[Federal Register Volume 68, Number 55 (Friday, March 21, 2003)]
[Proposed Rules]
[Pages 13988-14047]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-6388]



[[Page 13987]]

-----------------------------------------------------------------------

Part II





Department of Energy





-----------------------------------------------------------------------



Federal Energy Regulatory Commission



-----------------------------------------------------------------------



18 CFR Parts 4, 5, 16, and 385



Hydroelectric Licensing Under the Federal Power Act; Proposed Rule

  Federal Register / Vol. 68, No. 55 / Friday, March 21, 2003 / 
Proposed Rules  

[[Page 13988]]


-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 4, 5, 16, and 385

[Docket No. RM02-16-000]


Hydroelectric Licensing Under the Federal Power Act

February 20, 2003.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The Federal Energy Regulatory Commission is proposing to 
revise its regulations pertaining to hydroelectric licensing under the 
Federal Power Act. The proposed revisions would create a new licensing 
process in which a potential license applicant's pre-filing 
consultation and the Commission's scoping pursuant to the National 
Environmental Policy Act (NEPA) would be conducted concurrently, rather 
than sequentially. The proposed rules also provide for increased public 
participation in pre-filing consultation; development by the potential 
applicant of a Commission-approved study plan; better coordination 
between the Commission's processes, including NEPA document 
preparation, and those of Federal and state agencies with authority to 
require conditions for Commission-issued licenses; encouragement to 
informal resolution of any study disagreements, followed by mandatory, 
binding study dispute resolution; and schedules and deadlines.

DATES: Comments are due April 21, 2003.

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 14 
copies, with an accompanying computer diskette in the prescribed format 
requested).

FOR FURTHER INFORMATION CONTACT: John Clements, Office of the General 
Counsel, Room 101-57, Federal Energy Regulatory Commission, 888 First 
Street, NE., Washington, DC 20426, 202-502-8070.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Introduction
II. Background
    A. Current Licensing Procedures
    B. Reform Efforts
    C. The Instant Proceeding
III. Discussion
    A. Need for a New Integrated Process
    B. Traditional Process and ALP to be Retained
    D. Key Issues and Goals for an Integrated Licensing Process
    1. Early Identification of Issues and Study Needs
    a. Advance Notification of License Expiration
    b. Integrating Pre-Filing Consultation with NEPA Scoping
    c. Study Plan Development
    d. Study Dispute Resolution Process
    e. Other Recommended Uses for Dispute Resolution
    2. Consultation and Coordination with States
    a. Timing of Water Quality Certification Application
    3. Consultation with Indian Tribes
    4. Environmental Document Preparation
    a. Cooperating Agencies Policy
    b. NRG Cooperating Agency Proposal
    c. Non-Decisional NEPA Documents
    d. Draft License Articles
    e. Endangered Species Act Consultation
    f. Fish and Wildlife Agency Recommendations
    g. National Historic Preservation Act Consultation
    5. Public Participation
    6. Processing Schedules and Deadlines
    7. Settlement Agreements
    a. Flexibility in Processing Schedules
    b. Timing and Conduct of Settlement Negotiations
    c. Guidance on the Content of Settlement Agreements
    E. Description of Integrated Licensing Process
    1. Applicability
    a. New and Original Licenses
    b. Competition for New Licenses
    2. Process Steps
    a. NOI, Process Schedule, and Study Plan Development
    b. Conduct of Studies
    c. Draft Application to License Order
    F. Improvements to Traditional Process and ALP
    1. Increased Public Participation
    2. Mandatory, Binding Study Dispute Resolution
    3. Recommendations not Adopted
    a. Waiver of Pre-Filing Consultation
    b. Applicant-Prepared NEPA Documents
    c. Process Steps in the ALP
    G. Ancillary Matters
    1. Intervention by Federal and State Agencies
    2. Information Technology
    3. Project Boundaries and Maps
    4. Miscellaneous Filing Requirements
    H. Transition Provisions
IV. Environmental Analysis
V. Regulatory Flexibility Act
VI. Information Collection Statement
VII. Public Comment Procedures
VIII. Document Availability
Appendix A
Appendix B
Appendix C

I. Introduction

    1. The Federal Energy Regulatory Commission (Commission) proposes 
to amend its regulations governing the process for licensing of 
hydroelectric power projects by establishing a new licensing process. 
The proposed amendments are the culmination of many actions by the 
Commission, other Federal and state agencies, Indian tribes, licensees, 
and members of the public to develop a more efficient and timely 
licensing process, while ensuring that licenses provide appropriate 
resource protections required by the Federal Power Act (FPA) and other 
applicable laws.
    2. The proposed new licensing process is designed to create 
efficiencies by integrating a potential license applicant's pre-filing 
consultation with the Commission's scoping pursuant to the National 
Environmental Policy Act (NEPA).\1\ Highlights of this ``integrated'' 
process include:
---------------------------------------------------------------------------

    \1\ 42 U.S.C. 4321, et seq.
---------------------------------------------------------------------------

    [sbull] Increased assistance by Commission staff to the potential 
applicant and stakeholders during the development of a license 
application;
    [sbull] Increased public participation in pre-filing consultation;
    [sbull] Development by the potential applicant of a Commission-
approved study plan;
    [sbull] Better coordination between the Commission's processes, 
including NEPA document preparation, and those of Federal and state 
agencies and Indian tribes with authority to require conditions for 
Commission-issued licenses;
    [sbull] Encouragement of informal resolution of study 
disagreements, followed by mandatory, binding study dispute resolution;
    [sbull] Elimination of the need for post-application study 
requests; and
    [sbull] Issuance of public schedules and enforcement of deadlines.
    3. We believe that the proposed changes will significantly improve 
the licensing process. During the development of this proposed rule, 
many commenters have raised issues beyond the scope of this rulemaking 
and, in fact, beyond the scope of this Commission's jurisdiction, such 
as concerns about the content of license conditions imposed by various 
federal land and resource management agencies with authority to require 
conditions for Commission-issued licenses. We acknowledge that the 
changes proposed in this rulemaking are largely procedural in nature 
and would amend only the regulations of this Commission,

[[Page 13989]]

not the regulations of any of the Federal or state agencies involved in 
hydropower licensing. Nevertheless, we believe that these proposed 
procedural changes will promote better-informed decision-making by 
everyone involved in the licensing process.
    4. Moreover, we will continue to support the resource management 
agencies outside the context of this rulemaking as they explore ways of 
improving their own licensing-related processes. We appreciate the 
collegial spirit in which the Departments of Agriculture, Commerce, and 
the Interior, in particular, have worked with us during the development 
of this proposed rule. We applaud the announcement of Interior's 
Assistant Secretary-Policy, Management, and Budget, at our joint 
hearing on November 7, 2002 in this proceeding, that Interior is 
developing an administrative appeals process for its mandatory 
conditions. Agriculture has had such a process for several years, and 
we support that Department in examining ways of streamlining its 
existing process. The Commission is ready to assist these other 
agencies in this regard.

II. Background

    5. Sections 4, 10, 14, 15, and 18 of the FPA,\2\ as amended by the 
Electric Consumers Protection Act of 1986 (ECPA),\3\ provide the 
regulatory framework for the licensing of non-Federal hydroelectric 
projects.
---------------------------------------------------------------------------

    \2\ 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.
    \3\ Pub. L. 99-495, 100 Stat. 1243.
---------------------------------------------------------------------------

    6. Section 10(a)(1) \4\ 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 environmental values, including fish and 
wildlife and recreation, equal consideration with hydropower 
development. Under section 4(e),\5\ licenses for projects located 
within Federal reservations must also include any timely conditions 
mandated by the department that manages the reservation, which in most 
cases is the Department of Agriculture or the Interior. Under section 
18, licenses must also include fishways if they are timely prescribed 
by the Departments of Commerce or Interior.
---------------------------------------------------------------------------

    \4\ 16 U.S.C. 803(a)(1).
    \5\ 16 U.S.C. 797e.
---------------------------------------------------------------------------

    7. In addition, section 401(a)(1) of the Clean Water Act \6\ 
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(d) requires state water 
quality certification conditions to be included in hydroelectric 
licenses.
---------------------------------------------------------------------------

    \6\ 33 U.S.C. 1341(a)(1).
---------------------------------------------------------------------------

    8. Other Federal statutes may also apply to a license application. 
These include, among others, the Endangered Species Act (ESA),\7\ 
Coastal Zone Management Act (CZMA),\8\ and National Historic 
Preservation Act (NHPA).\9\
---------------------------------------------------------------------------

    \7\ 16 U.S.C. 1531-1543.
    \8\ 16 U.S.C. 1451-1465.
    \9\ 16 U.S.C. 470-470w-6.
---------------------------------------------------------------------------

A. Current Licensing Procedures

    9. 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 Commission efforts to make the process 
more efficient and effective.
    10. 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, state water 
quality agencies and, to some extent, the public, 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,\10\ the formal proceeding before the 
Commission does not begin until the license application is filed. 
Accordingly, the Commission staff do not generally participate in pre-
filing consultation.
---------------------------------------------------------------------------

    \10\ See 18 CFR Parts 4 and 16.
---------------------------------------------------------------------------

    11. After an application is filed, the Federal agencies with 
responsibilities under the FPA and other statutes, the states, Indian 
tribes, and other participants have opportunities to request additional 
studies and provide comments and recommendations. Federal agencies with 
mandatory conditioning authority also provide their conditions. The 
Commission staff may 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 NEPA.
    12. 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, in most 
cases, a preliminary draft NEPA document, and generally anticipate 
efforts to conclude a settlement agreement. Also, the Commission staff 
participate to a greater extent than under the traditional process.
---------------------------------------------------------------------------

    \11\ 18 CFR 4.34(i).
---------------------------------------------------------------------------

B. Reform Efforts

    13. There is widespread agreement that additional improvements are 
needed to further the goal of achieving a more efficient and timely 
licensing process without sacrificing environmental protection. The 
President's National Energy Policy report included recommendations in 
this regard,\12\ and the Commission, the Federal agencies, and many 
hydropower program stakeholders are engaged in a variety of activities 
toward the same end.
---------------------------------------------------------------------------

    \12\ Report of the National Energy Policy Group, May 2001.
---------------------------------------------------------------------------

    14. 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 laws and 
Commission regulations; various interagency training activities; 
encouragement of settlements through the use of Alternative Dispute 
Resolution (ADR); and issuance of guidance documents.\13\ In May 2001, 
the Commission staff prepared a comprehensive report on hydropower 
licensing, including recommendations designed to make the licensing 
process more efficient and timely.\14\ The Commission held in December 
2001 and November 2002 Hydroelectric Licensing Status Workshops to 
identify and focus attention on long-pending license applications and 
find ways to bring

[[Page 13990]]

these cases to completion.\15\ The Commission staff also held regional 
workshops with states on how better to integrate Commission licensing 
processes with the states' Clean Water Act responsibilities.\16\
---------------------------------------------------------------------------

    \13\ 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).
    \14\ 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 be viewed at http://www.ferc.gov/hydro/docs/section603.htm.
    \15\ 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.
    \16\ Summaries of these workshops are on the Commission's Web 
site at http://www.ferc.gov/hydro/docs/licensing_workshop_sched.htm.
---------------------------------------------------------------------------

    15. Federal agencies have also worked cooperatively on several 
efforts to improve the licensing process. For example, the staff of the 
Commission, the Departments of the 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 and timely.\17\
---------------------------------------------------------------------------

    \17\ Reports issued by the ITF have been made public and are 
posted on the hydroelectric page of the Commission's Web site. See 
http://www.ferc.gov/hydro/docs/interagency.htm.
---------------------------------------------------------------------------

    16. More recently, in July of 2001, senior managers from the 
Commission staff and other Federal agencies formed the Interagency 
Hydropower Committee (IHC) to build on the commitments developed by the 
ITF and to develop additional procedural modifications that would 
further improve the efficiency and timing of licensing while 
maintaining environmental protections. The IHC developed a proposal for 
an integrated licensing process. Another integrated licensing process 
proposal was developed and circulated for comment by the National 
Review Group (NRG), a multi-stakeholder forum consisting of 
representatives from industry and non-governmental organizations 
(NGOs).
    17. 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.

C. The Instant Proceeding

    18. On September 12, 2002, the Commission and the Federal agencies 
with mandatory conditioning authority under FPA sections 4(e) and 18 
commenced this proceeding by issuing a notice requesting comments in 
response to a series of questions concerning the need for a new 
licensing process, how an integrated process might best be implemented, 
and establishing a series of regional public and tribal forums to 
discuss issues and proposals associated with establishing a new 
licensing process.\18\
---------------------------------------------------------------------------

    \18\ 67 FR 58,739 (September 19, 2002). Public and Tribal forums 
were held in Milwaukee, Wisconsin; Atlanta, Georgia; the 
Commission's headquarters in Washington, DC; Bedford, New Hampshire; 
Sacramento, California; and Tacoma, Washington. Entities that made 
oral comments at the public and tribal forums or filed written 
comments in response to the September 12, 2002 notice are listed on 
Appendix A.
---------------------------------------------------------------------------

    19. Following the regional forums and submission of written 
comments in early December 2002, the Commission conducted public 
drafting sessions on December 10-12, 2002, in which discussion of the 
results of the regional forums and comments was followed by a broadly-
based collaborative effort to develop consensus recommendations on an 
integrated licensing process and, where possible, develop preliminary 
draft regulatory text.
    20. Following the December drafting sessions, the Commission staff 
and staff from the Federal agencies with mandatory conditioning 
authority held additional discussion and drafting sessions.
    21. The Commission appreciates the active participation and 
deliberate and thoughtful comments provided by the industry 
representatives, Federal and state resource agencies, Indian tribes, 
and members of the public in this proceeding. The provisions of the 
proposed rule, discussed below, attempt to fully take into 
consideration the interests of all of the stakeholders and to propose 
an integrated licensing process that will serve the public 
interest.\19\
---------------------------------------------------------------------------

    \19\ For the convenience of commenters on the proposed rule, a 
redline/strikeout version of the affected regulatory text is being 
posted on the hydroelectric page of the Commission's Web site.
---------------------------------------------------------------------------

    22. Following the issuance of this notice, and prior to the due 
date for comments, the Commission will conduct additional regional 
stakeholder workshops to seek consensus on final rule language. The 
schedule for these workshops may be viewed on the hydroelectric page of 
the Commission's website.

III. Discussion

A. Need for a New Integrated Process

    23. The fundamental issue in this proceeding is whether the 
Commission, by adopting a new licensing process, can make significant 
progress toward the goal of more efficient and timely licensing 
procedures, while ensuring environmental protection.\20\ Many 
commenters from across the spectrum of interests think a new process 
can achieve these goals.\21\ Many also support the adoption of an 
integrated process, subject to various recommendations.\22\
---------------------------------------------------------------------------

    \20\ Commenters raised many issues that exceed the Commission's 
jurisdiction or are beyond the scope of this rulemaking, including 
dispersed decisional authority in the statutory scheme, minimum 
terms for licenses, our policy on decommissioning of hydroelectric 
projects, annual charges for the use of Federal lands, and the 
Mandatory Conditions Review Policy of the Departments of the 
Interior and Commerce. These matters should be addressed elsewhere.
    \21\ E.g., Ameren/UE, RAW, HRC; NHA; NRG, AmRivers, Oregon, 
Washington, APT, Oregon, Kleinschmidt, Michigan DNR, C-WRC, CDWR, 
Menominee, WYGF, NHDES, Wisconsin DNR, California, Interior, NCWRC, 
WPPD, NYSDEC, Long View, Southern, Maryland DNR, NMFS, CRITFC, 
ADF&G, PG&E.
    \22\ E.g., NHA, HRC, NRG, Kleinschmidt, Michigan DNR, C-WRC, 
Menominee, WYGF, NHDES, KT, OWRB, Wisconsin DNR, Interior, EEI, 
PG&E, HETF, PCWA, NCWRC, WPPD NYSDEC, Southern, Caddo, Xcel, NMFS, 
CRITFC, California, NMFS, ADF&G, Oregon, CDWR, PG&E. The NHA version 
of an integrated process actually encompasses two differrent tracks, 
one of which features pre-application study development and NEPA 
scoping, and the other of which features post-application additional 
information and NEPA scoping. Only the first track would be 
considered an integrated process as we have defined it.
---------------------------------------------------------------------------

    24. Others assert that there is no need for an integrated licensing 
process distinct from the traditional process if the Commission takes 
the most beneficial aspects of such a process and incorporates them 
into the traditional process, or believe that a new untested process is 
unlikely to result in greater efficiency.\23\
---------------------------------------------------------------------------

    \23\ California, SCE, Idaho Power, EEI. California and SCE both 
proposed modified traditional process models, which they 
characterize as integrated processes. The California process does 
not fully integrate NEPA scoping with study plan development, but 
does feature pre-filing NEPA scoping. Wisconsin DNR and Oregon 
endorse California's version of the traditional process model.
---------------------------------------------------------------------------

    25. Many factors can cause delays in licensing. These include 
multiple applications for projects in the same watershed; Failure to 
resolve during pre-filing consultation disagreements over requests for 
the applicant to gather information or conduct studies; requests for 
extensions of time, including extensions of time for Federal agencies 
to provide mandatory conditions pursuant to FPA section 4(e) and

[[Page 13991]]

fishway prescriptions pursuant to section 18, or required consultation 
with the U.S. Fish and Wildlife Service or National Marine Fisheries 
Service (NMFS) and attendant studies under the ESA; and delayed receipt 
of state water quality certification.\24\
---------------------------------------------------------------------------

    \24\ Other actions that have increased the time required for 
licensing include a policy established in 1993 of issuing draft 
environmental analyses for comment in all license proceedings and 
increasing reluctance by states to grant waiver of water quality 
certification. See 603 Report, p. 32.
---------------------------------------------------------------------------

    26. Some or all of these factors may be present in any license 
proceeding. However, the principal causes of delay are the need for 
additional information or studies after the application is filed, 
untimely receipt of biological opinions under the ESA, and state water 
quality certification.\25\ The longer the delay in a licensing 
proceeding, the more likely the cause is to be lack of water quality 
certification.\26\
---------------------------------------------------------------------------

    \25\ Id., pp. 37-39.
    \26\ Id., p. 43.
---------------------------------------------------------------------------

    27. The potential benefit of an integrated licensing process can be 
judged by the extent to which it addresses these causes of delay in 
licensing. The process we are proposing addresses these causes by: 
merging pre-filing consultation with the Commission's NEPA scoping; 
enhancing consultation with Indian tribes; improving coordination of 
processes with Federal and state agencies, especially those with 
mandatory conditioning authority; increasing public participation 
during pre-filing consultation; and developing a study plan and 
schedule, including mandatory, binding study dispute resolution. With 
these features, the proposed process should make it much more likely 
that the Commission, Federal agencies with mandatory conditioning 
authority, and state agencies or Indian tribes with water quality 
certification authority obtain all the information they need to carry 
out their respective statutory responsibilities by the time the 
application is filed. This process should also encourage early 
settlement discussions by fostering early development of information 
necessary to inform settlement negotiations.\27\
---------------------------------------------------------------------------

    \27\ Some of these broadly-stated features and more specific 
features discussed below are consistent with, or were developed in 
the context of, the drafting groups. These include early Commission 
contact with Indian tribes, development of a pre-application 
document, inclusion of tribal and public interest considerations in 
information development and study plan criteria. One drafting group 
also discussed concepts related to the filing of a draft license 
application that are the subject of specific requests for comment.
---------------------------------------------------------------------------

    28. Some commenters made process proposals that they characterize 
as modifications to the traditional process but which incorporate some, 
but not all, of the elements of the proposed integrated process. NHA, 
for instance, would allow the license applicant to unilaterally 
determine whether to use an integrated process or to defer NEPA scoping 
until after the license application is filed, and would not provide for 
binding pre-filing study dispute resolution. California would include 
expanded pre-filing public participation and dispute resolution, but 
would defer NEPA scoping until late in the pre-filing process. For 
these and other reasons, these proposals fall short of the goal. These 
proposals do however also contain other elements which, as discussed 
below, have been included in the proposed process.

B. Traditional Process and ALP To Be Retained

    29. Our proposal to establish an integrated process raises the 
issue of whether there is a need to retain the traditional process or 
ALP. Industry commenters generally favor retaining both processes.\28\ 
They argue that a single process is not suitable for every case, and 
that they need flexibility to choose a process that best suits the 
circumstances of each project.\29\ NHA suggests that licensee process 
choice is needed to prevent participants from withholding agreement to 
an appropriate process as leverage to extract substantive or other 
procedural advantages. NHA also states that the traditional process 
remains suitable for projects that have few complications or issues. 
EEI adds that the traditional process may be most suitable for cases 
where the stakeholders are extremely polarized and unlikely to work 
cooperatively, and is less costly for licensees than the ALP. EEI and 
some licensees also state that the ALP, which tends to be labor-
intensive for all concerned, is best suited to large projects with the 
revenues to support an intensive collaborative effort, but makes little 
sense for the operator of a small project.\30\ Idaho Power adds that it 
can be difficult to get full participation in pre-filing consultation 
by agencies, tribes, and NGOs with large agendas and limited resources. 
Xcel states that both the traditional and ALP processes have been used 
successfully, and that the study criteria and timelines of the IHC and 
NRG proposals are rigid and less likely to foster settlements. At least 
one Native American commenter suggests that the limited resources of 
many Indian tribes favor a choice of processes, although it does not 
endorse leaving the choice to applicants.\31\ Some commenters also 
suggest that the traditional process needs to be retained as a fallback 
in the event that an integrated process or ALP breaks down.\32\
---------------------------------------------------------------------------

    \28\ NHA, Idaho Power, AEP, EEI, DM&GLH, APT, SCL, SCE, WPPD, 
Xcel, NEU, Troutman, Southern, NYSDEC. On this point, the industry 
majority appears to enjoy some support from NYSDEC and WDOE. 
Michigan DNR and WDOE state that they are less concerned with the 
number of processes than with funding, coordination, mutually 
agreeable time frames, and other matters. PG&E however suggests that 
an integrated process would eliminate the need for the traditional 
and alternative process.
    \29\ NHA, Idaho Power, AEP, EEI, DM&GLH, APT, SCL, SCE, WPPD 
Xcel, ORWB; NEU; Troutman; Southern; NEU.
    \30\ SCE, CHI, EEI, Idaho Power.
    \31\ GLIFWC.
    \32\ EEI, Troutman, Menominee.
---------------------------------------------------------------------------

    30. EEI and NHA also urge us to allow license applicants to tailor 
the licensing process to individual projects; that is, regardless of 
the process used, allow waiver of procedural requirements and the 
incorporation into ongoing processes of features from an integrated 
process.\33\ EEI, for instance, states that the National Energy Policy 
Act of 1992\34\ and the Council on Environmental Quality regulations 
\35\ permit license applicants to prepare draft environmental 
assessments and to have a third party (i.e., a contractor funded by the 
applicant, but working under the Commission's direction) prepare a 
draft environmental impact statement (EIS). It requests that the 
Commission modify its regulations to permit this in any process at the 
applicant's option, rather than only where an ALP is used. These 
arguments are considered below.\36\
---------------------------------------------------------------------------

    \33\ EEI.
    \34\ Pub. L. 102-486, 106 Stat. 2776-3133 (Oct. 24, 1992).
    \35\ 40 CFR part 1500, et seq.
    \36\ See Section III.F.3.b.
---------------------------------------------------------------------------

    31. Environmental groups, some Federal and state agencies, and 
tribes argue that the Commission should have one process that is 
sufficiently flexible to accommodate the circumstances of any specific 
proceeding. Broadly stated, they suggest that this flexibility would be 
achieved by allowing for the applicant and stakeholders to agree to 
modify process steps and schedules, subject to Commission assent, in 
order to ensure that all parties understand and agree to the process 
applicable to each proceeding, and by providing guidance on acceptable 
terms of settlement agreements. These commenters maintain that multiple 
processes will make it very difficult for participants with limited 
resources, and that it is already difficult for environmental groups 
that rely heavily on volunteers to

[[Page 13992]]

educate their members on the existing licensing processes.\37\
---------------------------------------------------------------------------

    \37\ HRC, AmRivers, NYRU, NE FLOLW, AMC, BRB-LST, Menominee, 
VANR, KT, RAW, GLIFWC, Oregon, CRITFC, AMC, BRB-LST, Interior.
---------------------------------------------------------------------------

    32. If there is to be more than one proceeding, some of these 
entities recommend that the ALP be the only alternative to the 
integrated process, and some suggest that it be modified to better 
encourage settlement agreements.\38\ HRC requests that if the 
traditional process is retained, it be modified to incorporate 
important elements of an integrated process. NHDES and OWRB recommend 
that the ALP and traditional processes be retained until it is 
demonstrated that the integrated process works, at which point those 
process options would be eliminated.
---------------------------------------------------------------------------

    \38\ RAW, Oregon, C-WRC, Menominee, VANR, Wisconsin DNR, DM&GLH, 
Domtar, FPL, AMC, AW, California.
---------------------------------------------------------------------------

    33. We conclude that it is appropriate to retain the traditional 
process and ALP, but that the integrated process should be the default 
process. Commission approval would be required to use the traditional 
process, as is now required for the ALP.\39\ We are persuaded that the 
concerns of the industry and others that the integrated process may not 
be appropriate for some proceedings are well-founded. The integrated 
process brings together in a compressed time frame consultation, 
studies, dispute resolution, NEPA scoping and document preparation, and 
water quality certification activities that are now conducted over a 
much longer time frame. This could pose undue difficulty for some 
licensees, particularly those operating small projects, and for the 
other participants, who may agree that the traditional process will 
work best. Other considerations in requesting the traditional process 
might include the degree of stakeholder support for that process, level 
of controversy concerning project impacts, and the degree to which 
relevant information already exists.
---------------------------------------------------------------------------

    \39\ See 18 CFR 4.34(i).
---------------------------------------------------------------------------

    34. We are also not inclined to abandon the alternative process. It 
has a demonstrated track record of reducing license application 
processing times,\40\ as well as fostering settlement agreements, which 
are commonly filed with the application itself.
---------------------------------------------------------------------------

    \40\ See 603 Report, pp. 29-54.
---------------------------------------------------------------------------

    35. We are mindful of concerns that the availability of three 
process alternatives could be a source of confusion for some 
participants. We conclude however that the benefit of having different 
processes that can be applied to differing circumstances outweighs this 
concern. In this regard, we also note that the integrated process 
regulations have been crafted to show the steps clearly in sequence 
from beginning to end, and to be as self-contained (i.e., with a 
minimum of cross-referencing to parts 4 and 16) as is practicable, 
given the complexity of the statutory scheme. We are also proposing to 
require any applicant seeking permission to use the traditional process 
or ALP to do so when the notification of intent to seek a license (NOI) 
is filed,\41\ so that all concerned will have a voice in the process 
selection and will know which process will apply to the proceeding from 
the very beginning.\42\
---------------------------------------------------------------------------

    \41\ See proposed 18 CFR 5.3 (Notification of intent).
    \42\ See proposed 18 CFR 5.1 (Applicability). As discussed 
below, we also propose to require a potential applicant for an 
original license to file an NOI.
---------------------------------------------------------------------------

    36. We have also concluded that certain elements of the integrated 
process can be included in the existing traditional licensing process. 
These include full public participation in pre-filing consultation, 
mandatory, binding study dispute resolution, and elimination of post-
application additional information requests for license applications. 
These are discussed below.\43\
---------------------------------------------------------------------------

    \43\ See Section III.F. We are also making certain other 
modifications applicable to all processes, such as including draft 
license articles with draft NEPA documents. See Section III.D.4.
---------------------------------------------------------------------------

D. Key Issues and Goals for an Integrated Licensing Process

    37. The September 12, 2002, notice requested comments on, among 
other things, what key issues in the licensing process need to be 
addressed and how a new process might be structured to resolve those 
key issues. The responses confirm that the notice correctly identified 
the key issues.
1. Early Identification of Issues and Study Needs
    38. Nearly all commenters state that one key to reducing the length 
of the licensing process is for all concerned entities, including the 
Commission staff, to participate as early as possible, so that issues 
can be fully identified, study needs resolved, and necessary studies 
timely conducted.\44\ Many also advise that a well-designed integrated 
process would improve the timing and development of mandatory terms and 
conditions by fostering the early involvement of Federal and state 
agencies with such authorities so that needed information-gathering and 
studies are timely commenced and completed.\45\
---------------------------------------------------------------------------

    \44\ E.g., EEI, PG&E, NRG, SCE, NHA, Michigan DNR, HRC, NYSDEC, 
Idaho Power, NF Rancheria, Caddo, ADK, AmRivers, AMC, APT, SCL, C-
WRC, CDWR, Interior, PG&E, HETF, PCWA, APT, DM&GLH, Skancke, NYRU, 
Oregon, Wausau, Salish-Kootenai, HLRTC, PREPA, Kleinschmidt, Xcel, 
California, WPPD, RAW, GLIFWC, Virginia, CRITFC, NMFS, NHDES, VANR, 
Wisconsin DNR.
    \45\ SCE, Oregon, Michigan DNR, HRC, NHDES, Wisconsin DNR, 
Interior, EEI, PG&E, PCWA, NCWRC, WPPD Xcel, NMFS, PacifiCorp, 
Kleinschmidt, Idaho Power, NYSDEC, Maryland DNR, ADF&R, CRITFC, 
California.
---------------------------------------------------------------------------

a. Advance Notification of License Expiration
    39. The IHC proposed that three years prior to the deadline for an 
existing licensee to file notification of intent (NOI) to seek a new 
license the Commission staff would notify the licensee of the deadline 
and provide it with a list of basic information needs and resource 
agency and tribal contacts (advance notification of license expiration, 
or advance notification). Under the IHC proposal, the licensee would be 
encouraged to contact resource agencies, Indian tribes, and the public 
to begin identifying issues and collecting data. This early issue 
identification and data collection would help to ensure that the 
licensee files with its NOI a complete ``Pre-Application Document,'' 
\46\ more fully described below, which would help to make effective 
integrated pre-filing consultation and early NEPA scoping.
---------------------------------------------------------------------------

    \46\ See proposed 18 CFR 5.4 (Pre-application document).
---------------------------------------------------------------------------

    40. The advance notification concept received much favorable 
comment.\47\ All of the process proposals include some form of 
voluntary or required pre-NOI consultation.\48\ Some proposals 
contemplate an advance notification followed by a pre-NOI meeting among 
the licensee, Commission staff and stakeholders.\49\ NHA would also 
have the Commission staff directly contact Indian tribes to discuss 
licensing process options and initiate government-to-government 
consultation. Under the NHA and SCE proposals the license applicant 
would, following the public meeting, choose a licensing process.\50\
---------------------------------------------------------------------------

    \47\ NHA, APT, Oregon, Idaho Power, VANR, NHDES, HRC, SCE, 
Kleinschmidt, Menominee, EEI, BRB-LST, Southern.
    \48\ Voluntary pre-NOI consultation is contemplated in the NRG 
and PG&E proposals. Required consultation, at least to the extent of 
an initial informational meeting conducted by the Commission staff 
and existing licensee, is provided for in the NHA proposal.
    \49\ NHA, HRC, SCE.
    \50\ NHA and SCE apparently would not have the applicant's 
process choice subject to Commission approval.
---------------------------------------------------------------------------

