[Federal Register Volume 67, Number 181 (Wednesday, September 18, 2002)]
[Proposed Rules]
[Pages 58739-58751]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-23655]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 4 and 16

[Docket No. RM02-16-000]


Hydroelectric License Regulations under the Federal Power Act; 
Notice Requesting Comments and Establishing Public Forums and 
Procedures and Schedule

September 12, 2002.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Notice requesting comments and establishing public forums and 
procedures and schedule.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) staff, 
in conjunction with the United States Departments of Agriculture, 
Commerce, and Interior, (jointly, the Federal Agencies), is providing 
interested entities an opportunity to enter into discussions and make 
comments and recommendations concerning adoption of a new hydropower 
licensing process.

[[Page 58740]]

    The Commission staff and Federal Agencies are also asking for 
comments on: A proposal for a new licensing process developed by the 
Interagency Hydropower Committee (IHC), consisting of staff from the 
Commission and the Federal Agencies (Attachment A), and a proposal for 
a new licensing process developed by the National Review Group (NRG), a 
coalition of industry and non-governmental organizations (Attachment 
B).
    The two proposals share several common elements. Both the IHC and 
NRG proposals are attached to this notice. The NRG proposal was filed 
on September 10, 2002 in Docket No. AD02-5.
    On November 7, 2002, the Commission will lead a public forum at the 
Commission's headquarters in Washington, DC to discuss issues and 
proposals associated with establishing a new licensing process. In 
addition, the Commission staff and the Federal Agencies will co-sponsor 
public and tribal forums for oral or written comments in locations 
around the country.
    The Commission staff and the Federal Agencies anticipate the 
Commission will issue a Notice of Proposed Rulemaking proposing new 
license application rules in February 2003. The comments and 
recommendations made in response to this notice will form part of the 
public record of that proceeding. The Commission is not, however, 
proposing new regulations at this time.
    Public and Tribal Forums: The forums to take oral and written 
comments and recommendations will be held in various locations around 
the country during October and November 2002, as further discussed in 
Sections V and VI below.

DATES: Written comments are due on or before December 6, 2002. See 
Section VI.

ADDRESSES: File written comments with the Office of the Secretary, 
Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC, 20426. Comments should reference Docket No. RM02-16-
000. Comments may be filed electronically or by paper (an original and 
eight (8) copies, with an accompanying computer diskette in the 
prescribed format requested). See Section VI.

FOR FURTHER INFORMATION CONTACT: Federal Energy Regulatory Commission.

Timothy Welch, Office of Energy Projects, Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426, (202) 502-
8760.
John Clements, Office of the General Counsel, Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426, (202) 502-
8070.

SUPPLEMENTARY INFORMATION:

I. Introduction

    The Commission staff and Federal Agencies that have statutory 
responsibilities under the Federal Power Act (FPA) (the Departments of 
Agriculture, Commerce, and Interior, or Federal Agencies) are inviting 
comments and recommendations concerning the need for the Commission to 
establish a new hydropower licensing process.
    Comments and recommendations are requested with respect to the need 
for a new licensing process and regarding new licensing process 
proposals. This notice explains the background of this issue, and 
includes a list of questions and information on comment procedures. Two 
attachments are also included describing new process proposals of the 
Interagency Hydropower Committee (IHC), composed of staff from the 
Commission and the Federal Agencies (Attachment A), and the National 
Review Group (NRG), a coalition of industry and non-governmental 
organizations (Attachment B).

II. Background

Statutory Framework

    Sections 4, 10, 14, 15, and 18 of the Federal Power Act (FPA),\1\ 
as amended by the Electric Consumers Protection Act of 1986 (ECPA),\2\ 
provide the regulatory framework for the licensing of non-federal 
hydroelectric projects.
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    \1\ 16 U.S.C. 797, 803, 807, 808, and 811. Sections 4 and 10 
apply to all licenses. Sections 14 and 15 are specific to the 
issuance of a new license following the expiration of an initial 
license.
    \2\ Pub. L. No. 99-495, 100 Stat. 1243.
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    Section 10(a)(1)\3\ provides that hydropower licenses issued must 
be best adapted to a comprehensive plan for the affected waterways for 
all beneficial public uses, and must include provisions for the 
protection of fish and wildlife and other beneficial public uses, and 
that the Commission must give fish and wildlife, recreation, and 
environmental concerns equal consideration with power development. 
Under Section 4(e),\4\ licenses for projects located within federal 
reservations must also include conditions mandated by the department 
which manages the reservation; in most cases the Departments of 
Agriculture or Interior. Under Section 18, licenses must also include 
fishways if they are prescribed by the Departments of Interior or 
Commerce.
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    \3\ 16 U.S.C. 803(a)(1).
    \4\ 16 U.S.C. 797e.
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    In addition, Section 401(a)(1) of the Clean Water Act \5\ requires 
a license applicant to obtain from the state in which any project 
discharge into navigable waters originates, certification that such 
discharge will comply with applicable water quality standards, or 
waiver of such certification. Section 401(a)(1) requires state water 
quality certification conditions to be included in hydropower licenses.
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    \5\ 33 U.S.C. 1341(a)(1).
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    Other Federal statutes may also be applicable to a license 
application. These include the Endangered Species Act,\6\ Coastal Zone 
Management Act,\7\ and National Historic Preservation Act.\8\
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    \6\ 16 U.S.C. 1531-1543.
    \7\ 16 U.S.C. 1451-1465.
    \8\ 16 U.S.C. 470-470w-6.
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Current Licensing Procedures

    The Commission staff processes license applications in hearings 
conducted by notice and comment procedures. Licensing procedures have 
evolved over time in response to changes in the statutory framework, 
increased public awareness of the need for increased environmental 
protection, and as a result of the Commission efforts to make the 
process more efficient and effective.
    Under the existing ``traditional'' process, prior to filing an 
application, applicants must consult with federal and state resource 
agencies, affected land managing agencies, Indian tribes, and state 
water quality agencies and must provide the consulted entities with 
information describing the proposed project. The applicant must also 
conduct studies necessary for the Commission staff to make an informed 
decision on the application. Under the Commission's detailed 
regulations concerning prefiling consultation and processing of filed 
applications \9\ the formal proceeding before the Commission does not 
begin until the application is filed. Accordingly, the Commission staff 
do not generally participate in pre-filing consultation.
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    \9\ See 18 CFR Parts 4 and 16.
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    After an application is filed, the Federal Agencies with 
responsibilities under the FPA and other statutes, the states, Indian 
tribes, and other participants in the licensing process have 
opportunities to request additional studies and provide comments and 
recommendations. Federal Agencies with mandatory conditioning authority 
also provide their conditions. The

[[Page 58741]]

Commission staff may also ask for additional information that it needs 
for its environmental analysis. All of this information is incorporated 
into the Commission staff's environmental review under the National 
Environmental Policy Act (NEPA).\10\
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    \10\ 42 U.S.C. 4321, et seq.
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    The Commission's regulations also provide for an alternative 
licensing process (ALP) which combines the pre-filing consultation 
process under the FPA with the environmental review process under 
NEPA.\11\ Under this process, the parties work collaboratively prior to 
the filing of the application to develop the application and a 
preliminary draft NEPA document, and generally anticipate efforts to 
conclude a settlement agreement. The Commission staff also participate 
to a greater extent than under the traditional process.
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    \11\ 18 CFR 4.34(i).
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Reform Efforts

