[House Report 115-458]
[From the U.S. Government Publishing Office]


115th Congress   }                                     {        Report
                        HOUSE OF REPRESENTATIVES
 1st Session     }                                     {       115-458

======================================================================



 
          PROMOTING CLOSED-LOOP PUMPED STORAGE HYDROPOWER ACT

                                _______
                                

 December 11, 2017.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

 Mr. Walden, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 2880]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 2880) to amend the Federal Power Act to promote 
closed-loop pumped storage hydropower, and for other purposes, 
having considered the same, report favorably thereon with an 
amendment and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     3
Background and Need for Legislation..............................     3
Committee Action.................................................     3
Committee Votes..................................................     4
Oversight Findings and Recommendations...........................     4
New Budget Authority, Entitlement Authority, and Tax Expenditures     4
Congressional Budget Office Estimate.............................     4
Federal Mandates Statement.......................................     4
Statement of General Performance Goals and Objectives............     4
Duplication of Federal Programs..................................     4
Committee Cost Estimate..........................................     4
Earmark, Limited Tax Benefits, and Limited Tariff Benefits.......     4
Disclosure of Directed Rule Makings..............................     5
Advisory Committee Statement.....................................     5
Applicability to Legislative Branch..............................     5
Section-by-Section Analysis of the Legislation...................     5
Changes in Existing Law Made by the Bill, as Reported............     6

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Promoting Closed-Loop Pumped Storage 
Hydropower Act''.

SEC. 2. CLOSED-LOOP PUMPED STORAGE PROJECTS.

  Part I of the Federal Power Act (16 U.S.C. 792 et seq.) is amended by 
adding at the end the following:

``SEC. 34. CLOSED-LOOP PUMPED STORAGE PROJECTS.