    41. Long View recommends that the Commission modify its regulations 
to allow existing licensees to file their NOI

[[Page 13993]]

any time prior to the statutory limit of five years prior to license 
expiration, rather than only during a five to five and one-half year 
window. California recommends moving the deadline date for the NOI 
forward one year (i.e., 6.5 years before license expiration) based on 
its belief that more time is needed between the NOI and license 
application to accommodate information-gathering and studies.\51\
---------------------------------------------------------------------------

    \51\ We disagree with California that the 3 to 3.5-year time 
frame from NOI to application contemplated by the FPA is 
insufficient to develop the necessary information and still provide 
about two years in which to conduct field studies. As discussed 
above, the principal barrier to success in the early conduct of 
studies has been the lack of active Commission staff participation 
early on and lack of effective pre-filing dispute resolution. The 
proposed integrated process should go a long way toward curing this 
problem.
---------------------------------------------------------------------------

    42. We conclude that the advance notification concept has merit, 
and that the notification should be issued regardless of which 
licensing process may be selected. It would however be inconsistent 
with our goal of developing a more timely process to compel existing 
licensees to commence the licensing process in advance of the NOI, and 
we will not do so. The Commission believes that in the great majority 
of cases, a license applicant should be able complete consultation, 
information-gathering and studies, and application development in the 
three to three and one-half year period provided for in our 
regulations.
    43. We propose to issue an advance notification sufficiently in 
advance of the deadline date for filing of an NOI with respect to each 
project to ensure that the existing licensee is alerted to the 
requirements of the NOI, Pre-Application Document, and any potential 
request to use the traditional process or ALP.\52\ Because the advance 
notification will be an administrative measure taken by the Commission 
which requires no action on the part of any other entity, and which 
would be undertaken regardless of the process selected, we do not 
propose to include it in the regulations.
---------------------------------------------------------------------------

    \52\ Entities other than the licensee will be able to determine 
which licenses expire, and when, on the hydroelectric page of the 
Commission's website. They will likewise have access to the 
Commission's regulations and Pre-Application Document guidance. 
These resources should together enable interested members of the 
public to inform themselves of potential future relicense 
proceedings.
---------------------------------------------------------------------------

    44. Also, as recommended by one of the December 2002 drafting 
groups, the Commission staff will contact Indian tribes whose resources 
may be affected by a future relicense proceeding to inform them about 
the licensing process and how they can participate in it, and to become 
aware of concerns the tribes have with respect to potential relicense 
proceedings. In this regard, we also intend to create a Tribal Liaison 
position to ensure that tribes have a clearly identified point of 
access to the Commission staff.\53\
b. Integrating Pre-Filing Consultation With NEPA Scoping
---------------------------------------------------------------------------

    \53\ See Section III.D.3.
---------------------------------------------------------------------------

    45. Under the traditional process, pre-filing consultation focuses 
on development of information and studies by the potential applicant, 
agencies, and Indian tribes. Public participation is limited.\54\ The 
Commission staff also has not participated in pre-filing consultation, 
because under the traditional process there is no proceeding until an 
application is filed, and, particularly with regard to potential 
original license applications, the Commission has not been willing to 
commit its limited resources to a process that may not result in a 
license application.
---------------------------------------------------------------------------

    \54\ Unless the potential applicant voluntarily does more, 
public participation is limited to attendance at a single, publicly 
noticed meeting. See 18 CFR 4.38(g).
---------------------------------------------------------------------------

    46. Nearly all commenters agree that the earlier the Commission's 
NEPA scoping begins, the earlier issues and information needs will be 
identified, and the earlier information-gathering and studies will be 
commenced and completed.\55\ We agree. Accordingly, the proposed 
integrated process provides for the Commission staff to begin NEPA 
scoping immediately after the NOI is filed.\56\
---------------------------------------------------------------------------

    \55\ E.g., NHA, CDWR, NYSDEC, RAW, Caddo, Menominee, CRITFC, 
DM&GLH, Domtar, APT, Oregon, SCL, HRC, CRITFC, Oregon, Kleinschmidt, 
C-WRC, Interior, NMFS, Washington, California, SCE, Salish-Kootenai, 
HLRTF, PG&E, PCWA, Idaho Power, PacifiCorp, SCDWQ, APT, Michigan 
DNR, HRC, Wisconsin DNR, EEI, Maryland DNR, NMFS.
    \56\ See Section III.E.2.a.
---------------------------------------------------------------------------

    47. NEPA scoping will be greatly assisted by the availability to 
the participants of as much relevant existing information as possible 
when scoping begins. The current regulations require an existing 
licensee, at the time it files its NOI, to make available to the public 
existing information with respect to the project, its operation, and 
project impacts on various resources.\57\ They also require all 
potential operating license applicants to provide an initial 
consultation package to consulted entities during first stage 
consultation.\58\ We propose to supplant these requirements for all 
processes by requiring a potential applicant for an operating license 
to file with its NOI the above-mentioned Pre-Application Document.\59\
---------------------------------------------------------------------------

    \57\ 18 CFR 16.7(d).
    \58\ 18 CFR 4.38(b)(1), 16.8(b)(1).
    \59\ Exemption and non-power license applicants would continue 
to use the traditional process and to distribute the initial 
consultation package now required by 18 CFR 4.38(b)(1) and 
16.8(b)(1).
---------------------------------------------------------------------------

    48. The proposed Pre-Application Document is intended to compile 
and provide to the Commission, Federal and state agencies, Indian 
tribes, and members of the public engineering, economic, and 
environmental information available at the time the notification of 
intent is filed. It would also provide the basis for identifying issues 
and information needs, developing study requests and study plans, and 
the Commission's environmental scoping documents under NEPA. Because of 
its form and content requirements, the Pre-Application Document would 
be a precursor to Exhibit E, the environmental exhibit, in the license 
application. For license applicants using the integrated process, the 
Pre-Application Document would evolve directly into a new Exhibit E. 
The integrated process Exhibit E would have the form and content 
requirements of an applicant-prepared draft NEPA document.\60\ 
Applicants using the traditional process would continue to use the 
existing Exhibit E, and applicants using the ALP could use the existing 
Exhibit E or file with their application in lieu thereof an applicant-
prepared environmental analysis. The Commission requests comments on 
the content of the Pre-Application Document.\61\
---------------------------------------------------------------------------

    \60\ See proposed 18 CFR 5.16(b).
    \61\ The Commission is interested in any comments parties may 
have on any aspect the proposed rule; however, there are several 
aspects on which we are particularly requesting comments. Appendix B 
is a list of all matters on which the Commission is specifically 
requesting comments, cross-referenced to the appropriate paragraph 
in the preamble. Commenters are requested to identify the paragraphs 
to which their comments respond.
---------------------------------------------------------------------------

    49. Some industry commenters contend that integrating pre-filing 
consultation with NEPA scoping should be optional for the 
applicant.\62\ That is, of course, fundamentally inconsistent with the 
concept of an integrated licensing process. Deferral of NEPA scoping 
until after the license application is filed should occur where the 
circumstances are such that use of the traditional process is 
permitted.\63\ We also think that requiring all potential operating 
license applicants to

[[Page 13994]]

file the Pre-Application Document will enhance the combined pre-filing 
consultation and NEPA scoping that now occurs in the ALP, and pre-
filing consultation under the traditional process as well.
---------------------------------------------------------------------------

    \62\ Xcel, NHA, HLRTF. Under NHA's proposal, an existing 
licensee would elect to have a pre- or post-application NEPA process 
when it files its NOI.
    \63\ The ALP generally encompasses pre-filing environmental 
scoping because it contemplates filing by the applicant of a draft 
environmental document.
---------------------------------------------------------------------------

c. Study Plan Development
    50. Involving all interested parties and Commission staff from the 
outset of consultation will not alone bring about timely development of 
information and studies. There is general agreement that a Commission-
approved study plan is needed as well,\64\ but divergent views on the 
appropriate development and content of study plans.
---------------------------------------------------------------------------

    \64\ E.g., NHA, SCE, HRC. PG&E's dispute resolution proposal 
calls for neutral, objective criteria. In most cases, these would be 
voluntarily applied by the parties to resolve disputes among 
themselves. Disputes brought to the Commission would not actually be 
resolved, because the Commission would issue only ``opinions'' based 
on the neutral, objective criteria.
---------------------------------------------------------------------------

    51. Industry commenters contend that agencies and NGOs often 
request studies not based on any demonstrable nexus between project 
operations and resource impacts, unreasonably oppose the use of 
existing data from the project in question or other projects, and are 
insensitive to the cost of the study to the applicant. They recommend 
that the Commission establish clear criteria for acceptable study and 
information-gathering requests, and some believe that clearly 
articulated criteria would significantly reduce the number of study 
disputes.\65\ The ``nexus'' criterion is the one they most often 
identify as necessary.\66\ Some request that we make explicit that 
site-specific studies are not always needed, since in many cases 
extrapolation of data from studies at similarly situated projects is 
appropriate.\67\ Some industry commenters, while supporting the concept 
of study criteria, oppose a prescriptive approach to defining the scope 
of studies, suggesting that the matter is best resolved in the context 
of specific cases or in alternative licensing proceedings.\68\
---------------------------------------------------------------------------

    \65\ SCE, Kleinschmidt, NHA, WPPD, Menominee, Oregon, Long View.
    \66\ NHA, EEI, Wausau, Ameren/UE, Spaulding, Xcel, APT, Duke, 
SCE.
    \67\ Xcel, NHA, Southern, NHA.
    \68\ NHA. EEI states that the scope of required studies is 
already too broad and that the Commission should require only 
studies based on demonstrated nexus between project operations and 
resource impacts.
---------------------------------------------------------------------------

    52. Agency, tribal, and NGO commenters generally agree that 
established study criteria are desirable, but disagree with the 
industry concerning the development and application of criteria. For 
instance, HRC and others state that criteria for acceptable studies 
should include potential cumulative impacts of projects throughout the 
relevant river basin, because project impacts may extend far beyond 
project boundaries.\69\ HRC adds that studies should be directed not 
merely at identifying project impacts, but also at determining the 
causes of those impacts and the sustainability of affected resources in 
a basin-wide cumulative impacts context. These commenters also tend to 
view the ``nexus'' issue differently, stating that a ``common sense'' 
test should apply to the establishment of a nexus between project 
operations and resource impacts.\70\ In addition, several commenters 
indicate that deference should be shown to state agency study 
requests.\71\
---------------------------------------------------------------------------

    \69\ HRC, NYSDEC, PFMC, Salish-Kootenai.
    \70\ GLIFWC, VANR.
    \71\ Michigan DNR, Wisconsin DNR, California, RAW.
---------------------------------------------------------------------------

    53. Licensees note that, notwithstanding the Commission's well-
established and judicially-approved policy that the baseline for 
environmental analysis is existing conditions,\72\ participants 
continue to request studies intended to establish a pre-project 
baseline that would serve as a standard for purposes of establishing 
environmental mitigation requirements. They recommend that the 
Commission incorporate its policy into regulations establishing study 
criteria.\73\ Some state agencies respond that state laws or policies 
require water quality standards to be established with reference to 
pre-project conditions, and that the record necessary to support 
certification is not complete until such studies are complete.\74\ ADK 
states that the continuing dispute is unproductive and requests only 
that we resolve the matter once and for all.
---------------------------------------------------------------------------

    \72\ See American Rivers v. FERC, 201 F.3d 1186 (9th Cir. 1999); 
Conservation Law Foundation v. FERC, 216 F.3d 41 (DC Cir. 2000).
    \73\ Wausau, WE Energies, Duke, DM&GLH, Domtar, Skancke, FPL, 
APT, SCE, NHA. In a related vein, Ameren/UE suggests that applicants 
who choose the ALP are under continuous pressure to agree to 
unneeded studies as the price for continued cooperation of special 
interest groups, and that the Commission should relieve these 
applicants of this pressure by itself deciding on all study 
requests. That would however be inconsistent with the collaborative 
thrust of the ALP.
    \74\ Wisconsin DNR, NYSDEC.
---------------------------------------------------------------------------

    54. We conclude that a Commission-approved study plan is an 
essential component of any integrated licensing process, and that such 
a plan will be most effective in reducing study disputes and allowing 
agreed-upon studies to go forward expeditiously if reasonably objective 
criteria by which to judge study requests are established.
    55. The IHC developed six study dispute resolution criteria. These 
criteria are:
    (a) Whether the request describes available, project-specific 
information, and provides a nexus between project operations and 
effects on the resources 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.\75\
---------------------------------------------------------------------------

    \75\ September 12, 2002 Notice, Attachment A, p. 11.
---------------------------------------------------------------------------

    56. Several commenters endorse the IHC study criteria, and some, as 
discussed below, also suggest additions or modifications.\76\
---------------------------------------------------------------------------

    \76\ Menominee, Duke, WPPD, Wisconsin DNR, Michigan DNR, Ameren/
UE, NHA, HRC.
---------------------------------------------------------------------------

    57. A few commenters found fault with the IHC criteria. The 
principal criticism is that the criteria are focused on the needs of 
agencies with mandatory conditioning authority, notwithstanding that 
the Commission's public interest analysis must include issues raised by 
tribes or NGOs which may have resource goals and management plans of 
their own, or for which no formal goals or management plans may 
exist.\77\ These commenters also take the position that a dispute 
resolution process should be open to any party, not just to Federal or 
state agencies or tribes to the extent that

[[Page 13995]]

exercise of their mandatory conditioning authority is implicated. EEI 
opposes the IHC criteria, because it opposes the IHC dispute resolution 
proposal in which they would be applied.
---------------------------------------------------------------------------

    \77\ PG&E, HRC. For instance, an NGO might support the 
establishment of certain instream flows in a bypass reach for 
aesthetic, biological health, or recreation purposes, but have no 
formal planning process of the kind that resource agencies typically 
employ.
---------------------------------------------------------------------------

    58. With regard to IHC criterion (a), the Menominee Tribe states 
that a study may be needed in some cases to determine if there is a 
nexus between project operations and resource impacts, and that this 
criterion should be applied liberally to accommodate that need. For 
instance, it may be reasonable to assume that unscreened turbines at a 
project cause entrainment mortality, but no data exist indicating the 
extent of such mortality or its biological impacts at the project site. 
GLIFWC similarly states a requester should not have to demonstrate a 
nexus when common sense dictates that there is one. VANR appears to 
assert that a requester should only have to articulate a relationship 
between the study request and a regulatory requirement.
    59. We believe the nexus requirement is important to ensure that 
the licensing process is the vehicle for making informed decisions 
pursuant to the FPA and other applicable laws, rather than for 
development of information at the applicant's expense that may be 
useful to the requester in some other context. The same rule of reason 
must apply to the application of this criterion as to the application 
of any other criteria.
    60. Some tribes state that the reference to agency jurisdiction 
over resources in criterion (b) should be removed, because it could be 
construed to exclude tribal participation in dispute resolution.\78\ 
Similarly, one of the drafting groups recommended that this criterion 
be modified to take into account tribal and public participation in 
study plan development. As discussed below, we are proposing a study 
dispute resolution process for the integrated process which encompasses 
the participation of tribes in the development of the applicant's 
Commission-approved study plan, and in formal dispute resolution to the 
extent their mandatory conditioning authority under the Clean Water Act 
is implicated.\79\
---------------------------------------------------------------------------

    \78\ Menominee, BRB-LST, GLIFWC, Shoshone.
    \79\ Consistent with the recommendation of one of the drafting 
groups, we have also modified the study criteria to require parties 
requesting information development or studies to address any known 
resource management goals of Indian tribes or non-governmental 
organizations.
---------------------------------------------------------------------------

    61. Wausau indicates that agency management goals may not be an 
appropriate determinant of what studies are necessary, citing the 
possibility that a resource agency could establish the removal of dams 
in general as a management goal, which could lead to lengthy and 
expensive dam removal studies where there is no realistic prospect that 
a dam will be removed. SCE similarly states that the requester should 
have to demonstrate that agency management goals are appropriate, then 
show that the study is designed to directly address the nexus between 
impacts and management goals.
    62. Our intention is that the criteria will be applied as a whole, 
so that the mere fact that a study request can be related to an agency 
management goal will not ensure that the study is required to be 
conducted. This necessarily implies that judgment calls will be made, 
and it is our intention that those calls be made in light of the 
principle that the integrated licensing process should to the extent 
reasonably possible serve to establish an evidentiary record upon which 
the Commission and all agencies or tribes with mandatory conditioning 
can carry out their responsibilities. We do not intend to second guess 
the appropriateness of agency or Tribal resource management goals, but 
must consider study requests based on those management goals in light 
of all applicable criteria, such as the ``nexus'' criteria, as well as 
the potential for conflict with important Commission policies, 
practices, or rules.
    63. Regarding IHC criteria (e) and (f), some tribes believe that 
where tribal trust resources are concerned, study cost is irrelevant 
once the reasonableness of the need for the data has been 
established.\80\ We cannot agree. Our responsibility to balance all 
aspects of the public interest with respect to any project proposal 
necessarily encompasses the exercise of independent judgement 
concerning the relative cost and value of obtaining information.
---------------------------------------------------------------------------

    \80\ Menominee, St. Regis Mohawks, GLIFWC.
---------------------------------------------------------------------------

    64. We conclude that the IHC study criteria are sound and 
reasonably objective, and propose to require participants in the 
integrated process to support their information-gathering or study 
requests with reference to those criteria, with minor modifications, 
such as the inclusion of tribal management plans and public interest 
considerations mentioned above. Our proposed criteria require an entity 
making an information-gathering or study request to, as applicable:
    (1) Describe the goals and objectives of the study and the 
information to be obtained;
    (2) If applicable, explain the relevant resource management goals 
of the agencies or tribes with jurisdiction over the resource to be 
studied;
    (3) If the requester is not a resource agency, explain any relevant 
public interest considerations in regard to the proposed study;
    (4) Describe existing information concerning the subject of the 
study proposal, and the need for additional information;
    (5) Explain any nexus between project operations and effects 
(direct, indirect, and/or cumulative) on the resource to be studied;
    (6) Explain how any proposed study methodology (including any 
preferred data collection and analysis techniques, or objectively 
quantified information, and a schedule including appropriate filed 
season(s) and the duration) is consistent with generally accepted 
practice in the scientific community or, as appropriate, considers 
relevant tribal values and knowledge;
    (7) Describe considerations of cost and practicality, and why any 
proposed alternatives would not be sufficient to meet the stated 
information needs.\81\
---------------------------------------------------------------------------

    \81\ See proposed 18 CFR 5.10.
---------------------------------------------------------------------------

    65. NHA and SCE would add the following three criteria:
    1. If a study request has previously been the subject of dispute 
resolution, or if the Study Plan was undisputed, requests for that 
study would be rejected except in extraordinary circumstances.\82\
---------------------------------------------------------------------------

    \82\ NHA and EEI frame this also in terms of ``rebuttable 
presumption'' that no additional studies would be required under 
these circumstances.
---------------------------------------------------------------------------

    2. Study requests intended to establish a ``pre-project 
conditions'' baseline would be rejected.
    3. The cost of the study must be justified relative to the value of 
the incremental information provided.\83\
---------------------------------------------------------------------------

    \83\ In a similar vein, PG&E suggests that criteria should 
include whether a real problem has been identified, how the 
information will be used, and the cost of the information relative 
to its value.
---------------------------------------------------------------------------

    66. NHA's first additional criterion has merit, particularly in 
light of the fundamental purpose of the proposed rule. It is not, 
however, really a study criterion, but a statement concerning treatment 
of additional information requests and will therefore be considered 
elsewhere.\84\ With regard to the baseline issue, we note that all of 
the criteria will be applied in light of important Commission policies. 
Thus, we will not include this as a criterion, but will continue to 
adhere to our environmental analysis baseline policy.\85\ NHA's third 
criterion is similar

[[Page 13996]]

to proposed criterion (7). Both our proposed criterion (7) and NHA's 
recommended criterion (3) involve a significant degree of subjectivity, 
to which a rule of reason must be applied. The Commission requests 
comments on whether our proposed criterion (6) or NHA's recommended 
criterion (3) more appropriately deals with the issue of study costs.
---------------------------------------------------------------------------

    \84\ See this section, infra, Section III.E.2, and proposed 18 
CFR 5.13 and 5.14.
    \85\ As stated above, existing environmental conditions, not 
pre-project conditions in the case of existing projects, is the 
baseline for analysis in our NEPA documents. We have also stated 
however that, while it does not change the focus our analysis, 
reliable information on pre-project conditions may help to inform 
our decisions about what environmental enhancement measures may be 
appropriate for a new license. See City of Tacoma, 67 FERC ] 61,152 
(1994), reh'g denied, 71 FERC ] 61,381 at pp. 62,491-92 (1995).
---------------------------------------------------------------------------

    67. SCE also proposes that we add a criterion that ``study results 
will aid the decision-making process in a substantive way.''\86\ We are 
not entirely certain what SCE means, but the proposed criteria 
implicitly require that study requests not be frivolous and add some 
appreciable evidentiary value to the record.
---------------------------------------------------------------------------

    \86\ SCE, p. 19.
---------------------------------------------------------------------------

    68. Duke and the Michigan and Wisconsin DNRs state that the study 
criteria might include standard study plan formats, including 
standardized formats for reporting results. Michigan and Wisconsin DNR 
state that this would better enable states and tribes to meet their own 
responsibilities with respect to water quality and coastal zone 
management plan certification, as well as fishery and energy management 
goals. AMC recommends that a scientific peer review process be employed 
to develop a list of approved study methodologies.
    69. We do not find that the guidance proposed by Duke and the 
Michigan and Wisconsin DNRs is appropriate for a rulemaking, because 
study plan development tends to be project-specific. We note however 
that Appendix D of the Commission's Hydroelectric Project Licensing 
Handbook, which may be viewed on the Commission's website, includes 
guidelines for preparing Exhibit E, the environmental exhibit. This 
appendix provides, in some detail, the information that should be 
considered for inclusion in a license application. Study plans can be 
developed from the information needs there described, and can be 
adapted to site-specific needs for information and in light of 
anticipated impacts.
    70. Several commenters indicate that an effective study plan must 
include one or more opportunities for additional study requests to 
account for circumstances where studies result in data very different 
from the data expected or otherwise demonstrate that additional 
information is required to make a fully informed decision.\87\ Licensee 
commenters generally acknowledge that such circumstances may occur, but 
stress their need for certainty with respect to costs and timeliness. 
They request that any new rule establish a presumption that an 
applicant which completes the approved study plan has obtained all of 
the information necessary for the Commission and agencies with 
mandatory conditioning authority to carry out their responsibilities, 
and that any request thereafter for additional information would be 
granted only upon a showing of extraordinary circumstances.\88\
---------------------------------------------------------------------------

    \87\ Wisconsin DNR, Washington, VANR, NMFS.
    \88\ NHA, Idaho Power, Van Ness, Kleinschmidt, PG&E, Southern, 
SCE.
---------------------------------------------------------------------------

    71. We recognize the tension between licensees' desire for 
certainty and the need for finality in compiling the decisional record, 
and, on the other hand, the likelihood that circumstances will occur 
during the course of studies and data gathering which require 
additional information or a course correction in order to develop the 
necessary information. We are proposing therefore that each Commission-
approved study plan under the integrated licensing process include 
specified points at which the status of information development and 
other relevant factors are reviewed and an opportunity for amendments 
provided. As the information-gathering and studies proceed however, the 
standard for new requests will increase.\89\ Also, because the 
integrated process would include stakeholder participation in study 
plan development, periodic review of results and opportunities for 
amendments, and study dispute resolution, the integrated process does 
not contemplate any additional opportunity for participants to request 
information and studies after the license application is filed.
---------------------------------------------------------------------------

    \89\ See Section III.E.2 and proposed 18 CFR 5.14 and 5.15.
---------------------------------------------------------------------------

    72. Finally, AMC contends that where studies are conducted by 
consultants who are paid by and answer to license applicants, the 
consultants are under explicit or implicit pressure from the applicant 
to find minimal or no impact on resources from project operations. It 
recommends that study plans require applicant-funded consultants to 
report directly to, and work under the direction of, a stakeholder 
group. We decline to adopt this proposal. Allegations of institutional 
bias might be directed at technical experts in the employ of any party 
to a license proceeding. AMC notes that applicants have agreed to such 
arrangements in at least one instance, and that it worked well for the 
participants, but we decline to establish a process that compels 
applicants to fund consultants who answer to other participants.
d. Study Dispute Resolution Process
    73. Early resolution of study disputes was identified by many 
commenters as critical to improving timeliness.\90\
---------------------------------------------------------------------------

    \90\ See Section III.D.1, supra. Also, NRG, DM&GLH, Skancke, New 
York Rivers, Oregon, NMFS.
---------------------------------------------------------------------------

    74. The pre-filing study dispute resolution process provided in the 
Commission's existing regulations \91\ is seldom used. Commenters cite 
various reasons for this. Some say it is because the decision of the 
Director of the Office of Energy Projects (OEP) is not binding.\92\ 
Others suggest that the absence of specific study criteria in the 
regulations creates uncertainty that leads parties to continue attempts 
to negotiate study requirements until after the application is 
filed.\93\ Some Federal and state agencies indicate that they do not 
use the process because the Commission only considers the need for 
information to support its own decisions, which may be different from 
the information these agencies require for a complete record to support 
the exercise of their own authorities.\94\ HRC notes that the current 
rules do not provide for resolution of disputes between the applicant 
and NGOs. A few other commenters, mostly from the industry, state that 
the existing process, or the existing process with minor modifications, 
works well enough.\95\
---------------------------------------------------------------------------

    \91\ See 18 CFR 4.38(b)(5) and (c)(2); 16.8(b)(5) and (c)(2).
    \92\ NHA, PG&E, NYSDEC, Van Ness, AMC, WPPD, SCE, Kleinschmidt.
    \93\ California, Oregon, Long View
    \94\ Interior, NYSDEC, NCWRC.
    \95\ SCE, Idaho Power, EEI, NAH, ADK.
---------------------------------------------------------------------------

    75. Commenters generally support the establishment of a more clear 
and effective dispute resolution process.\96\ There are, however, 
substantial differences concerning the details of what that process 
should be. It is helpful to use the IHC dispute resolution proposal as 
a frame of reference to discuss these differences.
---------------------------------------------------------------------------

    \96\ NHA, PRT, APT, CRITFC, NYSDEC, CTUIR, Menominee, AMC, 
Oregon, SCE, Kleinschmidt, WPPD, KCCNY, HRC, AmRivers, HRC, 
Menominee, Wisconsin DNR, EEI, Idaho Power, DM&GLH, APT, Duke, PG&E, 
NCWRC, Long View, Xcel, CSPPA. Some industry commenters recommend 
that any new dispute resolution process be incorporated into any and 
all licensing process options. Duke, EEI, Van Ness. This is 
discussed in Section III.H.

