[Federal Register Volume 59, Number 248 (Wednesday, December 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-31895]


[Federal Register: December 28, 1994]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 2

[Docket No. RM93-25-000]


Use of Reserved Authority in Hydropower Licenses to Ameliorate 
Cumulative Impacts; Policy Statement

Issued December 14, 1994.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Policy Statement.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) is 
adopting a policy statement with respect to the use of reserved 
authority in licenses for hydropower projects to ameliorate cumulative 
impacts of such projects in the same river basin. The policy statement 
says that if it is not possible to explore all aspects of the 
cumulative environmental impact of a project at relicensing, the 
Commission will reserve the right to address them at a later date. The 
Commission will define the reserved authority as narrowly and precisely 
as possible. Licensees will be provided notice of any proposed use of 
the reserved authority and an opportunity for a hearing before the 
Commission acts.

EFFECTIVE DATE: January 27, 1995.

FOR FURTHER INFORMATION CONTACT:
Barry Smoler, Office of the General Counsel, Federal Energy Regulatory 
Commission, 825 N. Capitol Street, N.E., Washington, D.C. 10426, (202) 
208-1269.

SUPPLEMENTARY INFORMATION: In addition to publishing the full text of 
this document in the Federal Register, the Commission also provides all 
interested persons an opportunity to inspect or copy the contents of 
this documents during normal business hours in Room 3104, 941 North 
Capitol Street, N.E., Washington, D.C. 20426.
    The Commission Issuance Posting System (CIPS), an electronic 
bulletin board service, provides access to the texts of formal 
documents issued by the Commission. CIPS is available at no charge to 
the user and may be accessed using a personal computer with a modem by 
dialing (202) 208-1397. To access CIPS, set your communications 
software to 19200, 14400, 12000, 9600, 7200, 4800, 2400, 1200 or 
300bps, full duplex, no parity, 8 data bits, and 1 stop bit. The full 
text of this document will be available on CIPS for 60 days from the 
date of issuance in ASCII and WordPerfect 5.1 format. After 60 days the 
document will be archived, but still accessible. The complete text on 
diskette in Wordperfect format may also be purchased from the 
Commission's copy contractor, La Dorn Systems Corporation, located in 
Room 3104, 941 North Capitol Street, N.E., Washington, D.C. 20426.

Before Commissioners: Elizabeth Anne Moler, Chair; Vicky A. Bailey, 
James J. Hoecker, William L. Massey, and Donald F. Santa, Jr.

I. Introduction

    The Federal Energy Regulatory Commission (Commission) is adopting a 
policy statement with respect to the use of reserved authority in 
licenses for hydropower projects to ameliorate cumulative impacts of 
such projects in the same river basin.

