[Senate Report 106-170]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 298
106th Congress                                                   Report
                                 SENATE
 1st Session                                                    106-170

======================================================================



 
                  ARROWROCK DAM HYDROELECTRIC PROJECT

                                _______
                                

                October 4, 1999.--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 S. 1236]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 1236) to extend the deadline under the 
Federal Power Act for commencement of the construction of the 
Arrowrock Dam Hydroelectric Project in the State of Idaho, 
having considered the same, reports favorably thereon without 
amendment and recommends that the bill do pass.

                         purpose of the measure

    The purpose of S. 1236 is to authorize the FERC to extend 
until March 26, 2005, the time period for the commencement of 
construction for the Arrowrock hydroelectric project, FERC No. 
4656.

                          background and need

    Section 13 of the Federal Power Act requires a 
hydroelectric licensee to commence the construction of its 
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. Unless additional legislation 
is enacted, if construction has not commenced by the end of the 
time period the license is terminated by the FERC.
    On March 27, 1989, the Commission issued a license for the 
Arrowrock Dam. Subsequently the Commission issued an order 
extending the commencement of construction to March 26, 1993. 
Under the terms of P.L. 102-486, the deadline was extended 
until March 26, 1999. On May 3, 1999, the Commission issued a 
notice of the probable termination of the license for failure 
to commence project construction by the March 26, 1999 
deadline. The license has not yet been terminated. In the 
absence of this legislation, the license will be terminated.

                          legislative history

    S. 1236 was introduced on June 17, 1999. A hearing was held 
by the Subcommittee on Water and Power on July 28, 1999.

            committee recommendation and tabulation of votes

    The Senate Committee on Energy and Natural Resources, in 
open business session on September 22, 1999, 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:

S. 1236--A bill to extend the deadline under the Federal Power Act for 
        commencement of the construction of the Arrowrock Dam 
        Hydroelectric Project in the state of Idaho

    CBO estimates that enacting S. 1236 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 and would impose no costs on 
state, local, or tribal governments.
    S. 1236 would extend the deadline for construction of a 
hydroelectric project currently subject to licensing by the 
Federal Energy Regulatory Commission (FERC) until March 26, 
2005. The proposed extension is for FERC project number 4656. 
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 Peter H. Fontaine, 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 views relating to this measure are set forth 
below:

  Statement of James J. Hoecker, Chairman, Federal Energy Regulatory 
                               Commission

    Mr. Chairman and Members of the subcommittee, I appreciate 
the opportunity to comment on S. 1236, an act to extend the 
construction deadlines applicable to a hydroelectric project 
licensed by the Federal Energy Regulatory Commission.
    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 up to an 
additional two years. If project construction has not commenced 
by this deadline, the Commission is required to terminate the 
license.
    On March 27, 1989, the Commission issued a license to five 
Idaho irrigation districts to construct and operate the 60-
megawatt Arrowrock Dam Project No. 4656, to be located at the 
U.S. Bureau of Reclamation's Arrowrock Dam and Reservoir on the 
South Fork of the Boise River, in Elmore and Ada Counties, 
Idaho. The deadline for the commencement of project 
construction, originally March 26, 1991, was extended by the 
Commission to March 26, 1993. Under the terms of P.L. 102-486, 
the deadline was further extended until March 26, 1999. On May 
3, 1999, the Commission issued notice of the probable 
termination of the Project No. 4656 license for failure to 
commence project construction by the March 26, 1999 deadline. 
The license has not yet been terminated.
    Construction of the project entails installation of two 
180-foot-long penstocks; excavation of a 90-by-50-foot 
tailrace; and construction of a powerhouse, a 15.2-mile-long, 
138-kV transmission line, and related project facilities.
    S. 1236 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 until 
March 26, 2005.
    As a general matter, enactment of bills authorizing or 
requiring construction extensions for individual projects 
delays utilization in the public interest of an important 
energy resource and therefore is inappropriate. In cases where 
project-specific extensions are authorized by the Congress, 
however, they should be of relatively short duration and 
respond only to the practical but unforeseeable needs of the 
licensee. I can think of no case where granting a licensee more 
than ten years from the issuance date of the license to 
commence construction meets those criteria, absent a showing of 
extraordinary circumstances. I believe ten years is a more than 
reasonable period for a licensee to determine whether a project 
is economically viable and to sign a power purchase agreement. 
If a licensee cannot meet such a deadline, I believe as a 
general matter that the license should be terminated pursuant 
to Section 13, so that the site is once again available for 
whatever uses current circumstances may warrant, based on up-
to-date information on economic and environmental 
consideration.
    The proposed legislation would give the license holder of 
Project No. 4656 fully 16 years to commence construction--12 
years more than the maximum allowed under Section 13. During 
that intervening time, substantial changes in economic factors 
such as the cost of project power and relevant public interest 
considerations such as the project's environmental impacts 
could affect the viability of the project. Because S. 1236 
would extend the construction commencement date beyond ten 
years from the issuance of the Project No. 4656 license, I do 
not support its 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 S. 1236 as ordered 
reported.

                                  