---------------------------------------------------------------------------

[[Page 13997]]

    76. In brief, the IHC proposal provides for the Commission staff to 
approve with any necessary modifications a proposed information-
gathering and study plan developed by the applicant in consultation 
with interested parties. Parties other than Federal or state agencies 
with mandatory conditioning authority under FPA Sections 4(e) and 18, 
or state or Tribal water quality certification agencies, as well as the 
applicant, would be bound by the decision. Agencies and tribes with 
conditioning authority would be able to dispute the decision with 
respect to studies pertaining to the exercise of their authorities.
    77. The dispute would be submitted to a panel consisting of a 
person nominated by the Commission staff, a person nominated by the 
agency or tribe referring the dispute, and a third person with the 
appropriate technical qualifications selected by the other two panel 
members from a list of such persons maintained by the Commission. The 
panel would review the request with reference to the study criteria 
discussed above. There would be an opportunity for other participants 
to submit information. If the panel concluded that the study request 
satisfied the criteria, it would recommend to the Director that the 
applicant be required to conduct the study. The Director would review 
the recommendation pursuant to the study criteria and, unless he 
disagreed with the panel's conclusions, would direct the applicant to 
do the study. This process would be available when the applicant's 
study plan is first considered and if disputes arise during periodic 
status reviews. Several commenters indicated that the IHC proposed 
dispute resolution process appears to be reasonable, subject to various 
suggested modifications.\97\ One frequent comment was that whatever 
dispute resolution mechanism is adopted, basic fairness requires that 
it be available to every participant that has a dispute with an 
applicant.\98\
---------------------------------------------------------------------------

    \97\ NYSDEC, Van Ness, Duke, CRITFC, NYRU, GLIFWC, BRB-LST, 
WPPD, Michigan DNR, California.
    \98\ SCE, Kleinschmidt, WPPD, SCE, Skancke, AMC, EEI, PG&E, 
NYRU, Van Ness, Oregon, VANR, Southern, Idaho Power, ADK. NHA's 
proposal is that only applicants, agencies, and tribes be able to 
initiate dispute resolution, but that any party could participate.
---------------------------------------------------------------------------

    78. Various commenters oppose the panel approach, or aspects of it, 
for different reasons. Some state that it would be costly, unwieldy, or 
take too long, and that the Commission has sufficient in-house 
expertise to resolve study disputes.\99\ PG&E is concerned that the 
panelists would not be directly involved in the proceeding and thus 
lack familiarity with the complexities of individual cases. Some object 
to the absence of the applicant from the panel, because it has 
expertise and will bear the cost of whatever studies are required.\100\ 
EEI and others suggest that a panel would diminish the Commission's 
authority by placing too much decisional input into the hands of an 
entity in which the Commission has a minority role.\101\ GLIFWC is 
concerned that a panel format might result in inconsistent resolution 
of disputes concerning the same or similar issues, and suggests that 
consistency could be ensured by having one neutral third party serve on 
multiple panels concerned with the same or similar issues. CDWR 
recommends that any panel have the applicant and resource agency or 
Tribe as the disputants, with the Commission staff acting as the third 
party.
---------------------------------------------------------------------------

    \99\ SCE, Kleinschmidt, Southern, Idaho Power, EEI, NHA. SCE 
adds that if the Commission lacks internal expertise with respect to 
a particular issue, it can obtain it by contract.
    \100\ Duke, Xcel, Kleinschmidt, Wausau, Georgia Power, WE 
Energies, Skancke, CDWR, Idaho Power.
    \101\ Wausau, FPL.
---------------------------------------------------------------------------

    79. Licensees further assert that if the licensee must be excluded 
from the panel, then it should in any event be afforded a role in the 
process. Suggestions in this regard include provisions for informal 
dispute resolution before a panel is convened,\102\ the panel convening 
a technical conference,\103\ and an opportunity for review and comment 
on the recommendation of any advisory panel before the Director 
resolves the issue.\104\
---------------------------------------------------------------------------

    \102\ NYSDEC.
    \103\ Duke, AEP, Van Ness.
    \104\ Duke.
---------------------------------------------------------------------------

    80. A few commenters object to the Commission resolving study 
disputes. Some states and HRC aver that deference to the expertise of 
state agencies requesting studies is appropriate, and that disputes 
over studies requested by agencies with mandatory conditioning 
authority should be resolved by those agencies.\105\ States also 
emphasize that they are not bound by Commission decisions with respect 
to information needs in support of water quality certification, and if 
the result of a dispute resolution process at the Commission was not 
favorable, they would use their own processes to deny the certification 
or otherwise ensure that they receive the requested data.\106\ The 
Menominee Tribe states that the Commission staff lacks impartiality 
and, recommends with GLIFWC that the panel's recommendation be binding 
on the Commission staff as well as other parties. Wisconsin DNR 
recommends development of a dispute resolution mechanism in which the 
Commission staff acts as a facilitator.
---------------------------------------------------------------------------

    \105\ California, Oregon, Michigan DNR, Washington, HRC.
    \106\ California, Oregon, Michigan DNR, Washington, NYSDEC.
---------------------------------------------------------------------------

    81. There is also no consensus on whether dispute resolution should 
be mandatory, and whether the result should be binding. Some licensee 
commenters would require stakeholders to refer an issue in dispute 
during prefiling consultation, and if they failed to do so, would not 
be able to make the study recommendation or raise the dispute after the 
application is filed.\107\ Other commenters appear to support 
continuation of dispute referral as optional.\108\
---------------------------------------------------------------------------

    \107\ This concept is frequently expressed in terms of there 
being a ban on post-application information requests, or a 
rebuttable presumption against them, or that they be allowable only 
under extraordinary circumstances. EEI, Idaho Power, NHA, Xcel.
    \108\ PG&E. NHA's dispute resolution proposal would appear to be 
voluntary but, if it was invoked, would in effect be binding on 
requesters because they could not later revisit the issue except in 
extraordinary circumstances. It would not appear to be binding on 
the applicant.
---------------------------------------------------------------------------

    82. Some commenters would make the result of the process 
binding.\109\ NHA and NRG would make participation mandatory, which NHA 
explains would provide a needed incentive for parties to become 
involved during pre-filing consultation, but would make the result 
advisory.\110\ Under HRC's collaborative process proposal, the 
participants would negotiate their own case-specific dispute resolution 
procedures with respect to study requests and various other aspects of 
the process, such as a plan and schedule for processing the 
application, as well as the contents of a draft license application, 
NEPA document, and mitigation and enhancement measures. HRC would have 
study disputes ultimately resolved by a panel which closely resembles 
the panel we are proposing.
---------------------------------------------------------------------------

    \109\ SCE, EEI, PG&E, Van Ness, Snohomish.
    \110\ NHA, NRG. Only a few commenters focused on the NRG dispute 
resolution process. In general, they approved that the process would 
be open to all participants, but expressed concern that criteria for 
dispute resolution were not defined, and that its advisory nature 
would result in no clear resolution. EEI, PG&E, Van Ness, Snohomish.
---------------------------------------------------------------------------

    83. We conclude that in order to be effective, a dispute resolution 
process should be timely, impartial, transparently based on a thorough 
consideration of the applicable facts and

[[Page 13998]]

decision criteria, and binding. We believe a modified version of the 
IHC proposal may satisfy these requirements.
    84. Timeliness can be ensured by building into the dispute 
resolution process deadlines for action by all parties. The advisory 
panel approach offers the best assurance of impartiality and acceptance 
by including a panel member with appropriate technical expertise 
agreeable to the other panelists, and who has no conflicts of interest. 
Transparency can be assured by requiring a disputing party, the 
advisory panel, and the Director to explain how they applied the facts 
in light of the study criteria.
    85. We propose to establish what is essentially a two-step dispute 
resolution process. In Step 1, the applicant files a draft study plan 
for comment; the participants (including Commission staff) meet to 
discuss the draft plan and attempt to informally resolve differences. 
The Commission then approves a study plan with any needed modifications 
after considering the applicant's proposed plan and the participants' 
comments (preliminary determination). Step 2 would be a formal dispute 
resolution process, including the panel described above, in which 
resource agencies with mandatory conditioning authority under FPA 
sections 4(e) and 18, and states or tribes with water quality 
certification authority under Clean Water Act section 401, would be 
able to dispute the preliminary determination to the extent their 
dispute concerns requests that directly implicate their exercise of 
that conditioning authority.\111\ If more than one agency or tribe 
filed a notice of dispute with respect to the preliminary 
determination's decision on a study request, the disputing agencies or 
tribes would select one representative to the panel, to ensure that 
balance is maintained.
---------------------------------------------------------------------------

    \111\ See proposed 18 CFR 5.12.
---------------------------------------------------------------------------

    86. This proposed process distinguishes between agencies and tribes 
with conditioning authority, to extent they are exercising that 
authority, and participants whose role is to make recommendations 
pursuant to FPA sections 10(a) and 10(j), NHPA section 106, or other 
applicable statutes. Agencies or tribes exercising mandatory 
conditioning authority have a duty to make reasoned decisions based on 
substantial evidence, and their decisions are subject to judicial 
review. Agencies, tribes, or members of the public that make 
recommendations to the Commission bear no such responsibility. The 
proposed integrated process ensures information and study requests of 
the latter entities receive appropriate consideration, in the context 
of early NEPA scoping and a process for developing the study plan 
provides all parties with opportunities to participate in study plan 
development meetings and file comments.
    87. We recognize that the applicant, by virtue of the fact that it 
must conduct any studies required by the Commission and implement the 
license, has a special interest in the outcome of any dispute 
resolution process involving the Commission and agencies or Tribes with 
mandatory conditioning authority. For that reason, the dispute 
resolution process we are proposing provides an opportunity for the 
applicant to submit to the panel information and arguments with respect 
to a dispute.
    88. The advisory panel procedure does not delegate any of the 
Commission's decisional authority, because the panel is advisory only. 
Nor do we think it is necessarily too costly or unwieldy if properly 
managed. All costs of panel members representing the Commission staff 
and the agency or tribe which served the notice of dispute would be 
borne by the Commission, agency, or tribe, respectively. The third 
panel member will serve without compensation, except for certain 
allowable travel expenses to be borne by the Commission.\112\
---------------------------------------------------------------------------

    \112\ The allowable travel expenses are defined at 31 CFR part 
301. In brief, travel allowances are the same as those of a salaried 
employee traveling on behalf of the Commission. The Commission has 
procedures and guidance in place for such situations.
---------------------------------------------------------------------------

    89. We agree with GLIFWC that consistency of analysis is desirable 
in a dispute resolution process, but anticipate that project-specific 
facts will play a large role in the recommendations of the panels. We 
are not moreover able to provide any assurance that third party 
panelists, who volunteer their services, would be willing to appear on 
multiple panels during any given period of time. Finally, the 
recommendations of each panel and the Director's decision will be 
matters of public record, and may inform the thinking of future panels 
applying the same criteria to issues concerning the same resource.
    90. NYSDEC and AMC state that to ensure the neutrality of the third 
panel member, that person should be from academia and not tied to any 
licensee's financial interests, or should be some other wholly 
independent party. We believe that neutrality will be sufficiently 
ensured by the fact that the third panelist must be agreed upon by the 
panelists representing the Commission staff and the disputing agency or 
tribe. The Commission requests comments on the proposed study dispute 
resolution process, and in particular on the efficacy of the advisory 
panel.
    91. California and others \113\ recommend that disputes be resolved 
by persons local to the project region, on the ground that local 
officials have a better understanding of the issues and states cannot 
afford to send staff to Washington, DC This is a matter best decided in 
the context of each proceeding.
---------------------------------------------------------------------------

    \113\ Oregon, CRITFC.
---------------------------------------------------------------------------

e. Other Recommended Uses for Dispute Resolution
    92. Menominee recommends that the study dispute resolution concept 
be extended to other elements of the licensing process, such as 
disagreements on draft license articles (which we propose to include 
with draft NEPA documents),\114\ and whether the Commission is in 
compliance with NEPA. Dispute resolution with the Commission staff is 
not appropriate for such matters, which are solely within the 
Commission's authority, and to which rehearing and the opportunity for 
judicial review apply. Dispute resolution procedures may however be 
appropriate in the context of settlement negotiations among parties 
where a settlement agreement could include recommendations to the 
Commission concerning the content of license articles.
    93. Some industry commenters suggest that disputes over material 
issues of fact related to issuance of mandatory conditions should be 
the subject of ``mini-hearings'' upon the applicant's request. They 
contend this would improve the overall record of the proceeding for 
judicial review, and that the prospect of a fact-finding hearing would 
make agencies with conditioning authority more likely to settle cases 
and less likely to impose unreasonable conditions.\115\ We do not 
propose to change our general practice of resolving most hydroelectric 
licensing matters by means of notice and comment procedures. We agree, 
however, that there may be merit in using evidentiary hearings before 
administrative law judges in licensing proceedings, and will give due 
consideration to any requests for such hearings.\116\
---------------------------------------------------------------------------

    \114\ See Section III.D.4.d.
    \115\ EEI, NHA, Idaho Power, DM&GLH, APT, Duke.
    \116\ Proposed 18 CFR 5.27(e) explicitly provides for this.

---------------------------------------------------------------------------

[[Page 13999]]

2. Consultation and Coordination With States
    94. The current regulations require prospective license applicants 
to include state fish and wildlife agencies and water quality 
certification agencies in pre-filing consultation,\117\ and for license 
applicants to include with their application proof that they have 
received, applied for, or received waiver of water quality 
certification.\118\ Notwithstanding, the Section 603 Report identified 
lack of timely state water quality certification as one of the 
principal causes of delay in licensing.\119\
    95. The causes for this appear to vary from state to state. States, 
including those which participated in the December 2001 regional 
workshops, indicate that they have very limited resources to devote to 
such applications; that disputes over the scope of studies required for 
a complete certification application are not resolved before the 
license application is filed; or that their water quality certification 
process is designed to use the Commission's final NEPA document to the 
extent possible as the basis for acting on the water quality 
certification application.\120\
---------------------------------------------------------------------------

    \117\ 18 CFR 4.38(a)(1) and (a)(2);and 16.8(a)(1) and (a)(2).
    \118\ 18 CFR 4.38(f)(7); 16.8(f)(7).
    \119\ See Section 603 Report, pp. 38-43.
    \120\ WDOE, Oregon, SCDWQ, Michigan DNR, California, Wisconsin 
DNR. EPA states that the limited resources of some states relative 
to their Clean Water Act responsibilities could make it difficult 
for the state agency to stay involved over the term of a multi-year 
license proceeding.
---------------------------------------------------------------------------

    96. Not surprisingly, then, there was broad agreement in the 
regional workshops with states and among the commenters that early 
collaboration or coordination by all parties with state agencies that 
issue water quality and CZMA consistency certification is essential to 
any effort to improve the timeliness of licensing.\121\ Many commenters 
recommend that these state agency processes be fully integrated with 
the Commission's processes from the beginning of pre-filing 
consultation through license issuance. This could include joint 
Federal/state environmental issues scoping and preparation of 
environmental documents as cooperating agencies.\122\ CRITFC states 
coordination of Federal and state regulatory agency action would also 
be enhanced by river basin-wide analyses that take into account all 
relevant state and tribal water quality standards and tribal water 
rights.
---------------------------------------------------------------------------

    \121\ Washington, California, SCE, Salish-Kootenai, NHA, HLRTF, 
Oregon, Interior, PG&E, PCWA, Idaho Power, PacifiCorp, SCDWQ, APT, 
Michigan DNR, HRC, Wisconsin DNR, EEI, NYSDEC, Maryland DNR, NMFS.
    \122\ NRG, Washington, Idaho Power, PacifiCorp, SCE, Oregon, 
Michigan DNR, HRC, KCCNY, CDWR, HRC, Idaho Power, PacifiCorp, NHDES, 
PG&E.
---------------------------------------------------------------------------

    97. The proposed integrated licensing process is designed to 
maximize coordination with state processes under the CWA and CZMA, and 
to aid the ability of state agencies to timely provide recommendations 
pursuant to FPA sections 10(a)(1) and 10(j). State agencies would be 
consulted with respect to development of the applicant's Commission-
approved study plan; invited to participate in an initial public 
meeting for the purpose, among others, of coordinating all regulatory 
processes to the extent possible; and could participate in the 
Commission's NEPA scoping activities. They would also be eligible for 
dispute resolution with respect to information and study requests 
pertaining to the exercise of their water quality conditioning 
authority.
    98. There are limits to what the Commission can do to coordinate 
its activities with state processes. Some states for instance indicate 
that the problem of incomplete water quality certification applications 
when the license application is filed would be eliminated if the 
Commission would treat states as ``full partners'' in the licensing 
process, which appears to entail, among other things, complete 
deference to state agency study requests.\123\ The Commission may in 
fact require an applicant to complete all of the information-gathering 
or studies requested by a state agency, but must exercise its 
independent judgement with respect to each study request in light of 
the comprehensive development standard of FPA section 10(a)(1), the 
Commission's policies, and any other applicable law. Several states 
moreover commented that they cannot be bound by the result of any 
Commission decisions on information and study needs insofar as their 
independent water quality certification authority is concerned, and if 
they are not satisfied with the information resulting from the 
Commission-approved study plan or dispute resolution process, they will 
deny water quality certification or use their other authorities to 
require the information they believe is needed.\124\ Finally, some 
states oppose participation as cooperating agencies for NEPA document 
preparation, on the ground that would conflict with their own policies 
or procedures.\125\
---------------------------------------------------------------------------

    \123\ California, NYSDEC, VANR, Wisconsin DNR.
    \124\ California, Oregon, Michigan DNR, Wisconsin DNR, WDOE.
    \125\ See Section III.D.4.b.
---------------------------------------------------------------------------

    99. EEI, NHA, and Idaho Power recommend that the Commission 
consider developing state-specific agreements comparable to 
programmatic agreements with State Historic Preservation Officers 
(SHPO), which might address such matters as coordination of schedules 
and key information needs of the states.\126\ As previously noted,\127\ 
the Commission has already begun consultations with the states to 
determine whether such memoranda or other actions to enhance 
coordination, apart from the proposed rule, may be useful. Our staff is 
also engaged in more focused discussions with some states where 
numerous relicense applications are expected to be filed over the next 
decade.
---------------------------------------------------------------------------

    \126\ EEI, NHA, Idaho Power. EEI states that any drafts of any 
such agreements should be submitted to licensees for comment.
    \127\ See Section II.B., supra.
---------------------------------------------------------------------------

    100. Some states \128\ indicate that their ability to timely issue 
water quality and coastal zone management plan consistency 
certifications would be greatly enhanced if the Commission directly 
funded their participation in the licensing process or used its 
authorities to require license applicants to fund their participation. 
The Commission does not have authority to directly fund state agencies. 
Licensee funding of Federal and State agencies is governed by FPA 
section 10(e)(1), which requires the Commission to collect in annual 
charges from licensees the Commission's administrative costs and * * * 
any reasonable and necessary costs incurred by Federal and State fish 
and wildlife agencies and other natural and cultural resource agencies 
in connection with studies or other reviews carried out by such 
agencies for purposes of administering their responsibilities under 
this part * * *.
---------------------------------------------------------------------------

    \128\ Washington, Oregon, Michigan DNR. California recommends 
that the Commission reimburse intervenors for attorneys' fees and 
travel expenses.
---------------------------------------------------------------------------

    101. This clause was added by section 1701(a) of the National 
Energy Policy Act of 1992 (EPAct).\129\ Section 1701(a)(2) of EPAct 
also added the following proviso:
---------------------------------------------------------------------------

    \129\ Pub. L. 102-486, 106 Stat. 2776-3133 (Oct. 24, 1992).
---------------------------------------------------------------------------

    Provided, That, subject to annual appropriations Acts, the portion 
of such annual charges imposed by the Commission under this subsection 
to cover the reasonable and necessary costs of such agencies shall be 
available to such agencies (in addition to other funds appropriated for 
such purposes) solely for carrying out such reviews and shall remain 
available until expended;
    102. The Commission has construed this provision to require an 
annual appropriation for this purpose by

[[Page 14000]]

Congress in the budgets of the applicable agencies or the 
Commission.\130\ Congress has not made such appropriations for the 
states.\131\
a. Timing of Water Quality Certification Application
---------------------------------------------------------------------------

    \130\ See Testimony of Commission Chair Elizabeth Moler before 
the Subcommittee on Energy and Water Development of the House 
Committee on Appropriations (April 21, 1993); Letter from Chair 
Elizabeth Moler to Hon. John Dingell of August 2, 1994.
    Certain Federal agencies have for a number of years submitted 
``reasonable and necessary costs'' to the Commission for inclusion 
in annual charges. Some licensees have challenged the eligibility of 
these costs for recovery in annual charges and the Commission's 
policies concerning the evidentiary showing necessary for the costs 
to be recovered. These matters are currently in litigation. City of 
Tacoma, et al. v. FERC, DC Cir. 01-1375 (filed August 28, 2001).
    \131\ Although the Commission's existing authority in this 
regard is constrained, we are well aware of the funding challenges 
faced by many states and are interested in pursuing with them in 
other contexts how the Commission might be able to assist them in 
meeting this challenge.
---------------------------------------------------------------------------

    103. Some commenters suggest that the timing of the water quality 
certification application should be governed by events other than the 
filing of the license application. Although the specific time frames 
that they recommend for filing are divergent, the common theme appears 
to be that the water quality certification application should be filed 
when the record with respect to water quality issues is complete.\132\ 
California recommends that the certification application be filed after 
the Commission's draft NEPA document is issued. New York Rivers and 
Oregon suggest that regardless of when the certification application is 
filed, the Commission should not begin counting the one-year period for 
state action until the state deems the application to be complete.\133\
---------------------------------------------------------------------------

    \132\ NHA, Idaho Power, NYSDEC, SCE (when the REA notice is 
issued); CDWR (one year prior to scheduled license issuance); HRC, 
NCWRC (following issuance of a draft or final NEPA document).
    \133\ NYRU, Oregon.
---------------------------------------------------------------------------

    104. The current rule requiring a license applicant to apply for 
water quality certification by the time the license application is 
filed rests on the assumption that water quality data issues will have 
been resolved during pre-filing consultation. The integrated licensing 
process we are proposing provides greater opportunity for that to 
occur. The applicant and water quality certification agencies will know 
well before the application is filed what related data the Commission 
will require to be filed with it. Thus, states should be in a position 
to inform license applicants if additional information will be required 
by the state for water quality certification purposes before the 
application is filed, and applicants should be prepared to begin 
obtaining any such information and assembling a water quality 
certification application before the license application is filed.
    105. For those applications developed using the traditional 
process, we propose to modify the rules to require the applicant to 
show that it has applied for, received, or received waiver of water 
quality certification no later than the date for responses to the 
Commission's REA notice. The later date may be appropriate for the 
traditional process because there is no Commission-approved pre-filing 
study plan, and therefore less reason to assume that water quality 
information and study issues will have been resolved when the 
application is filed. Similar considerations may apply to the ALP, 
where the parties have much flexibility with respect to the timing of 
the development of the record. On the other hand, and as discussed 
below, we are proposing to incorporate full public participation and 
mandatory, binding dispute resolution into the traditional process, 
which should result in pre-filing resolution of water quality data 
issues far more often than is currently the case. The Commission 
therefore requests comments on whether the deadline date for filing the 
water quality certification application should remain when the license 
application is filed for both the traditional process and ALP.
3. Consultation With Indian Tribes
    106. The September 12, 2002 Notice asked how a new licensing 
process can better accommodate the authorities, roles, and concerns of 
Indian tribes. The principal concerns expressed by tribes are that 
tribal sovereignty and authorities need to be recognized in the 
process, that the Commission have government-to-government relations 
with the tribes, and that the tribes be consulted and their issues 
identified very early in the process.\134\
---------------------------------------------------------------------------

    \134\ Menominee, GLIFWC, CRITFC, Salish-Kootenai, St. Regis 
Mohawks, PRT, HETF; CTUIR; St. Regis Mohawks, NF Rancheria, Catawba, 
APT, KT, Nez Perce.
---------------------------------------------------------------------------

    107. A few tribes suggest that the existence of a government-to-
government relationship means that only the Commission should consult 
with the tribes, and that the tribes should not have to deal directly 
with license applicants.\135\ Most tribes, however, recognize the 
crucial role of the license applicant in consultation and development 
of studies and the license application, and accordingly offer 
recommendations intended to improve coordination and development of 
information with the applicant as well as the Commission. A few 
licensees suggest that if consultations between the tribes and license 
applicants become unproductive, or at the tribe's request, all 
consultation with the tribe should be through the Commission.\136\
---------------------------------------------------------------------------

    \135\ Choctaw, PRT, Shoshone.
    \136\ PacifiCorp, NHA.
---------------------------------------------------------------------------

    108. Several tribes state that there is a lack of understanding by 
the Commission of its roles and responsibilities as a trustee for 
tribes, and of individual tribal concerns, and a lack of understanding 
by tribes of the Commission's processes. They also state that our 
regulations are not clear with respect to the rights, roles, and 
responsibilities of Indian tribes.\137\ Several suggest that the 
Commission establish either an office of tribal affairs or otherwise 
dedicate a specific person or persons as a tribal liaison.\138\
---------------------------------------------------------------------------

    \137\ E.g., Nez Perce.
    \138\ CRITFC, Salish-Kootenai, NF Rancheria, Menominee, KT, 
GLIFWC, BRB-LST, Quinault, CTUIR, Shoshone.
---------------------------------------------------------------------------

    109. The relationship between the United States and Indian tribes 
is defined by treaties, statutes, and judicial decisions. Indian tribes 
have various sovereign authorities, including the power to make and 
enforce laws, administer justice, and manage and control their lands 
and resources. Through several Executive Orders and a Presidential 
Memorandum,\139\ departments and agencies of the Executive Branch have 
been directed to consult with Federally recognized Indian tribes in a 
manner that recognizes the government-to-government relationship 
between these agencies and tribes. In essence, this means that 
consultation should involve direct contact between agencies and tribes, 
in a manner that recognizes the status of the tribes as governmental 
sovereigns.
---------------------------------------------------------------------------

    \139\ Executive Order 13175, Consultation and Coordination with 
Indian Tribal Governments (issued November 6, 2000); Executive Order 
13084, Consultation and Coordination with Indian Tribal Governments 
(issued May 14, 1998); Presidential Memorandum, Government-to-
Government Relations with Native American Tribal Governments (issued 
April 29, 1994), reprinted at 59 Fed. Reg. 22,951; Executive Order 
12875, Enhancing the Intergovernmental Partnership (issued October 
26, 1993).
---------------------------------------------------------------------------

    110. As an independent regulatory agency, the Commission functions 
as a neutral, quasi-judicial body, rendering decisions on license 
applications filed with it, and resolving issues among parties 
appearing before it, including Indian tribes. Therefore, the 
Commission's rules and the nature of its licensing process place some 
limitations on the nature and type of consultation

[[Page 14001]]

that the Commission may engage in with any party in a contested case.
    111. The Commission believes that the licensing process will 
benefit by more direct and substantial consultation between the 
Commission staff and Indian tribes. Because of the unique status of 
Indian tribes in relation to the Federal government, it may be 
beneficial to increase direct communications with tribal 
representatives in appropriate cases. The type and manner of 
consultation with Indian tribes should fit the circumstances. Different 
issues and stages of a proceeding may call for different approaches, 
and there are some limitations that must be observed. However, there 
are a number of steps that the Commission staff can take to improve 
consultation with Indian tribes on matters affecting their interests in 
hydroelectric licensing.
    112. For example, it may be mutually beneficial for the staff and 
Indian tribes to engage in some high-level meetings to discuss general 
matters of importance, rather than issues involved in specific 
licensing proceedings. These could be arranged for particular tribes, 
regions, or river basins, if appropriate.
    113. There are also opportunities for greater involvement with 
Indian tribes before a licensing proceeding has begun. Indian tribes 
may be reluctant to consult with the applicant, preferring to meet 
directly with the Commission staff. In these cases, the staff should 
consider some means of direct communication with the tribe, at an 
appropriate level, to explain the consultation process and the 
importance of tribal participation, and to learn more about the tribe's 
culture. Because it would occur before the proceeding commences, the 
Commission's rules regarding off-the-record communications would not 
apply. Our proposal to establish a tribal liaison, discussed below, 
responds to this concern.
    114. Once the licensing proceeding has begun, the Commission's 
rules prohibiting off-the-record communications must be observed. These 
rules apply in any case in which an intervenor disputes a material 
issue, and they generally prohibit off-the-record communications 
relevant to the merits of a proceeding between Commission employees 
involved in the decisional process and interested persons outside the 
agency. Thus, they would prevent Commissioners or Commission staff from 
consulting privately in a contested proceeding with representatives of 
any party to the proceeding, whether on a government-to-government 
basis or in any other capacity, to discuss matters relevant to the 
merits of the proceeding.
    115. However, under special exemptions provided in the rules, 
communications concerning the staff's preparation of environmental 
documents are permitted, as are communications with tribal and other 
governmental representatives if the tribe or government agency is not a 
party to the proceeding. In each instance, the staff must promptly 
disclose the substance of the communication and place it in the record 
for the proceeding. Using these guidelines, Commission staff can work 
to ensure that consultation with Indian tribes is both meaningful and 
appropriate to the circumstances of particular cases. For example, 
staff might consider holding a high-level ``kick-off'' meeting or 
invitation to participate, or a separate scoping meeting with tribal 
representatives.
    116. As part of the licensing process, the Commission must also 
comply with section 106 of the NHPA. Section 106 requires the 
Commission to take into account the effect of its actions on historic 
properties, and to afford the Advisory Council on Historic Preservation 
(ACHP) a reasonable opportunity to comment. The NHPA expressly provides 
that traditional cultural properties that are of religious or cultural 
significance to Indian tribes can be considered historic properties. It 
also requires the Commission to consult with representatives of 
Federally recognized Indian tribes that attach religious or cultural 
significance to those properties, if they may be affected by the 
licensing action. The Council's regulations provide that this 
consultation ``should be conducted in a sensitive manner respectful of 
tribal sovereignty,'' and ``must recognize the government-to-government 
relationship between the Federal government and Indian tribes.''\140\ 
If direct communication between Commission and tribal representatives 
occurs as part of the Section 106 process, it must be conducted in 
compliance with the Commission's rules regarding off-the-record 
communications.
---------------------------------------------------------------------------

    \140\ 36 CFR 800.2(c)(2)(ii)(B) and (C).
---------------------------------------------------------------------------

    117. A few tribes recommend that consultation be limited to 
Federally recognized tribes.\141\ The Commission is sensitive to the 
fact that Federal recognition establishes certain rights that are not 
enjoyed by non-recognized tribes, and that there may be competing 
interests at stake. For instance, some Federally recognized tribes have 
authority to issue water quality certification under section 401 of the 
Clean Water Act with respect to actions that require a Federal license 
and are located on reservation lands. Consultation under section 106 of 
the NHPA differs, depending on the tribe's status.\142\ The Council's 
regulations concerning government-to-government consultation apply only 
to Federally recognized tribes. However, they also provide for 
consultation with non-Federally recognized tribes as consulting parties 
that have an interest in the proposed licensing action.\143\ If a 
Federally recognized tribe has an approved Tribal Historic Preservation 
Officer (THPO), the Commission is required to consult with the THPO 
instead of the SHPO for undertakings that affect historic properties on 
tribal lands. We intend for the licensing process to be conducted in a 
manner consistent with the proper exercise of such rights, and that 
tribes be consulted at the earliest practicable opportunity. We 
believe, however, that members of unrecognized tribes can have Native 
American cultural resources that should also be respected by the 
Commission. We will therefore direct our staff to consult with non-
recognized tribes that choose to participate in license proceedings.
---------------------------------------------------------------------------

    \141\ Choctaw, Catwaba.
    \142\ As used in the NHPA and the Council's regulations, the 
term, ``Indian tribe'' refers to Federally recognized tribes; thus, 
only a Federally recognized tribe has the right to participate in 
Section 106 consultation. See http://www.achp.gov/regs_tribes.htm.
    \143\ 36 CFR 800.2(C)(5) and 800.3(f).
---------------------------------------------------------------------------

    118. The tribes and other commenters made many suggestions intended 
to enhance early consultation. These include: Commission contact with 
tribes before the due date for an existing licensee's NOI to better 
understand tribal issues and to ensure that the tribes are fully aware 
of the licensing process;\144\ Commission and tribe-only meetings to 
ensure confidential treatment of cultural resources and for NEPA 
scoping;\145\ development with each tribe of a plan for consultation 
with that tribe;\146\ more timely notice of deadlines and flexible 
deadlines;\147\ facilitation services for consultation between tribes 
and the Commission or tribes and license applicants;\148\ and that 
comprehensive information on future license expirations and the state 
of any existing consultations be posted

[[Page 14002]]

on the Commission's website or made available on CD ROM.\149\
---------------------------------------------------------------------------

    \144\ PacifiCorp, PRT.
    \145\ NF Rancheria. Several tribes broadly stated their concern 
that the licensing process protect the confidentiality of cultural 
resources; e.g., Choctaw, PRT, Shoshone, NF Rancheria.
    \146\ SCE, Idaho Power, EEI, NHA, NEU, Nez Perce.
    \147\ CRITFC, St. Regis Mohawks.
    \148\ Idaho Power, PRT, Nez Perce.
    \149\ NF Rancheria, PRT.
---------------------------------------------------------------------------

    119. Our proposed rule and related administrative actions should 
substantially address these concerns. First, we are establishing the 
position of Tribal Liaison. The Tribal Liaison will provide a single, 
dedicated point of contact and a resource to which Native Americans can 
go regardless of the proceeding or issue. Also, as discussed above, the 
Commission will be contacting Indian tribes likely to be interested in 
a relicense proceeding in a time frame consistent with the advance 
notification to initiate discussions concerning consultation 
procedures.
    120. Under section 304 of the NHPA, the Commission is required to 
withhold from public disclosure information about the location, 
character, or ownership of a historic property when disclosure may 
cause a significant invasion of privacy, risk harm to the property, or 
impede the use of a traditional religious site by practitioners. The 
Council's regulations reflect this requirement.\150\ The Commission 
also has regulations and practices in place that address the tribes' 
confidentiality concerns. For instance, all applicants must delete from 
any information made available to the public specific site or property 
locations if their disclosure would create a risk of harm, theft, or 
destruction of archeological or Native American cultural 
resources.\151\ In addition, the regulations provide specific 
procedures to follow when requesting privileged treatment of documents 
that are either filed with the Commission or submitted to the 
Commission staff.\152\
---------------------------------------------------------------------------

    \150\ See 36 CFR 800.6(a)(5) and 800.11(c).
    \151\ 18 CFR 4.32(b)(3)(ii) and 16.7(d)(5)(ii).
    \152\ 18 CFR 388.112.
---------------------------------------------------------------------------

    121. The Commission agrees that Commission-sponsored facilitation 
services, which some non-tribal commenters also recommend, may be 
useful in certain proceedings, as discussed in the preceding section. 
The most appropriate facilitation or dispute resolution techniques are 
a matter best considered in the context of specific proceedings.
    122. Some tribes suggest that, because original construction of 
dams caused impacts to tribal resources for which there was no 
compensation under an original license or other pre-license 
construction authorization, the licensing process should provide a 
means to identify and mitigate for those past impacts.\153\ The 
Commission has no authority under the FPA to require restitution or to 
assess damages. Moreover, the FPA does not mandate that all past 
environmental damage caused by a project be ``mitigated'' in a 
relicensing proceeding. Our responsibility at relicensing is to 
determine whether, and under what conditions, to issue a new license 
for a hydroelectric project. As previously stated, we use existing 
environmental conditions as a baseline for our analysis, and do not 
attempt to re-create a hypothetical pre-project environment. However, 
past environmental effects are relevant in assessing cumulative effects 
and in determining what measures are appropriate to protect, mitigate, 
and enhance natural resources for the new license term. This approach 
is reasonable, and complies with both NEPA and the FPA.\154\
---------------------------------------------------------------------------