II. Background

    On September 15, 1993, the Commission issued a Notice of Proposed 
Policy Statement (NOPPS). 1 The NOPPS referred to a roundtable 
discussion held by the Commission on June 17, 1993, with a broad 
spectrum of organizations interested in the process for considering 
applications for new licenses for existing hydropower projects, the 
original or prior licenses for which are expiring. A number of the 
participants at the roundtable discussion expressed concern over 
cumulative impacts on the environment of multiple hydropower projects 
located in the same river basin.
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    \1\IV FERC Stats. & Regs. 32,501. The NOPPS was published in 
the Federal Register on September 21, 1993 (58 FR 48,994).
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    The NOPPS noted that the Commission includes a set of standard 
articles, known as L-Forms, in each license that it issues. The L-Forms 
contain broad reservations of the Commission's authority to require 
alterations in the public interest to project works and operations, 
after notice and opportunity for hearing.2
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    \2\See Sec. 2.9 of the regulations, 18 CFR 2.9.
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    In the NOPPS, the Commission recognized the importance of analyzing 
the potential cumulative impacts of multiple projects in the same river 
basin. The Commission noted, however, that the issue had now arisen in 
an unusual context in that, in one year (1993) 167 original licenses 
would expire, and the vast majority of those licensees had filed 
applications for a new license. The Commission thus perceived a need 
``to strike a reasonable balance that maximizes, to the extent 
feasible, taking a meaningful hard look at the cumulative impacts in a 
river basin without allowing the relicensing program to bog down in 
unacceptable delay.''3 The Commission noted in this regard that 
such delays could in themselves be damaging to the environment, as they 
would delay mitigation of adverse impacts at individual project sites.
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    \3\IV FERC Stats. & Regs. at p. 32,799.
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    The Commission noted in the NOPPS that it will in any event be 
examining cumulative impacts in its environmental assessments (EA) and 
environmental impact statements (EIS), and that it intended to prepare 
a number of multi-project EA's and EIS's that examine the cumulative 
impacts of related projects whose original licenses expire reasonably 
contemporaneously with each other. The Commission further noted that it 
will also include consideration of potential cumulative impacts in its 
environmental analysis of individual projects.
    In the NOPPS, the Commission proposed several potential means of 
striking a reasonable balance when individual projects in the same 
river basin are subject to original or prior licenses that expire at 
fairly disparate points in time. The first option involved the project 
whose license does not expire for a number of years. If that project's 
license contained reserved authority of the kind set forth in the L-
Form license articles described above, then, in coordination with the 
relicensing proceedings of other projects in the basin, the Commission 
would consider the appropriateness of using its reserved authority to 
reopen that project's license to address the cumulative impact issue.
    The second option involved the project or projects being 
relicensed. The Commission might add to a new license a special article 
reserving the Commission's authority to address specific types of 
potential cumulative impacts in the future, in connection either with 
the relicense proceedings for other licensed projects in the basin or 
with any reopener proceedings that might be initiated prior to the 
expiration of the licenses for such other projects. The purpose of such 
an article would not be to narrow the Commission's ability to address 
an impact issue in the context of the new license, but to put the 
licensee on notice of the substantial likelihood that a particular 
issue or issues would be revisited in connection with the analysis of 
other specified projects in the basin.4
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    \4\The Commission noted that, although reopener clauses have 
been used in the past, they have not routinely been used to address 
cumulative impact concerns.
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    The Commission recognized the importance of providing project 
developers and financiers as much certainty as possible when it issues 
a license, and stated its intent to strive to do so. The Commission 
also stressed that, as is the case with any reservation of authority in 
a hydroelectric license, use of the reopener authority would be subject 
to the statutory standards of comprehensive development set forth in 
section 10(a)(1) of the Federal Power Act (FPA).5 Finally, the 
Commission stated that it would use the reopener authority under 
discussion to adopt only such modifications to licenses as may be 
reasonably necessary to ameliorate cumulative impacts. The Commission 
would consider a variety of factors, including the sources and causes 
of the cumulative impacts, the costs of ameliorating them, and the 
ability of the various licensed projects to bear those costs.
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    \5\Section 10(a)(1), 16 U.S.C. Sec. 803(a)(1), provides that all 
licenses issued by the Commission under Part I of the FPA shall be 
for projects which:
    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 water power development, for 
the adequate protection, mitigation, and enhancement of fish and 
wildlife (including related spawning grounds and habitat), and for 
other beneficial public purposes, including irrigation, flood 
control, water supply, and recreational and other purposes referred 
to in section 4(e).
    Section 4(e) of the FPA, 16 U.S.C. Sec. 797(e), states, in 
pertinent part:
    In deciding whether to issue any license under this Part for any 
project, the Commission, in addition to the power and development 
purposes for which licenses are issued, shall give equal 
consideration to the purposes of energy conservation, the 
protection, mitigation of damage to, and enhancement of, fish and 
wildlife (including related spawning grounds and habitat), the 
protection of recreational opportunities, and the preservation of 
other aspects of environmental quality.
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    The Commission invited comment on these policy proposals.

III. Comments

    In response to the NOPPS, the Commission received comments and 
reply comments from a great many commenters, including municipal and 
non-municipal licensees; federal, state, and local governmental 
organizations; national, regional, and local environmental, trade, or 
other organizations and associations; and private citizens. The more 
substantial comments are identified in Appendix A. In addition, there 
was a large volume of comments in the nature of short letters. Many 
were from individuals (including operators of small hydro projects), 
and many were from local or regional organizations or local branches of 
national organizations.

