[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.

                                
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