    There is widespread agreement that additional improvements are 
needed to further the goals of reducing the cost and time of licensing 
without sacrificing environmental protection and the fulfillment of 
other statutory responsibilities. The President's National Energy 
Policy report included recommendations for hydropower reform to make 
the licensing process more clear and efficient, while preserving 
environmental goals. The Commission, the Federal Agencies, and 
hydropower program stakeholders are engaged in many activities to 
achieve this goal.
    The Commission staff's ongoing efforts include an Outreach Program 
in which interested persons meet with members of the licensing staff to 
learn about the licensing process and related Commission laws and 
regulations; various interagency training activities; encouragement of 
settlements through the use of Alternative Dispute Resolution, and 
issuance of guidance documents.\12\ In May 2001, the Commission staff 
prepared a comprehensive report on hydro licensing, including 
recommendations designed to reduce the time and cost of licensing.\13\ 
The Commission also held in December 2001, a Hydroelectric Licensing 
Status Workshop to identify and focus attention on long-pending license 
applications and find ways to bring these cases to closure.\14\ The 
Commission staff also held regional workshops with states on how better 
to integrate Commission licensing processes with the states' Clean 
Water Act responsibilities.
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    \12\ Staff guidance documents include the Licensing Handbook, 
Environmental Analysis preparation, and ALP guidelines. All of these 
are posted on the Commission's Web site (http://www.ferc.gov/hydro).
    \13\ Report to Congress on Hydroelectric Licensing Policies, 
Procedures, and Regulations--Comprehensive Review and 
Recommendations Pursuant to Section 603 of the Energy Act of 2000, 
Federal Energy Regulatory Commission, May 2001 (Section 603 Report). 
The report can viewed at www.ferc.gov/hydro/docs/section603.htm.
    \14\ The Commission staff established Docket No. AD02-05 for the 
workshop proceeding. A number of entities have made filings in that 
proceeding with recommendations for improvements to the licensing 
process.
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    Federal agencies have also worked cooperatively on a number of 
efforts to improve the licensing process. For example, the Commission 
staff, the Departments of Interior, Commerce, Agriculture, and Energy, 
the Council on Environmental Quality, and the Environmental Protection 
Agency formed an Interagency Task Force to Improve Hydroelectric 
Licensing Processes (ITF). The ITF's efforts resulted in a series of 
commitments and administrative actions intended to make the licensing 
process more efficient, effective, and timely.\15\
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    \15\ Reports issued by the ITF, which consists of the Federal 
Agencies that also participated in the IHC, have been made public 
and are posted on the Commission's Web site on the hydro page. See 
www.ferc.gov/hydro/docs/interagency.htm.
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    More recently, in July of 2001, senior managers from the Commission 
staff and other Federal agencies formed the IHC to build on the 
commitments developed by the ITF and to develop additional procedural 
modifications that would further reduce the process time and cost of 
licensing while maintaining environmental protections. The IHC 
developed a proposal for an integrated licensing process. A detailed 
description of the IHC proposal, which has not previously been made 
public, is attached to this notice (Attachment A).
    Another integrated licensing process proposal has also been 
developed and circulated for comment by the NRG, a multi-stakeholder 
forum consisting of representatives from industry and non-governmental 
organizations. A detailed description of the NRG proposal is also 
attached to this notice (Attachment B).
    A common theme that underlies all of the efforts described above is 
the need to reduce the time and the cost of the licensing process, 
improve the quality of decision-making, and ensure early resolution of 
disputes. One reform concept that shows particular promise is a 
licensing process that integrates an applicant's prefiling consultation 
with resource agencies, Indian tribes, and the public with the 
Commission staff's NEPA scoping (integrated process). Such an approach 
could differ from the ALP in several respects, such as ensuring the 
Commission staff involvement at all stages, establishing deadlines for 
all participants, providing a more effective vehicle for study dispute 
resolution than currently exists, and better integrating the Commission 
staff actions with the actions of other federal agencies with statutory 
roles under the FPA.

III. Request for Comments

    The Commission staff and the Federal Agencies request comments on 
the need for a new licensing process.\16\ In particular, the Commission 
staff and the Federal Agencies request that commenters address the 
following questions, and provide any additional comments and 
recommendations concerning the need for and appropriate structure and 
content of new licensing procedures. Commenters are strongly urged to 
make their responses as specific as possible and to offer tangible 
solutions to any identified problems so as to maximize their 
usefulness. Commenters are also requested to provide specific responses 
to these questions in relation to the IHC proposal, the NRG proposal, 
and any other proposals, and to clearly identify the question(s) to 
which they are responding and the specific proposal, if any, they are 
addressing.
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    \16\ The U.S. Environmental Protection Agency participated in 
the IHC deliberations and is also expected to participate in the 
rulemaking proceeding.
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    1. Need for New Licensing Process: (a) Is there a need for a new 
licensing process? (b) If so, what key issues should a new process 
address, and how might a new process be structured to resolve those key 
issues?
    2. Integrated Process: (a) Should the Commission adopt an 
integrated process as referenced above in Section II? (b) How might an 
integrated process be structured to save time and be more efficient? 
(c) Are there issues unique to the processing of original license 
applications or new license applications that need to be addressed in 
an integrated process? If so, what are they and how should they be 
addressed? (d) Would an integrated process improve the development and 
timing of mandatory conditions?
    3. Settlements: (a) Should a new licensing process include specific 
provisions to accommodate settlement negotiations? (b) If so, what 
might those provisions include?
    4. Information Development (Studies): (a) What licensing process 
changes, if any, are needed to ensure development

[[Page 58742]]

of information and studies in a timely and cost-effective manner? (b) 
Do elements of the IHC and/or NRG proposals adequately address this 
issue?
    5. Study Dispute Resolution: (a) Do the existing Commission 
regulations provide an adequate process for resolving study disputes? 
(b) Do elements of the IHC and/or NRG proposals adequately address this 
issue?
    6. Time Periods: Do the specific time periods between steps in the 
IHC and/or NRG proposals appear to be reasonable?
    7. State Processes: How might a new licensing process better 
accommodate the State certification process pursuant to Section 401 of 
the Clean Water Act and/or a consistency determination under the 
Coastal Zone Management Act?
    8. Tribal Roles and Responsibilities: How best can a new licensing 
process accommodate the authorities, roles and concerns of Indian 
tribes?
    9. Optional Processes: If the Commission adopts a new licensing 
process, should it also retain the traditional and/or ALP processes?

IV. Process and Schedule for Rulemaking

    The Commission staff and Federal Agencies anticipate a future 
Commission rulemaking proceeding proposing to establish a new licensing 
process. The comments and recommendations received in response to this 
notice will form part of the record of that proceeding. A Notice of 
Proposed Rulemaking (NOPR) is tentatively scheduled for February 2003. 
The NOPR would be followed by an opportunity for further comments and 
technical conferences in the Spring of 2003. A final rule would be 
issued in the fall. It is further anticipated that the Federal Agencies 
with statutory responsibilities under the FPA will work together with 
the Commission staff and others to develop draft and final rules. The 
Commission, however, is the sole decisional authority with respect to 
any draft or final rule.

V. Public and Tribal Forums

    On November 7, 2002, the Commission will lead a public forum at the 
Commission's headquarters in Washington, DC to discuss issues and 
proposals associated with establishing a new licensing process. In 
addition, the Commission staff and the Federal Agencies will co-sponsor 
public and tribal forums for oral or written comments in the cities and 
on the dates established in the following table.\17\ Specific details 
regarding meeting structure and procedures for providing oral comments 
with respect to each forum will be posted on the Commission's web site.
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    \17\ The tribal forums are intended to address tribal issues; 
however, anyone may attend either forum.

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                 Location                                                Date/Time
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Milwaukee, Wisconsin, Courtyard Milwaukee  Public: October 16, 2002, 9 am-4 pm.
 Downtown, 300 W. Michigan St. 414-291-    Tribes: October 17, 2002, 9 am-4pm.
 4122.
Atlanta, Georgia, Marriot Century Center,  Tribes: October 23, 2002, 9 am-4 pm.
 2000 Century Boulevard, 404-325-0000.     Public: October 24, 2002, 9 am--4pm.
Commission-Sponsored Public Forum,         November 7, 2002, 9 am-4 pm.
 Commission Meeting Room, Commission
 Headquarters, 888 First Street, NE,
 Washington, DC.
Bedford, New Hampshire, Wayfarer Inn, 121  Tribes: November 13, 2002, 9 am-4 pm.
 S. River Road, 603-622-3766.              Public: November 14, 2002, 9 am-4pm.
Sacramento, California, Sheraton Grand     Public: November 19, 2002, 9 am-4 pm.
 Sacramento, 1230 J Street, 916-341-3600.  Tribes: November 20, 2002, 9 am-4pm.
Tacoma, Washington, Sheraton Tacoma, 1320  Tribes: November 21, 2002, 9 am-4 pm.
 Broadway Plaza, 253-572-3200.             Public: November 22, 2002, 9 am-4pm.
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VI. Public Comment Procedures

    The Commission staff and the Federal Agencies invite all interested 
persons to submit comments in response to this notice and attend the 
public forums.
    Comments may be filed by paper or electronically via the Internet 
and must be received by the Commission by December 6, 2002. Electronic 
filing is strongly encouraged. Those filing electronically do not need 
to make a paper filing. For paper filings, an original and 8 copies of 
such comments (with an accompanying computer diskette in the prescribed 
format requested) should be submitted to the Office of the Secretary, 
Federal Energy Regulatory Commission, 888 First Street, NE, Washington, 
DC 20426 and should refer to Docket No. RM02-16-000.
    Comments filed via the Internet must be prepared in WordPerfect, MS 
Word, Portable Document Format, or ASCII format. To file the document, 
access the Commission's web site at www.ferc.gov and click on ``e-
Filing,'' then follow the instructions on each screen. First time users 
will have to establish a user name and password. The Commission staff 
will send an automatic acknowledgment to the sender's e-mail address 
upon receipt of comments.
    User assistance for electronic filing is available at 202-502-8258 
or by e-mail to [email protected]. Comments should not be submitted to 
the e-mail address. All comments will be placed in the Commission's 
public files and will be available for inspection in the Commission's 
Public Reference Room at 888 First Street, NE, Washington, DC 20426, 
during regular business hours. Additionally, all comments may be 
viewed, printed, or downloaded remotely via the Internet through the 
Commission's Homepage using the FERRIS link. User assistance for FERRIS 
is available at 202-502-8222, or by e-mail to 
[email protected].