    \153\ Shoshone, NW Indians.
    \154\ See Section III.D.1.c
---------------------------------------------------------------------------

    123. Some tribes state that the geographic scope of the 
Commission's public interest analysis with respect to tribal cultural 
and other resources should not be limited to resources located within 
the project boundary, but should extend to project impacts wherever 
they may occur.\155\ The Commission agrees that there may be instances 
where project impacts occur outside of an existing or proposed project 
boundary, and that appropriate mitigation for these impacts, as well as 
possible changes to the project boundary, should be considered in the 
licensing process. For historic properties, this is taken into account 
in defining the project's ``area of potential effect'' during the 
consultation process under section 106 of the NHPA. Such matters are 
best dealt with in the context of specific proceedings.
---------------------------------------------------------------------------

    \155\ CTUIR, Menominee, Shoshone.
---------------------------------------------------------------------------

    124. Some commenters indicate that project-related social and 
economic issues raised by tribes should be addressed in the licensing 
process and should be given the same weight as developmental 
values.\156\ We agree that social and economic impacts of proposed 
projects on tribal resources, positive and negative, need to be 
addressed through consultation pursuant to our trust responsibility, 
the NHPA section 106 process, and in the Commission's NEPA and 
decisional documents. The enhanced consultation measures provided by 
the proposed integrated process generally, and for Indian tribes in 
particular, should ensure that such issues are fully considered.
---------------------------------------------------------------------------

    \156\ Shoshone, CTUIR.
---------------------------------------------------------------------------

    125. A few tribes suggest that tribal water rights should be 
specifically addressed in the licensing process.\157\ Issues concerning 
tribal water rights have rarely been raised in licensing proceedings, 
mainly because the Commission does not adjudicate water rights. The 
Commission's practice, when such water rights are in dispute, is that 
if it issues the license, it makes the license subject to a reservation 
of authority to reopen the license to make any changes that may be 
required once the water rights issues are resolved.\158\ This safeguard 
has worked in the past and should continue to adequately protect tribal 
water rights.\159\
---------------------------------------------------------------------------

    \157\ CTUIR, CRITFC.
    \158\ See, e.g., Idaho Water Resources Board, 84 FERC ] 61,146 
(1998) (reserving authority to modify the license to reflect the 
outcome of pending state water right proceeding in which an Indian 
Tribe claimed an implied Federal reserved water right). Similarly 
OWRB states that license conditions should be developed consistent 
with interstate water compacts enacted as Federal law. It is not the 
Commission's intention to interfere in any way with such compacts, 
and we are not aware of any instance where there has been an 
inconsistency.
    \159\ See Covelo Indian Community v. FERC, 895 F.2d 581, 586 
(9th Cir. 1990).
---------------------------------------------------------------------------

    126. Some commenters state that the Commission's guidelines for the 
development of Historic Properties Management Plans (HPMPs) are 
confusing with regard to how Section 106 is fulfilled and the degree of 
applicant responsibility. They request clarification of the distinction 
between government-to-government relations and consultation.\160\ The 
Commission and the Council issued these guidelines jointly in May 
2002.\161\ They are intended to assist license applicants in preparing 
their HPMPs, which the Commission includes as a license condition, and 
provide for the licensee's management of historic properties during the 
license term. These plans, while related to historic preservation, are 
not necessarily part of the Section 106 process. Rather, a programmatic 
agreement or memorandum of agreement entered into as part of the 
Section 106 process will usually include provisions requiring the 
applicant to prepare and implement an HPMP. The HPMP is often prepared 
in consultation with the SHPO, THPO, or Indian tribe, and may include 
provisions for consultation with the tribes during the term of the 
license. The Commission's role is to review and approve the HPMP. Thus, 
any consultation with tribes that may occur during the preparation or 
implementation of the HPMP ordinarily

[[Page 14003]]

would be with the applicant or licensee, rather than with the 
Commission. In some cases, consultation pursuant to Section 106 may be 
combined with consultation concerning the preparation of an HPMP. As 
discussed above, the Commission will attempt to be responsive to 
tribes' requests for direct communication, if this can be accomplished 
in a manner consistent with the Commission's rules governing off-the-
record communications.
---------------------------------------------------------------------------

    \160\ SCE, NHA. SCE states that Section 106 consultation should 
begin when the applicant files a draft HPMP.
    \161\ Guidelines for the Development of Historic Resources 
Management Plans for FERC Hydroelectric Projects (May 2002), http://www.ferc.gov/hydro/docs/hpmp/pdf.
---------------------------------------------------------------------------

    127. Some tribes state that they should be consulted on the 
identity of, or have the right to approve, all persons performing 
tribal cultural resources analyses pursuant to section 106 of the NHPA. 
Tribes may also have professional expertise in this area, and some 
indicate that qualified tribal members should be hired for such studies 
whenever possible.\162\ We agree that it is appropriate for license 
applicants to consult with tribes concerning the identity and 
qualifications of persons conducting studies with respect to a tribe's 
cultural resources. However, license applicants need to have 
flexibility in the hiring of consultants. We do not believe that 
applicants should be required to obtain a tribe's approval before 
engaging a consultant, or to engage a consultant based on tribal 
membership. It would however appear to be in a license applicant's best 
interests to consult affected tribes concerning these matters. We note 
that, in many proceedings, licensees have reached agreements with 
affected tribes in which the tribes have a voice in the selection of 
consultants.\163\
---------------------------------------------------------------------------

    \162\ Shoshone, Kalispel.
    \163\ Examples include relicense proceedings for the Condit 
Project No. 2342, Box Canyon Project No. 2040, Lake Chelan Project 
No. 637, Rocky Reach Project No. 2145, Klamath River Project No. 
2082, and Baker River Project No. 2150.
---------------------------------------------------------------------------

4. Environmental Document Preparation
a. Cooperating Agencies Policy
    128. The Commission's policy has for a number of years been that an 
agency that has served as a cooperating agency in a proceeding may not 
thereafter intervene in that proceeding. The reason for this policy is 
that staff of a cooperating agency is treated in some respects as 
though it were Commission staff, including having conversations and 
exchanging information that may not be put in the record, just as 
Commission staff shares predecisional analyses and information 
internally. To allow a cooperating agency to intervene in a proceeding 
would make it a party privy to decisional information not available to 
other parties, in violation of our rule prohibiting ex parte 
communications.\164\
---------------------------------------------------------------------------

    \164\ See Rainsong Company, 79 FERC ] 61,338, at p. 62,457, n.18 
(1997); Order No. 596, Regulations for the Licensing of 
Hydroelectric Projects, FERC Statutes and Regulations ] 31,057 at p. 
30,644 (1997). When the Commission modified its ex parte 
communication rules in 1999, it noted, but made no change to, this 
policy. See Order No. 607-A, FERC Statutes and Regulations ] 31,112 
n. 50 and p. 31,931 n. 41. See also Arizona Public Service Co., 94 
FERC ] 61,076 (2001) (denying request for late intervention by the 
Forest Service and rejecting arguments that the new ex parte rule 
does permit a cooperating agency to also be an intervenor).
---------------------------------------------------------------------------

    129. Other Federal agencies, environmental groups, and some states 
urge us to revisit this policy.\165\ They contend that the policy is 
inefficient because it discourages other agencies from becoming 
cooperating agencies, which forces the preparation of multiple NEPA 
documents. Interior suggests that if the Commission were to issue non-
decisional NEPA documents, that is, documents which are purely 
analytical and make no substantive recommendations, there should be no 
concern about off-the-record communications regarding the merits of the 
proceeding.\166\
---------------------------------------------------------------------------

    \165\ HRC, SCE, NYSDEC, WDOE, DOI. NRG also supports this 
proposal, but would put limits on the bases upon which a cooperating 
agency that subsequently became an intervenor could seek rehearing 
or judicial review, and would include disclosure requirements with 
respect to discussions concerning license articles or terms and 
conditions, and ``any communication necessary for the completeness 
of the record.'' See Attachment B to September 12, 2002 Notice, p. 
10.
    \166\ This suggestion is inconsistent with our ex parte 
regulations, which define ``relevant to the merits'' as ``capable of 
affecting the outcome of a proceeding, or of influencing a decision, 
or providing an opportunity to influence a decision, on any issue in 
the proceeding,'' subject to certain narrowly drawn exceptions not 
applicable here. See 18 CFR 385.2201(b)(c)(5).
---------------------------------------------------------------------------

    130. EEI and Idaho Power assert however that reversing the policy 
would violate the Administrative Procedure Act (APA).\167\ They state 
that APA section 557(d)(1) prohibits in an adjudicatory proceeding any 
``interested person'' from outside the agency from making any ``ex 
parte communication relevant to the merits of the proceeding'' to a 
decisional employee.\168\ This is correct, but the APA defines a 
``person'' as ``a public or private organization other than an 
agency.'' \169\ (emphasis added), and defines an agency, with certain 
exceptions not relevant here, as ``each authority of the Government of 
the United States.'' \170\ Thus, the APA does not prohibit ex parte 
communications between Federal agencies.
---------------------------------------------------------------------------

    \167\ 5 U.S.C. 551-559.
    \168\ 5 U.S.C. 557(d)(1).
    \169\ 5 U.S.C. 551(2).
    \170\ 5 U.S.C. 551(1).
---------------------------------------------------------------------------

    131. Our policies concerning ex parte communications exceed the 
requirements of the APA in this regard, because the Commission is 
concerned that its procedures be fundamentally fair in both appearance 
and reality. On this score, EEI and Idaho Power cite Order No. 607, 
where the policy against cooperating agency intervenors articulated 
above was codified, and Arizona Public Service, where it was affirmed. 
They assert that nothing has changed in this regard, and add that 
reversing the policy would afford a dissatisfied cooperating agency a 
``second bite at the apple'' by permitting it to seek rehearing and 
judicial review of Commission orders.\171\ EEI intimates that 
permitting cooperating agency relationships would enable other Federal 
agencies to prevent or hinder the issuance of economically vital gas 
pipeline certificates and unduly influence the Commission's public 
interest balancing under FPA section 10(a)(1).\172\ Finally, they argue 
that NRG's proposal would be impractical because it would require all 
communications to and from a cooperating agency to be placed on the 
record, which would be administratively unworkable and inimical to the 
free exchange of ideas essential to the cooperating agency 
relationship.
---------------------------------------------------------------------------

    \171\ EEI, Idaho Power.
    \172\ See EEI, pp. 45-46.
---------------------------------------------------------------------------

    132. We conclude that reversal of our policy (and the concomitant 
revision of our ex parte rules) as it applies to Federal agencies would 
increase the likelihood that Federal agencies with mandatory 
conditioning authority would be willing to act as cooperating agencies, 
which would better enable these agencies and the Commission to 
coordinate the exercise of their separate responsibilities. This should 
also better enable cooperating Federal agencies with conditioning 
authority to develop a complete record, reduce duplication of effort 
among cooperating agencies, and may help to focus discussion of 
scientific and policy issues. To be weighed against these benefits is 
the potential for prejudice to other parties that would not have access 
to some information and decisional communications between the 
Commission and the cooperating agency.
    133. On balance, we are persuaded that the potential benefits are 
significant and the likelihood of prejudice to other parties is minimal 
if an appropriate disclosure requirement is established. The Commission 
and other Federal agencies with mandatory conditioning

[[Page 14004]]

authority must support their conditions with reasoned decisions based 
on facts in the public record. A cooperating agency that supplies the 
Commission with study results or other information presumably does so 
because it believes the material adds value to the decisional record 
and deliberations. No cooperating agency should therefore object to a 
requirement that all study results and other information provided to 
the Commission also be served on parties to the proceeding. 
Deliberative communications however involve the interpretation and 
application of study results and other information. It is appropriate 
for such communications among cooperating agencies to remain off-the-
record in order to foster the free and timely exchange of ideas. As 
long as the analyses upon which the Commission and a cooperating agency 
ultimately rely are set forth in their respective NEPA or decisional 
documents, they will be subject to challenge in comments on draft NEPA 
documents, on rehearing of decisional orders, and on judicial review. 
Under these circumstances, no other party should be prejudiced.
    134. We therefore propose to modify our policy by permitting 
Federal cooperating agencies to intervene, subject to a requirement 
that all studies and other information provided by a cooperating agency 
to the Commission be promptly submitted to the Secretary and placed in 
the decisional record. Decisional communications such as working drafts 
of NEPA documents and associated communications would continue to be 
exempt from disclosure. Accordingly, we also propose to modify the text 
of the ex parte regulations to this effect.\173\ The exception to the 
APA's prohibition on ex parte communications for Federal agency 
communications does not extend to states or Indian tribes. Our policy 
will therefore remain in place with respect to these entities.
---------------------------------------------------------------------------

    \173\ Proposed new 18 CFR 385.2201(g)(2).
---------------------------------------------------------------------------

b. NRG Cooperating Agency Proposal
    135. NRG proposes that the Commission and Federal or state resource 
agencies that regularly participate in the Commission's licensing 
processes develop a general Memorandum of Understanding (MOU) that 
would establish a procedural framework in which the resource agencies 
would be cooperating agencies in the preparation of a non-decisional 
NEPA document; that is, one which would analyze resource impacts of the 
applicant's proposal and reasonable alternatives, but would not include 
any recommendations on license articles or terms and conditions. The 
MOU would cover procedures for cooperation, dispute resolution, and 
decision-making. Each MOU would be supplemented by a project-specific 
Memorandum of Agreement.\174\
---------------------------------------------------------------------------

    \174\ See NRG proposal summary, September 12, 2002 Notice, 
Attachment B, p. 9. NHA supports the NRG proposal in this regard. 
CRITFC and Nez Perce support joint-agency NEPA documents in concept, 
but are concerned that the NRG's proposal might exclude the tribes, 
or somehow impose inappropriate limitations on appeal rights.
---------------------------------------------------------------------------

    136. The Commission supports in general the use of cooperating 
agency NEPA documents as a means of increasing efficiency. We are not 
however prepared to structure the integrated licensing process proposal 
based on the assumption that there will be a cooperating agency 
relationship in all or most cases. Many considerations go into an 
agency's decision to seek or not to seek such status. These include 
staff availability, the nature and extent of the agency's 
responsibilities with respect to licensing, and the policies and 
practices of the potential cooperating agencies.\175\ Moreover, where 
the Commission and resource agencies have found it to their mutual 
benefit to be cooperating agencies, project-specific agreements have 
generally been timely concluded so that the processing milestones were 
not prejudiced. Nevertheless, the Commission acknowledges that there 
may be benefits to having general MOUs with resource agencies to 
address coordination issues that cut across projects, and we will 
continue to explore that approach outside the context of this 
rulemaking.
---------------------------------------------------------------------------

    \175\ Michigan DNR and WDOE object to the inclusion of state 
agencies as cooperating agencies, on the ground that would subject 
the state agency to schedules established by the Commission, which 
they aver would conflict with other Federal or state laws and 
regulations.
---------------------------------------------------------------------------

c. Non-Decisional NEPA Documents
    137. Under NRG's proposal for non-decisional NEPA documents, the 
Commission and cooperating agencies would separately publish records of 
decision explaining the basis for their respective decisions, based on 
the record in the joint NEPA document and other relevant materials in 
their public record. NRG believes there would be little controversy 
with regard to the scientific analyses, which would eliminate the need 
for the Commission and cooperating agencies to conduct separate NEPA 
reviews. It suggests that this might reduce the average time of license 
proceedings.
    138. NRG's proposal enjoys some support from across the spectrum of 
interests.\176\ HRC states that having a non-decisional NEPA document 
will help to ensure transparent decision-making, and that non-
decisional documents are needed to ensure that license articles and 
terms and conditions are not negotiated between agencies without public 
input. It is not however universally embraced. EPA, citing the 
regulations of the Council on Environmental Quality,\177\ and NMFS 
support a decisional NEPA document with a Commission-preferred 
alternative. ADK suggests that using two documents for what is now 
encompassed in one document might lead to inefficient sequential 
processing.
---------------------------------------------------------------------------

    \176\ HRC, AmRivers, SCE, CRITFC.
    \177\ See 40 CFR 1500, et seq.
---------------------------------------------------------------------------

    139. The Commission does not propose to adopt a practice of issuing 
non-decisional NEPA documents as proposed by NRG. Although we propose 
to change our existing policy with respect to intervenor status for 
cooperating agencies, there is no assurance that cooperating agency 
agreements will become the norm, as discussed above. We are moreover 
less optimistic than NRG concerning the likelihood of conflicts over 
scientific analyses. The ubiquity of study disputes and conflicts over 
interpretation of study results, quite apart from decisions over how 
they might translate into PM&E measures, leads us to believe that the 
resource impact analysis sections of NEPA documents will continue to be 
controversial.
    140. The Commission does however propose to modify the structure of 
its NEPA documents to better separate resource impact analysis from 
decisional analysis. In the future, all of our NEPA documents will 
confine decisional analyses pursuant to FPA sections 10(a) and 10(j) to 
clearly delineated sections at the close of the document. In this way, 
any other Federal or state agency or Tribe with mandatory conditioning 
authority will, whether or not it is a cooperating agency, be able to 
use those parts of the resource impact analysis not in dispute in 
whatever documents it prepares pursuant to its legislative mandates.
d. Draft License Articles
    141. Federal agencies and some commenters recommend that the 
Commission issue draft license articles for comment in connection with 
draft NEPA documents. They believe this will result in better license 
orders and license articles, and that issuance of draft articles would 
help to foster settlement agreements.\178\
---------------------------------------------------------------------------

    \178\ HRC, Menominee, BRB-LST.

---------------------------------------------------------------------------

[[Page 14005]]

    142. The Commission has previously issued draft license articles 
only in the extraordinary circumstance of a lengthy proceeding in which 
the Commission's jurisdiction was at issue and where it was concluded 
that issuance of draft license articles might provide assurance to the 
operator of existing, previously unlicensed facilities that a 
Commission license would not undermine its ability to operate the 
project in a manner consistent with certain state laws affecting 
project operations.\179\
---------------------------------------------------------------------------

    \179\ See Hudson River-Black River Regulating District, Project 
No. 2318, letter dated February 8, 2002.
---------------------------------------------------------------------------

    143. We propose to attach to the draft NEPA document for comment 
the preliminary terms and conditions of any Federal or state agency 
with mandatory conditioning authority, plus additional draft articles 
proposed by the Commission to be required pursuant to FPA section 
10(a)(1).\180\ This will provide the parties with more specific 
information concerning the staff's licensing recommendations. Where no 
draft NEPA document is issued, we would include draft license articles 
and preliminary terms and conditions with the environmental assessment. 
Parties would have an opportunity to file comments before the 
Commission issued an order acting on the license application. We also 
propose to begin this practice for applications developed under the 
traditional process and ALP.\181\
---------------------------------------------------------------------------

    \180\ This would encompass conditions based on 10(j) 
recommendations. We do not propose to attach the standard L-Form 
license articles (See 54 FPC 1799-1928 (1975)) to draft or final 
NEPA documents, as we have consistently rejected requests to modify 
these articles, which are intentionally broad, in the context of 
specific license proceedings.
    \181\ NYSDEC states that project operational effects cannot be 
fully understood before a new project is built, so license articles 
should be included to determine what a new project's actual impacts 
are, and to reserve authority to modify the project as needed to 
meet resource goals. Licenses very often include monitoring 
requirements and every license includes a standard form article 
reserving our authority to modify the license to respond to fish and 
wildlife concerns. Specific post-licensing articles are, of course, 
a matter best determined in the context of project-specific 
proceedings.
---------------------------------------------------------------------------

e. Endangered Species Act Consultation
    144. Currently, neither Interior and Commerce rules nor Commission 
rules specifically address how the ESA section 7 consultation process 
is to be integrated into the Commission's licensing process.\182\ NHA 
and others state that ESA consultation is often deferred until the end 
of the licensing process, causing delay and disruption. The ITF 
prepared a report on this subject \183\ containing recommendations for 
integrating consultation in the context of the traditional process, but 
which also includes an outline of a process beginning at the time the 
NOI is filed.\184\ These commenters state that the ITF recommendations 
have met with little success, and suggest that it is because the ITF 
recommendations are unenforceable. WPPD recommends that the Commission, 
Interior, and Commerce cooperate in developing joint rules to integrate 
ESA Section 7 consultation with the licensing process. Interior and 
NMFS recommend that the integrated process regulations identify the key 
steps and requirements for completing ESA consultation.
---------------------------------------------------------------------------

    \182\ The joint Interior and Commerce regulations implementing 
the ESA are found at 50 CFR part 402.
    \183\ Interagency Task Force Report on Improving Coordination of 
ESA Secton 7 with the FERC Licensing Process. http://www.ferc.gov/hydro/docs/interagency.htm.
    \184\ ITF ESA Report, Figure 1.
---------------------------------------------------------------------------

    145. The proposed integrated licensing process encourages early ESA 
consultation, and is consistent with the ITF Report on section 7 
consultation. First, it encourages an applicant to request designation 
as the Commission's non-Federal representative at the time it files its 
NOI and distributes its Pre-Application Document.\185\ The proposed 
process also provides a vehicle for all parties to make their issues 
and information needs known from the beginning. This, in conjunction 
early development of a process plan for coordinating regulatory 
processes, a Commission-approved study plan, binding dispute resolution 
process, periodic status reports, a high standard for requesting 
additional data and studies following an initial status report on 
studies and information gathering, a recommendation to include a draft 
Biological Assessment (BA) in the draft license application, and 
requirement for applicants that are designated non-Federal 
representatives to include a draft BA in their license application, 
should help to ensure that ESA consultation proceeds on the same track 
as the rest of the process. We acknowledge however that timely 
completion of ESA consultation has been an ongoing issue, particularly 
concerning projects in the Pacific Northwest, and we are open to 
working with the Departments of Interior and Commerce to develop 
additional means of effecting improvements in this area.
---------------------------------------------------------------------------

    \185\ Proposed 18 CFR 5.1.
---------------------------------------------------------------------------

f. Fish and Wildlife Agency Recommendations
    146. The proposed integrated process rules incorporate the 
Commission's existing practices with respect to consideration of fish 
and wildlife agency recommendations made pursuant to the Fish and 
Wildlife Coordination Act and FPA section 10(j), with minor 
modifications to the timing of any meetings that may occur in order to 
ensure that the 10(j) process is fully compatible with the proposed 
application processing milestones.\186\
---------------------------------------------------------------------------

    \186\ The Commission also proposes to make non-substantive 
modifications to the existing 10(j) process rule at 18 CFR 4.34(e), 
so that the language of that section will better track the statutory 
provisions.
---------------------------------------------------------------------------

g. National Historic Preservation Act Consultation
    147. Consultation pursuant to section 106 of the National Historic 
Preservation Act has not been a significant source of delay in 
licensing. The few parties who addressed section 106 recommend that 
such consultation begin early.\187\ We agree. The proposed integrated 
process includes SHPOs among the entities to be consulted and 
encourages applicants to request to initiate section 106 consultation 
when the NOI is filed.\188\
---------------------------------------------------------------------------

    \187\ ACHP, Menominee.
    \188\ Proposed 18 CFR 5.1.
---------------------------------------------------------------------------

5. Public Participation
    148. The traditional process regulations concerning prefiling 
consultation focus on the applicant's interactions with agencies and 
Indian tribes. Potential license applicants are required to conduct 
only one public meeting prior to filing the license application,\189\ 
and the draft license application is required to be served only on 
agencies and tribes.\190\ Thus, unless an applicant voluntarily 
consults with the public, the traditional process often causes 
identification of issues and study requests from the public to be 
delayed until after the license application is filed. Commenters from 
across the spectrum of interests agree that identifying NGO issues and 
study requests as early as possible is important to alleviating this 
source of delay.\191\
---------------------------------------------------------------------------

    \189\ 18 CFR 4.38(b)(3); 16.8(b)(3).
    \190\ 18 CFR 4.38(c)(4); 16.8(c)(4).
    \191\ EEI, PG&E, NRG, SCE, NHA, Michigan DNR, HRC, NYSDEC, Idaho 
Power, NF Rancheria, Caddo, ADK, AmRivers, AMC, SCL, C-WRC, CDWR, 
Interior, PG&E, HETF, PCWA, APT, DM&GLH, Skancke, NYRU, Oregon, 
Wausau, Salish-Kootenai, HLRTC, PREPA, Kleinschmidt, Xcel, 
California, Michigan DNR, WPPD, RAW, GLIFWC, Virginia, NE FLOW, 
Wehnes, RAW, AmRivers, CRWC, WDOE.
---------------------------------------------------------------------------

    149. We agree that improving public participation in pre-filing 
consultation is essential to the success of an integrated licensing 
process, and believe that the traditional process regulations should 
also be revised in this regard. The specific provisions for enhancing

[[Page 14006]]

public participation are discussed below.\192\
---------------------------------------------------------------------------

    \192\ See Section III.F.1.
---------------------------------------------------------------------------

6. Processing Schedules and Deadlines
    150. Many commenters express the view that timeliness would be 
improved if the Commission established schedules and deadlines, 
including for itself, and ensured that the deadlines are firm to the 
extent possible.\193\ Beyond that general principle, there is little 
agreement.
---------------------------------------------------------------------------

    \193\ Ameren/UE, NHA, HLRTC, Ameren/UE, APT, SCE, AmRivers, HRC, 
NMFS, RAW, NRG, California, Wisconsin DNR, Interior, PG&E, NCWRC, 
Southern, Duke, C-WRC, WPPD, Wyoming.
---------------------------------------------------------------------------

    151. Licensees fault resource agencies for most delays and favor 
strict application of deadlines to the actions required of agencies, 
tribes, and the public, particularly the filing of recommendations and 
Federal agency mandatory conditions, on the basis that strict deadlines 
provide an incentive to timely participation.\194\ Resource agency, 
Tribal, and NGO commenters identify tardy or incomplete filings 
(particularly studies) by licensees as the principal reason firm 
schedules and deadlines are needed.\195\
---------------------------------------------------------------------------

    \194\ NHA, HLRTC, Ameren/UE, APT, SCE, Southern, Xcel. SCE 
states that the Commission should decline to accept late-filed study 
requests and establish an ``extraordinary conditions'' test for any 
study requests following the first field season of studies as 
incentives to timely agency action.
    \195\ California, Oregon, Michigan DNR, HRC, NMFS, NYSDEC, 
CRITFC.
---------------------------------------------------------------------------

    152. Commenters from all camps favor the establishment of schedules 
and deadlines, with strict compliance required by others, but also 
agree that ``default'' or ``generic'' time frames need to be flexible 
to accommodate case-specific complicating factors and settlement 
agreements. There is also general agreement that the time frames in the 
IHC and NRG proposals, including the time period from NOI to filing of 
the license application, are too short, except for very simple 
cases.\196\
---------------------------------------------------------------------------

    \196\ EEI, PG&E, HETF, HRC, NHA, EEI, SCE, Snohomish, Xcel, 
WPPD, California, Oregon, Michigan DNR, NYSDEC, CRITFC, WGFD, 
Catawba, Choctaw, GLIFWC, BRB-LST, Menominee, KT, Interior. PG&E 
states that when parties work together to identify issues and study 
plans, three years is sometimes not enough to go from early issue 
identification to a filed license application, and that a five year 
process is realistic only for a simple proceeding.
---------------------------------------------------------------------------

    153. There is broad agreement that improving outcomes is equal in 
importance to reducing licensing process time and expense, particularly 
where 30-50 year license terms are involved, and that strict adherence 
to schedules may compromise the development of study plans and the 
conduct of studies, hamper public or Tribal participation, and be 
inconsistent with state water quality certification processes.\197\ 
Various commenters similarly state that it is inappropriate to make 
assumptions concerning the number of field seasons required to compile 
data on current conditions or to complete other studies, because the 
time needed to obtain representative data may be affected by drought, 
ESA consultation, insufficient years of existing data where anadromous 
fish with multi-year return cycles are involved, and many other 
factors.\198\ Others suggest that the time frames should be adjusted as 
necessary to accommodate instances where multi-project or basin-wide 
environmental analyses are necessary.\199\
---------------------------------------------------------------------------

    \197\ E.g., Oregon, HRC, California, NW Indians, Menominee, NHA, 
Idaho Power.
    \198\ HRC, Wisconsin DNR, AmRivers, AMC, NMFS, NHDES, Menominee, 
GLIFWC, NMFS, Washington, Xcel.
    \199\ GLIFWC, Interior, NCWRC.
---------------------------------------------------------------------------

    154. Commenters' perceptions of the nature of, and procedures for, 
study plan development and the conduct of studies also influence their 
perceptions of timeliness. HRC and RAW, for instance, appear to view 
these matters as a collaborative endeavor in which consensus is 
required. A number of agency, tribal, and public commenters similarly 
advocate that schedules in individual cases should be negotiated by the 
Commission staff with the stakeholders,\200\ or via agreements between 
the applicant and the parties.\201\
---------------------------------------------------------------------------

    \200\ Ameren/UE, AmRivers, HRC, NMFS, RAW, DM&GLH, SCL, 
Washington, ADK, Michigan DNR. Some commenters recommend that the 
rules provide for a ``default'' time frame that would apply to 
simple, non-controversial applications that can be adjusted to 
accommodate water quality certifying agency data requirements or the 
complications posed by individual cases. HRC, Michigan DNR, 
Wisconsin DNR, PG&E, Washington.
    \201\ HRC.
---------------------------------------------------------------------------

    155. In this connection, HRC states that NGOs with minimal staff 
are often trying to keep up with many projects in a region, so 
predictability of schedules and deadlines is an important tool for them 
to effectively allocate resources. It adds that the traditional process 
provides no advance warning of notices calling for comments, 
recommendations, responses to draft NEPA documents, and the like, which 
makes their task difficult. Some Indian tribes similarly state that 
they have very limited resources, and that tribal decisional 
hierarchies and communications channels may require longer to obtain a 
decision than in other organizations.\202\
---------------------------------------------------------------------------

    \202\ Catawba, Choctaw, Menominee.
---------------------------------------------------------------------------

    156. The Commission agrees with the commenters that firm schedules 
and deadlines are important to keep the licensing process moving, and 
also that there will be instances where a schedule or deadline will 
need to be revised. As of July 2002, the Commission's practice has been 
to publish a licensing schedule with each application tendering notice, 
and these schedules are updated periodically as required. The 
integrated process we are proposing also includes time frames for all 
critical process steps, from filing of the NOI to issuance of a license 
application, that will form the basis for development of case-specific 
detailed schedules.\203\
---------------------------------------------------------------------------

    \203\ Some commenters recommend that time be built into 
schedules to accommodate intra-agency appeals of Federal or state 
mandatory terms and conditions. APT, NHA, EEI. Our long-standing 
practice is to include final conditions in licenses and to reserve 
authority to modify the license depending if the licensee 
successfully appeals the conditions. See e.g., Southern California 
Edison Co., 77 FERC ] 61,313 (1996). That policy, which permits the 
licensee to seek extensions of time to comply with such conditions 
if the burden of interim compliance would be unduly onerous, 
recognizes the authority of the conditioning agency while protecting 
the interests of the licensee during the pendency of the appeal.
---------------------------------------------------------------------------