A. General Comments

    In general, environmental groups and licensees oppose the 
Commission's proposals, but for very different reasons. State and 
federal agencies generally support the proposals.
    Environmental groups and government agencies applaud the goals of 
the NOPPS, but contend that it errs in perpetuating case-by-case 
analysis. Instead, they prefer systematic cumulative analysis of all 
rivers and projects in the same watershed basin, and want to have that 
analysis performed now, at relicensing, rather than later through 
reopeners.6 Many commenters of all persuasions agree that the 
Commission ought to coordinate the terms of licenses for projects 
located in the same river basin so that in the future these licenses 
all will expire in the same year.7
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    \6\See, e.g., the Hydropower Reform Coalition (Reform) at 5-7.
    \7\See, e.g., Reform at 7; National Hydropower Association (NHA) 
at 13-21, NHA reply comments at 3.
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    The Hydropower Reform Coalition (Reform) urges the Commission to 
``adopt a schedule for performing watershed (basin-wide) environmental 
review, including impact analysis, for all watersheds that have at 
least one Class of 1993 relicensing and that have more than one hydro 
project.''8 Reform urges the Commission to commence such studies 
expeditiously, and to seek additional funding from Congress if 
necessary. Reform believes that its proposals are consistent with 
current federal environmental policy,9 and that there are ``sound 
scientific reasons to conduct cumulative impacts analyses that are 
based on watersheds or ecosystems, and to conduct them in a one-time, 
comprehensive fashion, rather than incrementally over a period of years 
as additional projects come up for relicensing.''10
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    \8\Reform at 12-13.
    \9\Id. at 14-17.
    \1\0Id. at 18-22.
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    Reform agrees with the licensees that a system of reopening 
previously-issued licenses every time another project in the same river 
basin comes up for relicensing would be onerous and unfair to the 
licensees. Therefore, Reform opposes seriatim consideration and 
reconsideration of cumulative impact as each license comes up for 
renewal.11
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    \1\1Id. at 23-24.
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    Reform emphasizes ``comprehensive'' rather than ``incremental'' 
analysis of cumulative impacts. Reform advocates scoping at the outset 
to determine the ``ecosystem boundaries'' in the affected watershed, 
including ``all past, present, and reasonably foreseeable future 
projects in an area, regardless of license status.''12 Reform 
contends that both NEPA13 and the FPA14 require consideration 
at relicensing of the cumulative impacts of a project ``in the context 
of the relevant watershed.''
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    \1\2Id. at 24.
    \1\3Id. at 28-32.
    \1\4Id. at 32-33.
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    The National Hydropower Association (NHA) suggests that ``the 
Proposed Policy runs the risk of being merely a solution in search of a 
problem.''15 NHA questions the Commission's legal authority to 
require the licensee to conduct costly studies based on unforeseen or 
hypothetical cumulative impacts.16 NHA emphasizes its view that 
while it is appropriate to examine cumulative impacts at the time of 
licensing it is not appropriate to reopen that matter after the license 
has been issued and while it is still in effect.
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    \1\5NHA at 4, 12-13.
    \1\6Id. at 6.
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    NHA expresses concern that the proposed policy on reopeners changes 
``the fundamental economic and operational assumptions on which 
licensees relied'' in such a manner as to threaten the continued and 
future viability of hydro projects.17 NHA and the Edison Electric 
Institute (EEI) contend that Congress crafted the FPA to provide 
security of investment so as to encourage investment in hydro projects, 
and that the generic use of reopener clauses is inconsistent with that 
Congressional purpose. In this regard, they and numerous other licensee 
commenters contend that the license is a ``contract'' between the 
federal government and the licensee, and that the proposed policy on 
reopeners would violate the ``contractual expectations'' and 
``contractual reliance'' created and intended by Congress.18 In 
relation to this thesis, NHA, EEI, and the American Public Power 
Association (APPA) discuss sections 6, 10, 13, 14, 15, 21 and 28 of the 
FPA,19 the legislative history of the FPA,20 court 
cases,21 and past Commission practice.22
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    \1\7Id. at 25.
    \1\8NHA at 25-31; EEI at 5-6, 16, 18-19.
    \1\9NHA at 26-29; EEI at 19-22, 26-29, 32; APPA at 11-14, 18-20. 
APPA's comments were submitted jointly by APPA and Certain Public 
Systems.
    \2\0NHA at 26-31; EEI at 19-22, 24-29, 33-35; APPA at 5-7.
    \2\1NHA at 29-30; EEI at 22-24, 32, 35-38; APPA at 9-11.
    \2\2NHA at 31-34; EEI at 29-32.
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    NHA points out that many of the dams that cumulatively affect a 
river basin are beyond the Commission's jurisdiction to license. NHA 
contends that the proposed policy could disproportionately shift the 
cost of mitigating cumulative impacts onto those projects that are 
licensed by the Commission.23
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    \2\3NHA at 34.
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    EEI questions the need for a policy statement on reopeners, 
contending that the Commission has not demonstrated the existence of a 
problem requiring a solution. EEI contends, thus, that the proposal is 
too broadly drawn.24
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    \2\4EEI at 3-4, 6-10, 15-16.
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    EEI contends that NEPA does not require the Commission to exercise 
reopener authority in this manner.25 EEI contends that reopener 
clauses may drive up the cost of operation, discourage settlements, 
discourage willingness to voluntarily participate in environmental 
mitigation programs, impede availability of financing, and disrupt 
long-term system planning.26
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    \2\5Id. at 10-14.
    \2\6Id. at 39-45.
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    APPA advocates an alternative policy consisting of voluntary 
coordinated activities by licensees and agencies, with appropriate 
incentives for licensees and applicants. APPA would hold licensees 
accountable for their environmental stewardship at relicensing. APPA 
also stresses the importance of notice and an opportunity for a hearing 
in reopener proceedings.27
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    \2\7APPA at 3.
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    The National Marine Fisheries Service (NMFS) of the U.S. Department 
of Commerce believes that ``working discussions'' would be more 
fruitful than notice and comment procedures. NMFS contends that ``[t]he 
impacts of hydroelectric development cannot be accurately assessed on a 
project-by-project basis, but must be evaluated for an entire river 
basin.''28 NMFS welcomes the use of reopener clauses to conduct 
such inquiries on a river-wide basis. NMFS seeks clarification that the 
Commission will reopen licenses at the request of state and federal 
agencies, and wants the Commission to state its reasons in writing 
