My name is Susan Tomasky, and I am General Counsel for the 
Federal Energy Regulatory Commission. I am appearing before you 
as a Commission staff witness and do not speak for individual 
members of the Commission.
    Thank you for the opportunity to be here today to comment 
on a bill affecting the Federal Energy Regulatory Commission's 
regulation of non-federal hydropower projects pursuant to Part 
I of the Federal Power Act and related statutes.
    S. 439 would allow for the removal of Commission 
jurisdiction over a category of hydropower projects five 
megawatts or smaller in the State of Alaska. The bill would 
also remove the Commission's voluntary licensing jurisdiction 
over hydroelectric projects on fresh waters in Hawaii (a 
provision that has been introduced as a separate bill, S. 846, 
by Senator Akaka), and would exempt from Commission 
jurisdiction the transmission line associated with the licensed 
El Vado Hydroelectric Project in New Mexico. Finally, it would 
extend the statutory deadline for commencement of hydropower 
project construction.
    Note: Section 2 of S. 439 is identical to S. 846.]
S. 439, Section 2: Voluntary Licensing of Hydroelectric Projects in the 
        State of Hawaii
    Section 2 of S. 439 would amend Section 4(e) of the Federal 
Power Act by inserting the following parenthetical limitation: 
``(except fresh waters in the State of Hawaii, unless a license 
would be required by section 23 of the Act)''. These words 
would modify the reference to ``several States,'' so as to 
partially limit the authority of the Commission to issue 
licenses under Section 4(e) with respect to proposed hydropower 
projects in Hawaii.
    Section 4(e) of the Act contains the Commission's authority 
to issue licenses for hydropower projects. Section 23(b)(1) 
sets forth the circumstances under which a project cannot be 
constructed, operated, or maintained without a license. In 
certain circumstances, the Commission has authority to issue a 
license for a hydropower project in response to a voluntary 
application under Section 4(e), even though licensing is not 
required under Section 23(b)(1). See Cooley v. Federal Energy 
Regulatory Commission, 843 F.2d 1464, 1469 (D.C. Cir. 1988).
    Under S. 439, the Commission would continue to have 
jurisdiction to issue licenses to construct, operate, and 
maintain hydropower projects in Hawaii whenever Section 
23(b)(1) would require a license for such activities. However, 
the Commission would be precluded from issuing a license for a 
project in Hawaii if Section 23(b)(1) did not require a license 
for such activities.
            Comments
    Pursuant to Section 2408 of the Energy Policy Act of 1992, 
the Commission on April 13, 1994, submitted to the Senate and 
House Committees a study of regulation of hydropower projects 
in Hawaii. The study noted that the Commission has never 
licensed a hydropower project in Hawaii, and is thus not 
currently regulating any project in Hawaii. Our data bases 
currently do not show any pending or outstanding preliminary 
permits, licenses, or exemptions in the State of Hawaii. 
Therefore, Section 2 of S. 439 would not disrupt the 
Commission's current operations, and we would not object to its 
enactment.

                             The Secretary of the Interior,
                                Washington, DC, September 19, 1997.
Hon. Frank Murkowski,
Chairman, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Mr. Chairman: This responds to your request for the 
views of this Department with respect to a bill, S. 439, to 
Provide for Alaska State jurisdiction over small hydroelectric 
projects, and for other purposes.
    The Department is strongly opposed to S. 439.
    The proposed legislation would make several amendments to 
the Federal Power Act (FPA) (16 U.S.C. 1791 et seq.). Section 1 
would amend section 23 of the FPA to transfer jurisdiction over 
hydroelectric projects of 5,000 kilowatts or less from the 
Federal Energy Regulatory Commission (FERC) to the State of 
Alaska. Section 2 would provide for voluntary licensing of 
hydroelectric projects in fresh waters in the State of Hawaii. 
Section 3 would exempt from licensing the transmission line 
portion of a hydroelectric project located in New Mexico. 