  ``(a) Expedited Licensing Process for Closed-loop Pumped Storage 
Projects.--
          ``(1) In general.--As provided in this section, the 
        Commission may issue and amend licenses and preliminary 
        permits, as appropriate, for closed-loop pumped storage 
        projects.
          ``(2) Rule.--Not later than 180 days after the date of 
        enactment of this section, the Commission shall issue a rule 
        establishing an expedited process for issuing and amending 
        licenses and preliminary permits for closed-loop pumped storage 
        projects under this section.
          ``(3) Interagency task force.--In establishing the expedited 
        process under this section, the Commission shall convene an 
        interagency task force, with appropriate Federal and State 
        agencies and Indian tribes represented, to coordinate the 
        regulatory processes associated with the authorizations 
        required to construct and operate closed-loop pumped storage 
        projects.
          ``(4) Length of process.--The Commission shall ensure that 
        the expedited process under this section will result in final 
        decision on an application for a license by not later than 2 
        years after receipt of a completed application for such 
        license.
  ``(b) Dam Safety.--Before issuing any license for a closed-loop 
pumped storage project, the Commission shall assess the safety of 
existing dams and other structures related to the project (including 
possible consequences associated with failure of such structures).
  ``(c) Exemptions From Other Requirements.--
          ``(1) In general.--In issuing or amending a license or 
        preliminary permit pursuant to the expedited process 
        established under this section, the Commission may grant an 
        exemption from any other requirement of this part with respect 
        to any part of the closed-loop pumped storage project (not 
        including any dam or other impoundment).
          ``(2) Consultation.--In granting an exemption under paragraph 
        (1), the Commission shall consult with the United States Fish 
        and Wildlife Service and the State agency exercising 
        administration over the fish and wildlife resources of the 
        State in which the closed-loop pumped storage project is or 
        will be located, in the manner provided by the Fish and 
        Wildlife Coordination Act (16 U.S.C. 661 et seq.).
          ``(3) Terms and conditions.--In granting an exemption under 
        paragraph (1), the Commission shall include in any such 
        exemption--
                  ``(A) such terms and conditions as the Fish and 
                Wildlife Service, National Marine Fisheries Service, 
                and the State agency described in paragraph (2) each 
                determine are appropriate to prevent loss of, or damage 
                to, fish and wildlife resources and to otherwise carry 
                out the purposes of the Fish and Wildlife Coordination 
                Act; and
                  ``(B) such terms and conditions as the Commission 
                deems appropriate to ensure that such closed-loop 
                pumped storage project continues to comply with the 
                provisions of this section and terms and conditions 
                included in any such exemption.
          ``(4) Fees.--The Commission, in addition to the requirements 
        of section 10(e), shall establish fees which shall be paid by 
        an applicant for a license for a closed-loop pumped storage 
        project that is required to meet terms and conditions set by 
        fish and wildlife agencies under paragraph (3). Such fees shall 
        be adequate to reimburse the fish and wildlife agencies 
        referred to in paragraph (3) for any reasonable costs incurred 
        in connection with any studies or other reviews carried out by 
        such agencies for purposes of compliance with this section. The 
        fees shall, subject to annual appropriations Acts, be 
        transferred to such agencies by the Commission for use solely 
        for purposes of carrying out such studies and shall remain 
        available until expended.
  ``(d) Transfers.--Notwithstanding section 5, and regardless of 
whether the holder of a preliminary permit for a closed-loop pumped 
storage project claimed municipal preference under section 7(a) when 
obtaining the permit, the Commission may, to facilitate development of 
a closed-loop pumped storage project--
          ``(1) add entities as joint permittees following issuance of 
        a preliminary permit; and
          ``(2) transfer a license in part to one or more nonmunicipal 
        entities as co-licensees with a municipality, if the 
        municipality retains majority ownership of the project for 
        which the license was issued.
  ``(e) Interagency Communications.--Interagency cooperation in the 
preparation of environmental documents under the National Environmental 
Policy Act of 1969 (42 U.S.C. 4321 et seq.) with respect to an 
application for a license for a closed-loop pumped storage project 
submitted pursuant to this section, and interagency communications 
relating to licensing process coordination pursuant to this section, 
shall not--
          ``(1) be considered to be ex parte communications under 
        Commission rules; or
          ``(2) preclude an agency from participating in a licensing 
        proceeding under this part.
  ``(f) Developing Abandoned Mines for Pumped Storage.--
          ``(1) Workshop.--Not later than 6 months after the date of 
        enactment of this section, the Commission shall hold a workshop 
        to explore potential opportunities for development of closed-
        loop pumped storage projects at abandoned mine sites.
          ``(2) Guidance.--Not later than 1 year after the date of 
        enactment of this section, the Commission shall issue guidance 
        to assist applicants for licenses or preliminary permits for 
        closed-loop pumped storage projects at abandoned mine sites.
  ``(g) Qualifying Criteria for Closed-loop Pumped Storage Projects.--
          ``(1) In general.--The Commission shall establish criteria 
        that a pumped storage project shall meet in order to qualify as 
        a closed-loop pumped storage project eligible for the expedited 
        process established under this section.
          ``(2) Inclusions.--In establishing the criteria under 
        paragraph (1), the Commission shall include criteria requiring 
        that the pumped storage project--
                  ``(A) cause little to no change to existing surface 
                and groundwater flows and uses; and
                  ``(B) is unlikely to adversely affect species listed 
                as a threatened species or endangered species under the 
                Endangered Species Act of 1973.''.

SEC. 3. OBLIGATION FOR PAYMENT OF ANNUAL CHARGES.

  Section 10(e) of the Federal Power Act (16 U.S.C. 803(e)) is amended 
by adding at the end the following:
  ``(5) Any obligation of a licensee for payment of annual charges 
under this subsection shall commence when the construction of the 
applicable facility commences.''.

                          Purpose and Summary

    H.R. 2880 promotes closed-loop pumped storage hydropower 
development by establishing an expedited licensing process that 
will result in a final decision on an application in two years 
or less. The legislation also requires Federal Energy 
Regulatory Commission (FERC) to hold a workshop to explore 
potential opportunities for development of closed-loop pumped 
storage projects at abandoned mine sites.

                  Background and Need for Legislation

    H.R. 2880, Promoting Closed-Loop Pumped Storage Hydropower 
Act, was introduced by Representative Morgan Griffith (R-VA) on 
June 12, 2017.

                            Committee Action

    The Committee on Energy and Commerce has not held hearings 
on the legislation.
    On October 26, 2017, the Subcommittee on Energy met in open 
markup session and forwarded H.R. 2880, without amendment, to 
the full Committee by a voice vote. On December 6, 2017, the 
full Committee on Energy and Commerce met in open markup 
session and ordered H.R. 2880, as amended, favorably reported 
to the House by a voice vote.