(i.e., in each individual case) if it declines to mandate such 
reopening. NMFS concludes with various suggestions for specific changes 
in the wording of the proposed policy statement.
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    \2\8NMFS at 1.
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    The U.S. Department of the Interior (Interior) supports the 
Commission's efforts. Interior encourages the Commission to seek new 
legislative authority to reopen extant licenses that do not contain 
reopener clauses. Interior urges caution on inclusion of special 
reopener articles, stating that they may be drafted too narrowly to 
achieve the desired objective.
    The U.S. Department of Energy (DOE) commends the Commission on its 
initiative. DOE suggests that the costs of mitigation be allocated in 
proportion to each project's impact and not be routinely divided up 
equally among all projects in a river basin. DOE urges the Commission 
to carefully balance the costs and benefits of energy production and 
environmental mitigation, so as to reach the most appropriate balance. 
DOE urges the Commission to require licensees to provide data only from 
their own projects and not from other licensees' projects.
    The U.S. Environmental Protection Agency (EPA) supports the 
Commission's inclusion of reopener clauses and encourages greater use 
of them. EPA seeks clarification as to the circumstances that would 
justify reopening a license; the ``avenues'' available to the public to 
encourage the Commission to exercise reopener options; when the 
Commission intends to start reopening licenses; whether the reopener 
clauses will address water quality and aquatic habitat; and whether 
states will have an opportunity to issue new water quality 
certifications when licenses are reopened.
    The Council on Environmental Quality urges the Commission to impose 
a moratorium on all hydropower licensing for a 10 to 15-year period, 
during which the Commission would prepare programmatic environmental 
impact statements on each watershed within the Commission's 
jurisdiction.
    The Arizona Department of Environmental Quality, the California 
Department of Fish and Game, the Michigan Department of Natural 
Resources, the State of Vermont, and the Washington Department of 
Fisheries and Wildlife support the Commission's proposals. The Kentucky 
Department for Environmental Protection and the Wisconsin Department of 
Natural Resources urge basin-wide review of impacts. The California 
Water Resources Control Board urges the Commission to include in its 
cumulative impact analysis all water development projects in a river 
basin regardless of whether such projects fall within the scope of the 
Commission's licensing and exemption jurisdiction. The Maine State 
Planning Office supports the proposals but inquires as to how the 
reopening process will be coordinated with the state water quality 
certification program so as to ensure that the states' current 
standards are met when licenses are reopened.
    The Adirondack Park Agency suggests use of very short-term licenses 
to synchronize the expiration dates of all licenses in the same river 
basin, but does not explain how that proposal would be consistent with 
the FPA.
    The Columbia River Inter-Tribal Fish Commission contends that NEPA 
and the FPA require a comprehensive cumulative impacts analysis prior 
to licensing, and that this analysis can only be performed by a basin-
wide approach. The Izaak Walton League contends that ``biology and the 
law'' require watershed-based cumulative effect analysis.29
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    \2\9Izaak Walton League at 1-2.
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    Northrop, Devine and Tarbell, Inc., analyzed the Commission's 
database to determine how many different licensees hold licenses within 
individual river basins, how the licensed capacity within individual 
river basins is distributed among the licensees, and how the expiration 
dates of existing licenses are distributed through time within 
individual river basins. They report the following results:
    With regard to project ownership, in 66% of the river basins, 70% 
or greater of the licenses are held by either a single licensee or 
collectively by two licensees.
    With regard to project capacity, in 92% of the river basins, 70% or 
greater of the existing capacity is controlled by either a single 
licensee or collectively by two licensees; in 74% of the basins, 90% or 
greater of existing capacity is controlled by either a single licensee 
or collectively by two licensees.
    With regard to license expiration time frames for projects with 
expiration dates between 1998 and 2015 (476 projects in 101 river 
basins), in 69% of the basins, all of the project licenses expire 
within seven years of each other; in 81% of the basins, 66% of the 
licenses expire within three years of each other.
    From this they conclude that ``over the next twenty years, on a 
river basin basis, the vast majority of relicensing activity will occur 
within a relatively short time-frame and involve at most two 
significant licensees.''30
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    \3\0Northrop, Devine and Tarbell, Inc. at 2.
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    The City of Seattle contends that the expanded use of reopeners 
``will discourage virtually all multi-party settlement agreements.'' 
The Seattle Audubon Society contends that reliance on reopener clauses 
to examine cumulative impacts would improperly shift the burden of 
proof from the license applicants to the resource agencies, Indian 
tribes, and the public.31
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    \3\1Seattle Audubon Society at 3.
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    Several western commenters stress the importance of considering the 
need to protect municipal water supplies in any reopening or cumulative 
impact analysis.32
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    \3\2See, e.g., Western Urban Water Coalition, City and County of 
San Francisco, and East Bay Municipal District.
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    One commenter suggested limiting potential reopenings to only one 
reopening during the term of a license, and no earlier than ten years 
after its issuance.33
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    \3\3Pend Oreille County Public Utility District, Washington at 
1.
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    Many municipal and non-municipal operators of major projects filed 
extensive comments. Generally, however, those comments emphasize, 
elaborate, or reiterate positions articulated by NHA, EEI, and APPA 
which were summarized above. Some commenters relate the Commission's 
proposals to the facts of their particular projects.
    Many environmental groups and individuals filed shorter comments. 
These generally reiterate and emphasize the importance of analyzing 
cumulative impacts on a basin-wide scale.
    In its reply comments, Reform suggests that the licensees' fears 
are premised on the false assumption that the Commission would 
implement its policy in an extreme and unreasonable manner.
    In its reply comments, NHA contends that no commenter has provided 
a methodology for implementing its proposed ``watershed'' or 
``ecosystem'' approach to cumulative impact, and that those proposals 
would substantially delay the relicense process. NHA also contends that 
no commenter has demonstrated a need for the Commission's proposed 
policy statement, nor a legal basis in support of it.
    In its reply comments, EEI suggests that the proposals to study 
watersheds and ecosystems go far beyond the scope of the NOPPS, and 
should be considered in a separate proceeding.