[[Page 58743]]

VII. Document Availability

    In addition to publishing the full text of this document in the 
Federal Register, the Commission staff provides all interested persons 
an opportunity to view and/or print the contents of this document via 
the Internet through the Commission's Home Page (http://www.ferc.gov) 
and in the Commission's Public Reference Room during regular business 
hours (8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street, NE, 
Room 2A, Washington, DC 20426.
    From the Commission's Home Page on the Internet, this information 
is available in the Federal Energy Regulatory Records Information 
System (FERRIS). The full text of this document is available on FERRIS 
in PDF and WordPerfect format for viewing, printing, and/or 
downloading. To access this document in FERRIS, type the docket number 
excluding the last three digits of this document in the docket number 
field.
    User assistance is available for FERRIS and the Commission's 
website during regular business hours from our Help line at (202) 502-
8222 or the Public Reference Room at (202) 502-8371, TTY (202) 502-
8659. Please e-mail the Public Reference Room at 
[email protected].

List of Subjects

18 CFR Part 4

    Licenses, Permits, Exemptions, and Determination of Project Costs.

18 CFR Part 16

    Procedures Relating to Takeover and Relicensing of Licensed 
Projects.

Magalie R. Salas,
Secretary.

Attachment A

Interagency Hydropower Committee Proposal for an Integrated 
Licensing Process

1. Introduction

    Hydropower projects licensed by the Federal Energy Regulatory 
Commission (Commission) produce over five percent of all electric 
power generated in the United States, making them an important part 
of the nation's energy mix. Pursuant to Part I of the Federal Power 
Act of 1935 (FPA),\18\ as amended by the Electric Consumers 
Protection Act of 1986 (ECPA),\19\ the Commission is responsible for 
determining whether and under what conditions to issue licenses for 
the construction, maintenance and operation of non-federal 
hydropower projects. The Departments of Agriculture, Commerce, and 
Interior (hereafter ``federal resource agencies'') are responsible 
for providing conditions and prescriptions (hereafter 
``conditions''), and recommendations to protect and enhance natural, 
cultural, recreational and tribal trust resources, including fish 
and wildlife, and to ensure that hydropower projects on federal 
lands are consistent with the management objectives for those lands.
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    \18\ 16 U.S.C. 797, 803, 807, and 808.
    \19\ Pub. L. 99-495, 100 Stat. 1243.
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    Streamlining the licensing process while continuing to find 
public interest solutions that balance power generation, natural and 
cultural resource protection, recreation, irrigation, flood control, 
and other public purposes is essential to ensuring the viability of 
this energy source. The Commission and the federal resource agencies 
recognize the need to exercise their respective authorities in a 
manner that best serves the public interest and each supports 
measures to improve coordination of their statutory 
responsibilities.
    Accordingly, last year, the Commission staff, the Departments of 
Agriculture, Commerce and Interior, and the Environmental Protection 
Agency formed a staff-level committee, the Interagency Hydropower 
Committee (IHC), to assess procedures that currently govern the 
hydropower licensing process.\20\ The IHC recognizes that improved 
coordination will help to eliminate duplication and conflicts, 
expedite implementation of agreed upon measures, and reduce the 
overall time and cost of the licensing process while ensuring the 
development and implementation of necessary environmental 
protections. To help achieve these objectives, the IHC has developed 
a proposal for an integrated licensing process.
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    \20\ The IHC also received assistance from the Council on 
Environmental Quality and the Advisory Council on Historic 
Preservation.
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    The proposal is intended to enable the early identification of 
issues and objectives, reduce duplication of procedures and 
analyses, improve environmental review and documentation, coordinate 
discretionary authorities, and expedite post-application procedures. 
The federal parties believe the proposal will help stimulate the 
necessary public comment and input needed to produce a new licensing 
process that can be supported by the Commission, license applicants, 
state and federal agencies, Indian tribes, non-governmental 
organizations (NGOs), and other stakeholders.

2. Benefits of the Proposal

    The IHC proposal addresses aspects of the existing license 
process that have: (1) Caused lengthy delays in processing license 
applications, (2) interfered with the development of a single 
consistent record from which each federal agency with statutory and 
trust responsibilities can base its decisions, (3) affected the 
quality and timeliness of information needed by the agencies to 
carry out their responsibilities, and (4) resulted in litigation on 
individual licensing actions. Addressing these problems should 
streamline the licensing process, reduce costs, and add certainty 
and predictability for the license applicant and all stakeholders. 
Specifically, the proposal addresses the issues listed in sections 
2.1 through 2.6.

2.1 Eliminates Duplication in the National Environmental Policy Act 
(NEPA) Scoping and Information Development Processes

    The Commission's traditional and alternative licensing processes 
both require that the license applicant identify issues associated 
with the project and propose measures to address those issues before 
a license application is filed. The public, federal and state 
agencies, NGOs, and Indian tribes currently assist the license 
applicant to varying degrees in identifying and analyzing resource 
issues associated with the project during this pre-application 
period. However, the Commission staff generally does not engage in 
formal NEPA scoping until after the license application is filed. At 
that time the Commission staff scopes the issues, accepts additional 
study and information requests by stakeholders, and develops its own 
analysis of the potential project effects.
    The proposal combines the license applicant's pre-filing 
consultation with the Commission staff's NEPA scoping process to 
improve efficiency, reduce duplication, and expedite the development 
of necessary information to meet the needs of all parties. By 
initiating the formal proceeding early in the pre-application stage, 
scoping would occur one time, and agreement could be reached on 
study and information needs by the Commission staff and the resource 
agencies and Indian tribes before the studies are implemented.
    The proposal further facilitates the Commission staff's scoping 
process by replacing the applicant's existing Initial Consultation 
Document with a ``Pre-Scoping Document,'' developed in the same 
format as the Commission staff's NEPA scoping document. The Pre-
Scoping Document would identify information gaps and include project 
information, documentation of previous consultations, a description 
of project effects and issues, and an initial list of potential 
stakeholders. The Commission staff, federal resource agencies, and 
stakeholders would comment on the Pre-Scoping Document immediately 
following the filing of the license applicant's Notice of Intent to 
seek a new license. The applicant would then file a revised Pre-
Scoping Document with the Commission in light of the comments it 
received. The Commission staff would use the applicant's Pre-Scoping 
Document to develop its Scoping Document 1.

2.2 Resolves Disagreements Early in the Licensing Process and Ensures 
an Adequate Evidentiary Record

    The Commission and the federal resource agencies with 
conditioning authority are required to support their decisions with 
substantial evidence. Federal resource agencies may find that 
studies required by the Commission staff are not sufficient to 
support the substantial evidence requirement with respect to the 
exercise of their own conditioning authorities. Study disputes 
between resource agencies and applicants are often not resolved 
during pre-filing consultation. This may lead to delays in the 
filing of conditions and to requests for rehearing of licensing 
orders, further delaying the ultimate conclusion of the proceeding.

[[Page 58744]]

    The IHC proposal includes a dispute resolution process that 
ensures study disputes will be resolved pursuant to clear criteria 
and that studies will be conducted without unnecessary delay. The 
intent of this process is to resolve issues before costly studies 
are implemented, to help ensure that the licensing process continues 
on schedule, and to help ensure that all agencies with statutory and 
trust responsibilities have a record adequate to support their 
decisions.

2.3 Includes Time Frames for All Participants

    The existing licensing processes lack predictable time frames. 
This affects the ability of all participants to efficiently utilize 
their time and resources.
    The proposal provides specific time frames for each step of the 
process, including actions by the Commission staff, applicants, 
Indian tribes, federal resource agencies, and other stakeholders. 
The proposal, with its associated time frames, is expected to 
significantly reduce the time required to conclude a licensing 
proceeding.

2.4 Facilitates Earlier Stakeholder Involvement

    The traditional licensing process emphasizes pre-filing 
consultation with resource agencies and Indian tribes, but provides 
limited opportunity for involvement by other potential stakeholders. 
As a result, public involvement in the licensing process is often 
delayed until after an application is filed. This can result in new 
issues being raised after an application is filed, as well as 
additional study requests, thereby lengthening the process.
    The proposal would address this problem for new licenses by 
requiring an existing licensee to broadly distribute a Pre-Scoping 
Document to resource agencies, Indian tribes, and other potential 
stakeholders at the time it files its Notice of Intent to seek a new 
license, 5 to 5\1/2\ years before license expiration. The Commission 
staff's public notice of the applicant's decision to seek a new 
license would invite comment by all concerned entities on the Pre-
Scoping Document.

2.5 Enables Concurrent Filings of Federal Resource Agency Conditions

    Under the existing licensing processes, the Departments of 
Commerce and Interior file their modified conditions after the close 
of the Commission staff's draft NEPA comment period and the 
Department of Agriculture files its final conditions after the final 
NEPA document has been completed. Non-concurrent filings by the 
federal resource agencies could result in conflicting conditions and 
may delay the licensing process.
    The proposal provides for concurrent filing of agency conditions 
prior to the completion of the Final NEPA document, which minimizes 
the potential for conflicting conditions, and helps to avoid the 
need for additional post-NEPA analysis.

2.6 Ensures the Development of Adequate Information in Support of Any 
Settlement Discussions

    The Commission's policy is to support settlement agreements that 
are consistent with the law and Commission policies. The federal 
resource agencies also support efforts to achieve settlement during 
the licensing process. Settlement agreements are more likely to 
result in the early implementation of environmental measures, 
continued cooperation among the stakeholders, and a license that is 
acceptable to all participants.
    The proposal establishes a process by which licensing issues are 
scoped and studies are agreed to within a time frame that will allow 
the developed information to be used for settlement discussions. 
This should ensure that agreements reached will be supported by 
adequate information in the record.