    157. The elements of the proposed integrated process should make it 
easier to establish and maintain a timely schedule. Early issue 
identification and voluntary commencement of information-gathering are 
fostered by the advance notification of license expiration; Commission 
contact with potentially affected tribes; existing information, and 
process options; and the more complete informational requirements of 
the Pre-Application Document. Pre-filing consultation following the 
Applicant's NOI will be improved by full Commission staff and public 
participation; a Commission-approved study plan binding on the 
applicant which provides for interim review of study results; and a 
study dispute resolution process for agencies with mandatory 
conditioning authority. There would moreover be no opportunity after 
the application is filed for parties to request additional information 
or studies. Under these conditions, every interested entity has 
powerful incentives to timely participate.
    158. We encourage all parties to consult in a collegial manner on 
the development of information and study plans (indeed, on all aspects 
of licensing). We are not however disposed to adopt a process, such as 
HRC appears to advocate, that relies almost entirely on consensus as 
the basis for approving a study plan and schedule. That approach would 
be incompatible with the three to three and one-half year time frame 
from the NOI to filing of the application, and would be certain to

[[Page 14007]]

ensure the filing of many applications requiring significant additional 
information. An applicant-proposed study plan and schedule, subject to 
review and comment, and appropriate dispute resolution provisions, is 
much more likely to ensure timeliness without sacrificing the quality 
of the record.
7. Settlement Agreements
    159. Commenters offered very broad support for the inclusion in our 
regulations of specific provisions to accommodate settlement 
agreements, regardless of which licensing process is employed.\204\
---------------------------------------------------------------------------

    \204\ EEI, SCE, Oregon, Kleinschmidt, NHA, Idaho Power, HRC, 
Wisconsin DNR, Interior, PG&E, AmRivers, NCWRC, Xcel, NYSDEC, NMFS, 
CRITFC, ADF&G.
---------------------------------------------------------------------------

a. Flexibility in Processing Schedules
    160. One view shared by nearly all commenters is that the 
Commission should allow more flexibility in schedules to accommodate 
settlement discussions. They state that settlement agreements generally 
best represent the public interest because they are consensus-based, 
may avoid Federal/state conflicts, can reduce delays and litigation, 
and result in limited resources being devoted to providing 
environmental benefits rather than transaction costs. They indicate 
that the Commission's recent practice of denying requests for temporary 
suspension of the licensing process pending settlement negotiations is 
hindering settlement agreements.\205\ NHA and Oregon recommend that the 
licensing process provide for a 12-18 month ``time-out'' for settlement 
negotiations, based on the joint request of the parties. California 
urges that flexibility in this regard is necessary in order to 
recognize the responsibilities of Federal and state agencies with 
mandatory conditioning authority.
---------------------------------------------------------------------------

    \205\ EEI, CRITFC, SCE, Oregon, Kleinschmidt, NHA, Idaho Power, 
HRC, Wisconsin DNR, Interior, PG&E, AmRivers, NCWRC, Xcel, NMFS, 
NYRU, NYSDEC, SCL, Idaho Power, CDWR, VANR, Troutman, Menominee, 
CTUIR, Xcel, Michigan DNR, NCWRC, WPPD, DM&GLH, Domtar, FPL, AMC, 
AW, California.
---------------------------------------------------------------------------

    161. The Commission strongly favors settlement agreements, which 
provide the opportunity to eliminate the need for more lengthy 
proceedings if the parties reach an agreement on the issues that is 
compatible with the public interest and within our authority to adopt. 
The integrated licensing process should provide substantial 
encouragement to settlement agreements by helping to ensure early 
identification of issues and production of information useful to 
parties considering whether to engage in settlement negotiations. We do 
not however see a need for specific provisions in our regulations to 
provide a ``time out'' or other flexibility in scheduling to 
accommodate settlement negotiations. General assertions to the contrary 
notwithstanding, we see no evidence that suspending Commission actions 
in the licensing process is more likely to result in a settlement 
agreement. Rather, our experience indicates that the prospect of near-
term Commission action in the form of a draft or final NEPA document, 
or a license order, is more likely to spur the parties to resolve their 
differences. We are also concerned that suspending the licensing 
process to accommodate settlement negotiations may cause parties to 
view settlement negotiations as a means to obtain an open-ended 
suspension of the licensing process. We will, however, continue to 
consider requests for brief suspension of the Commission's processes on 
a case-by-case basis.
b. Timing and Conduct of Settlement Negotiations
    162. HRC recommends that the Commission require the parties to a 
proceeding to meet at certain critical times in the process to explore 
interest in and opportunities for settlement. Others oppose this 
recommendation on the grounds that settlement negotiations require 
substantial commitments of time and can be costly, and that any such 
requirement is unnecessary because the parties will know whether and 
when the effort makes sense in the context of each proceeding.\206\ RAW 
states that settlement discussions should begin before the licensing 
proceeding begins. NHA suggests that appropriate junctures for such 
discussions are during formation of the study plan and preparation of a 
draft license application. NMFS recommends that settlement discussions 
be barred until all information requests have been satisfied.
---------------------------------------------------------------------------

    \206\ NHA, PG&E, CDWR, NMFS.
---------------------------------------------------------------------------

    163. We are not inclined to require parties to meet for this 
purpose, or to predetermine any particular point in the process where 
settlement should be considered. Settlement agreements have been 
conducted, and agreements filed, at every step in the licensing 
process, from the pre-filing consultation stage to after issuance of a 
license order. The parties themselves are in the best position to 
determine whether and when it makes sense to consider settlement 
negotiations. It may however be beneficial to encourage the applicant 
at the time the draft license application is filed to include with that 
filing a non-binding statement of whether or not it intends to make an 
offer to engage in settlement negotiations.\207\ Such a provision might 
encourage all parties to consider whether the proceeding is in a 
favorable posture with regard to potential settlement negotiations. The 
Commission requests comments on this matter.
---------------------------------------------------------------------------

    \207\ Alternatively, an applicant might make such a statement 
when all major information-gathering and studies are completed.
---------------------------------------------------------------------------

    164. NMFS recommends that we require parties to establish ground 
rules and a communications protocol before settlement discussions 
begin. C-WRC similarly suggests that the rules should provide for 
stakeholder charters to accompany settlement discussions. The 
Commission agrees in general that settlement discussions should proceed 
based on mutual understandings concerning the scope of, and procedures 
for, negotiation. These commenters however offer no reason, and we see 
none, to limit the flexibility of parties to an individual proceeding 
with regard to the drafting of agreements, written or oral, in this 
connection.
    165. NHA suggests that the ADR procedures established in Order No. 
578 \208\ may be unduly formal and that the Commission's Dispute 
Resolution Service (DRS) staff could serve as facilitators rather than 
mediators.\209\ Some commenters state that the Commission could assist 
settlement negotiations by providing training to stakeholders in 
interest-based negotiation processes \210\ or by providing neutral 
facilitators or mediators to parties involved in negotiations.\211\ The 
Commission's dispute resolution program encompasses all of these 
recommendations where circumstances are appropriate. The DRS is 
designed to encourage the use of ADR, train the Commission staff and 
other parties in its use, and, where appropriate, provide staff to 
serve as neutral facilitators of settlement negotiations. Under this 
program the Commission's administrative law judges have received

[[Page 14008]]

training in service as third-party neutrals, and judges have served in 
that capacity in a number of hydroelectric proceedings. In addition, 
the Commission has provided various training programs in facilitation, 
mediation, and dispute resolution to its staff. In just the past few 
years, over 100 members of the Commission staff have completed training 
courses in various forms of ADR, and many staff members have put their 
skills to work in assisting collaborative licensing processes and 
settlement negotiations as mediators or facilitators.
---------------------------------------------------------------------------

    \208\ Order No. 578 (1995), 60 FR 19494 (April 19, 1995), FERC 
Stats. & Regs., Regulations Preambles January 1991-June 1996 ] 
31,018 (April 12, 1995).
    \209\ In general, a facilitator is a person who works with the 
group members by providing procedural directions concerning how the 
group can move efficiently through the problem solving steps of the 
meeting and arrive at a jointly agreed-upon goal. More concisely 
stated, a facilitator's efforts are focused on process. A mediator 
also brings process skills to the group, but focuses in addition on 
helping the group member reach a mutually acceptable substantive 
resolution of the issues. This may involve working with the whole 
group or subsets of the group to explore interests and develop 
options that address the interests with the aim of reaching 
settlement.
    \210\ PacifiCorp.
    \211\ SCE, NHA, PG&E, NCWRC, Kleinschmidt, Michigan DNR.
---------------------------------------------------------------------------

    166. Finally, NMFS states that the Commission should establish 
schedules for acting on settlement agreements. As noted above, we are 
already providing schedules for license application proceedings.
c. Guidance on the Content of Settlement Agreements
    167. Several commenters stated that the Commission's rules should 
provide guidance concerning the Commission's policies on what kinds of 
settlement provisions are or are not acceptable,\212\ or that the 
Commission should have a policy of deferring to settlement agreements 
in the absence of illegality.\213\ Specific subjects on which 
commenters seek guidance include support for adaptive management 
programs for licenses,\214\ mitigation measures in lieu of additional 
studies,\215\ mitigation measures that occur outside of existing 
project boundaries or are beyond the Commission's authority to 
require,\216\ and confidentiality agreements.\217\
---------------------------------------------------------------------------

    \212\ APT, HRC, Interior, AMC, PG&E, Wisconsin DNR.
    \213\ Washington, Interior, NYSDEC, NMFS. DM&GLH states that 
when a settlement agreement is accompanied by an applicant-prepared 
EA (APEA), the Commission should adopt the APEA, rather than prepare 
a separate NEPA document. While an APEA prepared in connection with 
a settlement agreement is certain to be helpful to the Commission's 
analysis, the Commission cannot delegate its NEPA responsibilities 
to applicants or settling parties.
    \214\ RAW, NYSDEC, Oregon, Michigan DNR.
    \215\ Xcel, Southern, NHA.
    \216\ Oregon, Michigan DNR.
    \217\ SCE, NHA.
---------------------------------------------------------------------------

    168. The Commission strongly supports the efforts of parties 
appearing before it to settle their differences and propose to the 
Commission agreements to resolve pending proceedings in the public 
interest.\218\ We make every effort to fully accept uncontested 
settlement agreements that are consistent with the public interest. 
Where settlements are contested, the Commission has an additional duty 
to protect the interests of non-settling parties and must ensure that 
agreements are fair and reasonable. Our conclusions concerning the 
compatibility of a settlement agreement with the public interest are 
informed by the comprehensive development standard of FPA section 
10(a)(1) and the policies and practices we have adopted pursuant to 
that standard. This is not the same as the absence of illegality, and 
our responsibility to review the merits of each settlement agreement in 
this context is statutory and cannot be delegated to the settling 
parties.
---------------------------------------------------------------------------

    \218\ 18 CFR 385.602 (g)(3). See also City of Seattle, WA, 71 
FERC ] 61,159 (1995), order on reh'g, 75 FERC ] 61,319 (1996); 
Consumers Power Company, 68 FERC ] 61,1077 (1994); P.U.D. No. 2 of 
Grant County, WA, 45 FERC ] 61,401 (1988); Long Lake Energy Corp., 
34 FERC ] 61,225 (1986).
---------------------------------------------------------------------------

    169. Our practice is to incorporate into the license those 
provisions of an approved settlement agreement that are within the 
Commission's authority to enforce or, albeit not enforceable by the 
Commission, are required to be included because they are contained in a 
water quality certification issued pursuant to Clean Water Act Section 
401 or mandatory terms and conditions issued pursuant to FPA Sections 
4(e) or 18.\219\
---------------------------------------------------------------------------

    \219\ In Erie Boulevard Hydropower LP, 88 FERC ] 61,176 (1999), 
we identified the types of settlement provisions that are beyond our 
authority to enforce because they apply to non-jurisdictional 
entities. These typically include provisions which govern relations 
among parties to the settlement agreement, such as dispute 
resolution, and the procedural practices of such groups. See also 
Avista Corporation, 90 FERC ] 61,167 (2000) and 93 FERC ] 61,116 at 
p. 61,329. Until recently, the Commission declined, as a matter of 
policy, to enforce such provisions against licensees. That policy 
was reversed in Erie Boulevard Hydropower, LP and Hudson River-Black 
River Regulating District, 100 FERC ] 61,321, at p. 62,502 (2002).
---------------------------------------------------------------------------

    170. We do not propose to include in the regulations statements 
endorsing in general terms any potential components of a settlement 
agreement, such as adaptive management plans, mitigation measures in 
lieu of studies, or mitigation measures that may occur outside of an 
existing project boundary. The Commission has approved all of these 
things in the context of specific settlement agreements, but only after 
considering the entire record of the proceeding and conducting the 
analyses required by applicable portions of the FPA, NEPA, ESA, NHPA, 
and any other applicable statutes.

E. Description of Integrated Licensing Process

1. Applicability
a. New and Original Licenses
    171. The September 12, 2002 Notice solicited comments on whether 
there are issues unique to the processing of original license 
applications or new license applications that need to be addressed in 
an integrated licensing process. Most commenters suggested that studies 
associated with original licensing may require more time than studies 
for new licenses, owing to a lack of existing data and uncertainty with 
regard to the specific project proposal during pre-filing consultation. 
They recommend that an integrated licensing process, if it applies to 
original licenses, should be flexible in order to accommodate these 
considerations.\220\
---------------------------------------------------------------------------

    \220\ HRC, Michigan DNR, NMFS. HRC also notes that a license 
application for a new project might also involve regulatory 
requirements not applicable to a new license application, such as a 
dredge and fill permit from the U.S. Army Corps of Engineers 
pursuant to Section 404 of the Clean Water Act, 33 U.S.C. 344. Only 
ADK specifically recommends that the integrated licensing process 
apply to original licenses.
---------------------------------------------------------------------------

    172. The proposed integrated process would apply to original 
licenses as well as new licenses.\221\ As detailed below, a potential 
applicant for an original license would be required to file an NOI. 
Although there is no statutory limit on the time between filing of the 
NOI and filing of an original license application, the time periods in 
the proposed rule between NOI and license application are roughly 
coincident with the three year period for which preliminary permits are 
issued. This should bring some additional pressure to bear on permit 
holders to timely develop their project proposals, which responds to 
the concerns of states such as Oregon that believe too much of their 
time is spent responding to ill-formed and highly speculative proposals 
under preliminary permits.\222\ A few commenters suggest that it might 
be desirable to merge the integrated process and preliminary permit 
regulations,\223\ but we see no reason the proposed rules cannot co-
exist with the existing preliminary permit regulations. We would 
however modify our practice by including in each order issuing a 
preliminary permit language directing the permit holder to the 
requirements of new part 5. The Commission requests comments on whether 
the proposed

[[Page 14009]]

integrated process should apply to original license applications.
---------------------------------------------------------------------------

    \221\ The proposed rule would not apply to applications for non-
power licenses, because they are an interim measure until a separate 
state, municipal, interstate, or Federal agency assumes regulatory 
supervision over the lands and facilities involved when a licensee 
proposes to cease power generation. They are, in essence, a form of 
license surrender.
    \222\ Where a potential applicant is genuinely interested in 
submitting a license application, but circumstances are such that 
additional time is needed to develop the specific licensing 
proposal, it may be appropriate to grant a waiver or extension of 
the pertinent 18 CFR part 5 regulations.
    \223\ NHA, Interior.
---------------------------------------------------------------------------

b. Competition for New Licenses
    173. One matter that has received very little attention is whether 
a non-licensee competitor for a new license for an existing project 
should be subject to the same regulatory requirements under the 
integrated process as existing licensees. The proposed integrated 
process regulations would also apply to such competitors, except that 
they would not be required to file a notification of intent. We have 
twice previously considered and rejected recommendations to require 
potential competitors to file notices of intent,\224\ and we see no 
reason to revisit the matter again.
---------------------------------------------------------------------------

    \224\ See Order No. 513, 54 FR 23,756 (June 2, 1989), 55 FR 
10,768 (March 23, 1990), p. 31,415, FERC Stats. & Regs. Regulations 
Preambles 1986-1990, ] 30,854 (May 17, 1989).
---------------------------------------------------------------------------

2. Process Steps
    174. HRC states that the existing licensing process regulations are 
confusing because they require the reader to cross-reference sections 
in parts 4 and 16, and proposes that any integrated licensing process 
regulations be sequential in form; that is, consist of a series of 
steps from beginning to end. The proposed regulation text does just 
that and should make the process easily understood,\225\ but 
necessarily includes some cross-referencing to sections of parts 4 and 
16.\226\
---------------------------------------------------------------------------

    \225\ Appendix C is a flow chart depicting the proposed 
integrated process. The flow chart appears in color on the 
Commission's website.
    \226\ Some commenters also suggested a wholesale restructuring 
of the regulations in which parts 4 and 16 would be combined. Part 
16 is distinct from part 4 because the statutory provisions 
applicable to new licenses established in 1986 by ECPA are in 
numerous respects different from the requirements applicable to 
original licenses: The part 4 framework governs the many overlapping 
aspects (e.g., application procedures, application contents, 
amendments) of the numerous types of authorizations (original, new, 
subsequent, minor, major, non-power, and transmission line licenses; 
small conduit and under 5 megawatt exemptions; amendments to same) 
that the Commission's hydropower program entails.
---------------------------------------------------------------------------

a. NOI, Process Schedule, and Study Plan Development
    175. The NOI would continue to be due between five and five and 
one-half years prior to expiration of the license. It would be 
accompanied by the Pre-Application Document,\227\ which the potential 
applicant would serve on resource agencies, tribes, and the public. The 
Applicant could at that time also request to be designated as the 
Commission's non-Federal representative for purposes of consultation 
under the ESA and Magnuson-Stevens Act,\228\ or to initiate 
consultation under NHPA Section 106.
---------------------------------------------------------------------------

    \227\ See Section III.D.1.b, supra.
    \228\ Section 305(b) of the Magnuson-Stevens Fishery 
Conservation and Management Act, 16 U.S.C. 1855(b) requires Federal 
agencies to consult with NMFS on any action that may result in 
adverse effects to essential fish habitat.
---------------------------------------------------------------------------

    176. The integrated licensing process is proposed to be the default 
process. A potential applicant for an original or new license 
requesting to use the traditional process or ALP would have to file a 
request to do so when it files its NOI and Pre-Application Document. It 
would, at the same time, have to issue public notice of any request to 
use the traditional process or ALP in order to ensure that the general 
public has an opportunity to respond.\229\
---------------------------------------------------------------------------

    \229\ See proposed 18 CFR 5.1 (Applicability, definitions, 
requirement to consult, process selection). NGOs likely to be 
interested in the proceeding should not be caught unaware in any 
event, because existing license expiration dates will be posted on 
the Commission's website.
---------------------------------------------------------------------------

    177. Filing of the NOI and Pre-Application Document would mark the 
commencement of the integrated process proceeding. Commission staff 
would be assigned to the proceeding at that time.\230\ The Commission 
would issue public notice of the filing and of a public meeting and 
site visit. The purposes of the public meeting would be to review 
existing environmental conditions and resource management goals, review 
existing information, initiate NEPA scoping, consider the advisability 
of cooperating agency relationships, and develop a schedule that, to 
the extent possible, coordinates all applicable regulatory processes 
and results in an approved study plan (including any dispute 
resolution) no later than a year after the NOI is filed. The 
participants' comments and information requests would be due following 
the public meeting and site visit. That same notice would also include 
a decision on any request to use the traditional process or the ALP.
---------------------------------------------------------------------------

    \230\ Commission staff would be responsible for filing comments 
and recommendations on information-gathering and study proposals, 
and in other respects have the same functions as most other 
stakeholders throughout the licensing proceeding.
---------------------------------------------------------------------------

    178. For applications developed using the integrated process,\231\ 
the potential applicant would file, following comments in response to 
the notice, a revised Pre-Application Document and a proposed 
information-gathering and study plan following comments in response to 
the notice.\232\ That would be followed by the Commission's NEPA 
Scoping Document 1 (SD1), comments on SD1 and the applicant's proposed 
study plan, and a meeting to discuss the proposed study plan and seek 
informal resolution of study disagreements.\233\
---------------------------------------------------------------------------

    \231\ The remainder of the discussion in this section, unless 
specifically stated to be otherwise, pertains only to the proposed 
integrated process.
    \232\ Proposed 18 CFR 5.6 (Comments and information requests), 
18 CFR 5.7 (Revised pre-application document), and 18 CFR 5.8 
(Applicant's proposed study plan).
    \233\ Proposed 18 CFR 5.9 (Scoping document and study plan 
meeting); 18 CFR 5.10 (Comments and information or study requests); 
and 18 CFR 5.11 (Study plan meeting).
---------------------------------------------------------------------------

    179. Following the study plan meeting, the applicant would file for 
Commission approval a revised study plan, including a description of 
informal efforts made to resolve study disputes and explaining why the 
applicant rejected any of the stakeholder information and study 
requests. The Commission would issue a preliminary determination on the 
revised study plan, describing any modifications to the plan as 
proposed.\234\
---------------------------------------------------------------------------

    \234\ Proposed 18 CFR 5.12 (Revised study plan and preliminary 
determination).
---------------------------------------------------------------------------

    180. The study plan would be deemed approved as provided for in the 
preliminary determination and the Director would issue an order 
directing the Applicant to implement the plan, except with respect to 
any parts of the proposed study plan that become the subject of the 
formal dispute resolution procedure.\235\
---------------------------------------------------------------------------

    \235\ Id.
---------------------------------------------------------------------------

    181. The dispute resolution procedure is designed to be concluded 
within 90 days. Federal or state agencies or Indian tribes with 
mandatory conditioning authority would be required to file any notice 
of dispute within 20 days. The Commission would within another 20 days 
convene one or more three-member dispute resolution panels to consider 
all disputes with respect to specified resource areas (e.g., fisheries, 
recreation). Two of the panelists would represent the Commission and 
the agency that raised the dispute, respectively, and neither would 
have had any prior involvement with the proceeding. The third panelist 
would be selected by the other two panelists from among a list of 
technical experts, and would be required to certify that he or she has 
no conflicts of interest. The Commission requests comments on whether 
it may be appropriate in some circumstances for one panel to make 
recommendations with respect to disputes involving different, but 
related resources, such as fisheries and aquatic resources. The 
applicant would have 25 days from the notice of study dispute to file 
and serve on the panelists any information or argument with respect to 
the dispute.

[[Page 14010]]

    182. No later than 50 days following the notice of dispute, the 
panel would make a written recommendation to the Director of Energy 
Projects. The panel would recommend that the Director require the 
applicant to conduct the requested information-gathering or study if 
the panel finds that the request satisfies the criteria set forth in 
the regulations. The Director would issue a decision within 70 days of 
the notice of dispute, either accepting the panel's recommendation or 
reaching a different conclusion that explains why the information and 
arguments before the panel do not support the panel's recommendation or 
explains why the recommendation is inappropriate as a result of 
pertinent laws, regulations, or Commission policies. The Director's 
decision would constitute an amendment to the approved study plan, and 
would be accompanied by an order directing the applicant to carry out 
the study plan as amended.\236\
---------------------------------------------------------------------------

    \236\ Proposed 18 CFR 5.13 (Study dispute resolution process).
---------------------------------------------------------------------------

b. Conduct of Studies
    183. The proposed rule requires the applicant during the period of 
information-gathering and study to file status reports including study 
results and analyses to date. The first such report would be filed 
after the first season of studies or other appropriate time following 
the date of the preliminary determination. The status report would also 
include any proposals to modify the study plan and schedule in light of 
the results to date. The initial status report would be followed by a 
meeting with parties and Commission staff. Following the meeting, the 
Applicant would file a meeting summary and, if necessary, a request to 
modify the study plan. The Applicant's meeting summary and request to 
modify the plan, if any, would be deemed approved unless any party 
filed a notice of disagreement. The procedure for resolving these 
disagreements would not include a panel, but would rest on written 
submissions to the Director. Following responses to any notice of 
dispute, the Director would issue an order resolving the dispute.\237\
---------------------------------------------------------------------------

    \237\ Proposed 18 CFR 5.14 (Conduct of studies).
---------------------------------------------------------------------------

    184. An updated status report would follow the first status report 
after the second season of studies, if any, or other appropriate time 
in light of the circumstances of the cases. It would be subject to the 
same review, comment, and dispute resolution procedures, except that 
any party requesting additional information or studies at this late 
point in the information gathering process would be required to show 
exceptional circumstances warranting acceptance of the request.\238\ 
The Commission requests comments on whether participants should be 
permitted to make new information-gathering or study requests (as 
opposed to making requests for modification of ongoing studies, or to 
raise disputes concerning the implementation of, existing studies), 
following the updated status report.
---------------------------------------------------------------------------

    \238\ Id.
---------------------------------------------------------------------------

    185. The Commission also requests comments on whether there should 
be a requirement for parties to file written comments on the potential 
applicant's status reports prior to the required meeting, or whether 
the familiarity of the parties with the facts of the proceeding may 
make written comments at this juncture superfluous.
c. Draft Application to License Order
    186. Following the updated status report, the Applicant would file 
the draft license application for comment by the parties and Commission 
staff. The draft application would be required to contain, insofar as 
possible, the same contents as a final license application.\239\ Also, 
the form of Exhibit E, the environmental report, would be significantly 
different from the traditional Exhibit E because it would be prepared 
following the guidelines for preparation of an applicant-prepared 
environmental analysis.\240\
---------------------------------------------------------------------------

    \239\ Proposed 18 CFR 5.15 (Draft license application). In 
contrast, the existing regulations require the draft license 
application to include only responses to agency and tribal comments 
and study requests, the results of information-gathering and 
studies, and proposed environmental protection measures. See 18 CFR 
4.38(c)(4).
    \240\ Proposed 18 CFR 5.17 (Application content). By contrast, 
see e.g., the existing Exhibit E requirements of part 4, subpart F 
(Major Project--Existing Dam), 18 CFR 4.51(f).
---------------------------------------------------------------------------

    187. The Commission requests comments on whether the draft license 
application contents should be required to track the contents of the 
final application, or whether it would be preferable to require only 
the proposed revised Exhibit E, or any other materials, to be included. 
One drafting group also considered whether a draft license application 
should be filed at all, but reached no conclusions. The Commission also 
requests comments on whether, in lieu of filing a draft license 
application for comment, it would be a better use of the participants' 
time to continue informally working on the resolution of any 
outstanding issues, or whether other considerations weigh for or 
against a draft license application.
    188. The participants and Commission staff would file comments on 
the draft license application, including recommendations concerning 
whether an environmental assessment is acceptable or an environmental 
impact statement is needed. Any commenter requesting additional 
information or studies in its comments would be required to show 
exceptional circumstances, and to address in its request certain 
criteria, as applicable to the facts of that case.\241\
---------------------------------------------------------------------------

    \241\ Proposed 18 CFR 5.15.
---------------------------------------------------------------------------

    189. We expect that in most cases the updated status report will 
indicate that all of the information required by the approved study 
plan, or all of the information required to support the filing of FPA 
Section 10(j) recommendations or mandatory terms and conditions or 
fishways, has been collected and distributed to the relevant agencies. 
In such circumstances, it may be appropriate for the parties to file 
preliminary 10(j) recommendations, terms and conditions, or fishway 
prescriptions, and for the Commission staff to make a preliminary 
response, including initial 10(j) consistency findings, to those 
filings. Were this to happen, it follows that the parties could 
appropriately be asked to file modified (i.e., final) recommendations 
or terms and conditions in response to the Commission's notice of ready 
for environmental analysis, rather than following issuance of a draft 
environmental assessment or environmental impact statement, or an 
environmental assessment not preceded by a draft, as provided for in 
the proposed rule. If so, a step could be eliminated at the end of the 
process, and Commission action on the application could be rendered 
more timely.
    190. The Commission requests comments on whether the Commission 
should in each case make a determination following the updated studies 
status report of whether the record is sufficiently complete to require 
filing of preliminary recommendations and terms and conditions with 
comments on the draft license application, filing of final terms and 
conditions in response to the REA notice, and elimination of an 
opportunity to file further revised recommendations or terms and 
conditions following the draft NEPA document, or environmental 
assessment, as applicable.
    191. The Commission further solicits comment on how to ensure that 
resource agencies have an adequate opportunity to consider public 
comment on their proposed terms and conditions if such an approach were 
adopted, and how such an approach could be

[[Page 14011]]

accommodated where the resource agencies are working cooperatively with 
the Commission on preparation of the NEPA document.
    192. The application would be required to include the applicant's 
response to comments on the draft application and, with respect to any 
requests for additional information gathering or studies in the 
comments to which it agrees, either provide the requested information 
or include a plan and schedule for doing so. If the applicant does not 
agree to any additional information-gathering or study requests made in 
comments on the draft license application, it must explain the basis 
for declining to do so.\242\ The application would also be required to 
include a copy of the water quality certification, a copy of the 
request for certification, or evidence of waiver of water quality 
certification.\243\
---------------------------------------------------------------------------

    \242\ Proposed 18 CFR 5.16(e).
    \243\ Proposed 18 CFR 5.17(f).
---------------------------------------------------------------------------

    193. Within 14 days of the application filing, the Commission would 
issue public notice of the tendering of the application, including a 
preliminary schedule of major processing milestones.\244\ Within 30 
days, the Commission would make a determination with respect to any 
requests for additional information or studies made in comments on the 
draft license application.\245\
---------------------------------------------------------------------------

    \244\ Proposed 18 CFR 5.18 (Tendering notice and schedule).
    \245\ Proposed 18 CFR 5.18(b).
---------------------------------------------------------------------------

    194. When all filing requirements are met and the approved study 
plan is completed, the Commission would issue a notice of acceptance 
and ready for environmental analysis, requesting comments, protests, 
interventions; recommendations, preliminary mandatory terms and 
conditions, and fishway prescriptions, and an updated schedule for the 
remainder of the proceeding.\246\ Responses would be due within 60 
days.\247\
---------------------------------------------------------------------------

    \246\ Proposed 18 CFR 5.21 (Notice of acceptance and ready for 
environmental analysis).
    \247\ Proposed 18 CFR 5.22 (Response to notice).
---------------------------------------------------------------------------

    195. Each draft EA or EIS, and EA not preceded by a draft, will 
include for comment draft license articles based on recommendations 
made pursuant to FPA Sections 10(a) (including 10(j) 
recommendations),\248\ and preliminary mandatory terms and conditions 
and fishway prescriptions. If the application does not require a draft 
EA, the EA would be issued within 120 days of date for responses to the 
application acceptance and REA notice, with comments thereon due in 30-
45 days, and modified terms and conditions due 60 days thereafter. The 
Commission would act on the application within 60 days following the 
date for filing modified terms and conditions.\249\
---------------------------------------------------------------------------

    \248\ These would not include standard form license articles. 
See Section III.D.4.d., supra.
    \249\ Proposed 18 CFR 5.23 (Applications not requiring a draft 
NEPA document).
---------------------------------------------------------------------------

    196. For applications requiring a draft NEPA document, the draft 
NEPA document would be issued within 180 days from the date responses 
are due to the acceptance and REA notice, with comments due in from 30 
to 60 days. Modified recommendations, terms and conditions, and fishway 
prescriptions would be due within 60 days of the date for filing of 
comments on the draft NEPA document. The Commission would issue a final 
NEPA document within 90 days following the date for filing modified 
terms and conditions or fishway prescriptions. The Commission would act 
on the application within 90 days following issuance of the final NEPA 
document.\250\
---------------------------------------------------------------------------

    \250\ Proposed 18 CFR 5.24 (Applications requiring a draft NEPA 
document).
---------------------------------------------------------------------------

    197. An amendment to an application filed under part 5 would be 
governed by the same provisions that govern amendments to applications 
under the existing regulations.\251\
---------------------------------------------------------------------------

    \251\ Proposed 18 CFR 5.26 (Amendment of application).
---------------------------------------------------------------------------

    198. The Commission requests comments on which process steps in the 
proposed integrated process may require adjustment. The Commission also 
requests comments on which time frames, if any, should be specified in 
the regulations for purposes of guiding the development of a process 
plan and schedule (including studies), and which may not be appropriate 
for specification in the regulations, but rather should be developed 
entirely in the context of case-specific facts.