                            Committee Votes

    Clause 3(b) of rule XIII requires the Committee to list the 
record votes on the motion to report legislation and amendments 
thereto. There were no record votes taken in connection with 
ordering H.R. 2880 reported.

                 Oversight Findings and Recommendations

    Pursuant to clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII, the Committee has not held hearings on this 
legislation.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    Pursuant to clause 3(c)(2) of rule XIII, the Committee 
finds that H.R. 2880 would result in no new or increased budget 
authority, entitlement authority, or tax expenditures or 
revenues.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII, at the time this 
report was filed, the cost estimate prepared by the Director of 
the Congressional Budget Office pursuant to section 402 of the 
Congressional Budget Act of 1974 was not available.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

         Statement of General Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII, the general 
performance goal or objective of this legislation is to amend 
the Federal Power Act to promote closed-loop pumped storage 
hydropower.

                    Duplication of Federal Programs

    Pursuant to clause 3(c)(5) of rule XIII, no provision of 
H.R. 2880 is known to be duplicative of another Federal 
program, including any program that was included in a report to 
Congress pursuant to section 21 of Public Law 111-139 or the 
most recent Catalog of Federal Domestic Assistance.

                        Committee Cost Estimate

    Pursuant to clause 3(d)(1) of rule XIII, the Committee 
adopts as its own the cost estimate prepared by the Director of 
the Congressional Budget Office pursuant to section 402 of the 
Congressional Budget Act of 1974. At the time this report was 
filed, the estimate was not available.

       Earmark, Limited Tax Benefits, and Limited Tariff Benefits

    Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the 
Committee finds that H.R. 2880 contains no earmarks, limited 
tax benefits, or limited tariff benefits.

                  Disclosure of Directed Rule Makings

    Pursuant to section 3(i) of H. Res. 5, the following 
directed rule makings are contained in H.R. 2880:
           Not later than 180 days after the date of 
        enactment of this section, the Commission shall issue a 
        rule establishing an expedited process for issuing and 
        amending licenses and preliminary permits for closed-
        loop pumped storage projects.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    This section provides the short title of ``Promoting 
Closed-Loop Pumped Storage Hydropower Act.''