3.0 IHC Proposal

    The following discussions outline the specific steps and 
associated time frames of the IHC proposal. The proposal would 
provide for an advanced notice of license expiration; initiate the 
formal Commission proceeding when a license applicant files its 
Notice of Intent to seek a new license (NOI); allow for early NEPA 
scoping and timely resolution of study disputes; implement studies 
to ensure the development of complete information in support of a 
license application; and provide for the concurrent submission of 
the federal resource agencies' mandatory conditions.
    Sections 3.1 through 3.7 describe the proposal in detail. A 
step-by-step flowchart is provided at the end of the attachment and 
is posted on the Commission's website (www.ferc.gov).

3.1 Advance Notice of License Expiration

    In order to ensure that as much existing information as possible 
is available for the Commission staff's scoping efforts, three years 
prior to the NOI, the Commission staff would notify the licensee of 
its pending license expiration and would provide a list of basic 
information needs and resource agency and tribal contacts. The 
licensee would be encouraged to contact the resource agencies and 
Indian tribes regarding their upcoming licensing activities.

3.2 Pre-scoping, Initiation of Formal Commission Proceeding

    Between 5 and 5\1/2\ years before the license expires, the 
license applicant would file its Notice Of Intent to seek a new 
license (NOI) with the Commission. In lieu of the Initial 
Consultation Document required by the existing regulations, the 
license applicant would distribute a Pre-Scoping Document (PSD) to 
the Commission and other stakeholders (e.g., state and federal 
resource agencies, Indian tribes, non-governmental organizations, 
local communities, and the public). The PSD would include project 
information, documentation of previous consultations, a description 
of project effects and issues, and an initial list of potential 
stakeholders. The license applicant would be encouraged to work with 
stakeholders and with the Commission staff to determine resource 
impacts and information needs before issuing its PSD. Within 15 days 
of the NOI, the Commission staff would initiate the proceeding by 
issuing public notice of the applicant's NOI and commencing NEPA 
scoping.
    Within 60 days of initiating the formal proceeding, stakeholders 
and the Commission staff would provide comments on the PSD and have 
the opportunity to submit study requests to the license applicant. 
The license applicant would have 45 days to incorporate comments 
into its PSD (including an explanation of why any comments were not 
adopted) and to develop and include a detailed study plan (e.g., 
study proposals, methodologies, progress reports, and schedules) 
that considers any study requests. The PSD would then be filed, and 
the Commission staff and the license applicant would coordinate 
scoping meetings and a site visit.

3.3 Scoping, Development of Final Study Plan

    Within 45 days after the license applicant files its PSD, the 
Commission staff would issue its Scoping Document 1 (SD-1) based on 
the PSD provided by the applicant and notice the scoping meeting(s). 
The Commission staff would include the license applicant's study 
plan as an appendix to SD-1. The scoping meetings would be an 
opportunity for discussion of project-related issues including the 
applicant's study plan. Within 30 days of the scoping meetings, the 
license applicant and stakeholders would file comments on SD-1 with 
the Commission, and the Commission staff and stakeholders would 
provide comments regarding the study plan to the license applicant. 
The license applicant would then have an additional 30 days to 
revise its study plan as necessary to reflect stakeholder comments 
and file it with the Commission.
    If a federal resource agency or Indian tribe disagreed with the 
Commission staff's initial decision on the applicant's revised study 
plan, it would request the Commission staff to initiate the study 
dispute resolution process. The purpose of the study dispute 
resolution process would be to resolve disagreements between the 
resource agencies, Indian tribes, and the Commission staff regarding 
the need for and technical aspects of a requested study prior to 
implementation of the study phase of the process. By resolving 
studies at that time, additional information and study requests 
after the application has been filed should be rare.
    If there were no disagreements on the study plan, the Commission 
staff would complete Scoping Document 2 (SD-2) within 30 days and 
studies would be implemented according to the final study plan and 
schedule included in SD-2.

3.4 Study Dispute Resolution Process

    The proposed study dispute resolution process would maintain the 
Commission's ultimate authority to determine which studies were 
required, based on objective criteria that account for the 
information needs of the Commission staff and the federal resource 
agencies with statutory responsibility for formulating 
recommendations and conditions. The license applicant and all other 
stakeholders would have the opportunity to provide input that would 
be considered during the process. The study dispute resolution 
process would be completed within 60 days from the date that the 
final study plan was filed with the

[[Page 58745]]

Commission and the Commission staff would have an additional 30 days 
to complete SD-2. See section 4 for a detailed description of the 
study dispute resolution process.

3.5 Study Period, Development of Draft License Application

    Studies included in the final study plan would be implemented 
according to the schedule in SD-2. The study period would include an 
ongoing evaluation and review process in which the applicant, the 
Commission staff, and stakeholders, would ensure that studies were 
being conducted as described in the study plan and would 
periodically review the data being collected. This review could 
result in proposed modifications to the study plan, which would be 
subject to the study dispute resolution process. It is assumed that 
in most cases two years would be required to conduct studies.
    Following completion of the first year of studies, the license 
applicant, the Commission staff, and stakeholders would review the 
data and determine whether modifications to the study plan were 
warranted based on the initial results. The study dispute resolution 
process would be utilized to resolve any differences. The second 
year of studies would then be conducted, and would include the 
ongoing evaluation and review process.
    At the conclusion of the second year of studies, the license 
applicant, the Commission staff, and stakeholders would meet to 
determine: (1) If the studies had or would yield information 
necessary to complete the Commission staff's NEPA document, and (2) 
if the information collected was sufficient for the federal resource 
agencies to develop their recommendations and conditions. 
Continuation or modification of the study plan may be requested and 
dispute resolution would again be available.
    Following the second year of studies, the applicant would file a 
draft license application with the Commission, even though some 
final study results may be pending. The environmental section in the 
draft application would be in a similar format as the environmental 
analysis section of the Commission staff's NEPA document. Within 60 
days, stakeholders would file detailed comments on the draft 
application, including preliminary input on the appropriate level of 
NEPA analysis. The Commission staff comments would be filed 30 days 
after stakeholder comments to ensure that the Commission staff had 
all necessary information before providing its input.
    If additional information were needed, the applicant, the 
Commission staff, and stakeholders would develop a schedule allowing 
such information to be obtained prior to the applicant filing its 
draft application. If sufficient time was not available to develop 
the information before filing the license application (two years 
before the current license expired), then the Commission staff, 
applicant, and stakeholders would develop a time line for providing 
that information and the Commission staff would issue a revised 
schedule for its post-application actions. The study dispute 
resolution process would be available as needed.

3.6 Development of Final License Application

    Within 60 days after receiving comments on the draft license 
application, the applicant would file its final license application 
(including applicable responses to comments and an application 
summary) with the Commission. Within 15 days, the Commission staff 
would issue a notice that the application was filed, which would 
include a processing schedule.
    Following the notice of application filed, the Commission staff 
would have 45 days to: (1) Determine if the application met the 
Commission's filing requirements (i.e., to determine if any 
additional information was needed by the Commission staff to process 
the license) and (2) to issue a notice accepting the application and 
requesting interventions, recommendations, and conditions. The 
notice would also request recommendations on the level of NEPA 
analysis to be completed [Environmental Analysis (EA) or 
Environmental Impact Statement (EIS)], and on whether issuance of a 
draft is necessary should the Commission staff decide to develop an 
EA. If the application did not meet the Commission staff's needs, it 
would request additional information.
    Stakeholders would have 60 days from the date of the Commission 
staff's notice to file requests to intervene and to file comments, 
recommendations, and conditions. If submitting preliminary 
conditions, the federal resource agencies would also submit a 
schedule for producing final conditions.

3.7 Post-Filing, NEPA Analysis, License Issuance

    The IHC proposal includes separate tracks depending on whether 
the Commission staff issues a draft NEPA document. Track A 
anticipates draft and final NEPA documents and Track B anticipates a 
final NEPA document with comments addressed in the licensing order.

3.7.1 Track A

    Within 180 days after requesting comments and interventions, the 
Commission staff would issue its draft EA or EIS and request 
comments. Additionally, on behalf of the federal resource agencies, 
the Commission staff would specifically request comments on agency 
conditions. The license applicant and stakeholders would have up to 
60 days to file comments on the draft NEPA document and on the 
agencies' preliminary conditions. All comments would also be served 
on the intervenors. The federal resource agencies would then file 
their updated conditions within 30 to 60 days after close of the 
draft NEPA comment period. The Commission staff would issue the 
final NEPA document within 90 days of receiving the agencies' 
updated conditions and the draft license order would be provided to 
the Commission staff within an additional 30 to 90 days.