F. Improvements to Traditional Process and ALP

    199. Various commenters propose that the traditional licensing 
process be modified to include various elements of an integrated 
licensing process or other features.\252\ These include: Early public 
and agency input on issues and study design;\253\ establishment of 
specific criteria for study requests;\254\ the outcome of the existing 
pre-filing study dispute resolution to be binding on all 
stakeholders;\255\ waiver of pre-filing consultation requirements; 
greater use of applicant-prepared NEPA documents; including process 
steps in the ALP; and moving NEPA scoping into the pre-filing 
consultation period.\256\ In addition to draft license articles 
discussed above, we are adopting two of these recommendations; 
increased public participation and mandatory, binding dispute 
resolution.
---------------------------------------------------------------------------

    \252\ AMC, SCE, NHA, SCL, EEI, PREPA, California, Wisconsin DNR, 
CTUIR.
    \253\ HRC, AMC, California, SCE, NHA, Wisconsin DNR, SCDWQ, SCL.
    \254\ Study criteria are identified by SCE and NHA.
    \255\ SCE.
    \256\ SCL, Southern. Southern would also require the applicant 
to file a study plan for Commission approval following the issuance 
of a staff scoping document.
---------------------------------------------------------------------------

1. Increased Public Participation
    200. NGOs identify limited opportunity for public participation as 
a major problem in the traditional process,\257\ and many licensees and 
other commenters agree.\258\ American Rivers and Alabama Rivers also 
state that consultation meetings are often held at times and places 
that are inconvenient for unpaid volunteers. They recommend that 
applicants hold more consultation meetings on evenings and weekends 
when NGO volunteers are more likely to be available.
---------------------------------------------------------------------------

    \257\ HRC, ADK, AmRivers, C-WRC, KCCNY, CRWC, RAW, NE FLOW.
    \258\ NHA, SCE, PG&E, Southern. All of the industry-sponsored 
process proposals contemplate greater pre-filing participation by 
the public, although the degree of participation is not always 
clear. A few industry commenters suggest that the general public 
already plays too great a role in licensing and makes unreasonable 
study requests. They recommend that public participation be limited 
to local residents who own lands adjacent to project reservoirs or 
other persons similarly situated. Wausau, DM&GLH, Domtar.
---------------------------------------------------------------------------

    201. We agree that the traditional process needs to provide greater 
opportunity for public participation. Since the current regulations 
were established in 1989, the role of the public, in particular NGOs, 
has increased dramatically and their participation is often crucial to 
the negotiation of settlement agreements. Environmental groups, 
organizations representing recreation users, as well as local 
residents, consumer advocacy groups, and organizations representing 
ratepayers all have important interests to represent. We see no reason 
potential applicants should not make reasonable efforts to bring these 
entities into pre-filing consultation as early as possible, and for 
these entities to be involved in the development of study plans. We are 
therefore proposing to modify the existing pre-filing consultation 
regulations to that end.\259\
---------------------------------------------------------------------------

    \259\ Briefly stated, in most places that 18 CFR 4.38 and 16.8 
refer to consultation with resource agencies and Indian tribes, the 
reference has been changed to resource agencies, Indian tribes and 
members of the public.
---------------------------------------------------------------------------

    202. There is no need to modify the ALP with regard to public 
participation, since it already requires the applicant to include the 
public in pre-filing

[[Page 14012]]

consultation and to do so according to mutually agreeable rules.\260\
---------------------------------------------------------------------------

    \260\ See 18 CFR 4.38(i).
---------------------------------------------------------------------------

2. Mandatory, Binding Study Dispute Resolution
    203. As discussed above, lack of effective study dispute resolution 
has been identified as one of the principal reasons for license 
applications that are incomplete or require significant additional 
information. The most commonly identified reasons for failing to use 
the existing study dispute resolution process are that it is not 
required to be used and that the result is advisory only.
    204. We therefore propose to require consulted entities in the 
traditional process who oppose a potential applicant's information-
gathering and study proposals to file a request for dispute resolution 
during pre-filing consultation. Consulted entities that do not request 
dispute resolution would thereafter be precluded from contesting the 
potential applicant's study plan or results with respect to the issue 
in question. We also propose to make the outcome of dispute resolution 
binding on all participants. In other words, the Director's order 
resolving the dispute will, if information or a study is determined to 
be necessary, direct the potential applicant to gather the information 
or conduct the study. Consulted entities would not be permitted to 
revisit the dispute after the application is filed.
    205. Dispute resolution requests would occur during first stage 
consultation following the applicant's response to study requests by 
agencies, Indian tribes, or the public. Any additional study requests 
during the second stage of consultation would be subject to the same 
dispute resolution requirements.\261\
---------------------------------------------------------------------------

    \261\ See proposed changes to 18 CFR 4.38 (b)(5), (c)(1), and 
(c)(2); and 16.38 (b)(5), (c)(1), and (c)(2).
---------------------------------------------------------------------------

    206. Consistent with our proposals to provide for full public 
participation in pre-filing consultation, require all potential license 
applicants to prepare the Pre-Application Document, and make study 
dispute resolution mandatory and binding, we also propose to eliminate 
from the traditional process for license applications the provision for 
participants to file requests for additional scientific studies not 
later than 60 days after the application is filed, and for the license 
applicant to respond. Resource agencies, tribes, and the public will 
have had two opportunities to request studies during pre-filing 
consultation and study disputes should be resolved, so there should be 
no need for an additional post-application opportunity to do so.\262\
---------------------------------------------------------------------------

    \262\ See proposed changes to 18 CFR 4.32(b)(7).
---------------------------------------------------------------------------

    207. The ALP process includes a provision for dispute resolution 
which is similar to the existing procedures for the traditional process 
and which, like those procedures, is advisory.\263\ We propose to leave 
the existing ALP dispute resolution procedures in place, because 
mandatory, binding dispute resolution appears to be incompatible with 
the collaborative nature of the ALP. We request however comments on 
whether there may be circumstances under which binding study dispute 
resolution could be conducted in a manner that safeguards the 
collaborative process.
---------------------------------------------------------------------------

    \263\ 18 CFR 4.34(i)(6)(vii). Any party may request dispute 
resolution, but only after making reasonable efforts to resolve the 
matter informally.
---------------------------------------------------------------------------

3. Recommendations Not Adopted
a. Waiver of Pre-Filing Consultation
    208. Some industry commenters favor special provisions for non-
controversial projects, which may include many small projects.\264\ 
They state that small projects probably have few impacts that warrant 
serious study,\265\ and that the cost of licensing is already 
disproportionately high for small projects.\266\ PREPA recommends that 
projects be categorized by size and that small projects be the subject 
of a separate fast track process with short time frames and one year of 
studies, if any are needed.
---------------------------------------------------------------------------

    \264\ NHA, EEI, Spaulding.
    \265\ PREPA.
    \266\ Spaulding.
---------------------------------------------------------------------------

    209. In this connection, NHA and EEI recommend that applicants be 
permitted to request waiver of all or part of the pre-filing 
consultation requirements. Under this proposal, an applicant would, 
prior to the NOI deadline, distribute an information package to 
resource agencies, tribes, and other interested entities. This would be 
followed by a public meeting at which the Commission staff would 
explain the process options, and the Commission staff and applicant 
would seek input on an appropriate process. Following the meeting, and 
presumably before the NOI deadline, the applicant would choose a post-
application NEPA process for the project. This would be accompanied by 
a request for waiver of all or part of the pre-filing consultation 
requirements.\267\ The waiver request would be subject to public notice 
and comment. The applicant would still be required to meet the 
applicable filing requirements. Further public participation would be 
deferred until after the application is filed, as part of the 
Commission's NEPA process.\268\
---------------------------------------------------------------------------

    \267\ NHA suggests that appropriate criteria for granting such 
waivers would include where: (1) The project has previously 
undergone NEPA review, as far back as 1969, which predates the Clean 
Water Act; (2) no new ground-disturbing facilities would be 
constructed; or (3) the project operation would be the same as under 
the existing license.
    \268\ NHA, EEI.
---------------------------------------------------------------------------

    210. NYSDEC and New York Rivers oppose any special provisions for 
small projects or those an applicant may regard as non-controversial. 
They state that project size is no determinant of environmental impacts 
or the scope of issues.\269\ NYSDEC suggests that a single, flexible 
licensing process can accommodate small projects with few issues, but 
that the determination of issues and information needs can only be 
developed through NEPA scoping.
---------------------------------------------------------------------------

    \269\ NYSDEC, New York Rivers.
---------------------------------------------------------------------------

    211. We are not inclined to adopt this aspect of NHA's proposal. 
For those applicants who use the traditional process, existing Sec.  
4.38(e)(1) already excuses applicants from complying with the pre-
filing consultation requirements to the extent that a resource agency 
or Indian tribe is willing to waive consultation in writing. If a 
proposed project indeed engenders little controversy, then such 
waivers, in whole or part, may be obtainable in any event, or the 
burden of pre-filing information-gathering and studies should be 
modest. We also think it would be asking too much of stakeholders to 
comment on a waiver request following as little discussion as a single 
public meeting based on an information package that will necessarily be 
very slim with respect to project operations under a future new 
license. Finally, NHA's proposed criteria are not appropriate. Any 
information used in a NEPA analysis more than several years old is 
likely to be outdated with respect to current environmental conditions, 
and the document is likely to lack much information that is now 
routinely required. Nonetheless, the Commission recognizes the 
important place in the nation's energy infrastructure of small 
hydropower projects and is concerned about the potential imposition of 
unnecessary relicensing costs on these projects. We therefore request 
comments on other approaches to streamlining the licensing process for 
small projects without compromising the interests of other 
stakeholders.

[[Page 14013]]

b. Applicant-Prepared NEPA Documents
    212. Some licensees state that the licensing process would be less 
redundant and more timely if the Commission would permit applicants to 
include a draft EA or EIS with their application even if they use the 
traditional process.\270\ That would clearly be inappropriate under the 
existing traditional process, because of the limited opportunity for 
public participation and the all-too-common continuation at the license 
application stage of study disputes. Such documents would in many cases 
be less useful to the Commission in fulfilling its NEPA 
responsibilities than the existing Exhibit E. Increasing public 
participation and adding binding dispute resolution to the traditional 
process should alleviate this problem, but we are not certain to what 
extent. The Commission requests comments on whether the Commission 
should modify its regulations in this regard.
c. Process Steps in the ALP
---------------------------------------------------------------------------

    \270\ DM&GLH, Domtar, APT. Applicants who use the ALP are 
authorized to include a draft NEPA document with their application.
---------------------------------------------------------------------------

    213. Some commenters state that the ALP is difficult to work with 
because the regulations do not clearly define process steps and the 
roles of the participants. They suggest that this gives applicants too 
much control over ALP processes, and that the ALP rules should be 
clarified in this regard.\271\ We do not propose to impose any 
additional process steps to the ALP. The existing regulations provide 
the participants great flexibility to devise processes amenable to all 
participants, within certain general parameters, including a 
communications protocol, distribution of an initial information 
package, meetings open to the public, cooperative NEPA scoping and 
study plan development, and preliminary NEPA documents. The 
participants also set their own schedule, subject to the few limits 
established by the FPA and our implementing regulations (i.e., final 
date for NOI and filing of new license application). The Commission 
staff, including its DRS, is also available upon request to assist the 
participants' efforts to resolve issues. We think this consensus-based, 
flexible approach is in part responsible for making the ALP a success 
story. Commenters more comfortable with a pre-determined process should 
find the integrated process more appealing.
---------------------------------------------------------------------------

    \271\ CRITFC, NYRU, AMC, KCCNY, HRC.
---------------------------------------------------------------------------

    214. PFMC states that participation in ALPs is difficult for some 
entities because it tends to be labor-intensive and they lack the 
resources to make the necessary commitment of time. It recommends that 
the Commission deny applicant requests to use the ALP if stakeholders 
indicate that they lack the needed resources. The Commission carefully 
considers each request to use the ALP and will, in appropriate cases, 
deny requests to use it where there is an absence of sufficient support 
from stakeholders.\272\
---------------------------------------------------------------------------

    \272\ For example, the Commission declined to approve one 
licensee's request to use the ALP where it did not appear that there 
was sufficient support for the process from critical participants. 
In that case, the Commission is providing limited support by 
assigning separate technical and legal staff to assist stakeholders, 
but who are not active participants in prefiling consultation.
---------------------------------------------------------------------------

G. Ancillary Matters

1. Intervention by Federal and State Agencies
    215. Federal agencies have requested that the Commission permit 
them to file a notice of intervention rather than a motion to intervene 
in all hydroelectric proceedings, grant them automatic intervenor 
status in all hydroelectric proceedings, or treat a grant of 
intervention in a licensing proceeding for any project as a grant of 
intervention in all subsequent proceedings involving that project. They 
contend that their mandatory conditioning and fishway prescription 
authority under FPA sections 4(e) and 18, respectively, 
responsibilities with respect to providing fish and wildlife 
recommendations pursuant to FPA section 10(j), and roles and 
responsibilities under other statutes that directly implicate the 
licensing process, such as the ESA and NHPA, ensure that they have a 
basis for intervening in any licensing proceeding.
    216. The Commission agrees that the roles and responsibilities of 
these Federal agencies under the FPA and other applicable law ensure 
that their timely motions to intervene will be granted. The same 
consideration applies to the intervention of these Federal agencies in 
pipeline certificate proceedings under the Natural Gas Act. We 
therefore propose to permit these agencies to intervene by timely 
filing a notice of intervention in any proceeding, as is currently 
permitted for intervention by the Secretary of Energy and State 
Commissions pursuant to 18 CFR 385.214 (a) and (b). The Federal 
agencies that would be permitted to intervene by notice are the U.S. 
Departments of the Interior, Commerce, and Agriculture, and the 
Advisory Council on Historic Preservation.\273\ We also propose to 
permit notice by intervention by State fish and wildlife and State 
water quality certification agencies, in light of their 
responsibilities under FPA section 10(j) and section 401 of the Clean 
Water Act, respectively.
---------------------------------------------------------------------------

    \273\ An eligible Federal agency that does not timely intervene 
would be required to comply with the rules for motions to intervene 
applicable to any person under 18 CFR 385.214(a)(3), including the 
content requirements of 18 CFR 385.214(b).
---------------------------------------------------------------------------

    217. It is not appropriate to grant automatic intervenor status in 
all proceedings, or to treat an intervention in any proceeding as an 
intervention in any other proceeding. The filing of a notice of 
intervention is at worst a very minor inconvenience. More important, 
the Commission solicits interventions at the beginning of proceedings 
in order to ensure that the concerns of all interested entities are 
timely considered, and known to all other interested entities, in the 
context of the procedures specific to that proceeding. No interested 
entity should have the option of remaining silent until the proceeding 
is well advanced unless it can show, in a late motion to intervene, 
good cause why it has not previously intervened.
2. Information Technology
    218. GLIFWC states that pre-filing consultation and application 
development can involve many large documents that are not necessarily 
easily or cheaply obtained or readily searched, and that some tribes 
and other parties have limited areas of interest. They recommend that 
applicants be required to put as much information as possible on a 
website, so that participants can download documents of interest and 
use document searching capabilities to more easily find information 
relevant to their area of interest. Long View recommends that the 
Commission explicitly authorize license applicants to make the data now 
required to be made available to the public in public libraries or 
other places available on line instead.
    219. The use of websites to disseminate information in licensing 
proceedings has grown dramatically in the past several years, 
particularly where applicants are using the ALP. The manner in which 
the internet is used to disseminate information and documents varies 
substantially from case to case. Uses range from posting little more 
than schedules of events, to posting of all documents generated during 
the licensing process or that existing licensees are required to make 
public by Sec.  16.7 of our rules, to interactive stakeholder 
participation. The advantages of using the internet include adding 
transparency to the process,

[[Page 14014]]

document retrieval, and helping participants stay up to speed. If, for 
instance, a stakeholder in an ALP misses a meeting, it may be able to 
download or read meeting minutes.
    220. We are not convinced that it is necessary or appropriate to 
require that all information required by our regulations to be made 
public before or during a licensing proceeding be made available on the 
internet or by CD ROM.\274\ This may make sense for licensing 
proceedings in connection with large projects, or smaller projects 
operated by licensees with substantial resources.\275\ There are 
however many small projects operated by small enterprises for which the 
cost of establishing and maintaining a Web site may be 
prohibitive.\276\ There may also be concerns about site security and 
accidental dissemination of information prejudicial to national 
security.
---------------------------------------------------------------------------

    \274\ See, e.g., with respect to pre-filing consultation, 18 CFR 
4.32(b)(3)-(5); 4.38(b)-(d) and (g); 16.7; and 16.8(b)(c), (d), and 
(i).
    \275\ A paper company might be one example, or a licensee that 
operates several small projects.
    \276\ While there are free web hosting sites on the internet, 
they may not be available to commercial entities and, if so, are not 
likely to offer terms of service that would accommodate the amount 
of space required to host the volume of data required by the 
Commission's licensing regulations. An informal canvassing of free 
hosting services indicates that most limit space to 5 megabytes (MB) 
or less. A typical license application exceeds 20 MB. Free web 
hosting sites may also have technical specifications for content 
that are incompatible with the kind of complex data accompanying 
license applications.
---------------------------------------------------------------------------

    221. Finally, we note that the Commission has granted waiver for an 
existing licensee to use a Web site in lieu of the requirement of Sec.  
16.7(d) to maintain a public ``licensing library,'' in circumstances 
where the licensee agreed to mail documents to persons lacking access 
to the internet.\277\
---------------------------------------------------------------------------

    \277\ A waiver was granted to Alabama Power Company with respect 
to the relicensing of the Coosa-Warrior Project Nos. 82, 618, 2146, 
and 2165.
---------------------------------------------------------------------------

3. Project Boundaries and Maps
    222. The Commission believes the existing regulations regarding the 
filing of maps to accompany applications for preliminary permits, 
exemptions, and licenses, which were most recently updated in 1988, 
have become outdated as the result of technological innovations since 
that time. Specifically, the Commission has been converting project 
boundary maps into georeferenced electronic maps to better enable it to 
evaluate and describe hydropower applications. To facilitate this 
effort, the Commission proposes to require applicants for licenses, 
exemptions, and amendments thereto, to file project boundary maps in a 
georeferenced electronic format compatible with the Commission's 
geographic information system.
    223. Also, the Commission's current regulations do not require 
minor projects (projects with an installed capacity of 1.5 MW or less) 
occupying non-Federal lands to have a project boundary, because the 
project boundary for such projects was historically considered to be 
the reservoir shoreline.\278\ Consistent with the effort described 
above, the Commission proposes to require all license and exemption 
applicants, regardless of the license or exemption type, to provide a 
project boundary with each application. For minor projects, a project 
boundary line would assist in establishing the project lands. To have 
consistency among all types of licenses and exemptions, we propose to 
modify the convention for naming exhibit drawings by requiring for all 
licenses and exemptions that Exhibit F contain design drawings of the 
principal project works, including fishways and fish screening 
facilities, and Exhibit G identify the project boundaries.\279\ The 
Commission requests comments on this proposal.
---------------------------------------------------------------------------

    \278\ See Application for License for Minor Water Power Projects 
and Major Water Power Projects 5 Megawatts or Less, 46 FR 55,944 
(Nov. 13, 1981), FERC Stats. & Regs. Preambles 1977-1981 ] 30,309 at 
p. 31,372 (Nov. 6, 1981) (Order No. 185).
    \279\ See proposed modifications to 18 CFR 4.32(b)(2), 4.39 (a) 
and (b); 4.41(h), first paragraph, (h)(2), (h)(3), and (h)(4)(ii); 
4.51 (g) and (h); 4.61 (e) and (f); 4.81(b); 4.92(a)(2), (c), (d), 
and (f); and 4.107 (d) and (f).
---------------------------------------------------------------------------

4. Miscellaneous Filing Requirements
    224. The Commission also proposes minor additions to the 
application filing requirements of Sec. Sec.  4.41, 4.51, and 4.61. 
These are: monthly flow duration curves;\280\ minimum and maximum 
hydraulic capacities for the powerplant;\281\ estimated capital and 
operating and maintenance (O&M) expenses for each proposed 
environmental mitigation or enhancement measure;\282\ estimates of the 
costs to develop the license application;\283\ on-peak and off-peak 
values of project power, and the basis for the value 
determinations;\284\ estimated annual increase or decrease in 
generation at existing projects;\285\ remaining undepreciated net 
investment or book value of project;\286\ annual O&M expenses for 
environmental measures;\287\ a detailed, single-line electrical 
diagram;\288\ and a statement of measures taken or planned to ensure 
safe management, operation, and maintenance of the project.\289\
---------------------------------------------------------------------------

    \280\ See proposed modifications to 18 CFR 4.41(c)(2)(i), 
4.51(c)(2)(i), and 4.61(c)(1)(vii).
    \281\ Proposed modifications to 18 CFR 4.41(c)(4)(iii); 
4.51(c)(2)(iii), and 4.61(c)(1)(vii).
    \282\ Proposed new 18 CFR 4.41(e)(4)(v); 4.51(e)(7), and 
4.61(c)(1)(x).
    \283\ Proposed new 18 CFR 4.41(e)(9); 4.51(e)(7); and 
4.61(c)(3).
    \284\ Proposed new 18 CFR 4.41(e)(10); 4.51(e)(8); and 
4.61(c)(4).
    \285\ Proposed new 18 CFR 4.51(e)(9) and 4.61(c)(5).
    \286\ Proposed new 18 CFR 4.61(c)(6).
    \287\ Proposed new 18 CFR 4.41(e)(4)(v); 4.51(e)(4)(v); and 
4.61(c)(1)(x).
    \288\ Proposed new 18 CFR 4.61(c)(8).
    \289\ Proposed new 18 CFR 4.61(c)(9).
---------------------------------------------------------------------------

    225. These are items of information not specifically required to be 
included by the current regulations, but which the Commission staff 
requests as additional information in nearly every license proceeding 
in order to complete its NEPA and comprehensive development analyses. 
Obtaining this information with the application instead of via an 
additional information request will enable the staff to move forward 
more expeditiously to process license applications.

H. Transition Provisions

    226. Several licensee commenters request that any new rule contain 
appropriate transition provisions so that ongoing proceedings are not 
disrupted.\290\ The Commission proposes that the integrated licensing 
process rules and modifications to the traditional process and ALP 
apply to license applications for which the deadline for filing a 
notification of intent is three months or later after issuance of the 
final rule. If the deadline for existing licensees to file a 
notification of intent to seek a new license falls before that date, 
the rules as they exist prior to that date will apply to those 
licensees. The new rule will also not apply to potential original 
license applicants who have commenced first stage consultation prior to 
three months following the issuance date of the final rule. This will 
ensure that no ongoing proceedings are interrupted and would afford a 
window during which existing licensees facing a deadline for filing of 
their NOI can complete their Pre-Application Document and determine 
whether to file a request to use the traditional process or ALP.\291\
---------------------------------------------------------------------------

    \290\ EEI, PG&E, SCE, Idaho Power, NHA.
    \291\ We are also taking this opportunity to remove numerous 
obsolete transition provisions included in the part 16 relicensing 
rules promulgated pursuant to the Electric Consumers Protection Act. 
Specifically, we propose to remove 18 CFR 16.10(d) and (f); 
16.11(a)(2); 16.19 (b)(3) and (b)(4); 16.19(c)(2); and 16.20 (c)(2), 
and (c)(3).
---------------------------------------------------------------------------

    227. NHA recommends that applicants currently engaged in prefiling 
consultation under the traditional process or ALP be permitted

[[Page 14015]]

to decide whether to incorporate into the ongoing process any 
improvements resulting from this proceeding. Other licensee commenters 
similarly suggest that any new dispute resolution process be made 
available for use in any ongoing license proceeding.\292\ CTUIR opposes 
modification of any ongoing licensing processes unless all participants 
agree to the specific modification.
---------------------------------------------------------------------------

    \292\ Van Ness, Duke.
---------------------------------------------------------------------------

    228. We do not propose to make the modifications to the traditional 
process available for ongoing processes, because it would prejudice the 
interests of stakeholders with respect to pre-filing consultations 
ongoing when the rule is issued. As discussed above, for instance, the 
public is wholly excluded from first-stage consultation, and has very 
limited rights during second-stage consultation. NGOs that have had 
little or no opportunity to participate in a pre-filing consultation 
that is relatively advanced at the time the rules go into effect should 
not be bound by the dispute resolution provisions, which assume that 
they were full participants in consultation from the beginning. 
Likewise, an applicant that has conducted pre-filing consultation in 
good faith under the existing rules should not be faced during the 
later stages with the addition of NGOs making new study requests and 
filing 11th-hour dispute resolution requests because they were not 
consulted during first stage consultation, or because the opportunity 
to file a second stage dispute resolution request has passed. The more 
pre-filing consultation time has elapsed under the existing processes, 
the more prejudicial requests to import dispute resolution or other 
integrated process elements into the existing process become. If, 
however, all interested entities (including interested members of the 
public) are agreed that it would be advantageous to make an exception 
to this general rule, the Commission will entertain requests for 
exceptions.\293\
---------------------------------------------------------------------------

    \293\ See proposed new 18 CFR 4.38(e)(4) and 16.8(e)(4).
---------------------------------------------------------------------------

    229. Finally, the project maps and boundaries and miscellaneous 
filing requirements would take effect three months after the issuance 
date of the final rule, in order to give license and exemption 
applicants time to comply.

IV. Environmental Analysis

    230. The Commission is required to prepare an Environmental 
Assessment or an Environmental Impact Statement for any action that may 
have significant adverse effect on the human environment.\294\ The 
Commission has categorically excluded certain action from this 
requirement as not having a significant effect on the human 
environment. Included in the exclusions are rules that are clarifying, 
corrective, or procedural or that do not substantively change the 
effect of the regulations being amended.\295\ This proposed rule, if 
finalized, is procedural in nature and therefore falls under this 
exception; consequently, no environmental consideration would be 
necessary.
---------------------------------------------------------------------------

    \294\ Order No. 486, Regulations Implementing the National 
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & 
Regs. Preambles 1986-1990 ] 30,783 (December 10, 1987).
    \295\ 18 CFR 380.4(a)(2)(ii).
---------------------------------------------------------------------------

V. Regulatory Flexibility Act

    231. The Regulatory Flexibility Act of 1980 (RFA) \296\ generally 
requires a description and analysis of final rules that will have a 
significant economic impact on a substantial number of small 
entities.\297\ Pursuant to section 605(b) of the RFA, the Commission 
hereby certifies that the proposed licensing regulations, if 
promulgated, would not have a significant economic impact on a 
substantial number of small entities. We justify our certification on 
the fact that the efficiency and timeliness of the proposed integrated 
licensing process (early Commission assistance, early issue 
identification, integrated NEPA scoping with application development, 
and better coordination among federal and state agencies) would benefit 
small entities by minimizing the redundancy and waste caused by the 
often duplicative information needs of the Commission and the various 
federal and state agencies associated with the hydroelectric licensing 
process.
---------------------------------------------------------------------------

    \296\ 5 U.S.C. 601-612 (1994).
    \297\ Section 601(c) of the RFA defines a ``small entity'' as a 
small business, a small not-for-profit enterprise, or a small 
governmental jurisdiction. A ``small business'' is defined by 
reference to Section 3 of the Small Business Act as an enterprise 
which is ``independently owned and operated and which is not 
dominant in its field of operation'' 15 U.S.C. 632(a).
---------------------------------------------------------------------------

VI. Information Collection Statement

    232. The following collections of information contained in this 
proposed rule has been submitted to the Office of Management and Budget 
for review under sectio 3507(d) of the Paperwork Reduction Act of 1995, 
44 U.S.C. 3507(d). The Commission identifies the information provided 
for under parts 4, 5, and 16 and FERC-500 ``Application for License/
Relicense for Water Projects greater than 5 MW Capacity,'' and FERC-
505, ``Application for License for Water Projects less than 5 MW 
Capacity.'' Comments are solicited on the Commission's need for this 
information, whether the information will have practical utility, the 
accuracy of provided burden estimates, ways to enhance the quality, 
utility, and clarity of the information to be collected, and any 
suggested methods for minimizing respondent's burden, including the use 
of automated information techniques.
    Estimated Annual Burden:

                                     Table 1.--Traditional Licensing Process
----------------------------------------------------------------------------------------------------------------
                                                     Number of
                 Data collection                    respondents      Number of       Hours per     Total annual
                                                        \1\          responses       response           hrs
----------------------------------------------------------------------------------------------------------------
FERC-500........................................              26               1          46,000       1,196,000
FERC-505........................................              15               1          10,000         150,000
----------------------------------------------------------------------------------------------------------------
\1\ Estimated number of licenses subject to renewal through 2009.

    Total Annual Hours for Collection: (Reporting + Recordkeeping, (if 
appropriate)) = 1,356,000 hours.

                                 Table 2.--Proposed Integrated Licensing Process
----------------------------------------------------------------------------------------------------------------
                                                     Number of
                 Data collection                    respondents      Number of       Hours per     Total annual
                                                        \1\          responses     response \2\         hrs
----------------------------------------------------------------------------------------------------------------
FERC-500........................................              26               1          32,200         837,200

[[Page 14016]]

 
FERC-505........................................              15               1           7,000         105,000
----------------------------------------------------------------------------------------------------------------
\1\ Estimated number of licenses subject to renewal through FY 2009.
\2\ Based on a 30% reduction through concomitant processes.