Section 4 extends the period for the commencement of 
construction for hydroelectric projects.
    Section 1 of S. 439 would amend section 23 of the FPA by 
adding new subsections (c), (d), (e), and (f). Subsection (c) 
would transfer to the State of Alaska hydroelectric projects in 
the State that are not part of a project already licensed, that 
are not part of a project for which an application for license 
has been received, that have a production capacity of 5,000 
kilowatts or less, and that are not located on any Indian 
reservation, unit of the National Park System component of the 
Wild and Scenic Rivers System or segment of a river designated 
for study for potential addition to the system. Subsection (d) 
allows licensees already licensed by FERC to transfer 
jurisdiction to the State.
    In general, the Department objects to the focus of this 
legislation, which seeks to remove certain hydroelectric 
projects from Federal jurisdiction. The Department opposed 
similar amendments in 1994, and we continue to oppose the 
effort to remove hydroelectric projects from Federal 
jurisdiction. Allowing Alaska or Hawaii to assert jurisdiction 
over certain hydroelectric projects contradicts the intent of 
the FPA, which was enacted to establish a uniform system of 
licensing over hydroelectric projects in the United States. The 
FPA already includes provisions for exempting small projects 
and excludes from its jurisdiction certain projects which fail 
to meet the mandatory licensing criteria in section 23. 
Allowing one or two States to begin exercising independent 
jurisdiction will very likely lead to similar provisions for 
other States and a patchwork of regulatory programs and of 
related environmental review and enforcement, thereby defeating 
the intent of Congress in enacting the FPA in 1920 and 
subsequent Federal laws.
    The transfer would take effect upon the Governor's 
notification to the Secretary of Energy that the State has in 
place a comprehensive process for regulating the facilities. 
The State process is to give appropriate consideration to the 
improvement or development of the State's waterways for the use 
or benefit of commerce, for the improvement and use of water 
power development, for the adequate protection, mitigation and 
enhancement of fish and wildlife (including related spawning 
grounds), for Indian rights, and for other beneficial public 
uses, including irrigation, flood control, water supply, 
recreation and other purposes.
    We object to the Governor's unilateral determination and 
notification. Under this proposal the determination that the 
State's regulations give appropriate consideration to a variety 
of factors and circumstances is made unilaterally by the State. 
The State merely notifies the Secretary of Energy when it has 
regulations in place. There is no provision for approval or 
even review or consultation in the development of the State 
process by the Secretary of Energy or by any other Federal 
agency with an interest in the many purposes specified to be 
covered by the plan to be proposed by the Governor.
    We also object to the limited exception provided in 
subsection (c). Exceptions include Indian reservations, 
National parks, and wild and scenic rivers system lands, but 
not National Wildlife Refuge System units and other 
conservation units, components of the National Wilderness 
Preservation System, wilderness study areas, other areas of 
critical environmental concern, and lands provided to Alaska 
Natives pursuant to the Alaska Native Claims Settlement Act.
    Subsection (e) requires that State authorizations for 
project works located in whole or in part on Federal lands be 
subject to the approval of the Secretary having jurisdiction 
with respect to such lands, and subject to such terms and 
conditions as the Secretary may prescribe. Subsection (f) 
States that Federal environment, natural and cultural resource 
protection laws continue to apply to the lands transferred 
under subsection (c). These provisions, while potentially 
helpful, leave many questions unanswered.
    Would the State enforce compliance of federally-identified 
terms and conditions under the State authorization? What 
mechanism or procedure would be available if the Secretary with 
jurisdiction did not agree with the State's enforcement 
actions?
    Applications for license filed with FERC under Sec. 24 of 
the FPA withdraw public land from the operation of public land 
laws. The issuance of a license by FERC further withdraws the 
land from mining. Would applications and authorizations filed 
with and granted by the State of Alaska also segregate the 
public lands? Section 24 of the FPA also controls the opening 
of withdrawn lands. What would the State's role and authority 
be with regard to opening Federal lands?