B. Invoking Existing Reopeners in Licenses Already Issued

    NHA advocates reopening existing licenses only on a case-by-case 
basis, and not generically. NHA contends that excessive reliance on 
standard reopener clauses would discourage future investment in 
hydropower facilities by increasing uncertainty over project costs. 
Future cumulative impacts ought to be identified at relicensing, and 
not deferred.34
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    \3\4NHA at 21-24.
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    EEI believes licenses should be reopened only pursuant to the 
mutual agreement of the Commission and the licensee. The licensee 
should have notice and an opportunity for a hearing. The proponent of 
reopening should demonstrate its appropriateness. The license amendment 
must be reasonably necessary to address the impacts, and must be 
consistent with the licensee's reasonable expectations.35
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    \3\5EEI at 45-57.
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    APPA also stresses voluntary cooperation, with the focus at 
relicensing rather than during the term of the license.36
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    \3\6APPA at 18-21.
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    The Industrial Licensees Group (like EEI, NHA, and other licensees) 
contends that the Commission's legal authority to reopen a license 
during its term is sharply limited.37
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    \3\7Industrial Licensees Group at 6-10.
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C. Including Special Reopeners in New Licenses

    Environmental groups express concern that inclusion of reopener 
reservation articles will be used as a substitute for meaningful 
cumulative impact analysis at relicensing, thus postponing the ``hard 
look'' required by NEPA until after the license has been issued, in 
derogation of both NEPA and the FPA.38 Reform is concerned that 
consideration of cumulative impacts pursuant to a reopener proceeding 
would shift the burden of proof away from the licensee, who would have 
that burden if cumulative impacts were considered at 
relicensing.39
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    \3\8See, e.g., Reform at 9.
    \3\9Reform at 10.
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    NHA does not object to the use of special reopeners as long as that 
use is limited to situations in which the Commission, after appropriate 
analysis under FPA sections 4 and 10 in the context of the first 
project's relicense proceeding, is genuinely unable to ascertain what 
mitigatory measures may be required at that first project in light of 
the future relicensing proceeding for the cumulatively-related second 
project. The first project's licensee should be given notice and an 
opportunity for hearing, with the issues limited to the matters raised 
by the second project, and with the burden of proof on the proponent of 
reopening. NHA prefers such specialized reopeners to more generalized 
reopeners because they provide better notice to the licensee and 
interested government agencies as to what future changes in the license 
the Commission might be contemplating, and when. NHA would have the 
Commission synchronize future license expiration dates to the extent 
possible so as to minimize the future need for special 
reopeners.40
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    \4\0NHA at 13-21.
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    As noted above, Interior is concerned that inclusion of special 
reopeners might narrow what it perceives to be the Commission's broad 
powers to reopen licenses.

IV. Discussion

    The extensive comments received in response to the NOPPS have given 
the Commission a deeper understanding of the complexities inherent in 
this matter, and we have expanded and modified our policy statement 
accordingly.
    It is beyond dispute that the Commission must deal with cumulative 
impacts of multiple projects in a river basin. In issuing licenses for 
new projects, and in issuing licenses for relicensed projects, the 
Commission will examine cumulative impacts carefully.
    A number of commenters suggested that the Commission consider 
cumulative impacts in the factual context of specific cases instead of 
trying to establish generic rules. The point is well taken, in that 
decisions on cumulative impacts must necessarily consider the 
particular facts and circumstances in which the issues arise, and the 
Commission's determinations in each such individual case will 
necessarily be strongly shaped by the facts and circumstances 
presented. There are, however, several broad principles that we can 
state as a starting point and touchstone for the case-specific 
inquiries.
    Our most fundamental principle is that issues of cumulative impacts 
ought to be examined at the time of relicensing to the fullest extent 