3.7.2 Track B

    Within 90 to 120 days after requesting comments and 
interventions, the Commission staff would issue its EA. The 
stakeholders and the applicant would have 30 to 45 days to comment 
on the EA and on the resource agencies' preliminary conditions. All 
comments would be filed with the Commission and served on the 
intervenors. Within 60 to 90 days after receiving comments, the 
federal resource agencies would file their updated conditions. The 
Commission staff would prepare a draft order for Commission issuance 
within 15 to 60 days after receiving the federal resource agencies' 
updated conditions.

4. Study Dispute Resolution Process

4.1 Background

    The purpose of the proposed study dispute resolution process 
would be to resolve disagreements between the federal resource 
agencies, Indian tribes, and the Commission staff regarding the need 
for and technical aspects of a requested study prior to 
implementation of the study and during the study phase of the 
process (as necessary). By resolving study disputes early, requests 
for additional studies and information after the application has 
been filed with the Commission should be rare.
    The proposed study dispute resolution process maintains the 
Commission's ultimate authority to determine which studies were 
required, based on objective criteria that account for the 
information needs of the Commission as final decision-maker, and for 
the resource agencies with statutory responsibility to formulate 
recommendations, terms, conditions or prescriptions. The applicant 
and all other stakeholders would have an opportunity to provide 
input during the process. The dispute resolution process would be 
completed within 60 days and the Commission staff would have an 
additional 30 days to complete SD-2.

4.2 Disputed Issues, Dispute Resolution Team

    To facilitate the process, disputes would be limited to two 
issues: (1) Whether a study was necessary for either the federal 
agencies, Indian tribes or the Commission staff to develop their 
recommendations, conditions, prescriptions, or license terms, and 
(2) whether a specific study methodology was necessary to obtain the 
information.\21\ Each dispute would be measured against 
predetermined criteria by a dispute resolution team. The team would 
review the available information and document findings in a report 
filed with the Commission Secretary, to be forwarded to the Director 
of the Office of Energy Projects for inclusion into the 
administrative record. The Commission staff would then consider the 
findings of the team when making its final determination on studies 
to be required of the applicant. The entire process would take 
approximately 60 days. Once the team filed its findings with the 
Commission and the Commission staff made its decision, the issue 
would be considered resolved for purposes of completing the final 
study plan and proceeding with the study implementation phase of the 
licensing process.
---------------------------------------------------------------------------

    \21\ Studies not in dispute would proceed in accordance with the 
study plan.
---------------------------------------------------------------------------

    The team approach would help to ensure that the issue was 
broadly considered and

[[Page 58746]]

potential compromises were discussed before a final Commission staff 
decision. The team would include one person from the Commission 
staff, one person from the federal agency or Indian tribe requesting 
the study and an agreed-upon neutral party. If the team determined 
that the study criteria were met based on the information provided, 
then a finding that the study was needed would be provided to the 
Commission staff. If the team determined that the criteria were not 
met based on the information provided, then a finding that the study 
was not needed would be provided to the Commission staff.

4.3 Study Request Criteria

    All study requests subject to dispute resolution under this 
process would include supporting information sufficient to satisfy 
the following criteria:
    (a) Whether the request describes available project-specific 
information, and provides a nexus between project operations and 
effects on the resource to be studied.
    (b) Whether the request includes an explanation of the relevant 
resource management goals of the agencies with jurisdiction over the 
resource to be studied.
    (c) Whether the study objectives are adequately explained in 
terms of new information to be yielded by the study and its 
significance relative to the performance of agency roles and 
responsibilities in connection with the licensing proceeding.
    (d) If a study methodology is recommended, whether the 
methodology (including any preferred data collection and analysis 
techniques) is consistent with generally accepted practice in the 
scientific community.
    (e) Whether the requester has considered cost and practicality, 
and recommended a study or study design that would avoid unnecessary 
costs while still fully achieving the stated study objectives.
    (f) If the license applicant has provided a lower cost 
alternative, whether the requester has considered this alternative, 
and if not adopted, explained why the lower cost alternative would 
not be sufficient to achieve the stated study objectives.

4.4 The Commission Staff's Consideration of Findings

    Based on the team's findings, the Director of the Office of 
Energy Projects or the Director's delegate would determine within 30 
days whether the requester has adequately justified the need for the 
study (including any technical aspects in dispute) according to the 
criteria set forth above. Resource agency goals and objectives would 
be considered valid if they were relevant to the proceeding, 
expressly stated or referenced in the study request, and identified 
by the resource agency with jurisdiction over the resource in 
question. The decision maker would take into account the team's 
findings, the views of the parties, the expertise of the resource 
agencies, and any other relevant information in the administrative 
record. If the team's findings were adopted, the decision would be 
issued in writing under delegated authority. If not, the Director of 
the Office of Energy Projects would be required to render a decision 
in writing.\22\ The decision would be included in SD-2.
---------------------------------------------------------------------------

    \22\ Requests for dispute resolution would be filed within 20 
days of the issuance of the revised study plan. The team would 
convene within 10 more days, and have 30 days to develop and file 
its findings and recommendation with the Commission. A decision 
would be rendered within an additional 30 days.
---------------------------------------------------------------------------

5. Other Issues

    The IHC emphasizes that its proposal is in an early stage of 
development. All stakeholders should have substantial opportunity to 
participate in fully developing any new licensing process. The IHC 
proposal has been sufficiently developed to ensure that the key 
steps in the process have been identified, although significant 
detail has yet to be determined. For example, the IHC is aware of 
specific issues that have not yet been addressed, including those 
relating to preparation of the NEPA document, consultation under the 
Endangered Species Act, and inclusion of recommendations under 
Section 10(j) of the Federal Power Act. The IHC is also aware that 
other stakeholders may have additional or alternative ideas for 
addressing the identified process issues or may have concerns and 
issues not anticipated by the federal parties while drafting this 
proposal.
    Comments on the IHC proposal should be made according to the 
instructions described in the Commission staff's accompanying 
Federal Register notice. Any and all comments are solicited, 
although specific responses to the questions contained in the notice 
would be helpful.

6. Contact Information

    For further information regarding the IHC proposal, 
representatives of the IHC New Issues Subgroup may be contacted.
    Specifically: Kathryn Conant, Office of Habitat Conservation, 
National Marine Fisheries Service, telephone: (301) 713-2325 (e-
mail: [email protected]).
    Tom DeWitt, Office of Energy Projects, Federal Energy Regulatory 
Commission, telephone: (202) 502-6070 (e-mail: 
[email protected]).
    Bob Dach, Division of Federal Program Activities, U.S. Fish and 
Wildlife Service, telephone: (703) 358-2183 (e-mail: [email protected]).
    David Diamond, Office of Policy Analysis, Department of the 
Interior, telephone: (202) 219-1136 (e-mail: [email protected]).
    Mona Janopaul, Lands, U.S. Forest Service, telephone: (202) 205-
0880 (e-mail: [email protected]).
BILLING CODE 6712-01-P

[[Page 58747]]

[GRAPHIC] [TIFF OMITTED] TP18SE02.015

BILLING CODE 6712-01-C?

[[Page 58748]]

Attachment B

National Review Group; Summary of Proposal for a Coordinated 
Environmental Review and Application Development in the Relicensing 
Process

Introduction

    The National Review Group (``NRG'') is a task force of 
individual representatives from the hydropower industry and 
conservation organizations who share a common interest in improving 
the relicensing process for non-federal hydropower projects under 
the Federal Power Act (``FPA''), Part I. These representatives are 
listed below. The NRG originally convened in 1998 and published a 
report on voluntary practices that may be implemented under existing 
rules to serve this interest. [See http://www.ferc.gov/hydro/hydro2.htm]
    Since 2000 the NRG has worked to develop a proposal for 
administrative reforms (including amendments to existing rules) to 
reduce the time, costs, and complexity of the relicensing process. 
The Federal Energy Regulatory Commission (``FERC''), the U.S. 
Departments of Agriculture, Commerce, and Interior, and the U.S. 
Environmental Protection Agency have participated in a limited 
fashion to comment on the process.
    The NRG now releases the attached proposal for administrative 
reform. This proposal does not involve a statutory change and, 
therefore, does not change any agencies' statutory authority or 
responsibility. The proposal focuses on coordination through the 
administrative process of license application development and 
environmental review under the National Environmental Policy Act 
(''NEPA'') and related laws, and further on resolving disputes 
related to such review early in the process. While this proposal is 
written in the context of the relicensing of an existing project, we 
believe that the fundamental concepts may be applicable to the 
licensing of a new project.
    The attached proposal is stated in conceptual form and language. 
The NRG has solicited and considered public comments submitted, and 
based on comments received has revised this proposal to reflect 
areas where commenters believed the intent of the NRG was not clear. 
Comments received are summarized in a matrix to be attached to the 
proposal when submitted to the FERC.