    Since enactment of Federal Land Policy and Management Act 
(43 U.S.C. 1701 et seq.) (FLPMA), power projects involving 
Bureau of Land Management (BLM) lands require both a FERC 
license (or an exemption from licensing) and a FLPMA right-of-
way. Does this section include Federal land use authorization 
with the issuance of the State authorization, or would there be 
a separate FLPMA right of way?
    This bill would remove small projects in Alaska from the 
Commission's evaluation under the National Environmental Policy 
Act. (NEPA). How would NEPA be applied to the State process?
    In the absence of a current State capability, the 
Department cannot predict which role and authority we would 
have in an as yet undisclosed State process. This legislation 
could seriously impair or eliminate our review and mitigation 
formulation roles under the Federal Power Act and the Fish & 
Wildlife Coordination Act and the mandatory conditioning 
authority now exercised by the Federal fishery agencies to 
prescribe conditions for fish passage. Our mission requires us 
to exercise trust responsibility for migratory birds, resident 
and anadromous fish, endangered species, and certain marine 
mammals. If we do not have authority under this bill at least 
as strong as under the FPA, we will be unable to undertake our 
trust responsibilities and the Nation's and Alaska's fish and 
wildlife resources will suffer.
    The references included in the bill to ``Federal lands'' 
and to ``any Indian reservation'' do not adequately address the 
rights of Alaska Natives afforded under the Alaska Native 
Claims Settlement Act, and the Alaska National Interest 
Conservation Lands Act and thus may fail to provide adequate 
protection of Alaska Natives, their lands, and their 
traditional way of life. The bill is silent on Alaska Native 
corporations, their lands and their selections. Moreover, the 
Department objects to any provision in the bill which may be 
construed to assign to a State authority to delineate Indian 
rights.
    There is no provision in the proposed legislation to assure 
that State promulgated regulations would provide appropriate 
consideration of responsibilities under the subsistence 
provisions of section VIII of ANILCA.
    Section 2 of the bill amends section 4(e) of the FPA to 
``except fresh waters in the State of Hawaii, unless a license 
would be required by section 23 of the Act.'' The applicability 
of this provision is unclear. Apparently, it seeks to exclude 
projects on fresh waters in Hawaii from Federal licensing, but 
limits that exclusion to those projects which do not require 
licensing under section 23 and which would be exempt from 
Federal licensing even without this proposal. In any case this 
provision will likely fragment Federal licensing authority.
    Section 3 would exempt from FERC jurisdiction a 12-mile 
transmission line extending from the El Vado Project 
switchyard. FERC issued a compliance order in 1993, finding the 
Project Licensee in violation of its license, in that the 
transmission line was not located within the project 
boundaries. Apparently, through this exemption, the Licensee 
seeks to remove itself from FERC's enforcement and penalty 
authority, even though when accepting the license, it accepted 
the condition requiring location of the transmission line 
within the project boundaries. We oppose this exception. FERC's 
enforcement authority, and the various reviews and conditions 
attendant to the license, will be meaningless if licensees can 
seek legislative exemption from the license conditions to which 
they originally agreed.
    Section 4 amends section 13 of the FPA, which currently 
provides for a two year period in which to commence 
construction of a project, to extend the commencement of 
construction period up to 10 years. Currently, section 13 
allows the Commission to grant an extension of two years for 
commencement, and additional extensions for the completion of 
construction. Numerous licensees now obtain legislative 
extensions, a practice about which the Department expressed 
concerns on the 1994 amendments, which contained several 
project-specific extensions. This proposal for a general 
extension is new.