that such examination is feasible. Reservations of authority to reopen 
licenses at a later date for the purpose of considering cumulative 
impacts should be resorted to only if it is not possible to examine all 
such impacts during the relicensing process. Thus, the Commission will 
deal with cumulative impact issues as comprehensively as possible at 
the licensing stage. Specific license articles will be fashioned as 
necessary.
    There will be circumstances, however, in which comprehensive 
analysis of all potential cumulative impacts could entail unacceptably 
long delays in the relicensing process. Such delays could in themselves 
generate harm to the environment by delaying the implementation of 
necessary environmentally ameliorative construction or operation 
pursuant to a new license. Thus, if it is not possible to fully explore 
all of the cumulative impacts on a timely basis, the Commission will 
reserve the authority necessary to revisit those issues at a later 
date. If the Commission foresees the need to deal with a cumulative 
impact issue at a future date it will fashion specific, tailor-made 
license conditions to do so to the maximum extent possible. Such 
``reopener'' authority will be defined as narrowly and specifically as 
possible, particularly with respect to the purpose of the reservation 
of such authority.
    Many commenters stressed the importance of providing notice and an 
opportunity for hearing before exercising any reserved authority. We 
agree completely, and will do so. Any use of a reopener provision will 
have adequate procedural safeguards to protect the licensee. This will 
include notice and an opportunity for a hearing. Any conditioning of 
the license will be prospective, although it may address prior impacts.
    Finally, as noted above, commenters of many persuasions urged us to 
coordinate the expiration dates of licenses to the maximum extent 
feasible. We will endeavor to do so in the licenses that come before us 
in the future.41 This is consistent with, and will considerably 
facilitate implementation of, our overriding principle--that the 
cumulative impacts of projects in the same river basin ought to be 
considered collectively at relicensing.
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    \4\1We note, in this regard, that the FPA requires that new 
licenses be issued for a minimum of 30 years, and that the economics 
of hydropower projects are frequently dependent on long-term 
licenses. This can be particularly significant if the new license 
requires the licensee to construct new project facilities (e.g., 
fish ladders or screens) to ameliorate environmental impacts.
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    Several commenters discussed the Commission's legal authority to 
use reservation articles in licenses. As discussed in the NOPPS, 
pursuant to sections 10(a)(1) and 4(e) of the FPA, all licenses issued 
by the Commission under Part I of the FPA shall be for projects which 
are best adapted to a comprehensive plan for improving or developing 
the waterway for beneficial public purposes, consistent with the 
comprehensive development standard of section 10(a)(1). The section 
10(a)(1) mandate continues throughout the term of a license, and is the 
standard by which license amendments, whether initiated by the licensee 
or the Commission, are judged.42 Under this standard, all public 
interest considerations, including the impact on project viability, are 
relevant to the Commission's decisionmaking.
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    \4\2See, e.g., Trinity River Authority of Texas, 41 FERC 61,300 
(1987); Pacific Gas & Electric Co., 46 FERC 61,249 (1989); 
Oroville-Wyandotte Irrigation District, 53 FERC 61,439 (1990).
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    As discussed in the NOPPS, the use of reopener license articles has 
been sustained as an appropriate means for the Commission to pursue the 
broad public policy objectives of section 10(a)(1) of the FPA.43 
In Platte River Whooping Crane Critical Habitat Maintenance Trust v. 
FERC,44 the Court of Appeals quoted from the legislative history 
of the Electric Consumers Protection Act of 1986 (ECPA)45 in 
concluding that ``Congress expected FERC to exercise whatever authority 
it might have to introduce into existing licenses environmental 
protective conditions that in its judgment appear necessary.''
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    \4\3See Dept. of the Interior v. FERC, 952 F.2d 538, 546-48 
(D.C. Cir. 1992); LaFlamme v. FERC, 945 F.2d 1124, 1130 (9th Cir. 
1991); Pacific Gas & Electric Co. v. FERC, 720 F.2d 78, 83-84 (D.C. 
Cir. 1983); State of California v. Federal Power Commission, 345 
F.2d 917, 921-25 (9th Cir. 1965).
    \4\4876 F.2d 109, 118 (D.C. Cir. 1989).
    \4\5Pub. L. No. 99-495, 100 Stat. 1243 (Oct. 16, 1986) (codified 
at 16 USC 791a et seq.).
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List of Subjects in 18 CFR Part 2