Section 2. Closed-loop pumped storage projects

    Section 2 amends Part I of the Federal Power Act (FPA) by 
adding a new section titled ``Sec 34. Closed-Loop Pumped 
Storage Projects.''
    FPA section 34(a) allows the Commission to issue and amend 
licenses and preliminary permits for closed-loop pumped storage 
projects and directs the Commission to issue a rule not later 
than 180 days after the date of enactment of this section to 
establish this expedited process. When establishing the 
expedited process, the Commission shall convene an interagency 
task force with appropriate Federal and State agencies and 
Indian tribes to coordinate the regulatory process associated 
with the authorizations required to construct and operate 
closed-loop pumped storage projects. The expedited process 
established by the Commission shall result in a final decision 
on applications for a license within two years of receipt of a 
completed license application.
    FPA section 34(b) requires the Commission to assess the 
safety of existing dams and other structures related to the 
project before issuing any license for a closed-loop pumped 
storage project.
    FPA section 34(c) allows the Commission to grant an 
exemption from any other requirement of Part I of the FPA with 
respect to any portion of the closed-loop pumped storage 
project when issuing or amending a license or preliminary 
permit pursuant to the expedited process established under this 
section. When granting an exemption, the Commission shall 
consult with the United States Fish and Wildlife Service and 
the relevant State agency in the manner provided by the Fish 
and Wildlife Coordination Act. Additionally, when granting an 
exemption, the Commission shall include in the exemption terms 
and conditions that the Fish and Wildlife Service, National 
Marine Fisheries Service, and the relevant State agency 
determine are appropriate to prevent loss, or damage to, fish 
and wildlife resources and to otherwise carry out the purposes 
of the Fish and Wildlife Coordination Act, along with terms and 
conditions that the Commission deems appropriate to ensure that 
such closed-loop pumped storage project continues to comply 
with the provisions of this section. The Commission shall 
establish fees that shall be paid by an applicant for a license 
for a closed-loop pumped storage project that shall be adequate 
to reimburse the fish and wildlife agencies for any reasonable 
costs incurred in connection with any studies or other reviews 
carried out by such agencies in order to comply with this 
section. The fees shall be subject to annual appropriation Acts 
and shall be transferred to such agencies by the Commission for 
use solely for purposes of carrying out such studies.
    FPA section 34(d) specifies that the Commission may add 
entities as joint permittees following issuance of a 
preliminary permit and may transfer a license in part to one or 
more nonmunicipal entities as co-licensees with a municipality, 
if the municipality retains majority ownership of the project 
for which the license was issued.
    FPA section 34(e) directs that any interagency cooperation 
in the preparation of environmental documents under the 
National Environmental Policy Act of 1969 with respect to an 
application for a license for a closed-loop pumped storage 
project, and any interagency communications related to 
licensing process coordination shall not be considered to be ex 
parte communications under Commission rules and shall not 
preclude an agency from participating in a licensing proceeding 
under Part I of the FPA.
    FPA section 34(f) directs the Commission to hold a 
workshop, not later than six months after the date of enactment 
of this section, to explore potential opportunities for 
development of closed-loop pumped storage projects at abandoned 
mine sites. Not later than one year after the date of enactment 
of this section, the Commission shall issue guidance to assist 
applicants for licenses or preliminary permits for closed-loop 
pumped storage projects at abandoned mine sites.
    FPA section 34(g) directs the Commission to establish 
criteria that a pumped storage project must meet in order to 
qualify as a closed-loop pumped storage project eligible for 
the expedited process established under this section. The 
Commission established criteria shall include criteria 
requiring that the pumped storage project cause little to no 
change to existing surface and groundwater flows and uses and 
is unlikely to adversely affect species listed as a threatened 
species or endangered species under the Endangered Species Act 
of 1973.

Section 3. Obligation for payment of annual charges

    This section amends section 10(e) of the FPA by adding a 
requirement that any obligation or a licensee for payment of 
annual charges under this subsection shall commence when the 
construction of the applicable facility commences.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

