[Senate Report 106-26]
[From the U.S. Government Publishing Office]
Calendar No. 63
106th Congress Report
1st Session SENATE 106-26
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FERC LICENSING OF HYDROELECTRIC PROJECTS ON FRESH WATERS IN HAWAII
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March 18, 1999.--Ordered to be printed
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Mr. Murkowski, from the Committee on Energy and Natural Resources,
submitted the following
R E P O R T
[To accompany S. 334]
The Committee on Energy and Natural Resources, to which was
referred the bill (S. 334) 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. 334 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)(1) 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 to 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)(1) 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 interstate
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 application 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)(1) 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 National 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 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.
The Committee again passed legislation to exempt these
projects in 1998. S. 846 and section 2 of S. 439 in the 105th
Congress.) S. 846 was reported by the Committee on October 15,
1997 (Report 105-112), and passed the Senate on June 25, 1998.
S. 439 was reported by the Committee on October 15, 1997
(Report 105-111), and passed the Senate on June 25, 1998. No
action was taken by the House on either bill. S. 334 is
identical to S. 846 and section 2 of S. 439.
Committee Recommendations
The Senate Committee on Energy and Natural Resources, in
open business session on March 4, 1999 by a voice vote with a
quorum present, recommends that the Senate pass S. 334 without
amendment.
Section-by-Section Analysis
S. 334 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, March 9, 1999.
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. 334, 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 Lisa Cash
Driskill (for the state and local impact).
Sincerely,
Barry B. Anderson
(For Dan L. Crippen, Director).
Enclosure.
S. 334--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. 334 contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act and would have no impact on the
budgets of state, local, or tribal governments. The bill would
limit FERC's authority to license certain hydroelectric
projects in Hawaii, leaving the state with that authority.
Because Hawaii already licenses and regulates these projects,
the bill would not require Hawaii to take any action.
S. 334 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, enacting S. 334 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 Lisa Cash Driskill (for the state and
local impact). 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
No executive communications were received by the Committee
on S. 334. Executive communications were received by the
Committee on identical legislation in the 105th Congress, S.
846 and section 2 of S. 439, which appear in Senate Reports
105-112 and 105-111 respectively.
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. 334, 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
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Sec. 4. * * *
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(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.
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.
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