    Administrative practice and procedure, Electric power, Natural gas, 
Pipelines, Reporting and recordkeeping requirements.

    By the Commission.
Lois D. Cashell,
Secretary.
    In consideration of the foregoing, the Commission amends Part 2, 
Chapter I, Title 18 of the Code of Federal Regulations as set forth 
below.

PART 2--GENERAL POLICY AND INTERPRETATIONS

    1. The authority citation for Part 2 continues to read as follows:

    Authority: 15 U.S.C. 717-717w, 3301-3432; 16 U.S.C. 792-825y, 
2601-2645; 42 U.S.C. 4321-4361, 7101-7352.

    2. Part 2 is amended by adding Sec. 2.23, to read as follows:


Sec. 2.23  Use of Reserved Authority in Hydropower Licenses to 
Ameliorate Cumulative Impacts.

    The Commission will address and consider cumulative impact issues 
at original licensing and relicensing to the fullest extent possible 
consistent with the Commission's statutory responsibility to avoid 
undue delay in the relicensing process and to avoid undue delay in the 
amelioration of individual project impacts at relicensing. To the 
extent, if any, that it is not possible to explore and address all 
cumulative impacts at relicensing, the Commission will reserve 
authority to examine and address such impacts after the new license has 
been issued, but will define that reserved authority as narrowly and 
with as much specificity as possible, particularly with respect to the 
purpose of reserving that authority. The Commission intends that such 
articles will describe, to the maximum extent possible, reasonably 
foreseeable future resource concerns that may warrant modifications of 
the licensed project. Before taking any action pursuant to such 
reserved authority, the Commission will publish notice of its proposed 
action and will provide an opportunity for hearing by the licensee and 
all interested parties. Hydropower licenses also contain standard 
``reopener'' articles (see Sec. 2.9 of this part) which reserve 
authority to the Commission to require, among other things, licensees 
of projects located in the same river basin to mitigate the cumulative 
impacts of those projects on the river basin. In light of the policy 
described above, the Commission will use the standard ``reopener'' 
articles to explore and address cumulative impacts only (except in 
extraordinary circumstances) where such impacts were not known at the 
time of licensing or are the result of changed circumstances. The 
Commission has authority under the Federal Power Act to require 
licensees, during the term of the license, to develop and provide data 
to the Commission on the cumulative impacts of licensed projects 
located in the same river basin. In issuing both new and original 
licenses, the Commission will coordinate the expiration dates of the 
licenses to the maximum extent possible, to maximize future 
consideration of cumulative impacts at the same time in contemporaneous 
proceedings at relicensing. The Commission's intention is to consider 
to the extent practicable cumulative impacts at the time of licensing 
and relicensing, and to eliminate the need to resort to the use of 
reserved authority.