                           FEDERAL POWER ACT


PART I

           *       *       *       *       *       *       *


  Sec. 10. All licenses issued under this Part shall be on the 
following conditions:
  (a)(1) That the project adopted, including the maps, plans, 
and specifications, shall be such as in the judgment of the 
Commission will be best adapted to a comprehensive plan for 
improving or developing a waterway or waterways for the use or 
benefit of interstate or foreign commerce, for the improvement 
and utilization of waterpower development, for the adequate 
protection, mitigation, and enhancement of fish and wildlife 
(including related spawning grounds and habitat), and for other 
beneficial public uses, including irrigation, flood control, 
water supply, and recreational and other purposes referred to 
in section 4(e); and if necessary in order to secure such plan 
the Commission shall have authority to require the modification 
of any project and of the plans and specifications of the 
project works before approval.
  (2) In order to ensure that the project adopted will be best 
adapted to the comprehensive plan described in paragraph (1), 
the Commission shall consider each of the following:
          (A) The extent to which the project is consistent 
        with a comprehensive plan (where one exists) for 
        improving, developing, or conserving a waterway or 
        waterways affected by the project that is prepared by--
                  (i) an agency established pursuant to Federal 
                law that has the authority to prepare such a 
                plan; or
                  (ii) the State in which the facility is or 
                will be located.
          (B) The recommendations of Federal and State agencies 
        exercising administration over flood control, 
        navigation, irrigation, recreation, cultural and other 
        relevant resources of the State in which the project is 
        located, and the recommendations (including fish and 
        wildlife recommendations) of Indian tribes affected by 
        the project.
          (C) In the case of a State or municipal applicant, or 
        an applicant which is primarily engaged in the 
        generation or sale of electric power (other than 
        electric power solely from cogeneration facilities or 
        small power production facilities), the electricity 
        consumption efficiency improvement program of the 
        applicant, including its plans, performance and 
        capabilities for encouraging or assisting its customers 
        to conserve electricity cost-effectively, taking into 
        account the published policies, restrictions, and 
        requirements of relevant State regulatory authorities 
        applicable to such applicant.
  (3) Upon receipt of an application for a license, the 
Commission shall solicit recommendations from the agencies and 
Indian tribes identified in subparagraphs (A) and (B) of 
paragraph (2) for proposed terms and conditions for the 
Commission's consideration for inclusion in the license.
  (b) That except when emergency shall require for the 
protection of navigation, life, health, or property, no 
substantial alteration or addition not in conformity with the 
approved plans shall be made to any dam or other project works 
constructed hereunder of an installed capacity in excess of two 
thousand horsepower without the prior approval of the 
Commission; and any emergency alteration or addition so made 
shall thereafter be subject to such modification and change as 
the Commission may direct.
  (c) That the licensee shall maintain the project works in a 
condition or repair adequate for the purposes of navigation and 
for the efficient operation of said works in the development 
and transmission of power, shall make all necessary renewals 
and replacements, shall establish and maintain adequate 
depreciation reserves for such purposes, shall so maintain and 
operate said works as not to impair navigation, and shall 
conform to such rules and regulations as the Commission may 
from time to time prescribe for the protection of life, health, 
and property. Each licensee hereunder shall be liable for all 
damages occasioned to the property of others by the 
construction, maintenance, or operation of the project works or 
of the works appurtenant or accessory thereto, constructed 
under the license, and in no event shall the United States be 
liable therefor.
  (d) That after the first twenty years of operation, out of 
surplus earned thereafter, if any, accumulated in excess of a 
specified reasonable rate of return upon the net investment of 
a licensee in any project or projects, under license, the 
licensee shall establish and maintain amortization reserves, 
which reserves shall, in the discretion of the Commission, be 
held until the termination of the license or be applied from 
time to time in reduction of the net investment. Such specified 
rate of return and the proportion of such surplus earnings to 
be paid into and held in such reserves shall be set forth in 
the license. For any new license issued under section 15, the 
amortization reserves under this subsection shall be maintained 
on and after the effective date of such new license.
  (e)(1) That the licensee shall pay to the United States 
reasonable annual charges in an amount to be fixed by the 
Commission for the purpose of reimbursing the United States for 
the costs of the administration of this Part, including any 
reasonable and necessary costs incurred by Federal and State 
fish and wildlife agencies and other natural and cultural 
