[Senate Report 105-239]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 453
105th Congress                                                   Report
                                 SENATE

 2d Session                                                     105-239
_______________________________________________________________________


 
                       FERC PROJECT NUMBER 10395

                                _______
                                

                  July 2, 1998.--Ordered to be printed

   Filed under authority of the order of the Senate of June 26, 1998

_______________________________________________________________________


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

                              R E P O R T

                        [To accompany H.R. 2841]

    The Committee on Energy and Natural Resources, to which was 
referred the Act (H.R. 2841) to extend the time required for 
the construction of a hydroelectric project, 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. 2841 is to extend the deadline 
contained in the Federal Power Act for the commencement of 
construction of a FERC-licensed hydroelectric project (No. 
10395) located in the State of Kentucky.

                          Background and need

    Section 13 of the Federal Power Act requires a licensee to 
commence the construction of the 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 by 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 for project No. 10395 at the end of the 
time period authorized under the Federal Power Act for 
commencement of construction.
    On occasion a licensee may have difficulty obtaining a 
power sales contract, and until that is obtained the licensee 
cannot secure the financing necessary to commence construction. 
If the license is terminated, to continue the project the 
licensee would have to undergo the time and expense of 
obtaining a new license, which is considerable.
    H.R. 2841 would require the FERC, upon the request of the 
licensee, to extend the time required for commencement of 
construction for not more than 3 consecutive 2-year periods. 
This is a 35 megawatt project located in Bracken County, 
Kentucky.

                          legislative history

    H.R. 2841 was passed by the House on May 12, 1998. A 
hearing was held by the Subcommittee on Water and Power on June 
16, 1998.

            committee recommendation and tabulation of votes

    The Senate Committee on Energy and Natural Resources, in 
open business session on June 24, 1998, by majority vote of a 
quorum present, recommends that the Senate pass the bill 
without amendment.
    The role call vote on reporting the measure was 20 yeas, 0 
nays as follows:
        YEAS                          NAYS
Mr. Murkowski
Mr. Domenici \1\
Mr. Nickles \1\
Mr. Craig
Mr. Campbell
Mr. Thomas
Mr. Kyl \1\
Mr. Grams
Mr. Smith
Mr. Gorton
Mr. Burns
Mr. Bumpers \1\
Mr. Ford
Mr. Bingaman \1\
Mr. Akaka \1\
Mr. Dorgan
Mr. Graham \1\
Mr. Wyden \1\
Mr. Johnson
Ms. Landrieu

    \1\Indicates 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, June 24, 1998.
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. 2841, an act 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.

               congressional budget office cost estimate

H.R. 2841--An Act to extent 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 
act's provisions 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 to H.R. 2841.
    The CBO staff contact for this estimate is Kim Cawley. This 
estimate was approved by Robert A. Sunshine, Deputy 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 recommendation relating to this measure are 
set forth below:

  Prepared Testimony of Kristina Nygaard, Assistant General Counsel, 
     Hydroelectric Licensing, Federal Energy Regulatory Commission

    Mr. Chairman and members of the subcommittee, my name is 
Kristina Nygaard, and I am Assistant General Counsel for 
Hydroelectric Licensing 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 three bills 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. 2165, H.R. 2217, and H.R. 2841 would extend the 
statutory deadline for the start of construction of three 
licensed projects.
    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 three projects in question are the 24-megawatt LeClaire 
Project (FERC No. 3862) in Scott County, Iowa; the 4.6-megawatt 
San Miguel Project (FERC No. 9248) in San Miguel County, 
Colorado; and the 35-megawatt Meldahl Project (FERC No. 10395) 
in Bracken County, Kentucky. All three projects have received 
the maximum four years for commencement of construction. The 
bills would authorize (H.R. 2165) or require (H.R. 2217 and 
H.R. 2841) the Commission to extend the construction deadline 
for up to ten years from the date of licensing.
    When the Congress has authorized extensions of the 
construction deadlines for individual licensed hydropower 
projects, we have not objected to extensions of up to ten years 
from the date the project was licensed. Because the three bills 
in question would not extend the deadline beyond the ten-year 
mark, we have no objections to them. Attached to my testimony 
are detailed comments about the bills and the projects they 
concern.
    This concludes my prepared remarks. I would be pleased to 
answer any questions you may have.
                                ------                                


               Appendix to Testimony of Kristina Nygaard

                               H.R. 2841

    On July 31, 1995, the Commission issued a license to the 
City of Augusta, Kentucky, to construct and operate the 35-
megawatt Meldahl Project No. 10395, to be located at the Corps 
of Engineers' Captain Anthony Meldahl Project on the Ohio River 
in Bracken County, Kentucky. At the same time, the Commission 
denied applications for license filed by two competing 
applicants: the Cities of Vanceburg, Kentucky, and Hamilton, 
Ohio. The original deadline for the commencement of project 
construction, July 31, 1997, was extended by the Commission to 
July 31, 1999, at the request of the licensee. The City of 
Vanceburg did not seek rehearing of the license order; the City 
of Hamilton's rehearing request was denied.
    H.R. 2841 would authorize the Commission, upon the request 
of the licensee and in accordance with the good faith, due 
diligence, and public interest requirements of Section 13, to 
extend the deadline for commencement of construction for three 
consecutive 2-year periods, for a maximum of ten years from the 
issuance date of the license.
    Commission Chairman James J. Hoecker submitted comments on 
H.R. 2841 to Chairman Schaefer (letter dated April 17, 1998), 
advising that, because the bill would not extend the 
commencement of construction deadline past ten years from the 
date the project was licensed, he did not object to the bill's 
enactment.

                        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. 2841, as reported.

                                
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