    The Department's concerns about the specific legislative 
extensions are even more applicable to this long general 
extension. Extending the time for commencement of a 
construction up to 10 years will render the environmental 
evaluation, and other evaluations performed in the licensing 
proceeding, stale. Conditions can change drastically in 10 
years. Protections afforded by license reviews may be rendered 
meaningless. Licenses should not be granted if projects are not 
ripe for development and construction is to be delayed for such 
an extended period. Extensions are much better handled 
administratively and on a case-specific basis.
    For all of the above reasons, the Department is strongly 
opposed to S. 439.
    The Office of Management and Budget advises that there is 
no objection to the presentation of this report from the 
standpoint of the Administration's program.
            Sincerely,
                                                     Bruce Babbitt.

                             General Counsel of the
                               U.S. Department of Commerce,
                                Washington, DC, September 22, 1997.
Hon. Frank H. Murkowski,
Chairman, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Mr. Chairman: This letter responds to your request for 
the views of the Department of Commerce on S. 439, a bill to 
amend the Federal Power Act (FPA). The Department is strongly 
opposed to S. 439, because it would eliminate certain important 
marine resource protections provided under the FPA. 
Specifically, by removing small hydropower projects in Alaska 
and all freshwater hydropower projects in Hawaii from the 
jurisdiction of the Federal Energy Regulatory Commission 
(Commission), the bill would eliminate the ability of the 
Federal Government to provide adequate protection of anadromous 
fish and other federally protected and managed resources.
    The Department, through the National Oceanic and 
Atmospheric Administration (NOAA), is responsible for ensuring 
the protection of anadromous and marine fishery resources and 
their habitats, pursuant to the Magnuson-Stevens Fishery 
Conservation and Management Act and other statutes. The 
National Marine Fisheries Service (NMFS) exercises this 
authority with respect to hydropower licensing on rivers 
pursuant to certain sections of the FPA, including sections 
10(j) and 18, as well as the Fish and Wildlife Coordination 
Act.
    In general, the FPA authorizes the Commission to require of 
hydroelectric projects to undertake actions to protect fish and 
wildlife resources. These protections are imposed as conditions 
of operating licenses granted by the Commission. The Commission 
must, with certain exceptions, include in the license NMFS 
recommendations for the protection of, mitigation of damages 
to, and enhancement of fish resources as required by section 
10(j). The Commission must also include fishway prescriptions 
issued by NMFS pursuant to section 18. When a hydropower 
project qualifies for a license exemption, the Commission must 
include NMFS' conditions for fish protection.
    We believe the current responsibilities under the FPA 
should continue, providing necessary fish protection at the 
state and Federal level. However, S. 439 would remove small 
hydropower projects in Alaska and all freshwater hydropower 
projects in Hawaii from the jurisdiction of the Commission.
    Alaska has the last remaining healthy stocks of anadromous 
fish, and we have a statutory responsibility to protect them. 
We believe that the existing exemption requirement 
appropriately addresses the interests of states and the Federal 
Government. However, by making small projects subjects to the 
exclusive authorizing authority of the state, S. 439 fails to 
ensure that fish protection measures determined to be necessary 
pursuant to Federal statute would be undertaken. Projects of 
5,000 kilowatts or less may have significant environmental 
consequences. Damming an anadromous fish stream will have 
adverse impacts regardless of the project's size. Further, 
small hydroelectric projects in particular are often located 
near anadromous fish spawning habitat and can effectively block 
fish access to the upstream areas. We believe that such 
projects should remain subject to conditions for fish 
protection issued by Federal agencies such as NMFS.
    In addition, S. 439 would limit the Department's ability to 
protect species listed under the Endangered Species Act (ESA). 
The ESA required that Federal agencies undertaking an action 
that would potentially affect a listed species first consult 
with the appropriate Federal resource agency. However, S. 439 
would eliminate Federal agency actions in connection with the 
licensing of hydropower projects, without imposing a 
corresponding requirement for the state to consult with the 
Federal resource agencies.