resource agencies in connection with studies or other reviews 
carried out by such agencies for purposes of administering 
their responsibilities under this part; for recompensing it for 
the use, occupancy, and enjoyment of its lands or other 
property; and for the expropriation to the Government of 
excessive profits until the respective States shall make 
provision for preventing excessive profits or for the 
expropriation thereof to themselves, or until the period of 
amortization as herein provided is reached, and in fixing such 
charges the Commission shall seek to avoid increasing the price 
to the consumers of power by such charges, and any such charges 
may be adjusted from time to time by the Commission as 
conditions may require: Provided, That, subject to annual 
appropriations Acts, the portion of such annual charges imposed 
by the Commission under this subsection to cover the reasonable 
and necessary costs of such agencies shall be available to such 
agencies (in addition to other funds appropriated for such 
purposes) solely for carrying out such studies and reviews and 
shall remain available until expended: Provided, That when 
licenses are issued involving the use of Government dams or 
other structures owned by the United States or tribal lands 
embraced within Indian reservations the Commission shall, 
subject to the approval of the Secretary of the Interior in the 
case of such dams or structures in reclamation projects and, in 
the case of such tribal lands, subject to the approval of the 
Indian tribe having jurisdiction of such lands as provided in 
section 16 of the Act of June 18, 1934 (48 Stat. 984), fix a 
reasonable annual charge for the use thereof, and such charges 
may with like approval be readjusted by the Commission at the 
end of twenty years after the project is available for service 
and at periods of not less than ten years thereafter upon 
notice and opportunity for hearing: Provided further, That 
licenses for the development, transmission, or distribution of 
power by States or municipalities shall be issued and enjoyed 
without charge to the extent such power is sold to the public 
without profit or is used by such State or municipality for 
State or municipal purposes, except that as to projects 
constructed or to be constructed by States or municipalities 
primarily designed to provide or improve navigation, licenses 
therefor shall be issued without charge; and that licenses for 
the development, transmission, or distribution of power for 
domestic, mining, or other beneficial use in projects of not 
more than two thousand horsepower installed capacity may be 
issued without charges, except on tribal lands within Indian 
reservations; but in no case shall a license be issued free of 
charge for the development and utilization of power created by 
any Government dam and that the amount charged therefor in any 
license shall be such as determined by the Commission : 
Provided however, That no charge shall be assessed for the use 
of any Government dam or structure by any licensee if, before 
January 1, 1985, the Secretary of the Interior has entered into 
a contract with such licensee that meets each of the following 
requirements:
          (A) The contract covers one or more projects for 
        which a license was issued by the Commission before 
        January 1, 1985.
          (B) The contract contains provisions specifically 
        providing each of the following:
                  (i) A powerplant may be built by the licensee 
                utilizing irrigation facilities constructed by 
                the United States.
                  (ii) The powerplant shall remain in the 
                exclusive control, possession, and ownership of 
                the licensee concerned.
                  (iii) All revenue from the powerplant and 
                from the use, sale, or disposal of electric 
                energy from the powerplant shall be, and 
                remain, the property of such licensee.
          (C) The contract is an amendatory, supplemental and 
        replacement contract between the United States and: (i) 
        the Quincy-Columbia Basin Irrigation District (Contract 
        No. 14-06-100-6418); (ii) the East Columbia Basin 
        Irrigation District (Contract No. 14-06-100-6419); or, 
        (iii) the South Columbia Basin Irrigation District 
        (Contract No. 14-06-100-6420).
This paragraph shall apply to any project covered by a contract 
referred to in this paragraph only during the term of such 
contract unless otherwise provided by subsequent Act of 
Congress. In the event an overpayment of any charge due under 
this section shall be made by a licensee, the Commission is 
authorized to allow a credit for such overpayment when charges 
are due for any subsequent period.
  (2) In the case of licenses involving the use of Government 
dams or other structures owned by the United States, the 
charges fixed (or readjusted) by the Commission under paragraph 
(1) for the use of such dams or structures shall not exceed 1 
mill per kilowatt-hour for the first 40 gigawatt-hours of 
energy a project produces in any year, 1\1/2\ mills per 
kilowatt-hour for over 40 up to and including 80 gigawatt-hours 
in any year, and 2 mills per kilowatt-hour for any energy the 
project produces over 80 gigawatt-hours in any year. Except as 
provided in subsection (f), such charge shall be the only 
charge assessed by any agency of the United States for the use 
of such dams or structures.
  (3) The provisions of paragraph (2) shall apply with respect 
to--
          (A) all licenses issued after the date of the 