    Note: This Appendix will not be published in the Code of Federal 
Regulations.

Appendix A--List of Commenters

    A large number of interested persons and organizations expressed 
their views in comments ranging in length and style from extensive 
analysis in a formal pleading to a brief statement of position in a 
letter. All of the comments were read and considered. This list 
includes all commenters who are governments, or agencies of 
governments, including states, counties, cities, and municipalities, 
and federal, state, and local government agencies. In addition, the 
list includes those commenters who filed the more comprehensive or 
extended comments.

Federal Agencies

Bonneville Power Administration
Council on Environmental Quality
National Marine Fisheries Service (NMFS)
U.S. Department of Energy (DOE)
U.S. Department of the Interior (Interior)
U.S. Environmental Protection Agency (EPA)
U.S. Forest Service, Huron-Manistee
National Forests

State Agencies

Arizona Department of Environmental Quality
California Department of Fish and Game
California Water Resources Board
Kentucky Department for Environmental Protection
Maine Department of Inland Fisheries and Wildlife
Maine State Planning Office
Michigan Department of Natural Resources
State of Vermont
Washington Departments of Fisheries and Wildlife
Wisconsin Department of Natural Resources
State of Wyoming46
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    \4\6Almost all of the commenters filed initial comments. 
Commenters identified by this footnote filed only reply comments.
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Associations

Adirondack Park Agency
American Forest and Paper Association
American Public Power Association and Certain Public Systems 
(APPA)47
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    \4\7Commenters identified by this footnote filed both initial 
and reply comments.
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American Rivers
Appalachian Mountain Club
California Urban Water Agencies
Columbia River Inter-Tribal Fish Council
Edison Electric Institute (EEI)46
Friends of the Cowlitz
Hydropower Reform Coalition (Reform)46
Industrial Licensee Group
Izaak Walton League
National Hydropower Association (NHA)46
New York Rivers United
Northrop, Devine & Tarbell, Inc.
Northwest Hydroelectric Association
Public Generating Pool
Seattle Audubon Society
Trout Unlimited
The Tulalip Tribes
Western Urban Water Coalition

Municipal Licensees

Bountiful City Light and Power
Central Nebraska Public Power and Irrigation District
Central Oregon Irrigation District
City and County of San Francisco
City of New Martinsville, West Virginia
City of Oswego, New York
City of Rocky Mount, North Carolina
City of Saint Cloud, Minnesota
City of Seattle, Washington
City of Spokane, Washington
County of Amador, California
East Bay Municipal District
El Dorado Irrigation District
Lewis County Public Utility District, Washington
Merced Irrigation District
Nebraska Public Power District
Nevada Irrigation District
Oroville-Wyandotte Irrigation District, and Tri-Dam Project
Pend Oreille County Public Utility District, Washington
Power Authority of the State of New York
Public Utility District No. 1 of Chelan County, Washington
Public Utility District No. 1 of Douglas County, Washington
Public Utility District No. 2 of Grant County, Washington
Sacramento Municipal Utility District
Tacoma Public Utilities
Turlock Irrigation District
Village of Morrisville, Vermont
Yuba County Water Agency

Non-Municipal Licensees

Adirondack Hydro Development Corporation
Alabama Power Company and Georgia Power Company
Consolidated Hydro, Inc.
Consolidated Hydro, Inc., HYDRA-CO Enterprises, Inc., Hydro Development 
Group, STS Hydropower, Ltd., and Synergics
Duke Power Company
Great Northern Paper, Inc.
Idaho Power Company
James River-New Hampshire Electric, Inc.
Montana Power Company
New England Power Company Niagara Mohawk Power Corporation
Northern States Power Company
Pacific Gas and Electric Company
Pacificorp
Portland General Electric Company
Public Service Company of Colorado
Puget Sound Power & Light Company
Simpson Paper Company
Southern California Edison Company
Summit Hydropower
United Energy Corporation, Mt. Hope Hydro Inc., and Liberty Power 
Corporation
Upper Peninsula Power Company
Washington Water Power Company\46\
Wisconsin Valley Improvement Company
Wisconsin Valley, Wisconsin Public Service Corporation, Weyerhaeuser 
Company, Consolidated Water Power Company, Neekosa Papers Inc., and 
Wisconsin River Power Company

[FR Doc. 94-31895 Filed 12-27-94; 8:45 am]
BILLING CODE 6717-01-P