[Senate Report 108-286]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 601
108th Congress                                                   Report
                                 SENATE
 2d Session                                                     108-286
======================================================================


 
 EXTENSION OF DEADLINE FOR HYDROELECTRIC PROJECT IN THE STATE OF ALASKA

                                _______
                                

                 June 25, 2004.--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. 2243]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 2243) to extend the deadline for 
commencement of construction of a hydroelectric project in the 
State of Alaska, having considered the same, reports favorably 
thereon without amendment and recommends that the bill do pass.

                                PURPOSE

    The purpose of S. 2243 is to extend the deadline for 
commencement of construction of a hydroelectric project in the 
State of Alaska.

                          BACKGROUND AND NEED

    Section 13 of the Federal Power Act requires that the 
construction of a licensed project commence within two years 
from the date the license is issued. The Federal Energy 
Regulatory Commission (``FERC'' or ``Commission'') 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 date the license is issued unless legislation 
authorizing an additional extension is enacted. S. 2243 
authorizes FERC to extend the construction deadline for Project 
No. 11480.
    On October 24, 2000, the Commission issued a license to the 
Haida Corporation to construct, operate, and maintain the 5-
megawatt Reynolds Creek Project No. 11480 on Prince of Wales 
Island, in southeast Alaska. The license's original deadline 
for construction commencement was October 23, 2002. Because the 
project lacked a power purchase contract, FERC granted the 
licensee's request to extend the deadline to October 23, 2004, 
four years after the license was issued. Construction of 
Project No. 11480 entails building a 20-foot-long, 6-foot-high 
diversion dam, a 3,200-foot-long penstock, a powerhouse with 
two turbine-generator units, and a transmission line.

                          LEGISLATIVE HISTORY

    S. 2243 was introduced by Senator Murkowski on March 26, 
2004, and referred to the Committee on Energy and Natural 
Resources. A hearing on S. 2243 was conducted by the Water and 
Power Subcommittee on May 19, 2004. The Energy and Natural 
Resources Committee, on June 16, 2004, by a unanimous vote of a 
quorum present, favorably reported S. 2243.

                        COMMITTEE RECOMMENDATION

    The Senate Committee on Energy and Natural Resources, in an 
open business session on June 16, 2004, by a unanimous voice 
vote of a quorum present, recommends that the Senate pass S. 
2243.

                      SECTION-BY-SECTION ANALYSIS

    Section 1 authorizes FERC, at the request of the licensee, 
to extend the deadline for commencing construction of 
hydroelectric project No. 11480. The time period may be 
extended for three consecutive two-year periods. The extension 
is to take effect on the date of the expiration of the 
extension originally issued by the Commission under section 13 
of the Federal Power Act.

                   COST AND BUDGETARY CONSIDERATIONS

    The following estimate of the costs of this measure has 
been provided by the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 22, 2004.
Hon. Pete V. Domenici,
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. 2243, a bill to 
extend the deadline for commencement of construction of a 
hydroelectric project in the state of Alaska.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Lisa Cash 
Driskill.
            Sincerely,
                                      Elizabeth M. Robinson
                               (For Douglas Holtz-Eakin, Director).
    Enclosure.

S. 2243--A bill to extend the deadline for commencement of construction 
        of a hydroelectric project in the state of Alaska

    CBO estimates that implementing S. 2243 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.
    If requested by the licensee, S. 2243 would authorize the 
Federal Energy Regulatory Commission (FERC) to extend the 
deadline for construction of a hydroelectric project (number 
11480) in Alaska by up to six years. This bill would have a 
minor impact on FERC's workload. Because FERC recovers 100 
percent of its costs through user fees that the commission 
charges. Hence, the legislation's provisions would have no net 
budgetary impact.
    Because FERC's administrative costs are limited in annual 
appropriations, the bill would not affect direct spending or 
revenues.
    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 S. 2243. The Act is not a regulatory measure in 
the sense of imposing government-established standards or 
significant 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. 2243.

                        EXECUTIVE COMMUNICATIONS

    On June 16, 2004, the Committee on Energy and Natural 
Resources requested legislative reports from the Federal Energy 
Regulatory Commission setting forth executive views on S. 2243. 
This report had not been received at the time the report on S. 
2243 was filed. When the report becomes available, the Chairman 
will request that it be printed in the Congressional Record for 
the advice of the Senate. The testimony provided by the Federal 
Energy Regulatory Commission at the Subcommittee hearing 
follows:

    Statement of Chairman Pat Wood, III, Federal Energy Regulatory 
                               Commission

    Madam Chairman and members of the subcommittee, I 
appreciate the opportunity to comment on S. 2243, a bill to 
extend the deadline for commencement of construction of a 
hydroelectric project in the State of Alaska.
    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 
Federal Energy Regulatory Commission to extend this deadline 
once, for a maximum additional two 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 October 24, 2000, the Commission issued a license to 
Haida Corporation to construct, operate, and maintain the 5-
megawatt Reynolds Creek Project No. 11480, on Prince of Wales 
Island, in southeast Alaska. The original deadline in the 
license for the commencement of construction, October 23, 2002, 
was, at the licensee's request, extended by the Commission to 
October 23, 2004, four years after license issuance. The 
request cited the lack of a power purchase contract.
    Construction of Project No. 11480 entails building a 20-
foot-long, 6-foot-high diversion dam, a 3,200-foot-long 
penstock, a powerhouse with two turbine-generator units, and a 
transmission line.


                            the legislation


    S. 2243 would authorize the Commission, at the request of 
the project licensee, and after reasonable notice, in 
accordance with the good faith, due diligence, and public 
interest requirements of section 13 and the Commission's 
procedures under that section, to extend the time period during 
which the licensee is required to commence the construction of 
the project for three consecutive two-year periods beyond the 
date that is four years after the date of issuance of the 
license.
    In cases where project-specific extensions of construction 
deadlines are authorized by the Congress, it has been the 
position of prior Commission chairmen that such extensions 
should not go beyond ten years from the date the project was 
licensed. I have no reason to depart from this extension 
policy.
    S. 2243 would permit the licensee for Project No. 11480 to 
extend the deadline for commencement of construction for three 
consecutive 2-year periods beyond the date that is four years 
after the date of issuance of the license. Accordingly, 
construction could commence no later than ten years from the 
date the license was issued. This time frame is consistent with 
the Commission's policy, and I have no objection to the bill.

                        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 the bill S. 2243 as ordered 
reported.

                                  
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