    The Department also has concerns regarding hydropower 
projects located in whole or in part on Federal lands. S. 439 
would require that the Secretary having jurisdiction with 
respect to such lands must approve the State of Alaska's 
authorization for the hydropower project. However, the bill 
fails to require any consultation with the Federal fish and 
wildlife resource agencies before such approval is provided. 
Federal trust resources may be affected, as well as Federal 
resource management plans.
    The Department has similar concerns regarding the bill's 
exemption for all hydroelectric projects on fresh waters in the 
State of Hawaii from the jurisdiction of the Commission. The 
effect would be to free operators of hydroelectric projects in 
Hawaii from requirements needed to protect fish and wildlife 
resources that are imposed as conditions of operating licenses 
granted by the Commission. While the Department currently has 
not needed to become involved in hydropower licensing in 
Hawaii, we should not be precluded from doing so in the future, 
if appropriate.
    We have been advised by the Office of Management and Budget 
that there is no objection to the submission of this report 
from the standpoint of the Administration's program.
            Sincerely,
                                                  Andrew J. Pincus.

                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing rules of the Senate, changes in existing law made by 
the bill S. 846, as ordered reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets, new matter is printed in italic, existing law in 
which no change is proposed is shown in roman):

                           Federal Power Act

                 The Act of June 10, 1920, Chapter 285

                                 part i

          * * * * * * *
    Sec. 4. * * *
          * * * * * * *
    (e) To issue licenses to citizens of the United States, or 
to any association of such citizens, or to any corporation 
organized under the laws of the United States or any State 
thereof, or to any State or municipality for the purpose of 
constructing, operating, and maintaining dams, water conduits, 
reservoirs, power houses, transmission lines, or other project 
works necessary or convenient for the development and 
improvement of navigation and for the development, 
transmission, and utilization of power across, along, from or 
in any of the streams or other bodies of water over which 
congress had jurisdiction under its authority to regulate 
commerce with foreign nations and among the [several States, or 
upon] several States (except fresh waters in the State of 
Hawaii, unless a license would be required by section 23 of the 
Act), or upon any part of the public lands and reservations of 
the United States (including the Territories), or for the 
purpose of utilizing the surplus water or water power from any 
Government dam, except as herein provided: Provided, That 
licenses shall be issued within any reservation only after a 
finding by the Commission that the license will not interfere 
or be inconsistent with the purpose for which such reservation 
was created or acquired, and shall be subject to and contain 
such conditions as the Secretary of the department under whose 
supervision such reservation falls shall deem necessary for the 
adequate protection and utilization of such reservation.\1\ 
Provided further, That no license affecting the navigable 
capacity of any navigable waters of the United States shall be 
issued until the plans of the dam or other structures affecting 
navigation have been approved by the Chief of Engineers and the 
Secretary of the Army. Whenever the contemplated improvement 
is, in the judgment of the Commission, desirable and justified 
in the public interest for the purpose of improving or 
developing a waterway or waterways for the use or benefit of 
interstate or foreign commerce, a finding to that effect shall 
be made by the Commission and shall become a part of the 
records of the Commission: Provided further, That in case the 
Commission shall find that any Government dam may be 
advantageously used by the United States for public purposes in 
addition to navigation, no license therefor shall be issued 
until two years after it shall have reported to Congress the 
facts and conditions relating thereto, except that this 
provision shall not apply to any Government dam constructed 
prior to June 10, 1920: And provided further, That upon the 
filing of any application for a license which has not been 
preceded by a preliminary permit under subsection (f) of this 
section, notice shall be given and published as required by the 
proviso of said subsection. In deciding whether to issue any 
license under this Part for any project, the Commission, in 
addition to the power and development purposes for which 
licenses are issued, shall give equal consideration to the 
purposes of energy conservation, the protection, mitigation of 
damage to, and enhancement of, fish and wildlife (including 
related spawning grounds and habitat), the protection of 
recreational opportunities, and the preservation of other 
aspects of environmental quality.
          * * * * * * *