[Senate Report 108-22]
[From the U.S. Government Publishing Office]



                                                        Calendar No. 37
108th Congress                                                   Report
                                 SENATE
 1st Session                                                     108-22
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            HYDROELECTRIC PROJECTS IN THE STATE OF ILLINOIS

                                _______
                                

                 March 19, 2003.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 220]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 220) to reinstate and extend the deadline 
for commencement of construction of a hydroelectric project in 
the State of Illinois, having considered the same, reports 
favorably thereon without amendment and recommends that the 
bill do pass.

                         PURPOSE OF THE MEASURE

    The purpose of S. 220 is to reinstate the license for 
construction, operation, and maintenance and to extend the 
deadline for commencement of construction of a hydroelectric 
project in the State of Illinois.

                          BACKGROUND AND NEED

    Section 13 of the Federal Power Act requires that 
construction commence within 2 years after a project is 
licensed. The Federal Energy Regulatory Commission (FERC) is 
authorized under the Federal Power Act to extend this deadline 
once, for a maximum of two additional years, upon a finding 
that such extension is ``not incompatible with the public 
interest.'' Consequently, a license is subject to termination 
if a licensee fails to begin construction within four years 
after the license is issued.
    S. 220 would reinstate an expired license for Project No. 
11214, a four-megawatt hydroelectric project on the U.S. Army 
Corps of Engineers' Carlyle Dam, located on the Kaskaskia 
River, as of the effective date of the surrender of the 
license. In 1997, Southwestern Electric Cooperative, Inc. 
(Southwestern) was issued the original license by FERC. 
However, Southwestern did not begin construction of the project 
and surrendered the license to FERC in 2000. According to the 
bill's sponsor, the city of Carlyle, Illinois, is interested in 
developing the hydroelectric project and has reached agreement 
with Southwestern whereby once the license is reinstated, 
Southwestern has agreed to transfer the license, designs and 
development of the project to the city. FERC has stated that it 
is not aware of any other party that is interested in 
developing this project site.

                          LEGISLATIVE HISTORY

    S. 220 was introduced by Senator Fitzgerald on January 28, 
2003, and referred to the Committee on Energy and Natural 
Resources. The Subcommmittee on Water and Power conducted a 
hearing on the measure on March 6, 2003. At the business 
meeting on March 12, 2003, the Committee on Energy and Natural 
Resources ordered S. 220 favorably reported.

                        COMMITTEE RECOMMENDATION

    The Committee on Energy and Natural Resources, in open 
business session on March 12, 2003, by a voice vote of a quorum 
present, recommends that the Senate pass S. 220.

                      SECTION-BY-SECTION ANALYSIS

    Section 1 authorizes FERC, for Project No. 11214, upon the 
request of the licensee, and in accordance with the good faith, 
due diligence, and public interest requirements of section 13 
of the FederalPower Act and FERC's procedures under such 
section: (1) to reinstate the license for construction of the project 
as of the effective date of surrender of the license; and (2) to extend 
the deadline to commence construction of the project for up to three 
additional 2-year periods beyond the date that is 4 years after the 
date of the issuance of the license.

                   COST AND BUDGETARY CONSIDERATIONS

    The Congressional Budget Office estimate of the costs of S. 
220 has been requested but was not received at the time the 
report was filed. When the report is available, the Chairman 
will request it to be printed in the Congressional Record for 
the advice of the Senate.

                      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 S. 220. 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 program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of S. 220.

                        EXECUTIVE COMMUNICATIONS

    The pertinent legislative report received by the Committee 
from FERC setting forth Executive agency recommendations 
relating to S. 220 is set forth below:

                      Federal Energy Regulatory Commission,
                                    Washington, DC, March 13, 2003.
Hon. Pete V. Domenici,
Chairman, Committee on Energy and Natural Resources,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: Thank you for your letter of March 10, 
2003 asking for my views on H.R. 397, a House-passed bill to 
reinstate the surrendered license and to extend the 
commencement of construction deadline applicable to a 
hydroelectric project licensed by the Federal Energy Regulatory 
Commission in the State of Illinois. My comments also apply to 
an identical Senate bill, S. 220.
    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 additional years. If project construction has 
not commenced by this deadline, the Commission is required to 
terminate the license. Section 13 also authorizes the 
Commission to extend the deadline for completion of 
construction when not incompatible with the public interest.

The Project

    On June 26, 1997, the Commission issued a license to 
Southwestern Electric Cooperative, Inc. (Southwestern) to 
construct, operate, and maintain the 4-megawatt Carlyle 
Hydroelectric Project No. 11214, to be located at the U.S. Army 
Corps of Engineers' Carlyle Dam on the Kaskaskia River in 
Clinton County, Illinois. Construction of the project entails 
installing an intake structure, five intake conduits, a 
powerhouse with five 800-kilowatt generating units, a 
transmission line, and appurtenances. The deadline for the 
commencement of project construction was June 26, 1999.
    By filing of March 3, 1999, Southwestern advised the 
Commission that it would be applying to surrender the project 
license. On March 27, 2000, Southwestern filed an application 
to surrender the license, stating that the project was no 
longer economicallyfeasible. No project construction had 
commenced. The Commission accepted the surrender, effective June 24, 
2000.

H.R. 397 and S. 220

    Both bills would authorize the Commission, upon request of 
the licensee, after reasonable notice and in accordance with 
the requirements of Section 13 of the Federal Power Act, to 
reinstate the surrendered license for Project No. 11214 and to 
extend the deadline for commencement of project construction 
for three consecutive 2-year periods beyond the date that is 
four years after the issuance date of the license.
    As a general matter, enactment of bills authorizing or 
requiring commencement-of-construction extensions for 
individual projects delays the development of an important 
energy resource and therefore has not been recommended. In 
cases where project-specific extensions are authorized by the 
Congress, it has been the policy of prior Commission chairmen 
that such extensions not go beyond ten years from the date the 
project was licensed. If a licensee cannot meet a ten-year 
deadline, then as a general rule the license should be 
terminated, making the site once again available for such uses 
as current circumstances may warrant, based on up-to-date 
information on economic and environmental considerations. I 
have no reason to depart from this extension policy.
    H.R. 397 and S. 220 would provide for extensions of the 
deadline for commencement of construction that would not exceed 
ten years from the date the license was issued. Since this time 
period is within the ten-year deadline, I have no objection to 
the bills' enactment.
    I hope that this information is helpful to you. If I can be 
of further assistance to you in this or any other Commission 
matter, please let me know.
            Best regards,
                                              Pat Wood III,
                                                          Chairman.

                        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. 220, as ordered 
reported.

                                
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