    Total Annual Hours for Collections: (Reporting + Recordkeeping, (if 
appropriate)) = 942,200 hours
    Information Collection Costs: The Commission seeks comments on the 
costs to comply with these requirements. It has projected the average 
annualized cost per respondent to be the following:

                                                Annualized Costs
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Annualized Costs (Capital & Startup Costs)
(1) Using Traditional Licensing Process:
    (a) Projects less than 5 MW (average).  $500,000.00
    (b) Projects greater than 5 MW          $2,300,000.00
     (average).
(2) Using Proposed Integrated Licensing
 Process:
    (a) Projects less than 5MW average....  $350,000.00
    (b) Projects greater than 5 MW........  $1,610,000.00
Total Annualized Costs:
    (1) Traditional Licensing Process.....  $67,300,000 ($59.8 mil. + $7.5 mil.)
    (2) Proposed Integrated Licensing       $47,110,000 ($41.8 mil. + $5.25 mil.)
     Process.
----------------------------------------------------------------------------------------------------------------

    The Office of Management and Budget's (OMB) regulations \298\ 
require OMB to approve certain information collection requirements 
imposed by agency rule. The Commission is submitting notification of 
this proposed rule to OMB.
---------------------------------------------------------------------------

    \298\ 5 CFR 1320.11.
---------------------------------------------------------------------------

    Title: FERC-500 ``Application for License/Relicense for Water 
Projects greater than 5 MW Capacity,'' and FERC-505, ``Application for 
License for Water Projects less than 5 MW Capacity.''
    Action: Proposed Collections.
    OMB Control No: 1902-0058 (FERC 500) and 1902-0115 (FERC 505).
    Respondents: Business or other for profit, or non-profit.
    Frequency of Responses: On occasion.
    Necessity of the Information: The proposed rule would revise the 
Commission's regulations regarding applications for licenses to 
construct, operate, and maintain hydroelectric projects. Specifically, 
proposed revisions would establish a new process for the development 
and processing of license applications that combines during the pre-
filing consultation phase activities that are currently conducted 
during pre-filing consultation and after the license application is 
filed. The information proposed to be collected is needed to evaluate 
the license application pursuant to the comprehensive development 
standard of FPA section 10(a)(1), to consider in the comprehensive 
development analysis certain factors with respect to new licenses set 
forth in FPA section 15, and to comply with NEPA, ESA, and NHPA. Most 
of the information is already being collected under the existing 
regulations, and the new regulations would for the most part affect 
only the timing of the collection and the form in which it is 
presented. Internal Review: The Commission has reviewed the 
requirements pertaining to evaluation of hydroelectric license 
applications and has determined that the proposed revisions are 
necessary because the hydroelectric licensing process is unnecessarily 
long and costly.
    These requirements conform to the Commission's plan for efficient 
information collection, communication, and management within the 
hydroelectric power industry. The Commission has assured itself, by 
means of internal review, that there is specific, objective support for 
the burden estimates associated with the information requirements.
    Interested persons may obtain information on the reporting 
requirements by contacting the following: Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426, [Attention: 
Michael Miller, Office of the Chief Information Officer, Phone: (202) 
502-8415, fax: (202) 273-0873, e-mail: [email protected]]
    For submitting comments concerning the collection of information(s) 
and the associated burden estimate(s), please send your comments to the 
contact listed above and to the Office of Management and Budget, Office 
of Information and Regulatory Affairs, 725 17th Street, NW., 
Washington, DC 20503 [Attention: Desk Officer for the Federal Energy 
Regulatory Commission, phone (202) 395-7318, fax: (202) 395-7285.

VII. Public Comment Procedures

    233. The Commission invites interested persons to submit comments, 
data, views and other information concerning the matters set out in 
this proposed rule. To facilitate the Commission's views of the 
comments, the Commission requests commenters to provide an executive 
summary of their recommendations. To the greatest degree possible, 
commenters should use the topic headings that the proposed rule uses 
and arrange their comments in the order of topics presented in this 
proposed rule, and cite the specific referenced paragraph numbers. 
Commenters should identify separately any additional issues they may 
wish to address. Comments must refer to Docket No. RM02-16-000, and may 
be filed on paper or electronically via the Internet. The Commission 
must receive all such comments no later than 60 days after the issuance 
of this notice of proposed rulemaking. Those filing electronically do 
not need to make a paper filing. Reply comments will not be 
entertained.
    234. Those making paper filings should submit the original and 14 
copies of their comments to the Office of the Secretary, Federal Energy 
Regulatory Commission, 888 First Street, NE., Washington, DC 20426.
    235. The Commission strongly encourages electronic filings.

[[Page 14017]]

Commenters filing their comments via the Internet must prepare their 
comments in WordPerfect, MS Word, Portable Document Format, Real Text 
Format, or ASCII format as listed on the Commission's Web site at 
http://www.ferc.gov , under the e-Filing link. To file the document, 
access the Commission's Web site at http://www.ferc.gov and click on 
``e-Filing'' and then follow the instructions for each screen. First 
time users will have to establish a user name and password. The 
Commission 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]. Do not 
submit comments to the E-Mail address.
    236. The Commission will place all comments in the public files and 
they 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.

VIII. Document Availability

    237. In addition to publishing the full text of this document in 
the Federal Register, the Commission also 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 p.m. Eastern time) at 888 First 
Street, NE., Room 2A, Washington, DC 20426.
    238. 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 of this docket, excluding the last three digits, in 
the docket number field.
    239. User assistance is available for FERRIS and the Commission's 
Web site during regular business hours. For assistance, contact FERC 
Online Support at [email protected] or toll-free at (866) 208-
3676, or for TTY, contact (202) 502-8659.

List of Subjects

18 CFR Part 4

    Administrative practice and procedure, Electric power, Reporting 
and record keeping requirements.

18 CFR Part 5

    Administrative practice and procedure, Electric power, Reporting 
and record keeping requirements.

18 CFR Part 16

    Administrative practice and procedure, Electric power, Reporting 
and record keeping requirements.

18 CFR Part 385

    Administrative practice and procedure, Electric power, Penalties, 
Pipelines, Report and record keeping requirements.

    By direction of the Commission.
Magalie R. Salas,
Secretary.
    In consideration of the foregoing, the Commission proposes to amend 
parts 4, 16, and 385, and add part 5 to Chapter I, Title 18, Code of 
Federal Regulations as follows:

Regulatory Text

PART 4--LICENSES, PERMITS, EXEMPTIONS, AND DETERMINATION OF PROJECT 
COSTS

    1. The authority citation for part 4 continues to read as follows:

    Authority: 16 U.S.C. 791a-825r, 2601-2645; 42 U.S.C. 7101-7352.

    2. Amend Sec.  4.30 by revising paragraph (a) to read as follows:


Sec.  4.30  Applicability and definitions.

    (a)(1) This subpart applies to applications for preliminary permit, 
license, or exemption from licensing.
    (2) Any potential applicant for an original license for which 
prefiling consultation begins on or after [insert date three months 
following issuance date of final rule] and which wishes to develop and 
file its application pursuant to this part, must seek Commission 
authorization to do so pursuant to the provisions of part 5 of this 
chapter.
* * * * *
    3. Amend Sec.  4.32 as follows.
    a. Throughout the section, remove the phrase ``Office of Hydropower 
Licensing'' and add in its place the phrase ``Office of Energy 
Projects''.
    b. The second sentence of paragraph (b)(1) is revised.
    c. Paragraph (b)(2) is revised.
    d. In paragraph (b)(7), add the phrase ``Except as to a license or 
exemption application,'' at the beginning of the first sentence.
    e. Paragraph (b)(10) is added.
    f. Paragraph (k) is added.
    The revised and added text reads as follows.


Sec.  4.32  Acceptance for filing or rejection; information to be made 
available to the public; requests for additional studies.

* * * * *
    (b) * * *
    (1) * * * The applicant or petitioner must serve one copy of the 
application or petition on the Director of the Commission's Regional 
Office for the appropriate region and on each resource agency, Indian 
tribe, or member of the public consulted pursuant to Sec.  4.38 or 
Sec.  16.8 of this chapter or part 5 of this chapter * * *.
    (2) Each applicant for exemption must submit to the Commission's 
Secretary for filing an original and eight copies of the application. 
An applicant must serve one copy of the application on each resource 
agency consulted pursuant to Sec.  4.38. For each application filed 
following [insert date three months following issuance date of final 
rule], maps and drawings must conform to the requirements of Sec.  
4.39. The originals (microfilm) of maps and drawing are not to be filed 
initially, but will be requested pursuant to paragraph (d) of this 
section.
* * * * *
    (10) Transition provisions. (i) This section shall apply to license 
applications for which the deadline for filing a notification of intent 
to seek a new or subsequent license, or for filing a notification of 
intent to file an original license application required by Sec.  5.3 of 
this chapter, is [insert date three months following issuance date of 
final rule] or later.
    (ii) Applications for which the deadline date for filing a 
notification of intent to seek a new or subsequent license is prior to 
[insert date three months following issuance date of final rule], and 
potential applications for original license for which the potential 
applicant commenced first stage pre-filing consultation pursuant to 
Sec.  4.38(b) prior to [insert date three months following issuance 
date of final rule], are subject to the Commission's regulations in 
Sec.  4.32 as promulgated prior to [insert date three months following 
issuance date of final rule].
    (iii) This section shall apply to exemption applications filed on 
or after [insert date three months following issuance date of final 
rule]. For exemption applications filed prior to [insert date three 
months following issuance date of final rule], this section

[[Page 14018]]

shall apply in the form in which it was promulgated prior to that date.
* * * * *
    (k) Transition provisions. (1) This section shall apply to license 
applications for which the deadline for filing a notification of intent 
to seek a new or subsequent license , or for filing a notification of 
intent to file an original license application required by Sec.  5.3 of 
this chpater, is [insert date three months following issuance date of 
final rule] or later.
    (2) Applications for which the deadline date for filing a 
notification of intent to seek a new or subsequent license is prior to 
[insert date three months following issuance date of final rule], and 
potential applications for original license for which the potential 
applicant commenced first stage pre-filing consultation pursuant to 
Sec.  4.38(b) prior to [insert date three months following issuance 
date of final rule], are subject to the Commission's regulations in 
Sec.  4.32 as promulgated prior to [insert date three months following 
issuance date of final rule].
    (3) This section shall apply to exemption applications filed on or 
after [insert date three months following issuance date of final rule]. 
For exemption applications filed prior to [insert date three months 
following issuance date of final rule], this section shall apply in the 
form in which it was promulgated prior to that date.
    4. Amend Sec.  4.34 as follows:
    a. In paragraph (b)(1), add at the beginning of the third sentence 
which begins ``If ongoing agency proceedings * * *'' the phrase ``In 
the case of an application prepared other than pursuant to part 5 of 
this chapter,''.
    b. Paragraph (b)(5) is added.
    c. Paragraph (e) is revised.
    d. Paragraph (i)(5) is removed.
    e. Paragraph (i)(9) is removed.
    f. Paragraph (j) is added.
    The revised and added text reads as follows:


Sec.  4.34  Hearings on applications; consultation on terms and 
conditions; motions to intervene; alternative procedures

* * * * *
    (b) * * *
    (5)(i) With regard to certification requirements for a license 
applicant under section 401(a)(1) of the Federal Water Pollution 
Control Act (Clean Water Act), an applicant shall file within 60 days 
from the date of issuance of the notice of ready for environmental 
analysis:
    (A) A copy of the water quality certification;
    (B) A copy of the request for certification, including proof of the 
date on which the certifying agency received the request; or
    (C) Evidence of waiver of water quality certification as described 
in paragraph (f)(5)(ii) of this section.
    (ii) A certifying agency is deemed to have waived the certification 
requirements of section 401(a)(1) of the Clean Water Act if the 
certifying agency has not denied or granted certification by one year 
after the date the certifying agency received a written request for 
certification. If a certifying agency denies certification, the 
applicant must file a copy of the denial within 30 days after the 
applicant received it.
    (iii) Notwithstanding any other provision in Title 18, Chapter I, 
subchpater B, part 4, any application to amend an existing license, and 
any application to amend a pending application for a license, requires 
a new request for water quality certification pursuant to paragraph 
(b)(5)(i) of this section if the amendment would have a material 
adverse impact on the water quality in the discharge from the project 
or proposed project.
* * * * *
    (e) Consultation on recommended fish and wildlife conditions; 
section 10(j) process.
    (1) In connection with its environmental review of an application 
for license, the Commission will analyze all terms and conditions 
timely recommended by fish and wildlife agencies pursuant to the Fish 
and Wildlife Coordination Act for the protection, mitigation of damages 
to, and enhancement of fish and wildlife (including related spawning 
grounds and habitat) affected by the development, operation, and 
management of the proposed project. Submission of such recommendations 
marks the beginning of the process under section 10(j) of the Federal 
Power Act.
    (2) The Commission may seek clarification of any recommendation 
from the appropriate fish and wildlife agency. If the Commission's 
request for clarification is communicated in writing, copies of the 
request will be sent by the Commission to all parties, affected 
resource agencies, and Indian tribes, which may file a response to the 
request for clarification within the time period specified by the 
Commission.
    (3) If the Commission believes any fish and wildlife recommendation 
may be inconsistent with the Federal Power Act or other applicable law, 
the Commission will make a preliminary determination of inconsistency 
in the draft environmental document or, if none, the environmental 
analysis. The preliminary determination, for those recommendations 
believed to be inconsistent, shall include:
    (i) An explanation why the Commission believes the recommendation 
is inconsistent with the Federal Power Act or other applicable law, 
including any supporting analysis and conclusions, and
    (ii) An explanation of how the measures recommended in the 
environmental document would equitably protect, mitigate damages to, 
and enhance, fish and wildlife (including related spawning grounds and 
habitat) affected by the development, operation, and management of the 
project.
    (4) Any party, affected resource agency, or Indian tribe may file 
comments in response to the preliminary determination of inconsistency 
within the time frame allotted for comments on the draft environmental 
document or, if none, the time frame for comments on the environmental 
analysis. In this filing, the fish and wildlife agency concerned may 
also request a meeting, telephone or video conference or other 
additional procedure to attempt to resolve any preliminary 
determination of inconsistency.
    (5) The Commission shall attempt, with the agencies, to reach a 
mutually acceptable resolution of any such inconsistency, giving due 
weight to the recommendations, expertise, and statutory 
responsibilities of the fish and wildlife agency. If the Commission 
decides, or an affected resource agency requests, the Commission will 
conduct a meeting, telephone, or video conference, or other procedures 
to address issues raised by its preliminary determination of 
inconsistency and comments thereon. The Commission will give at least 
15 days' advance notice to each party, affected resource agency, or 
Indian tribe, which may participate in the meeting or conference. Any 
meeting, conference, or additional procedure to address these issues 
will be scheduled to take place within 90 days of the date the 
Commission issues a preliminary determination of inconsistency. The 
Commission will prepare a written summary of any meeting held under 
this subsection to discuss 10(j) issues, including any proposed 
resolutions and supporting analysis, and a copy of the summary will be 
sent to all parties, affected resource agencies, and Indian tribes.
    (6) The section 10(j) process ends when the Commission issues an 
order

[[Page 14019]]

granting or denying the license application in question.
* * * * *
    (j) Transition provisions. (1) This section shall apply to license 
applications for which the deadline for filing a notification of intent 
to seek a new or subsequent license, or for filing a notification of 
intent to file an original license application required by Sec.  5.3 of 
this chpater, is [insert date three months following issuance date of 
final rule] or later.
    (2) Applications for which the deadline date for filing a 
notification of intent to seek a new or subsequent license is prior to 
[insert date three months following issuance date of final rule], and 
potential applications for original license for which the potential 
applicant commenced first stage pre-filing consultation pursuant to 
Sec.  4.38(b) prior to [insert date three months following issuance 
date of final rule], are subject to the Commission's regulations as 
promulgated prior to [insert date three months following issuance date 
of final rule].
    (3) This section shall apply to exemption applications filed on or 
after [insert date three months following issuance date of final rule]. 
For exemption applications filed prior to [insert date three months 
following issuance date of final rule], this section shall apply in the 
form in which it was promulgated prior to that date.
    5. Amend Sec.  4.38 as follows:
    a. Throughout the section, remove the phrase ``Office of Hydropower 
Licensing'' and add in its place the phrase ``Office of Energy 
Projects.''
    b. In paragraph (a)(1), after the phrase 33 U.S.C. 1341(c)(1),'' 
remove the phrase ``and any Indian tribe that may be affected by the 
proposed project.'' and add in its place the following text: ``any 
Indian tribe that may be affected by the project, and members of the 
public. A potential license applicant must file a notification of 
intent to file a license application pursuant to Sec.  5.3 and a Pre-
Application Document pursuant to the provisions of Sec.  5.4.''
    c. Paragraph (a)(2) is revised.
    d. Paragraph (b) is revised.
    e. Paragraph (c) is revised.
    f. In paragraph (d)(1), remove the phrase ``Indian tribes and other 
government offices'' and add in its place the phrase ``Indian tribes, 
other government offices, and consulted members of the public''.
    g. In paragraph (d)(2), after the phrase ``Indian tribe'', add a 
comma and the following phrase ``members of the public''.
    h. Paragraph (e) is revised.
    i. Paragraph (f) is revised.
    j. In paragraph (g)(1), remove the phrase ``(b)(2)'' and add in its 
place the phrase ``(b)(3)''.
    k. Paragraph (g)(2) is revised.
    k. Paragraph (h) is revised.
    The revised text reads as follows:


Sec.  4.38  Consultation requirements.

    (a) * * *
    (2) The Director of the Energy Projects will, upon request, provide 
a list of known appropriate Federal, state, and interstate resource 
agencies, Indian tribes, and local, regional, or national non-
governmental organizations likely to be interested in any license 
application proceeding.
    (b) First Stage of Consultation. (1) A potential applicant for an 
original license must, at the time it files its notification of intent 
to seek a license pursuant to Sec.  5.2 of this chapter, provide a copy 
of the Pre-Application Document to the entities specified in Sec.  5.3 
of this chapter.
    (2) A potential applicant for an exemption must promptly contact 
each of the appropriate resource agencies, affected Indian tribes, and 
members of the public likely to be interested in the proceeding; 
provide them with a description of the proposed project and supporting 
information; and confer with them on project design, the impact of the 
proposed project (including a description of any existing facilities, 
their operation, and any proposed changes), reasonable hydropower 
alternatives, and what studies the applicant should conduct. The 
potential applicant must provide to the resource agencies, Indian 
tribes and the Commission the following information:
    (i) Detailed maps showing project boundaries, if any, proper land 
descriptions of the entire project area by township, range, and 
section, as well as by state, county, river, river mile, and closest 
town, and also showing the specific location of all proposed project 
facilities, including roads, transmission lines, and any other 
appurtenant facilities;
    (ii) A general engineering design of the proposed project, with a 
description of any proposed diversion of a stream through a canal or 
penstock;
    (iii) A summary of the proposed operational mode of the project;
    (iv) Identification of the environment to be affected, the 
significant resources present, and the applicant's proposed 
environmental protection, mitigation, and enhancement plans, to the 
extent known at that time;
    (v) Streamflow and water regime information, including drainage 
area, natural flow periodicity, monthly flow rates and durations, mean 
flow figures illustrating the mean daily streamflow curve for each 
month of the year at the point of diversion or impoundment, with 
location of the stream gauging station, the method used to generate the 
streamflow data provided, and copies of all records used to derive the 
flow data used in the applicant's engineering calculations;
    (vi)(A) A statement (with a copy to the Commission) of whether or 
not the applicant will seek benefits under section 210 of PURPA by 
satisfying the requirements for qualifying hydroelectric small power 
production facilities in Sec.  292.203 of this chapter;
    (B) If benefits under section 210 of PURPA are sought, a statement 
on whether or not the applicant believes diversion (as that term is 
defined in Sec.  292.202(p) of this chapter) and a request for the 
agencies' view on that belief, if any;
    (vii) Detailed descriptions of any proposed studies and the 
proposed methodologies to be employed; and
    (viii) Any statement required by Sec.  4.301(a).
    (3) No earlier than 30 days, but no later than 60 days, from the 
date of the potential applicant's letter transmitting the Pre-
Application Document, or information required by paragraph (b)(2) of 
this section, as applicable, to the agencies, Indian tribes and members 
of the public under paragraph (b)(1) of this section, the potential 
applicant must:
    (i) Hold a joint meeting at a convenient place and time, including 
an opportunity for a site visit, with all pertinent agencies, Indian 
tribes, and members of the public to explain the applicant's proposal 
and its potential environmental impact, to review the information 
provided, and to discuss the data to be obtained and studies to be 
conducted by the potential applicant as part of the consultation 
process;
    (ii) Consult with the resource agencies, Indian tribes and members 
of the public on the scheduling and agenda of the joint meeting; and
    (iii) No later than 15 days in advance of the joint meeting, 
provide the Commission with written notice of the time and place of the 
meeting and a written agenda of the issues to be discussed at the 
meeting.
    (4) The potential applicant must make either audio recordings or 
written transcripts of the joint meeting, and must promptly provide 
copies of these recordings or transcripts to the Commission and, upon 
request, to any resource agency, Indian tribe, or member of the public.
    (5) Not later than 60 days after the joint meeting held under 
paragraph

[[Page 14020]]

(b)(2) of this section (unless extended within this time period by a 
resource agency, Indian tribe, or members of the public for an 
additional 60 days by sending written notice to the applicant and the 
Director of the Office of Energy Projects within the first 60 day 
period, with an explanation of the basis for the extension), each 
interested resource agency, Indian tribe, and members of the public 
must provide a potential applicant with written comments:
    (i) Identifying its determination of necessary studies to be 
performed or the information to be provided by the potential applicant;
    (ii) Identifying the basis for its determination;
    (iii) Discussing its understanding of the resource issues and its 
goals and objectives for these resources;
    (iv) Explaining why each study methodology recommended by it is 
more appropriate than any other available methodology alternatives, 
including those identified by the potential applicant pursuant to 
paragraph (b)(2)(vii) of this section;
    (v) Documenting that the use of each study methodology recommended 
by it is a generally accepted practice; and
    (vi) Explaining how the studies and information requested will be 
useful to the agency, Indian tribe, or member of the public in 
furthering its resource goals and objectives that are affected by the 
proposed project.
    (6) Study dispute resolution. (i) If a potential applicant and a 
resource agency, Indian tribe, or member of the public disagree as to 
any matter arising during the first stage of consultation or as to the 
need to conduct a study or gather information referenced in paragraph 
(c)(2) of this section, the potential applicant or resource agency, 
Indian tribe, or member of the public may refer the dispute in writing 
to the Director of the Office of Energy Projects (Director) for 
resolution.
    (ii) At the same time as the request for dispute resolution is 
submitted to the Director, the entity referring the dispute must serve 
a copy of its written request for resolution on the disagreeing party 
and any affected resource, Indian tribe, or member of the public, which 
may submit to the Director a written response to the referral within 15 
days of the referral's submittal to the Director.
    (iii) Written referrals to the Director and written responses 
thereto pursuant to paragraphs (b)(6)(i) or (b)(6)(ii) of this section 
must be filed with the Commission in accordance with the Commission's 
Rules of Practice and Procedure, and must indicate that they are for 
the attention of the Director pursuant to Sec.  4.38(b)(6).
    (iv) The Director will resolve the disputes by an order directing 
the potential applicant to gather such information or conduct such 
study or studies as, in the Director's view, is reasonable and 
necessary.
    (v) If a resource agency, Indian tribe, or member of the public 
fails to refer a dispute regarding a request for a potential applicant 
to obtain information or conduct studies (other than a dispute 
regarding the information specified in paragraph (b)(1) or (b)(2) of 
this section), the Commission will not entertain the dispute following 
the filing of the license application.
    (vi) If a potential applicant fails to obtain information or 
conduct a study as required by the Director pursuant to paragraph 
(b)(6)(iv) of this section, its application will be considered 
deficient.
    (7) The first stage of consultation ends when all participating 
agencies, Indian tribes, and members of the public provide the written 
comments required under paragraph (b)(5) of this section or 60 days 
after the joint meeting held under paragraph (b)(3) of this section, 
whichever occurs first, unless a resource agency or Indian tribe timely 
notifies the applicant and the Director of Energy Projects of its need 
for more time to provide written comments under paragraph (b)(5) of 
this section, in which case the first stage of consultation ends when 
all participating agencies and Indian tribes provide the written 
comments required under paragraph (b)(5) of this section or 120 days 
after the joint meeting held under paragraph (b)(5) of this section, 
whichever occurs first.
    (c) Second stage of consultation. (1) Unless determined to be 
unnecessary by the Director pursuant to paragraph (b)(6) of this 
section, a potential applicant must diligently conduct all reasonable 
studies and obtain all reasonable information requested by resource 
agencies, Indian tribes, and members of the public under paragraph (b) 
of this section to which the potential applicant has agreed. The 
applicant shall also obtain any data and conduct any studies required 
by the Commission pursuant to the dispute resolution procedures of 
paragraph (b)(6) of this section. These studies must be completed and 
the information obtained:
    (i) Prior to filing the application, if the results:
    (A) Would influence the financial (e.g., instream flow study) or 
technical feasibility of a project (e.g., study of potential mass soil 
movement); or
    (B) Are needed to determine the design or location of project 
features, reasonable alternatives to the project, the impact of the 
project on important natural or cultural resources (e.g., resource 
surveys), or suitable mitigation or enhancement measures, or to 
minimize impact on significant resources (e.g., wild and scenic river, 
anadromous fish, endangered species, caribou migration routes);
    (ii) After filing the application but before issuance of a license 
or exemption, if the applicant otherwise complied with the provisions 
of paragraph (b)(1) or (b)(2) of this section, as applicable, and the 
study or information gathering would take longer to conduct and 
evaluate than the time between the conclusion of the first stage of 
consultation and the expiration of the applicant's preliminary permit 
or the application filing deadline set by the Commission;
    (iii) After a new license or exemption is issued, if the studies 
can be conducted or the information obtained only after construction or 
operation of the proposed facilities, would determine the success of 
protection, mitigation, or enhancement measures (e.g., post-
construction monitoring studies), or would be used to refine project 
operation or modify project facilities.
    (2) If, after the end of the first stage of consultation as defined 
in paragraph (b)(7) of this section, a resource agency, Indian tribe, 
or member of the public requests that the potential applicant conduct a 
study or gather information not previously identified and specifies the 
basis and reasoning for its request, under paragraphs (b)(5)(i)-(vi) of 
this section, the potential applicant must promptly initiate the study 
or gather the information, or explain to the requesting entity why it 
believes the request is not reasonable or necessary. If the potential 
applicant declines to obtain the information or conduct the study, any 
resource agency, Indian tribe, or consulted member of the public may 
refer any such request to the Director of the Office of Energy Projects 
for dispute resolution under the procedures and subject to the other 
requirements set forth in paragraph (b)(6) of this section
    (3)(i) The results of studies and information-gathering referenced 
in paragraphs (c)(1)(ii) and (c)(2) of this section will be treated as 
additional information; and
    (ii) Filing and acceptance of an application will not be delayed 
and an application will not be considered deficient or patently 
deficient pursuant to Sec.  4.32(e)(1) or (e)(2) merely because the 
study or information gathering is not complete before the application 
is filed.

[[Page 14021]]

    (4) A potential applicant must provide each resource agency, Indian 
tribe, and consulted member of the public with:
    (i) A copy of its draft application that:
    (A) Indicates the type of application the potential applicant 
expects to file with the Commission; and
    (B) Responds to any comments and recommendations made by any 
resource agency, Indian tribe, or consulted member of the public either 
during the first stage of consultation or under paragraph (c)(2) of 
this section;
    (ii) The results of all studies and information-gathering either 
requested by that resource agency, and Indian tribe, or consulted 
member of the public in the first stage of consultation (or under 
paragraph (c)(2) of this section if available) or which pertain to 
resources of interest to the resource agency, Indian tribe, or 
consulted member of the public and which were identified by the 
potential applicant pursuant to paragraph (b)(2)(vii) of this section, 
including a discussion of the results and any proposed protection, 
mitigation, or enhancement measures; and
    (iii) A written request for review and comment.
    (5) A resource agency, and Indian tribe, or consulted member of the 
public will have 90 days from the date of the potential applicant's 
letter transmitting the paragraph (c)(4) of this section information to 
it to provide written comments on the information submitted by a 
potential applicant under paragraph (c)(4) of this section.
    (6) If the written comments provided under paragraph (c)(5) of this 
section indicate that a resource agency, Indian tribe, or consulted 
member of the public has a substantive disagreement a potential 
applicant's conclusions regarding resource impacts or its proposed 
protection, mitigation, or enhancement measures, the potential 
applicant will:
    (i) Hold a joint meeting with the resource agency, Indian tribe, 
other agencies, and consulted members of the public with similar or 
related areas of interest, expertise, or responsibility not later than 
60 days from the date of the written comments of the disagreeing 
agency, Indian tribe, or consulted member of the public to discuss and 
to attempt to reach agreement on its plan for environmental protection, 
mitigation, or enhancement measures;
    (ii) Consult with the disagreeing agency, Indian tribe, other 
agencies with similar or related areas of interest, expertise, and 
responsibility, and consulted member of the public on the scheduling of 
the joint meeting; and
    (iii) At least 15 days in advance of the meeting, provide the 
Commission with written notice of the time and place of the meeting and 
a written agenda of the issues to be discussed at the meeting.
    (7) The potential applicant and any disagreeing resource agency, 
Indian tribe, or consulted member of the public may conclude a joint 
meeting with a document embodying any agreement among them regarding 
environmental protection, mitigation, or enhancement measures and any 
issues that are unresolved.
    (8) The potential applicant must describe all disagreements with a 
resource agency, Indian tribe, or consulted member of the public on 
technical or environmental protection, mitigation, or enhancement 
measures in its application, including an explanation of the basis for 
the applicant's disagreement with the resource agency, Indian tribe, 
and consulted non-governmental organization, and must include in its 
application any document developed pursuant to paragraph (c)(7) of this 
section.
    (9) A potential applicant may file an application with the 
Commission if:
    (i) It has complied with paragraph (c)(4) of this section and no 
resource agency, Indian tribe, or consulted member of the public has 
responded with substantive disagreements by the deadline specified in 
paragraph (c)(5) of this section; or
    (ii) It has complied with paragraph (c)(6) of this section and a 
resource agency, Indian tribe, or consulted member of the public has 
responded with substantive disagreements.
    (10) The second stage of consultation ends:
    (i) Ninety days after the submittal of information pursuant to 
paragraph (c)(4) of this section in cases where no resource agency, 
Indian tribe, or consulted member of the public has responded with 
substantive disagreements; or
    (ii) At the conclusion of the last joint meeting held pursuant to 
paragraph (c)(6) of this section in case where a resource agency, 
Indian tribe, or consulted member of the public has responded with 
substantive disagreements.
* * * * *
    (e) Waiver of compliance with consultation requirements. (1) If a 
resource agency, Indian tribe, or consulted member of the public waives 
in writing compliance with any requirement of this section, a potential 
applicant does not have to comply with that requirement as to that 
agency or tribe.
    (2) If a resource agency, Indian tribe, or consulted member of the 
public fails to timely comply with a provision regarding a requirement 
of this section, a potential applicant may proceed to the next 
sequential requirement of this section without waiting for the resource 
agency, Indian tribe, or consulted member of the public to comply.
    (3) The failure of a resource agency, Indian tribe, or consulted 
member of the public to timely comply with a provision regarding a 
requirement of this section does not preclude its participation in 
subsequent stages of the consultation process.
    (4) Following [insert issuance date of final rule], a potential 
license applicant engaged in pre-filing consultation under this part 
may during first stage consultation request to incorporate into pre-
filing consultation any element of the integrated license application 
process provided for in part 5 of this chapter. Any such request must 
be accompanied by a:
    (i) Specific description of how the element of the part 5 license 
application would fit into the pre-filing consultation process under 
this part; and
    (ii) Demonstration that the potential license applicant has made 
every reasonable effort to contact all resource agencies, Indian 
tribes, non-governmental organizations, and others affected by the 
applicant's proposal, and that a consensus exists in favor of 
incorporating the specific element of the part 5 process into the pre-
filing consultation under this part.
    (f) Application requirements documenting consultation and any 
disagreements with resource agencies. An applicant must show in Exhibit 
E of its application that it has met the requirements of paragraphs (b) 
through (d) and paragraphs (g) and (h) of this section, and must 
include a summary of the consultation process and:
    (1) Any resource agency's, Indian tribe's, or consulted member of 
the public letters containing comments, recommendations, and proposed 
terms and conditions;
    (2) Any letters from the public containing comments and 
recommendations;
    (3) Notice of any remaining disagreements with a resource agency, 
Indian tribe, or consulted member of the public on:
    (i) The need for a study or the manner in which a study should be 
conducted and the applicant's reasons for disagreement;
    (ii) Information on any environmental protection, mitigation, or 
enhancement measure, including the basis for the applicant's 
disagreement with the resource agency, Indian tribe, or

[[Page 14022]]

consulted non-governmental organization.
    (4) Evidence of any waivers under paragraph (e) of this section;
    (5) Evidence of all attempts to consult with a resource agency, 
Indian tribe, or consulted non-governmental organization, copies of 
related documents showing the attempts, and documents showing the 
conclusion of the second stage of consultation.
    (6) An explanation of how and why the project would, would not, or 
should not, comply with any relevant comprehensive plan as defined in 
Sec.  2.19 of this chapter and a description of any relevant resource 
agency or Indian tribe determination regarding the consistency of the 
project with any such comprehensive plan;
    (7) A description of how the applicant's proposal addresses the 
significant resource issues raised at the joint meeting held pursuant 
to paragraph (b)(3) of this section; and
    (8) A list containing the name and address of every Federal, state, 
and interstate resource agency, Indian tribe, or consulted member of 
the public with which the applicant consulted pursuant to paragraph 
(a)(1) of this section.
    (g) * * *
    (2)(i) A potential applicant must make available to the public for 
inspection and reproduction the information specified in paragraph 
(b)(1) or (b)(2) of this section, as applicable, from the date on which 
the notice required by paragraph (g)(1) of this section is first 
published until a final order is issued any the license application.
    (ii) The provisions of Sec.  4.32(b) will govern the form and 
manner in which the information is to be made available for public 
inspection and reproduction.
    (iii) A potential applicant must make available to the public for 
inspection at the joint meeting required by paragraph (b)(3) of this 
section at least two copies of the information specified in paragraph 
(b)(1) or (b)(2) of this section, as applicable.
    (h) Transition provisions. (1) This section shall apply to license 
applications for which the deadline for filing a notification of intent 
to seek a new or subsequent license, or for filing a notification of 
intent to file an original license application required by Sec.  5.3 of 
this chapter, is [insert date three months following issuance date of 
final rule] or later.
    (2) Applications for which the deadline date for filing a 
notification of intent to seek a new or subsequent license is prior to 
[insert date three months following issuance date of final rule], and 
potential applications for original license for which the potential 
applicant commenced first stage pre-filing consultation pursuant to 
Sec.  4.38(b) prior to [insert date three months following issuance 
date of final rule], are subject to the Commission's regulations in 
Sec.  4.38 as promulgated prior to [insert date three months following 
issuance date of final rule].
* * * * *
    6. Amend Sec.  4.39 as follows:
    a. Paragraph (a) is revised.
    b. Paragraph (b), introductory language, is revised.
    c. Paragraph (e) is added.
    d. Paragraph (f) is added.
    The revised and added text reads as follows:


Sec.  4.39  Specifications for maps and drawings.