        enactment of this paragraph; and
          (B) all licenses issued before such date which--
                  (i) did not fix a specific charge for the use 
                of the Government dam or structure involved; 
                and
                  (ii) did not specify that no charge would be 
                fixed for the use of such dam or structure.
  (4) Every 5 years, the Commission shall review the 
appropriateness of the annual charge limitations provided for 
in this subsection and report to Congress concerning its 
recommendations thereon.
  (5) Any obligation of a licensee for payment of annual 
charges under this subsection shall commence when the 
construction of the applicable facility commences.
  (f) That whenever any licensee hereunder is directly 
benefited by the construction work of another licensee, a 
permittee, or of the United States of a storage reservoir or 
other headwater improvement, the Commission shall require as a 
condition of the license that the licensee so benefited shall 
reimburse the owner of such reservoir or other improvements for 
such part of the annual charges for interest, maintenance, and 
depreciation thereon as the Commission may deem equitable. The 
proportion of such charges to be paid by any licensee shall be 
determined by the Commission. The licensees or permittees 
affected shall pay to the United States the cost of making such 
determination as fixed by the Commission.
  Whenever such reservoir or other improvement is constructed 
by the United States the Commission shall assess similar 
charges against any licensee directly benefited thereby, and 
any amount so assessed shall be paid into the Treasury of the 
United States, to be reserved and appropriated as a part of the 
special fund for headwater improvements as provided in section 
17 hereof.
  Whenever any power project not under license is benefited by 
the construction work of a licensee or permittee, the United 
States or any agency thereof, the Commission, after notice to 
the owner or owners of such unlicensed project, shall determine 
and fix a reasonable and equitable annual charge to be paid to 
the licensee or permittee on account of such benefits, or to 
the United States if it be the owner of such headwater 
improvement.
  (g) Such other conditions not inconsistent with the 
provisions of this Act as the Commission may require.
  (h)(1) That combinations, agreements, arrangements, or 
understandings, express or implied, to limit the output of 
electrical energy, to restrain trade, or to fix, maintain, or 
increase prices for electrical energy or service are hereby 
prohibited.
  (2) That conduct under the license that: (A) results in the 
contravention of the policies expressed in the antitrust laws; 
and (B) is not otherwise justified by the public interest 
considering regulatory policies expressed in other applicable 
law (including but not limited to those contained in Part II of 
this Act) shall be prevented or adequately minimized by means 
of conditions included in the license prior to its issuance. In 
the event it is impossible to prevent or adequately minimize 
the contravention, the Commission shall refuse to issue any 
license to the applicant for the project and, in the case of an 
existing project, shall take appropriate action to provide 
thereafter for the operation and maintenance of the affected 
project and for the issuing of a new license in accordance with 
section 15 of this Part.
  (i) In issuing licenses for a minor part only of a complete 
project, or for a complete project of not more than two 
thousand horsepower installed capacity, the Commission may in 
its discretion waive such conditions, provisions, and 
requirements of this Part, except the license period of fifty 
years, as it may deem to be to the public interest to waive 
under the circumstances: Provided, That the provision hereof 
shall not apply annual charges for use of lands within Indian 
reservations.
  (j)(1) That in order to adequately and equitably protect, 
mitigate damages to, and enhance, fish and wildlife (including 
related spawning grounds and habitat) affected by the 
development, operation, and management of the project, each 
license issued under this Part shall include conditions for 
such protection, mitigation, and enhancement. Subject to 
paragraph (2), such conditions shall be based on 
recommendations received pursuant to the Fish and Wildlife 
Coordination Act (16 U.S.C. 661 et seq.) from the National 
Marine Fisheries Service, the United States Fish and Wildlife 
Service, and State fish and wildlife agencies.
  (2) Whenever the Commission believes that any recommendation 
referred to in paragraph (1) may be inconsistent with the 
purposes and requirements of this Part or other applicable law, 
the Commission and the agencies referred to in paragraph (1) 
shall attempt to resolve any such inconsistency, giving due 
weight to the recommendations, expertise, and statutory 
responsibilities of such agencies. If, after such attempt, the 
Commission does not adopt in whole or in part a recommendation 
of any such agency, the Commission shall publish each of the 
following findings (together with a statement of the basis for 
each of the findings):
          (A) A finding that adoption of such recommendation is 
        inconsistent with the purposes and requirements of this 
        Part or with other applicable provisions of law.
          (B) A finding that the conditions selected by the 
        Commission comply with the requirements of paragraph 
        (1).
Subsection (i) shall not apply to the conditions required under 
this subsection.