Key Elements

    The proposal includes four key reforms of existing rules, 
including 18 CFR Parts 4 and 16 as administered by FERC. These are:
    [sbull] Before the start of a relicensing proceeding, a License 
Applicant may undertake early consultation, to identify issues, 
share available information, and obtain needed information. Such 
early disclosure of issues should help a License Applicant develop 
its application in a manner that meets the informational 
requirements of all agencies and reduces the potential for 
additional information requests.
    [sbull] FERC and Cooperating Agencies will execute general 
Memoranda of Understanding (``MOU'') and project-specific Memoranda 
of Agreement (''MOA'') to establish procedures for cooperation, 
including development of the record, dispute resolution, and 
decision-making. These documents will provide for the License 
Applicant's appropriate involvement. The MOU will help to define 
which agency is generally responsible for assembling information and 
substantive drafting within an area of expertise under NEPA. The MOA 
will apply that general construct to a specific licensing 
proceeding. This procedure is intended to reduce duplicative 
requirements on the Licensee and provide for maximum cooperation 
among the agencies and FERC. All agencies will be encouraged to 
participate as Cooperating Agencies.
    [sbull] Before publication of the draft NEPA document, FERC and 
the Cooperating Agencies will use an advisory opinion procedure to 
identify studies necessary for their respective decisions. They will 
use a dispute resolution procedure when they disagree on the scope 
of that advisory opinion. This procedure includes an inter-agency 
advisory panel, and if necessary, a decision at the Chairman/
Secretary level to resolve disputes. Under this approach, the 
License Applicant gains greater certainty that, if it complies with 
study requests deemed reasonable at the beginning of the procedure 
as set forth in the advisory (or revised advisory) opinion, there is 
a strong presumption that no additional studies will be required by 
FERC. Other stakeholders also gain certainty, since the procedure 
will help define the study requirements early in the proceeding and 
is intended to create an incentive for the License Applicant to 
implement the study plan as described in the advisory opinion.
    [sbull] FERC and the Cooperating Agencies will publish a single 
informational (not decisional) NEPA document. This procedure is 
intended to eliminate the need for FERC and these other agencies to 
conduct separate and potentially duplicative or conflicting NEPA 
reviews and may reduce the average period of time for a relicensing 
proceeding. While the single NEPA document will be used as the basis 
for decision-making, FERC will, and each Cooperating Agency may, 
publish a separate record of decision stating each agency's 
preferred alternative. This will minimize conflict over the 
informational NEPA document that contains the scientific and 
analytic basis for a decision and will allow agency preferences to 
be represented in separate decisional documents. Conflicts may then 
be limited to the outcome resulting from the separate decisional 
documents rather than potentially divergent NEPA records, studies, 
and background information.

Public Comments and Responses

    Several themes emerged from the comments.
    [sbull] Tribal rights: Commenters expressed concern that this 
proposal would adversely affect Tribal rights. However, the NRG 
proposal encourages at least the same if not greater Tribe 
participation. The NRG recognizes the consultation requirements with 
Tribes. The proposal encourages early and frequent discussions with 
important stakeholders like the Tribes so that the full breadth of 
their interests is addressed. Although not specific addressed in 
detail, the proposal recognizes that the Tribes may exercise 
independent regulatory authority in areas such as water quality and 
cultural resources.
    This proposal does not address the issue of Tribal sovereignty, 
but it does include early consultation with all stakeholders (which 
includes all persons, entities, etc.), and early issue 
identification. Including Tribal issues in these early phases will 
minimize the chances that Tribal issues will be overlooked or that 
insufficient information will be gathered to adequately address the 
issues.
    [sbull] State role: The overlap of state and federal authorities 
in FERC licensing proceedings can lead to uncoordinated efforts and 
delay and can be especially acute in water resource management 
issues, where FERC and federal agencies have broad ranging authority 
and also the states have broad ranging authority over water quality 
and quantity.
    This proposal for administrative change can retains current 
federal and state authorities. However, we suggest that the exercise 
of these authorities can be rationalized so as to make the process 
more efficient and to encourage better licensing outcomes. While the 
NRG proposal does not directly address state authorities, 
integration of the states into the process is a critical next step.
    [sbull] Public participation: The public must have an 
opportunity for meaningful participation in the licensing process.
    The NRG proposal would not diminish opportunities for public 
involvement. Although the proposal is not specific as to all points 
at which the public would be actively involved in the process, there 
is a clear intent to have substantial opportunities for all 
stakeholders to participate in the process. In its current state, it 
does not address the role of collaborative processes, which are 
often the most effective forums for public participation. We do not 
believe, however, that collaboration is foreclosed by a consolidated 
environmental review process.
    [sbull] Licensee roles and responsibilities: Any process for 
relicensing a hydro project must provide an appropriate role for the 
current licensee. As the party responsible for funding and executing 
the required studies, and implementing any license conditions, 
licensees must be intimately involved in all phases of the process.
    [sbull] The NRG proposal actively involves the licensee in 
information gathering, scoping, study development, proposed 
licensing alternatives and environmental analysis. However, refining 
and clarifying the role of the licensee throughout the process will 
be an important task in the development of a functional and 
supportable rule.
    [sbull] Time frames: Many parties believe that, as a matter of 
principle, relicensing a hydro project should not take as long as it 
does. However, there is a great deal of work that must be 
accomplished within the available 5-year window. The desire to move 
expeditiously must be weighed against the need for adequate study 
seasons, appropriate consultation and dispute resolution timelines 
and sufficient time for document preparation. The NRG proposal 
attempts to balance those considerations.
    Some commenters have indicated that they believe the timelines 
suggested in the NRG

[[Page 58749]]

proposal are tight. The time line in the proposal can be evaluated 
further to determine if it is unrealistic. Other commenters 
expressed concern that the dispute resolution process could cause 
substantial delay. If a dispute arises over necessary studies, steps 
to keep the rest of the process on track and resolve the dispute(s) 
expeditiously will be in the interests of all participants.
    [sbull] Integration of other processes (CWA, ESA): Not all 
authorities affecting relicensing arise from the Federal Power Act. 
Integration of these parallel authorities such as the Clean Water 
Act, Endangered Species Act, and the National Historic Preservation 
Act is difficult. Nonetheless, integration of these authorities and 
their attendant processes is critical to development of a process 
that minimizes duplication and uses available agency resources 
wisely.
    [sbull] Consideration of additional studies: The NRG proposal is 
based on the concept that information be gathered and studies 
executed once, early in the process of relicensing. However, 
commenters have pointed out that long-term resource management 
decisions demand appropriately rigorous development of information. 
If unusual circumstances require additional studies to be performed, 
the process should allow this to happen.
    [sbull] Role of non-cooperating agencies: Commenters expressed 
concern that the proposal addresses the role of non-cooperating 
agencies in some, but not all, elements. The NRG proposal does not 
diminish the role of non-cooperating agencies as currently exercised 
in the FERC process; however, the proposal encourages agencies to 
accept cooperating agency status to make the process more efficient. 
To the extent that the role of non-cooperating agencies needs to be 
more fully developed, that development can occur in the context of 
the FERC's rulemaking proceeding.

Members of the NRG

    Utility and NGO Members:
[sbull] American Rivers
[sbull] American Whitewater
[sbull] Chelan County Public Utility District
[sbull] EPRI
[sbull] Grant County Public Utility District
[sbull] Kearns & West (Facilitator)
[sbull] Kleinschmidt & Associates
[sbull] Law Offices of GKRSE
[sbull] Natural Heritage Institute
[sbull] New York Power Authority
[sbull] Pacific Gas and Electric
[sbull] PacifiCorp
[sbull] Portland General Electric
[sbull] Reliant Energy
[sbull] Southern California Edison
[sbull] Southern Company
[sbull] Troutman Sanders
    Agency Advisors:
[sbull] US Department of the Interior/Bureau of Indian Affairs/US 
Fish and Wildlife Service
[sbull] Energy Information Administration
[sbull] US Environmental Protection Agency
[sbull] Federal Energy Regulatory Commission
[sbull] National Marine Fisheries Service/US Department of Commerce
[sbull] USDA Forest Service

National Review Group; Detailed Proposal for Coordinated 
Environmental Review and Application Development in the Relicensing 
Process

1. Definitions

    1.1. ``Cooperating Agency'' means: a federal, interstate, state, 
local, or tribal agency that cooperates with FERC in the NEPA review 
in a proceeding.
    1.2. ``Tribal agency'' means: a tribal entity which (A) is 
recognized by the federal government, and (B) performs a 
governmental function, such as the Tribal Historic Preservation 
Officer or an agency that has been delegated the authority to 
develop and administer a water quality standards program, including 
Clean Water Act section 401 certifications.
    1.3. ``License Applicant'' means: an applicant for a license, 
whether or not the existing licensee.
    1.4. ``License Articles'' means: articles adopted by FERC in a 
license.
    1.5. ``Licensee'' means: the existing licensee.
    1.6. ``Resource Agencies'' means: a Federal, interstate, State, 
local, or tribal agency exercising administration over the areas of 
flood control, navigation, irrigation, recreation, fish and 
wildlife, water resource management, or cultural or other relevant 
resources of the area affected by a project.
    1.7. ``Stakeholder'' means: a person or entity interested in a 
project, including an agency, non-governmental or other 
organization, or individual.
    1.8. ``Terms and Conditions'' means: conditions submitted by a 
Resource Agency for inclusion in the License under any claim of 
authority, including FPA sections 4(e), 18, 10(a), and 10(j) and 
Clean Water Act section 401(a).

