[Senate Report 105-134]
[From the U.S. Government Publishing Office]
Calendar No. 253
105th Congress Report
SENATE
1st Session 105-134
_______________________________________________________________________
EXTENDING THE DEADLINE FOR THE CONSTRUCTION OF A HYDROELECTRIC PROJECT
LOCATED IN THE STATE OF WASHINGTON
_______
November 4, 1997.--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 H.R. 652]
The Committee on Energy and Natural Resources, to which was
referred the Act (H.R. 652) to extend the deadline under the
Federal Power Act for the construction of a hydroelectric
project located in the State of Washington, and for other
purposes, having considered the same, reports favorably thereon
without amendment and recommends that the Act do pass.
purpose of the measure
The purpose of H.R. 652 is to extend the deadline contained
in the Federal Power Act for the commencement of construction
of a FERC-licensed hydroelectric project (project number 9025)
located in the State of Washington.
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.
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.
H.R. 652 would extend the time allowed to complete
construction of hydroelectric project numbered 9025 for three
consecutive two-year periods. This assures the project
additional time to secure a contract and financing.
legislative history
H.R. 652 was passed by the House on March 11, 1997. A
hearing was held by the Subcommittee on Water and Power on June
10, 1997.
committee recommendation and tabulation of votes
The Senate Committee on Energy and Natural Resources, in
open business session on October 22, 1997, by a voice vote with
a quorum present, recommends that the Senate pass the bill
without amendment.
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, October 24, 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 H.R. 652, an act to
extend the deadline under the Federal Power Act for the
construction of a hydroelectric project located in the State of
Washington, and for other purposes.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact for this
estimate is Kim Cawley.
Sincerely,
James L. Blum
(For June E. O'Neill, Director).
Enclosure.
Congressional Budget Office Cost Estimate
H.R. 652--An act to extend the deadline under the Federal Power Act for
the construction of a hydroelectric project located in the
State of Washington, and for other purposes
CBO estimates that enacting H.R. 652 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. 652 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 9025. 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
provision would have no net budgetary impact.
Because FERC's administrative costs are limited in annual
appropriations, enactment of this legislation would not affect
direct spending or receipts. Therefore, pay-as-you-go
procedures would not apply.
The CBO staff contact for this estimate is Kim Cawley. 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 setting forth
Executive agency relating to this measure are set forth below:
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.
H.R. 652 would extend the statutory deadline for the start
of construction of a licensed project.
h.r. 651 and h.r. 652; extending deadlines to commence project
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.
The two projects in question are the 5-megawatt Calligan
Creek Project (FERC No. 8864) and the 6-megawatt Hancock Creek
Project (FERC No. 9025), both to be located in King County,
Washington. Both projects have received the maximum four years
for commencement of construction. The bills would require the
Commission to extend the deadline for up to six additional
years, for a total of 10 years from the date of licensing.
As a general principle, we do not support the enactment of
bills authorizing or requiring construction deadline extensions
for individual projects. However, if such extensions are
authorized by the Congress, as a matter of policy we would
object to granting a licensee more than ten years from the
issuance date of the license to commence construction. In our
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. Since the two
bills in question would not extend the deadline beyond the ten-
year mark, we have no specific objections to them. Attached to
my testimony are detailed comments about the bills and the
projects they concern.
Appendix to Testimony of Susan Tomasky
h.r 651 and h.r. 652 (mr. white)
Both bills would require the Commission, upon the request
of the licensee and in accordance with the good faith, due
diligence, and public interest requirements of Section 13 of
the Federal Power Act, to extend for up to six years (10 years
after licensing) the deadline for commencement of construction
of, respectively, Project No. 8864 and project No. 9025.
Project No. 8864
On May 13, 1993, the Commission issued a license to
Weyerhaeuser Company to construct, operate, and maintain the
5.4-megawatt Calligan Creek project No. 8864, to be located in
King County, Washington. The deadline for the commencement of
project construction, originally May 13, 1995, was extended to
May 13, 1997. The Commission approved a transfer of the license
to Calligan Hydro, Inc. on November 1, 1996. The licensee is in
the process of preparing an amendment application to increase
the authorized installed capacity of the proposed project to
7.73 MW, which it anticipates may take up to a year to
complete.
Project No. 9025
On June 21, 1993, the Commission issued a license to
Weyerhaeuser Company to construct, operate, and maintain the
6.3-megawatt Hancock Creek Project No. 9025, to be located in
King County, Washington. The deadline for commencement of
project construction, originally June 21, 1995, was extended to
June 21, 1997. The Commission approved a transfer of the
license to Hancock Hydro, Inc. on November 1, 1996. The
licensee is in the process of preparing an amendment
application to increase the authorized installed capacity of
the proposed project to 7.5 MW, which it anticipates may take
up to a year to complete.
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 H.R. 652, as ordered
reported.