[Senate Report 106-381]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 757
106th Congress                                                   Report
                                 SENATE
 2d Session                                                     106-381

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                 HYDROELECTRIC PROJECT IN PENNSYLVANIA

                                _______
                                

                August 25, 2000.--Ordered to be printed

   Filed under authority of the order of the Senate of July 26, 2000

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 2499]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 2499) to extend the deadline for 
commencement of construction of a hydroelectric project in the 
State of Pennsylvania, having considered the same, reports 
favorably thereon without amendment and recommends that the 
bill do pass.

                         purpose of the measure

    The purpose of S. 2499 is to require the Federal Energy 
Regulatory Commission, upon the request of the licensee, to 
extend until December 31, 2001, the deadline for the licensee 
to commence construction of hydroelectric project No. 7041. S. 
2449 also provides for the reinstatement of the license for the 
project if it has expired before the enactment of the Act.

                          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. Thus, in the 
absence of this legislation, the license will be terminated.
    On September 27, 1989, the FERC issued a license to Potter 
Township, Pennsylvania to construct and operate the 20-megawatt 
Emsworth Project, FERC license No. 7041, to be located at an 
existing U.S. Army Corps of Engineers dam on the Ohio River in 
Allegheny County, Pennsylvania. The deadline for commencement 
of construction of the Emsworth Project was originally 
September 26, 1991. Pending judicial review of the license, the 
Commission stayed most of the license requirements, including 
the construction deadline, from September 27, 1990, to April 
16, 1992, which resulted in a new construction commencement 
deadline of April 15, 1993. At the licensee's request, this 
deadline was subsequently extended to April 15, 1995, to give 
the licensee additional time to consult with the Corps 
regarding site access and project design and construction, and 
to obtain a power sales contract. Pursuant to Pub. L. No. 104-
254, the Commission further extended the deadline to September 
26, 1999. On March 29, 2000, the Commission denied, for lack of 
authority, the licensee's request for an extension to September 
26, 2001, denied its alternative request for a stay of the 
deadline, and terminated the license, effective April 28, 2000.

                          legislative history

    S. 2499 was introduced on May 3, 2000. A hearing was held 
by the Subcommittee on Water and Power on June 21, 2000.

            committee recommendation and tabulation of votes

    The Senate Committee on Energy and Natural Resources, in 
open business session on July 13, 2000, 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, July 17, 2000.
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. 2499, a bill to 
extend the deadline for commencement of construction of a 
hydroelectric project in the state of Pennsylvania.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Lisa Cash 
Driskill.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

S. 2499--A bill to extend the deadline for commencement of construction 
        of a hydroelectric project in the State of Pennsylvania

    CBO estimates that enacting S. 2499 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. 2499 would extend the deadline, until December 31, 2001, 
for construction of a hydroelectric project currently subject 
to licensing by the Federal Energy Regulatory Commission 
(FERC). The proposed extension is for project number 7041. S. 
2499 also would direct FERC to reinstate the license for the 
project should it expire prior to enactment of this bill. These 
provisions 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 S. 2499.
    The CBO staff contact for this estimate is Lisa Cash 
Driskill. 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: Thank you for 
the opportunity to comment on S. 2499, a bill 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 a maximum of two 
additional years. If project construction has not commenced by 
this deadline, Section 13 requires the Commission to terminate 
the license.
    On September 27, 1989, the Commission issued a license to 
Potter Township, Pennsylvania, to construct and operate the 20-
megawatt Emsworth Project No. 7041 at an existing Army Corps of 
Engineers dam on the Ohio River in Allegheny County, 
Pennsylvania. Construction of the project entails building a 
1,800-foot-long dike for the forebay, a 250-foot-long open-
channel intake, and a powerhouse. In 1994, the Commission 
approved the transfer of the project license to Potter Township 
Hydroelectric Authority.
    The deadline for commencement of construction of the 
Emsworth Project was originally September 26, 1991. Pending 
judicial review of the license, the Commission stayed most of 
the license requirements, including the construction deadline, 
from September 27, 1990, to April 16, 1992 (nearly 19 months), 
which resulted in a new construction commencement deadline of 
April 15, 1993. At the licensee's request, this deadline was 
subsequently extended to April 15, 1995, to give the licensee 
additional time to consult with the Corps regarding site access 
and project design and construction, and to obtain a power 
sales contract. Pursuant to Pub. L. No. 104-254, the Commission 
further extended the deadline to September 26, 1999. On March 
29, 2000, the Commission denied, for lack of authority, the 
licensee's request for an extension to September 26, 2001, 
denied its alternative request for a stay of the deadline, and 
terminated the license, effective April 28, 2000.
    S. 2499 would require the Commission, upon the request of 
the licensee, to extend the deadline for commencement of 
construction until December 31, 2001, which is nearly 27 months 
after the date the license was issued.
    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. Absent a showing of extraordinary circumstances, 
granting a licensee more than ten unstayed years from the 
issuance date of the license to commence construction does not 
meet these criteria. (Where the Commission has stayed the 
construction deadlines, or the entire license, for example, 
pending judicial appeal of the license, which was the case 
here, the period of the stay should not be counted in applying 
this 10-year policy.) 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, then I believe as a 
general matter the license should be terminated pursuant to the 
requirements of 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 
considerations.
    S. 2499 would extend the construction commencement date for 
the Emsworth Project ten years and eight months beyond the 
issuance of the Project No. 7041 license, excluding the period 
of the stay. During the intervening time, substantial changes 
in economic factors, such as the cost of project power, and in 
relevant public interest considerations, such as the project's 
environmental impacts, could affect the viability of the 
project. Because S. 2499 would extend the deadline beyond ten 
years from license issuance, 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. 2499, as ordered 
reported.

                                  
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