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SEC. 34. CLOSED-LOOP PUMPED STORAGE PROJECTS.

  (a) Expedited Licensing Process for Closed-loop Pumped 
Storage Projects.--
          (1) In general.--As provided in this section, the 
        Commission may issue and amend licenses and preliminary 
        permits, as appropriate, for closed-loop pumped storage 
        projects.
          (2) Rule.--Not later than 180 days after the date of 
        enactment of this section, the Commission shall issue a 
        rule establishing an expedited process for issuing and 
        amending licenses and preliminary permits for closed-
        loop pumped storage projects under this section.
          (3) Interagency task force.--In establishing the 
        expedited process under this section, the Commission 
        shall convene an interagency task force, with 
        appropriate Federal and State agencies and Indian 
        tribes represented, to coordinate the regulatory 
        processes associated with the authorizations required 
        to construct and operate closed-loop pumped storage 
        projects.
          (4) Length of process.--The Commission shall ensure 
        that the expedited process under this section will 
        result in final decision on an application for a 
        license by not later than 2 years after receipt of a 
        completed application for such license.
  (b) Dam Safety.--Before issuing any license for a closed-loop 
pumped storage project, the Commission shall assess the safety 
of existing dams and other structures related to the project 
(including possible consequences associated with failure of 
such structures).
  (c) Exemptions From Other Requirements.--
          (1) In general.--In issuing or amending a license or 
        preliminary permit pursuant to the expedited process 
        established under this section, the Commission may 
        grant an exemption from any other requirement of this 
        part with respect to any part of the closed-loop pumped 
        storage project (not including any dam or other 
        impoundment).
          (2) Consultation.--In granting an exemption under 
        paragraph (1), the Commission shall consult with the 
        United States Fish and Wildlife Service and the State 
        agency exercising administration over the fish and 
        wildlife resources of the State in which the closed-
        loop pumped storage project is or will be located, in 
        the manner provided by the Fish and Wildlife 
        Coordination Act (16 U.S.C. 661 et seq.).
          (3) Terms and conditions.--In granting an exemption 
        under paragraph (1), the Commission shall include in 
        any such exemption--
                  (A) such terms and conditions as the Fish and 
                Wildlife Service, National Marine Fisheries 
                Service, and the State agency described in 
                paragraph (2) each determine are appropriate to 
                prevent loss of, or damage to, fish and 
                wildlife resources and to otherwise carry out 
                the purposes of the Fish and Wildlife 
                Coordination Act; and
                  (B) such terms and conditions as the 
                Commission deems appropriate to ensure that 
                such closed-loop pumped storage project 
                continues to comply with the provisions of this 
                section and terms and conditions included in 
                any such exemption.
          (4) Fees.--The Commission, in addition to the 
        requirements of section 10(e), shall establish fees 
        which shall be paid by an applicant for a license for a 
        closed-loop pumped storage project that is required to 
        meet terms and conditions set by fish and wildlife 
        agencies under paragraph (3). Such fees shall be 
        adequate to reimburse the fish and wildlife agencies 
        referred to in paragraph (3) for any reasonable costs 
        incurred in connection with any studies or other 
        reviews carried out by such agencies for purposes of 
        compliance with this section. The fees shall, subject 
        to annual appropriations Acts, be transferred to such 
        agencies by the Commission for use solely for purposes 
        of carrying out such studies and shall remain available 
        until expended.
  (d) Transfers.--Notwithstanding section 5, and regardless of 
whether the holder of a preliminary permit for a closed-loop 
pumped storage project claimed municipal preference under 
section 7(a) when obtaining the permit, the Commission may, to 
facilitate development of a closed-loop pumped storage 
project--
          (1) add entities as joint permittees following 
        issuance of a preliminary permit; and
          (2) transfer a license in part to one or more 
        nonmunicipal entities as co-licensees with a 
        municipality, if the municipality retains majority 
        ownership of the project for which the license was 
        issued.
  (e) Interagency Communications.--Interagency cooperation in 
the preparation of environmental documents under the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) with 
respect to an application for a license for a closed-loop 
pumped storage project submitted pursuant to this section, and 
interagency communications relating to licensing process 
coordination pursuant to this section, shall not--
          (1) be considered to be ex parte communications under 
        Commission rules; or
          (2) preclude an agency from participating in a 
        licensing proceeding under this part.
  (f) Developing Abandoned Mines for Pumped Storage.--
          (1) Workshop.--Not later than 6 months after the date 
        of enactment of this section, the Commission shall hold 
        a workshop to explore potential opportunities for 
        development of closed-loop pumped storage projects at 
        abandoned mine sites.
          (2) Guidance.--Not later than 1 year after the date 
        of enactment of this section, the Commission shall 
        issue guidance to assist applicants for licenses or 
        preliminary permits for closed-loop pumped storage 
        projects at abandoned mine sites.
  (g) Qualifying Criteria for Closed-loop Pumped Storage 
Projects.--
          (1) In general.--The Commission shall establish 
        criteria that a pumped storage project shall meet in 
        order to qualify as a closed-loop pumped storage 
        project eligible for the expedited process established 
        under this section.
          (2) Inclusions.--In establishing the criteria under 
        paragraph (1), the Commission shall include criteria 
        requiring that the pumped storage project--
                  (A) cause little to no change to existing 
                surface and groundwater flows and uses; and
                  (B) is unlikely to adversely affect species 
                listed as a threatened species or endangered 
                species under the Endangered Species Act of 
                1973.

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