2. Optional Pre-NOI/Pre-Application Initial Meetings and Consultation

    This step provides an informal opportunity to identify available 
and needed information and begin identification of issues, before 
the formal licensing proceeding commences on the filing of the 
Notice of Intent (``NOI'') for a new license.
    2.1. Licensee is encouraged to meet with FERC and Resource 
Agencies before the filing of the NOI, as appropriate, to begin 
identification of issues and collection of data to compose a record 
necessary for the licensing proceeding. In any such meeting, each 
agency will describe relevant existing information, procedures for 
Licensee's access to it, current expectations for study plans, known 
and relevant agency goals and objectives, and published plans 
relevant to the project. Licensee will provide a description of the 
existing project and supporting information. Licensee and Resource 
Agencies will attempt to define potential issues that may arise in 
the study plan or otherwise in the licensing proceeding.
    2.2. Licensee is encouraged to informally consult with 
Stakeholders including FERC using a Project Report or Project 
Description, which in summary form describes the existing project, 
environmental information, and Licensee plans for any upgrades and 
changes. The purpose of such consultation will be to obtain 
information for the IIP/ICD as described in paragraph 3.

3. Notice of Intent and Initial Information Package/Initial 
Consultation Document (``IIP/ICD'')

    3.1. The FERC proceeding will begin with the filing by the 
Licensee of the NOI with the FERC.
    3.2. IIP/ICD will be issued by the Licensee no less than 5 years 
and no more than 5.5 years before license expiration for existing 
licensees and 4.5 years for competitors. Expanded contents (roughly 
mirroring the current draft application) will include the following:
    A. Exhibits A and B, modified Exhibits D and E (sections on 
existing environment), existing Exhibits F and G, and modified 
exhibit H;
    B. Record of consultations to date, including information 
developed under paragraph 2 above.
    C. Issues identified in any preliminary consultation and a 
preliminary list of information needed to address those issues, and 
any other issues identified by the Licensee as relevant;
    D. Licensee's opening study proposals including scope, method, 
and schedule in outline format;
    E. List and description of any study requests made to date; and
    F. A draft Scoping Document (``SD'') to be in the IIP/ICD 
(including the Licensee's preferred alternative).
    3.3. IIP/ICD will be sent out by the Licensee for a 60-Day 
comment period to Resource Agencies, FERC, and other Stakeholders.

4. Development of Cooperating Agency Agreements or Relationship

    4.1. A general MOU (which provides the framework for subsequent 
project-specific agreements) will be developed between FERC and each 
Resource Agency which participates in licensing proceedings on a 
regular basis. The general MOU will be consistent with and reflect 
the process laid out here.
    4.2. Following the issuance of the IIP/ICD by the Licensee and 
before FERC issues the Scoping Document (``SD''), FERC will request 
that each Resource Agency participate as a Cooperating Agency, 
pursuant to a written agreement specific to that proceeding 
(``MOA'').
    4.3. The MOA in a given proceeding will provide for maximum 
cooperation consistent with FERC's responsibility as lead agency 
under NEPA. It will establish procedures for cooperation, including 
preparation of NEPA documents [i.e., draft and final Environmental 
Assessment (``EA'')/Environmental Impact Statement (``EIS'')], 
dispute resolution, and decision-making.
    A. As provided in such agreement, such cooperating agency 
procedures will require time and resources by those involved. Each 
Cooperating Agency will be responsible for collecting and compiling 
information in its possession relevant to the NEPA review, and for 
substantive drafting in the agreed-to area of NEPA drafting 
responsibility. As a general matter, such responsibility will be 
roughly proportionate to the Cooperating Agency's

[[Page 58750]]

regulatory responsibilities in assessing a given resource impact.
    B. As lead agency, FERC will retain the final responsibility for 
the content of the jointly prepared NEPA documents. FERC and the 
Cooperating Agencies will attempt to resolve any conflicts regarding 
an alternative or impact in findings prior to issuance of NEPA 
documents through the dispute resolution procedure in section 6 
hereof. However, if all disputes are not so resolved, the NEPA 
document will state any unresolved dispute between FERC and a 
Cooperating Agency regarding an alternative or impact, including the 
separate findings of each agency, except as limited in this 
paragraph 4.3.
    C. NEPA documents in licensing proceedings will be factual and 
analytical, not decisional. The EA/EIS (whether draft or final) will 
include the project description, project alternatives, the impacts 
(beneficial and adverse, environmental and economic) of such 
alternatives, and protection, mitigation, and enhancement measures 
(``PM&E''). Each document will conform to this scope.
    D. The EA/EIS will not include a decision on License Articles or 
Terms and Conditions. Instead, in a given proceeding, FERC will, and 
each Cooperating Agency (or non-cooperating Resource Agency) may, 
publish a record of decision separate from the informational final 
NEPA document which so states that agency's preferred alternative, 
the basis thereof (which should expressly reference the portions of 
the final NEPA document described in the above paragraph).
    E. To encourage resolution of issues informally and to reduce 
time should an advisory panel need to be convened pursuant to 
paragraph 6.3 below, FERC and Cooperating Agencies, and, if 
possible, involved Resource Agencies will attempt to identify at the 
onset of the licensing proceeding senior policy staff in each 
respective organization. These designated staff members will be 
available to advise and resolve issues informally throughout the 
licensing process. They also will serve as the members of the 
dispute resolution panel if convened under paragraph 6. The neutral 
third party panelist(s) described in paragraph 6.3.A. will not be 
identified and enlisted until it is determined that a panel is 
necessary.
    4.4. A Cooperating Agency will not be considered a party to the 
relicensing proceeding for the term of its cooperating relationship. 
Any communication between FERC and a Cooperating Agency that 
involves the cooperating relationship and relates to the NEPA 
documents will be exempt from disclosure consistent with the FERC ex 
parte regulations in 18 CFR Section 385.2201(e); except that any 
communication necessary for the completeness of the record, 
including any communication necessary to preserve a Cooperating 
Agency's right pursuant to paragraph 4.5 hereof, will be on the 
record. Any communication between FERC and a Cooperating Agency that 
relates to the merits of the decision on the License Articles or 
Terms and Conditions will be on the record.
    4.5. Regardless of whether or not it is a Cooperating Agency in 
a given proceeding, a Resource Agency has the same rights and duties 
to participate in the development of the public record in that 
proceeding as provided in 18 CFR Parts 4 and 16.
    4.6. A Cooperating Agency may elect to terminate its cooperating 
status as a non-party and become a party at any time prior to the 
deadline for rehearing of the final licensing decision by filing an 
intervention with FERC. However, a Cooperating Agency which 
terminates its status may seek rehearing or judicial review on the 
ground that the document is inadequate only as follows:
    A. The document omits an alternative or finding of impact timely 
proposed by the Cooperating Agency pursuant to paragraph 4.3;
    B. It does not conform to the scope stated in paragraph 4.3.C 
and 4.3.D; or
    C. The Cooperating Agency disagrees with the ultimate finding of 
FERC as lead agency regarding an alternative or impact; provided 
that the Cooperating Agency had previously stated its specific 
objection to that finding on the record, including detailed basis 
both in law and fact, and had proposed an alternative finding in an 
appropriate form, in a timely communication consistent with 
paragraph 4.3; and provided further that the Cooperating Agency had 
diligently pursued a remedy for that objection, including the 
dispute resolution procedure stated in paragraph 6.

5. Scoping and Issuance of Scoping Document

    5.1. FERC and Cooperating Agencies, with input from the Licensee 
and Stakeholders, will issue Scoping Document 1 (``SD1'') 90 days 
following IIP/ICD issuance. SD1 will include:
    A. Identification of resource goals and objectives, issues and 
information needed (basic methodology, geographic and temporal 
scope), including consideration of the need by FERC and Resource 
Agencies to compile a complete administrative record.
    B. Preliminary alternatives, including the No Action 
alternative, the Licensee's alternative, and others as appropriate.
    C. A schedule (conforming to applicable rules, as amended by 
this proposal) for all subsequent actions by the Licensee, FERC, 
Cooperating Agencies, and others leading to timely licensing 
decision. The schedule will be kept current and periodically revised 
as necessary based on developments.
    D. A description of unresolved disagreements between FERC and 
Cooperating Agencies on each of the above. The description will 
state each side of the dispute.
    5.2. FERC and Cooperating Agencies in cooperation with the 
Licensee will hold a Scoping Meeting within 30 days of the issuance 
of SD1 and a Site Visit. The site visit may occur prior to the 
issuance of SD1 or soon after the comment period to accommodate 
weather or seasonal needs.
    5.3. Comments to SD1, which may include requests for studies, 
will be due 30 days after the Scoping Meeting.
    5.4. Licensee will develop a study plan outline and send it to 
FERC and Resource Agencies within 30 days after the public comment 
period under section 5.3 ends.

