[Senate Report 109-32]
[From the U.S. Government Publishing Office]



                                                        Calendar No. 45
109th Congress                                                   Report
                                 SENATE
 1st Session                                                     109-32
======================================================================


 
    EXTENSION OF TIME FOR THE FEDERAL ENERGY REGULATORY COMMISSION 
                         HYDROELECTRIC PROJECT

                                _______
                                

                 March 10, 2005.--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. 244]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 244) to extend the deadline for 
commencement of construction of a hydroelectric project in the 
State of Wyoming, having considered the same, reports favorably 
thereon without amendment and recommends that the bill do pass.

                         PURPOSE OF THE MEASURE

    The purpose of S. 244 is to extend the deadline for 
commencement of construction of a hydroelectric project in the 
State of Wyoming.

                          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. 244 
authorizes FERC to extend the construction deadline for Project 
No. 1651.
    On December 19, 1997, the Commission issued a license to 
the Swift Creek Power Company to rehabilitate, operate, and 
maintain the 1.5 megawatt Swift Creek Project No. 1651, located 
in Lincoln County, Wyoming. The original deadline for 
commencing construction of the project was December 18, 1999. 
The Commission subsequently extended that deadline to December 
18, 2001.
    Project No. 1651 includes rehabilitation of the upper 
development of the project by modifying the upper dam to add 
one-foot stoplogs, replacing a 36-inch-diameter penstock with 
one 48 inches in diameter, dredging around the intake 
structure, refurbishing the powerhouse, and installing two 
generators. The rehabilitation of the project's lower 
development includes dredging behind the lower dam, installing 
a 2,000-foot-long buried penstock, building a powerhouse, 
installing two generating units, and burying a short new 
transmission line.

                          LEGISLATIVE HISTORY

    S. 244 was introduced by Senator Thomas on February 1, 
2005. S. 244 is identical to S. 1577 as passed by the Senate 
during the 108th Congress.
    During the 108th Congress, S. 1577 was introduced by 
Senator Thomas on September 3, 2003, and referred to the 
Committee on Energy and Natural Resources. A hearing on S. 1577 
was conducted by the Water and Power Subcommittee on October 
15, 2003. S. Hrg. 108-271. The Energy and Natural Resources 
Committee, on February 11, 2004, by unanimous vote of a quorum 
present, ordered S. 1577 favorably reported. S. Rept. 108-237. 
S. 1577 was passed by the Senate by unanimous consent on May 
19, 2004.
    During the 107th Congress, S. 1852, identical legislation 
to the measure now under consideration, was reported by the 
Senate Energy and Natural Resources Committee on June 28, 2002. 
S. Rept. 107-195. The bill passed the Senate on August 1, 2002, 
by unanimous consent, but the House failed to act in time to 
enact the measure.
    At a business meeting on February 9, 2005, the Committee on 
Energy and Natural Resources ordered S. 244 favorably reported.

                        COMMITTEE RECOMMENDATION

    The Senate Committee on Energy and Natural Resources, in an 
open business session on February 9, 2005, by unanimous voice 
vote of a quorum present, recommends that the Senate pass S. 
244.

                      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. 1651. 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 costs of this measure has been 
provided by the Congressional Budget Office.

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, February 14, 2005.
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. 244, a bill to 
extend the deadline for commencement of construction of a 
hydroelectric project in the state of Wyoming.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Lisa Cash 
Driskill.
            Sincerely,
                                     Douglas Holtz-Eakin, Director.
    Enclosure.

S. 244--A bill to extend the deadline for commencement of construction 
        of a hydroelectric project in the state of Wyoming

    CBO estimates that implementing S. 244 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. 244 would authorize the Federal Energy Regulatory 
Commission (FERC) to extend the deadline for construction of a 
hydroelectric project (number 1651) in Lincoln County, Wyoming. 
These provisions could 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 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. 244. The bill 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. 244.

                        EXECUTIVE COMMUNICATIONS

    The testimony provided by the Commission at the 
Subcommittee hearing on S. 1577, an identical bill to S. 244 in 
the 108th Congress, 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. 1577, a bill to 
extend the deadline for commencement of construction of a 
hydroelectric project in the State of Wyoming.
    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 December 19, 1997, the Commission issued a license to 
Swift Creek Power Company to rehabilitate, operate, and 
maintain the 1.5-megawatt Swift Creek Project No. 1651, in 
Lincoln County, Wyoming. The project occupies 20 acres of 
federal land within the Bridger-Teton National Forest. The 
original deadline in the license for the commencement of 
construction, December 18, 1999, was, at the licensee's 
request, extended by the Commission to December 18, 2001, four 
years after license issuance. The request cited the lack of a 
power purchase contract. The licensee did not ask the 
Commission for any further extensions of the deadline. On 
November 29, 2002, Swift Creek Power Company and the Town of 
Afton, Wyoming, filed a joint application to transfer the 
project license from the company to the town. In response to 
notice of the application, the U.S. Forest Service filed on 
February 28, 2003, a motion to intervene in the transfer 
proceeding, and commented that it supported the transfer if it 
facilitated either placing the project back into operation or 
removing the project works from and restoring National Forest 
System lands. Action on the application remains pending.
    Rehabilitation of the upper development of Project No. 1651 
entails modifying the upper dam to add one-foot stoplogs, 
replacing a 36-inch-diameter penstock with one 48 inches in 
diameter, dredging around the intake structures, refurbishing 
the powerhouse, and installing two generators. Rehabilitation 
of the project's upper development entails dredging behind the 
lower dam, installing a 2,000-foot-long buried penstock, 
building a powerhouse, installing two generating units, and 
burying a short new transmission line.


                            the legislation


    S. 1577 would authorize the Commission, at the request of 
the licensee for the project, and after reasonable notice, in 
accordance with the good faith, due diligence, and public 
interest requirements of that section 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 from the 
date of the expiration of the extension originally issued by 
the Commission.
    The Commission interprets the deadlines in Section 13 as 
applying only to the initial construction of a project. Project 
No. 1651 was in existence when the project was issued a new 
license in 1997, although refurbishment of the damaged project 
entails significant new construction. But while Section 13 is 
not an impediment to the Project No. 1651 licensee, the 
Commission has rarely given a licensee more than ten years to 
commence new construction at an existing project.
    As a general matter, enactment of bills authorizing or 
requiring commencement-of-construction extensions for 
individual projects delays utilization in the public interest 
of an important energy resource and therefore is not 
recommended. In cases where project-specific extensions 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. 1577 would permit the licensee for Project No. 1651 to 
extend the deadline for commencement of construction for three 
consecutive 2-year periods from the date of the expiration of 
the extension originally issued by the Commission. Accordingly, 
construction could commence no later than ten years from the 
date the license was issued. This time frame is therefore 
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. 244, as ordered 
reported.

                                  
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