6. Dispute Resolution

    6.1. This dispute resolution process can be used to resolve 
disputes between FERC, Cooperating Agencies and other Resource 
Agencies.
    6.2. FERC and Cooperating Agencies will issue an advisory 
opinion 60 days after the Licensee issues its study plans on the 
extent to which the data to be provided and the study plan outline 
as developed by the Applicant is sufficient. That advisory opinion 
will also discuss and determine study topics to be addressed, 
methodology to be used, geographic and temporal scope of the 
analysis, and the foreseeable project-related impacts on target 
resources that the study plan is to address consistent with 
previously established resource goals and objectives. The advisory 
opinion will be joint, including a statement of any unresolved 
dispute between FERC and a Cooperating Agency related to the 
advisory opinion and will be distributed to both the Licensee and 
the Stakeholders.
    6.3. FERC and a disputing Cooperating Agency will make best 
efforts to resolve disputes prior to issuance of the joint advisory 
opinion. However, if the dispute between FERC and a Cooperating 
Agency is not resolved pursuant to paragraph 6.2, then an advisory 
panel will be convened as stated below. Studies discussed in the 
advisory opinion which are not subject to a dispute between FERC and 
a Cooperating Agency shall proceed while the dispute resolution 
process is conducted on the specific disputed studies.
    A. The panel will be comprised of a senior policy staff member 
from FERC and from the disputing agency, and such neutral third 
parties (as necessary to ensure that there is an odd number in 
total). FERC and the disputing agency will choose (with disclosure 
of any potential conflict of interest) the neutrals, after 
consultation with the Licensee and participating Stakeholders.
    B. At the time of issuance of the advisory opinion under 
paragraph 6.2, FERC will notify Licensee and other Stakeholders that 
the panel will be convened (specifying a date more than 30 days but 
no more than 60 days after issuance of the advisory opinion), and 
Licensee and other Stakeholders will have 30 days to submit 
information for the panel's consideration.
    C. The panel will issue a recommendation within 90 days after 
being convened, subject to adjustment in extraordinary 
circumstances.
    D. FERC and Cooperating Agencies will issue a revised advisory 
opinion 30 days following the panel recommendation, which 
incorporates and responds to the recommendations of the advisory 
panel.
    6.4. A Resource Agency which declines to become a Cooperating 
Agency will use the procedure established in paragraph 6.3 to 
resolve an otherwise unresolved dispute related to study requests in 
the NEPA review.
    6.5. If a dispute regarding a matter addressed by the advisory 
opinion issued under paragraph 6.2 has not been timely resolved at 
the staff level or through the panel procedure in paragraph 6.3, the 
dispute will be elevated to a meeting at the level of the disputing 
agencies' Chairman or

[[Page 58751]]

Secretary within 60 days after the deadline of 120 days represented 
by steps 6.3 (B) and 6.3 (C) above.
    6.6. FERC will inform the Licensee and Stakeholders of the 
outcomes of the dispute resolution procedure within 15 days of the 
decision(s) reached pursuant to paragraphs 6.3 through 6.5.
    6.7. In addition, or as an alternative, to the dispute 
resolution procedure provided in paragraphs 6.2-6.6 above, Licensee 
and Stakeholders may develop an alternative procedure to resolve 
disputes on the content of the advisory opinion. Such an alternative 
procedure will be developed prior to the due date for the advisory 
opinion as stated in paragraph 6.2 above.

7. Study Development

    7.1. After consideration of Stakeholders' comments and the 
advisory opinions (as revised pursuant to paragraphs 6.2 through 
6.7), Licensee will adopt a study plan within 60 days after notice 
from FERC of the advisory opinion (as revised) which plan will 
provide for conducting studies and collecting data.
    7.2. Any Stakeholder will follow 18 C.F.R. Section 16.8(b)(4), 
(c)(2), or (d)(2), and the schedule established in paragraph 5.3 to 
make any Additional Information/Study Requests (``AI/SR'').
    7.3. The Licensee will be deemed to have discharged its 
responsibility to conduct studies or gather information if its study 
plan is executed in a manner consistent with the advisory opinion 
issued pursuant to paragraphs 6.2 to 6.7. This presumption may be 
rebutted by the objecting stakeholder only if (A) an unexpected 
study result is found, (B) there is a change in applicable law, or 
(C) there is a dispute regarding implementation of the study plan, 
relative to the AI/SR that the Licensee did not undertake.
    A. ``Unexpected study result'' means that there is a potentially 
significant impact that was previously not foreseen to occur, or 
that the intensity of a significant impact is so different than 
foreseen that additional study is appropriate for the development of 
protection, mitigation, or enhancement measures. This contemplates a 
clear demonstration of an anomalous result \23\.
---------------------------------------------------------------------------

    \23\ This is not intended to repeat studies because the results 
obtained were unexpected. However, it would apply to new issues 
identified either through the studies or outside activities.
---------------------------------------------------------------------------

    B. ``Change in applicable law'' is a change in statute or rule, 
that may materially affect the appropriate level of protection, 
mitigation, or enhancement of resources affected by the project. An 
example is a new ESA listing applicable to the project reach.
    C. ``Dispute regarding implementation of study plan'' means that 
an objecting stakeholder has a reasonable basis to dispute that the 
Licensee followed generally accepted scientific methods in the 
implementation of the study plan. This excludes the choice of any 
scientific method specifically identified in the advisory opinion, 
although it may include a dispute regarding the implementation of 
the method.

8. Preliminary Draft Environmental Document and Preliminary Conditions

    8.1. Prior to the release of Preliminary Draft Environmental 
Document (``PDED''), the Licensee will release a summary of which 
studies have been completed to date and will disclose which 
additional studies the Licensee intends to conduct.
    8.2. Licensee will issue its PDED after consulting with FERC and 
Cooperating Agencies, and no later than 3 years prior to license 
expiration. There will be a 60-day comment period on the PDED. The 
PDED document, which functionally will replace the environmentally 
related sections of the draft application, will include:
    A. Refined issues based on completed studies;
    B. Review of comments on study results.
    C. A description of additional studies planned.
    D. A refined set of alternatives.
    8.3. Concurrent with issuance of the PDED, the Licensee will 
commit to provide the additional information identified as to be 
done in the PDED, on a schedule acceptable to itself, FERC and 
Cooperating Agencies.
    8.4. Licensee will convene a public meeting within 30 days after 
PDED publication. FERC and Cooperating Agencies will participate. 
FERC will issue notice of the publication within ten days of 
receiving the PDED, at least 15 days prior to the meeting.
    8.5. Each Resource Agency will provide preliminary draft Terms 
and Conditions during the 60-day comment period on the PDED.

9. Application Filed

    9.1. Application will be filed 2 years before license expiration 
date (same as existing practice). The application will include all 
results from studies completed, a listing of studies in progress, 
and proposed protection, mitigation and enhancement measures.

10. FERC Tender and Procedural Notice/Ready for Environmental Decision 
(``Red'') Notice/Revised Agency Draft Terms and Conditions

    10.1. FERC will issue a tender notice within 14 days of filing 
and will issue a procedural notice within 60 days of filing of 
application. On publication of such tender notice, Stakeholders 
become subject to ex parte rules.
    10.2. Within 60 days of filing of the application, FERC and 
Cooperating Agencies will issue notice that the application is ready 
for environmental decision (``RED''), or if the application is not 
ready for environmental decision FERC and Cooperating Agencies will 
identify additional information needed as listed in the joint 
advisory opinion (as revised to handle resolution of any disputes 
pursuant to paragraph 6 above) to make it ready.
    10.3. Each Resource Agency will issue revised preliminary draft 
Terms and Conditions within 60 days after RED notice.

11. Draft Environmental Assessment/Environmental Impact Statement; 
Draft Terms and Conditions; and Draft License Articles

    11.1. Within 180 days after the RED notice, FERC and Cooperating 
Agencies will issue draft EA/EIS (as an informational document, not 
decisional, as set forth in paragraph 4.3 above) for public review 
and comment. Also within 180 days after the RED, FERC and any other 
agency that plans to submit Terms and Conditions to FERC will 
separately issue draft License Articles and draft Terms and 
Conditions. The draft EA/EIS will state any dispute between FERC and 
Cooperating Agencies with respect to environmental impact analysis 
(consistent with paragraph 4.3 above).
    11.2. There will be a 60-day public comment period on the draft 
EA/EIS, draft License Articles, and draft Terms and Conditions.
    11.3. Each Resource Agency will submit final or final draft 
Terms and Conditions, within 45 days following the close of the 
public comment period on the draft EA/EIS. A Resource Agency may 
require publication of a final NEPA document before issuance of 
final Terms and Conditions, in which case the agency may issue final 
draft Terms and Conditions at this time. In the alternative the 
agency may issue final Terms and Conditions at this time, subject to 
reopener if the final EA/EIS document contains new information not 
contained in the draft.
    11.4. To encourage resolution of issues informally and to reduce 
time regarding disputes related to final (and draft) Terms and 
Conditions, FERC and the Agencies may use the dispute resolution 
process described in section 6 above.

12. Final Environmental Document and License Issuance

    12.1. The final EA/EIS (as an informational document, consistent 
with paragraph 4.3 above) will be published separately from the 
License. The License will be issued by FERC and will include final 
Terms and Conditions. The final EA/EIS will describe any remaining 
dispute between FERC and a Cooperating Agency regarding 
environmental impacts analysis.

[FR Doc. 02-23655 Filed 9-17-02; 8:45 am]
BILLING CODE 6717-01-P