* * * * *
    (a) Each original map or drawing must consist of a print on silver 
or gelatin 35mm microfilm mounted on Type D (3\1/4\ by 7\3/8\  aperture cards. Two 
duplicates must be made on sheets of each original. Full-sized prints 
of maps and drawings must be on sheets no smaller than 24 by 36 inches 
and no larger than 28 by 40 inches. A space five inches high by seven 
inches wide must be provided in the lower right hand corner of each 
sheet. The upper half of this space must bear the title, numerical and 
graphical scale, and other pertinent information concerning the map or 
drawing. The lower half of the space must be left clear. Exhibit G 
drawings must be stamped by a Registered Land Surveyor. If the drawing 
size specified in this paragraph limits the scale of structural 
drawings (exhibit F drawings) described in paragraph (c) of this 
section, a smaller scale may be used for those drawings.
    (b) Each map must have a scale in full-sized prints no smaller than 
one inch equals 0.5 miles for transmission lines, roads, and similar 
linear features and no smaller than one inch equals 1,000 feet for 
other project features, including the project boundary. Where maps at 
these scale do not show sufficient detail, large scale maps may be 
required. * * *
* * * * *
    (e) The maps and drawings showing project location information and 
details of project structures must be filed in accordance with the 
Commission's instructions on submission of Critical Energy 
Infrastructure Information in Sec. Sec.  388.112 and 388.113 of 
subchapter X of this chapter.
    (f) Transition provisions. (1) This section shall apply to license 
or exemption applications filed following [insert date three months 
following issuance date of final rule].
    (2) For license or exemption applications filed prior to [insert 
date three months following issuance date of final rule], this section 
shall apply in the form in which it was promulgated prior to that date.
* * * * *
    7. Amend Sec.  4.41 as follows:
    a. In paragraph (c)(4)(i), remove the phrase ``a flow duration 
curve'' and add in its place the phrase ``monthly flow duration 
curves''.
    b. In paragraph (c)(4)(iii), add the phrase ``minimum and maximum'' 
between the words ``estimated'' and ``hydraulic''.
    c. In paragraph (e)(4)(iii), remove the word ``and''.
    d. In paragraph (e)(4)(iv), add the word ``and'' after the word 
``contingencies''.
    e. In paragraph (e)(7), remove the word ``and'' after the word 
``constructed;''.
    f. Paragraph (e)(4)(v) is added.
    g. In paragraph (e)(8), remove the period after ``section'' and add 
in its place a semi-colon.
    h. Paragraphs (e)(9) and (e)(10) are added.
    i. Paragraph (h), introductory text, is revised.
    j. In paragraph (h)(2), second sentence, the word ``license'' is 
removed from the phrase ``the license application''.
    k. Paragraph (h)(3)(iv) is added.
    l. Paragraph (h)(4)(ii) is revised.
    m. Paragraph (i) is added.
    The revised and added text reads as follows.


Sec.  4.41  Contents of Application.

* * * * *
    (e) * * *
    (4) * * *
    (v) The estimated capital cost and estimated annual operation and 
maintenance expense of each proposed environmental measure.
* * * * *
    (9) An estimate of the cost to develop the license application;
    (10) The on-peak and off-peak values of project power, and the 
basis for estimating the values, for projects which are proposed to 
operate in a mode other than run of river.
* * * * *
    (h) Exhibit G is a map of the project that must conform to the 
specifications of Sec.  4.39. In addition, each exhibit G boundary map 
must be submitted in a geo-referenced electronic format--such as 
ArcView shape files, GeoMedia files, MapInfo files, or any similar 
format. The

[[Page 14023]]

electronic boundary map must be positionally accurate to + 40 feet, in 
order to comply with the National Map Accuracy Standards for maps at a 
1:24,000 scale (the scale of USGS quadrangle maps). The electronic 
exhibit G data must include a text file describing the map projection 
used (i.e., UTM, State Plane, Decimal Degrees, etc.), the map datum 
(i.e., feet, meters, miles, etc.). Three copies of the electronic maps 
must be submitted on compact disk or DVD. If more than one sheet is 
used for the paper maps, the sheets must be numbered consecutively, and 
each sheet must bear a small insert sketch showing the entire project 
and indicate that portion of the project depicted on that sheet. Each 
sheet must contain a minimum of three know reference points. The 
latitude and longitude coordinates, or state plane coordinates, or each 
reference point must be shown. If at any time after the application is 
filed there is any change in the project boundary, the applicant must 
submit, within 90 days following the completion of project 
construction, a final exhibit G showing the extent of such changes. The 
map must show:
* * * * *
    (3) * * *
    (iv) The project location must include the most current information 
pertaining to affected Federal lands as described under Sec.  
4.81(b)(5).
    (4) * * *
    (ii) Lands over which the applicant has acquired or plans to 
acquire rights to occupancy and use other than fee title, including 
rights acquired or to be acquired by easement or lease.
    (i) Transition provisions. (1) This section shall apply to license 
applications filed following [insert date three months following 
issuance date of final rule].
    (2) For license applications filed prior to [insert date three 
months following issuance date of final rule], this section shall apply 
in the form in which it was promulgated prior to that date.
    8. Amend Sec.  4.51 as follows:
    a. In paragraph (c)(2)(i), after the phrase ``available flow;'' 
remove the word ``a'' and add in its place the word ``monthly''.
    b. In paragraph (c)(2)(iii), before the word ``maximum'', add the 
phrase ``minimum and''.
    c. Paragraph (e)(4) is revised.
    d. Paragraphs (e)(7)-(9) are added..
    e. Paragraph (g) is revised.
    f. Paragraph (h) is revised.
    g. Paragraph (i) is added.
    The revised and added text reads as follows:


Sec.  4.51  Contents of application.

* * * * *
    (e) * * *
    (4) A statement of the estimated average annual cost of the total 
project as proposed specifying any projected changes in the costs 
(life-cycle costs) over the estimated financing or licensing period if 
the applicant takes such changes into account, including:
    (i) Cost of capital (equity and debt);
    (ii) Local, state, and Federal taxes;
    (iii) Depreciation and amortization, (iv) Operation and maintenance 
expenses, including interim replacements, insurance, administrative and 
general expenses, and contingencies; and
    (v) The estimated capital cost and estimated annual operation and 
maintenance expense of each proposed environmental measure.
* * * * *
    (7) An estimate to develop the cost of the license application;
    (8) The on-peak and off-peal values of project power, and the basis 
for estimating the values, for projects which are proposed to operate 
in a mode other than run-of-river; and
    (9) The estimated average annual increase or decrease in project 
generation, and the estimated average annual increase or decrease of 
the value of project power, due to a change in project operations 
(i.e., minimum bypass flows; limits on reservoir fluctuations).
* * * * *
    (g) Exhibit F. See Sec.  4.41(g).
    (h) Exhibit G. See Sec.  4.41(h).
    (i) Transition provisions. (1) This section shall apply to license 
applications filed following [insert date three months following 
issuance date of final rule].
    (2) For license applications filed prior to [insert date three 
months following issuance date of final rule], this section shall apply 
in the form in which it was promulgated prior to that date.
* * * * *
    9. Amend Sec.  4.61 as follows:
    a. In paragraph (c)(1)(vii), after the first appearance of the word 
``estimated'' add the phrase ``minimum and maximum''. After the phrase 
``1.5 megawatts,'' remove the word ``a'' and add in its place the word 
``monthly''. Pluralize the word ``curve''.
    b. Paragraph (c)(1)(x) is added.
    c. Paragraphs (c) (3) through (9) are added.
    d. Paragraph (e) is revised.
    e. Paragraph (f) is revised.
    f. Paragraph (g) is added.
    The revised and added text reads as follows:


Sec.  4.61  Contents of Application

* * * * *
    (c) * * *
    (1) * * *
    (x) The estimated capital costs and estimated annual operation and 
maintenance expense of each proposed environmental measure.
* * * * *
    (3) An estimate of the cost to develop the license application; and
    (4) The on-peak and off-peak values of project power, and the basis 
for estimating the values, for project which are proposed to operate in 
a mode other than run-of-river.
    (5) The estimated average annual increase or decrease in project 
generation, and the estimated average annual increase or decrease of 
the value of project power due to a change in project operations (i.e., 
minimum bypass flows, limiting reservoir fluctuations) for an 
application for a new license;
    (6) The remaining undepreciated net investment, or book value of 
the project;
    (7) The annual operation and maintenance expenses, including 
insurance, and administrative and general costs;
    (8) A detailed single-line electrical diagram;
    (9) A statement of measures taken or planned to ensure safe 
management, operation, and maintenance of the project.
* * * * *
    (e) Exhibit F. See Sec.  4.41(g).
    (f) Exhibit G. See Sec.  4.41(h).
    (g) Transition provisions. (1) This section shall apply to license 
applications filed following [insert date three months following 
issuance date of final rule].
    (2) For license applications filed prior to [insert date three 
months following issuance date of final rule], this section shall apply 
in the form in which it was promulgated prior to that date.
* * * * *
    10. Amend Sec.  4.81 as follows:
    a. Paragraph (b)(5) is revised.
    b. Paragraph (f) is added.
    The revised and added text reads as follows:


Sec.  4.81  Contents of application.

* * * * *
    (b) * * *
    (5) All lands of the United States that are enclosed within the 
proposed project boundary described under paragraph (e)(3) of this 
section, identified and tabulated on a separate

[[Page 14024]]

sheet by legal subdivisions of a public land survey of the affected 
area, if available. If the project boundary includes lands of the 
United States, such lands must be identified on a completed land 
description form, provided by the Commission. The project location must 
identify any Federal reservation, Federal tracts, and townships of the 
public land surveys (or official protractions thereof if unsurveyed). A 
copy of the form must also be sent to the Bureau of Land Management 
state office where the project is located;
* * * * *
    (f) Transition provisions. (1) This section shall apply to 
preliminary permit applications filed following [insert date three 
months following issuance date of final rule].
    (2) For preliminary permit applications filed prior to [insert date 
three months following issuance date of final rule], this section shall 
apply in the form in which it was promulgated prior to that date.
* * * * *
    11. Amend Sec.  4.92 as follows:
    a. Paragraph (a)(2) is revised.
    b. In paragraph (c), introductory text, remove the phrase ``Exhibit 
B'' and add it its place the phrase ``Exhibit F''.
    c. Paragraph (d) is revised.
    d. Paragraph (f) is revised.
    e. Paragraph (g) is added.
    The revised and added text reads as follows:


Sec.  4.92  Contents of exemption application.

    (a) * * *
    (2) Exhibits A, E, F, and G.
* * * * *
    (d) Exhibit G. Exhibit G is a map of the project and boundary and 
must conform to the specifications of Sec.  4.41(h).
* * * * *
    (f) Exhibit F. Exhibit F is a set of drawings showing the 
structures and equipment of the small conduit hydroelectric facility 
and must conform to the specifications of Sec.  4.41(g).
    (g) Transition provisions. (1) This section shall apply to 
exemption applications filed following [insert date three months 
following issuance date of final rule].
    (2) For exemption applications filed prior to [insert date three 
months following issuance date of final rule], this section shall apply 
in the form in which it was promulgated prior to that date.
* * * * *
    12. Amend Sec.  4.107 as follows:
    a. Paragraph (d) is revised.
    b. Paragraph (f) is revised.
    c. Paragraph (g) is added.
    The revised and added text reads as follows:


Sec.  4.107  Contents of application for exemption from licensing.

* * * * *
    (d) Exhibit G. Exhibit G is a map of the project and boundary and 
must conform to the specifications of Sec.  4.41(h).
* * * * *
    (f) Exhibit F. Exhibit F is a set of drawings showing the 
structures and equipment of the small hydroelectric facility and must 
conform to the specifications of Sec.  4.41(g).
    (g) Transition provisions. (1) This section shall apply to 
exemption applications filed following [insert date three months 
following issuance date of final rule].
    (2) For exemption applications filed prior to [insert date three 
months following issuance date of final rule], this section shall apply 
in the form in which it was promulgated prior to that date.
    1. Add part 5 to read as follows:

PART 5--INTEGRATED LICENSE APPLICATION PROCESS

Sec.
5.1 Applicability, definitions, requirement to consult, process 
selection.
5.2 Acceleration of a license expiration date.
5.3 Notification of intent.
5.4 Pre-Application document.
5.5 Commission notice.
5.6 Comments and information requests.
5.7 Revised pre-application document.
5.8 Applicant's proposed study plan.
5.9 Scoping document and study plan meeting.
5.10 Comments and information-gathering or study requests.
5.11 Study plan meeting.
5.12 Revised study plan and preliminary determination.
5.13 Study dispute resolution process.
5.14 Conduct of studies.
5.15 Draft license application.
5.16 Filing of application.
5.17 Application content.
5.18 Tendering notice and schedule.
5.19 Deficient applications.
5.20 Additional information.
5.21 Notice of acceptance and ready for environmental analysis.
5.22 Response to notice.
5.23Applications not requiring a draft NEPA document.
5.24 Applications requiring a draft NEPA document.
5.25 Section 10(j) process.
5.26 Amendment of application.
5.27 Competing applications.
5.28 Other provisions.
5.29 Transition provisions.

    Authority: 16 U.S.C. 791a-825r, 2601-2645; 42 U.S.C. 7101-7352.


Sec.  5.1  Applicability, definitions, requirement to consult, process 
selection.

    (a) Applicability. This part applies to the filing and processing 
of an application for an:
    (1) Original license;
    (2) New license for an existing project subject to sections 14 and 
15 of the Federal Power Act; or
    (3) Subsequent license.
    (b) Definitions. The definitions in Sec. Sec.  4.30(b) and 16.2 of 
this chapter apply to this part.
    (c) Who may file. Any citizen, association of citizens, domestic 
corporation, municipality, or state may develop and file a license 
application under this part.
    (d) Requirement to consult. (1) Before it files any application for 
an original, new, or subsequent license under this part, a potential 
applicant must consult with the relevant Federal, state, and interstate 
resource agencies, including the National Marine Fisheries Service, the 
United States Fish and Wildlife Service, the National Park Service, the 
United States Environmental Protection Agency, the Federal agency 
administering any United States lands utilized or occupied by the 
project, the appropriate state fish and wildlife agencies, the 
appropriate state water resource management agencies, the certifying 
agency under Section 401(a)(1) of the Federal Water Pollution Control 
Act (Clean Water Act), 33 U.S.C. 1341(c)(1)), any Indian tribe that may 
be affected by the project, and members of the public. A potential 
license applicant must file a notification of intent to file a license 
application pursuant to Sec. Sec.  5.2 and a Pre-Application Document 
pursuant to the provisions of Sec. Sec.  5.3.
    (2) The Director of the Office of Energy Projects will, upon 
request, provide a list of known appropriate Federal, state, and 
interstate resource agencies, Indian tribes, and local, regional, or 
national non-governmental organizations likely to be interested in any 
license application proceeding.
    (e) Default process. Each potential original, new, or subsequent 
license applicant must use the license application process provided for 
in this part unless the potential applicant applies for and receives 
authorization from the Commission under this part to use the licensing 
process provided for in:
    (1) 18 CFR part 4, subparts D-H and, as applicable, part 16 of this 
chapter (i.e., traditional process), pursuant to paragraph (c) of this 
section; or
    (2) Section 4.34(i) Alternative procedures of this chapter
    (f) Request to use traditional licensing process or alternative 
procedures. (1) A

[[Page 14025]]

potential license applicant may file with the Commission a request to 
use the traditional licensing process or alternative procedures 
pursuant to this paragraph.
    (2) A potential applicant for an original, new, or subsequent 
license must file its request for approval to use the traditional 
licensing process or alternative procedures with its notification of 
intent pursuant to Sec.  5.3.
    (3) (i) An application for authorization to use the traditional 
process must include any existing written comments on the applicant's 
proposal and a response thereto.
    (ii) A potential applicant requesting the use of Sec.  4.34(i) 
alternative procedures of this part must:
    (A) Demonstrate that a reasonable effort has been made to contact 
all resource agencies, Indian tribes, citizens' groups, and others 
affected by the applicant's proposal, and that a consensus exists that 
the use of alternative procedures is appropriate under the 
circumstances;
    (B) Submit a communications protocol, supported by interested 
entities, governing how the applicant and other participants in the 
pre-filing consultation process, including the Commission staff, may 
communicate with each other regarding the merits of the applicant's 
proposal and proposals and recommendations of interested entities; and
    (C) Serve a copy of the request on all affected resource agencies 
and Indian tribes and on all entities contacted by the applicant that 
have expressed an interest in the alternative pre-filing consultation 
process.
    (4)(i) The applicant shall serve a copy of the request on all 
affected resource agencies, Indian tribes, and members of the public 
likely to be interested in the proceeding. The request shall state that 
comments on the request to use the traditional process or alternative 
procedures must be filed with the Commission within 15 days of the 
filing date of the request and, if there is no project number, that 
responses must reference the potential applicant's name and address.
    (ii) The Applicant must also publish notice of the filing of its 
notification of intent, Pre-Application Document, and request to use 
the traditional process or alternative procedures no later than the 
filing date of the notification of intent in a daily or weekly 
newspaper of general circulation in each county in which the project is 
located. The notice must:
    (A) Disclose the filing date of the notification of intent, Pre-
Application Document, and request to use the traditional process or 
alternative procedures;
    (B) Briefly summarize these documents and the basis for the request 
to use the traditional process or alternative procedures;
    (C) Include the potential applicant's name and address, and 
telephone number, the type of facility proposed to be applied for, its 
proposed location, the places where the Pre-Application Document is 
available for inspection and reproduction;
    (D) Include a statement that comments on the request to use the 
traditional process or alternative procedures are due to the Commission 
and the potential applicant no later than 15 days following the filing 
date of that document and, if there is no project number, that 
responses must reference the potential applicant's name and address; 
and
    (E) State that respondents must submit an original and eight copies 
of their comments to the Office of the Secretary, Federal Energy 
Regulatory Commission, 888 First Street, NE., Washington, DC 20426.
    (5) Requests to use the traditional process or alternative 
procedures shall be granted for good cause shown.


Sec.  5.2  Acceleration of a license expiration date.

    (a) Request for acceleration. (1) A licensee may file with the 
Commission, in accordance with the formal filing requirements in 
subpart T of part 385 of this chapter, a written request for 
acceleration of the expiration date of its existing license, containing 
the statements and information specified in Sec.  16.6(b) of this 
chapter and a detailed explanation of the basis for the acceleration 
request.
    (2) If the Commission grants the request for acceleration pursuant 
to paragraph (c) of this section, the Commission will deem the request 
for acceleration to be a notice of intent under Sec.  16.6 of this 
chapter and, unless the Commission directs otherwise, the licensee 
shall make available the Pre-Application Document provided for in Sec.  
5.4 no later than 90 days from the date that the Commission grants the 
request for acceleration.
    (b) Notice of request for acceleration. (1) Upon receipt of a 
request for acceleration, the Commission will give notice of the 
licensee's request and provide a 45-day period for comments by 
interested persons by:
    (i) Publishing notice in the Federal Register;
    (ii) Publishing notice once in a daily or weekly newspaper 
published in the county or counties in which the project or any part 
thereof or the lands affected thereby are situated; and
    (iii) Notifying appropriate Federal, state, and interstate resource 
agencies and Indian tribes, and non-governmental organizations likely 
to be interested by mail.
    (2) The notice issued pursuant to paragraphs (b)(1) (i) and (ii) of 
this section and the written notice given pursuant to paragraph 
(b)(1)(iii) of this section will be considered as fulfilling the notice 
provisions of Sec.  16.6(d) of this chapter should the Commission grant 
the acceleration request and will include an explanation of the basis 
for the licensee's acceleration request.
    (c) Commission order. If the Commission determines it is in the 
public interest, the Commission will issue an order accelerating the 
expiration date of the license to not less than five years and 90 days 
from the date of the Commission order.


Sec.  5.3  Notification of intent.

    (a) A potential applicant for an original license and, in the case 
of an existing licensee for the project, a potential applicant for new 
or subsequent license, must file a notification of its intent to do so 
in the manner provided for in paragraphs (b) and (c) of this section.
    (b) In order to notify the Commission whether it intends to file an 
application for an original license or, in the case of an existing 
licensee, whether or not it intends to file an application for a new or 
subsequent license, a potential applicant for an original license or an 
existing licensee must file with the Commission an original and eight 
copies of a letter that contains the following information:
    (1) The potential applicant or existing licensee's name and 
address.
    (2) The project number, if any.
    (3) The license expiration date, if any.
    (4) An unequivocal statement of the potential applicant's intention 
to file an application for an original license, or, in the case of an 
existing licensee, to file or not to file an application for a new or 
subsequent license.
    (5) The type of principal project works licensed, if any, such as 
dam and reservoir, powerhouse, or transmission lines.
    (6) The location of the project by state, county, and stream, and, 
when appropriate, by city or nearby city.
    (7) The installed plant capacity, if any.
    (8) The names and mailing addresses of:
    (i) Every county in which any part of the project is located, and 
in which any Federal facility that is used or to be used by the project 
is located;

[[Page 14026]]

    (ii) Every city, town, Indian tribe, or similar political 
subdivision:
    (A) In which any part of the project is or is to be located and any 
Federal facility that is or is to be used by the project is located, or
    (B) That has a population of 5,000 or more people and is located 
within 15 miles of the existing or proposed project dam,
    (iii) Every irrigation district, drainage district, or similar 
special purpose political subdivision:
    (A) In which any part of the project is or is proposed to be 
located and any Federal facility that is or is proposed to be used by 
the project is located, or
    (B) That owns, operates, maintains, or uses any project facility or 
any Federal facility that is or is proposed to be used by the project; 
and
    (iv) Every other political subdivision in the general area of the 
project or proposed project that there is reason to believe would be 
likely to be interested in, or affected by, the notification.
    (c) Before it files any application for an original, new, or 
subsequent license, a potential license applicant proposing to file a 
license application pursuant to this part or to request to file a 
license application pursuant to part 4 and, as appropriate, part 16 
(i.e., the ``traditional process''), including an application pursuant 
to Sec.  4.34(i) alternative procedures of this chapter must distribute 
to appropriate Federal, state, and interstate resource agencies, Indian 
tribes, and members of the public likely to be interested in the 
proceeding the notification of intent provided for in paragraph (a) of 
this section.
    (d) An existing licensee must notify the Commission as required in 
paragraph (b) of this section at least five years, but not more than 
five and one-half years, before its existing license expires.
    (e) Any entity that files a notification of intent to seek an 
original, new, or subsequent license application shall be referred to 
hereafter in this part as a license applicant.
    (f) A license applicant may at the same time it files its 
notification of intent and distributes its Pre-Application Document, 
request to be designated as the Commission's non-Federal representative 
for purposes of consultation under section 7 of the Endangered Species 
Act and the joint agency regulations thereunder at 50 CFR part 402, 
section 305(b) of the Magnuson-Stevens Fishery Conservation and 
Management Act and the implementing regulations at 50 CFR 600.920, or 
request to initiate consultation under section 106 of the National 
Historic Preservation Act and the implementing regulations at 36 CFR 
800.2(c)(4).
    (g) The provisions of subpart F of part 16 of this chapter apply to 
projects to which this part applies.
    (h) The provisions of this part and parts 4 and 16 of this chapter 
shall be construed in a manner that best implements the purposes of 
each part and gives full effect to applicable provisions of the Federal 
Power Act.


Sec.  5.4  Pre-Application document.

    (a) Along with its notification of intent (if applicable), before 
it files any application for an original, new, or subsequent license, a 
license applicant filing an application pursuant to this part or 
requesting to file an application pursuant to part 4 of this chapter 
and, as appropriate, part 16 of this chapter, (e.g., the traditional 
process) including an application pursuant to Sec.  4.34(i), 
alternative procedures of this chapter must, at the time it files its 
notification of intent to seek a license, file with the Commission and 
distribute to the appropriate Federal, state, and interstate resource 
agencies, Indian tribes, and members of the public likely to be 
interested in the proceeding, the Pre-Application Document provided for 
in paragraph (b) of this section.
    (b) The agencies referred to in paragraph (a) of this section 
include, by resource area:
    (1) Geology and soils, water resources, fish and aquatic resources, 
wildlife and botanical resources, wetlands and riparian habitat, and 
rare, threatened, and endangered species: Any state agency with 
responsibility for fish, wildlife, and botanical resources, the U.S. 
Fish and Wildlife Service, the National Marine Fisheries Service (if 
the project may affect anadromous fish resources subject to that 
agency's jurisdiction), and any other state or Federal agency with 
managerial authority over any part of project lands.
    (2) Cultural resources: The State Historic Preservation Officer, 
Tribal Historic Preservation Officer, National Park Service, and any 
other state or Federal agency with managerial authority over any part 
of project lands.
    (3) Recreation and land use, aesthetic resources: Local, state, and 
regional recreation agencies and planning commission, local and state 
zoning agencies, the National Park Service, and any other state or 
Federal agency with managerial authority over any part of project 
lands.
    (c) Pre-Application Document: (1) Purpose. This document is 
intended to compile and provide to the Commission, Federal and state 
agencies, Indian tribes, and members of the public engineering, 
economic, and environmental information available at the time the 
applicant files the notification of intent required by Sec.  5.2. The 
Pre-Application Document also provides the basis for identifying issues 
and information needs, developing study requests, study plans, and the 
Commission's environmental scoping documents under the National 
Environmental Policy Act (NEPA). It is a precursor to Exhibit E of the 
draft and final license applications and the Commission's NEPA 
document.
    (2)(i) Form and Content. The potential applicant must include in 
the Pre-Application Document:
    (A) The exact name and business address, and telephone number of 
each person authorized to act as agent of the applicant.
    (B) A record of contacts, if any, with Federal, state, and 
interstate resource agencies, Tribes, non-governmental organizations 
(NGOs) or other members of the public made in connection with preparing 
the Pre-Application Document.
    (C) Detailed maps showing project boundaries, proper land 
descriptions of the entire project area by township, range, and 
section, as well as by state, county, river, river mile, and closest 
town, and also showing the specific location of Federal and tribal 
lands, and all proposed project facilities, including roads, 
transmission lines, and any other appurtenant facilities.
    (D) A general description of the river basin in which the project 
is located, including:
    (1) Land use and cover;
    (2) Hazardous waste disposal sites;
    (3) Federal or tribal lands;
    (4) Dams and diversions, whether or not used for hydropower 
generation, within the basin;
    (5) A list of relevant comprehensive or resource management plans 
applicable to both the basin and the project (Federal and state 
comprehensive plans are listed on the Commission's Web site at http://
www.ferc.gov/hydro/docs/complan.pdf).
    (E) If applicable, a description of all project facilities and 
associated components. The description must include:
    (1) The physical composition, dimensions, and general configuration 
and engineering design of any dams, spillways, penstocks, canals, 
powerhouses, tailraces or other structures proposed to be included as 
part of the project;
    (2) The normal maximum water surface area and normal maximum water 
surface elevation (mean sea level), gross storage capacity of any

[[Page 14027]]

impoundments to be included as part of the project;
    (3) The number, type, and the hydraulic and installed (rated) 
capacity of any proposed turbines or generators to be included as part 
of the project;
    (4) The number, length, voltage and interconnections of any primary 
transmission lines proposed to be included as part of the project;
    (5) The description of any additional mechanical, electrical, and 
transmission equipment appurtenant to the project; and
    (6) An estimate of the dependable capacity, average annual, and 
average monthly energy production in kilowatt-hours (or mechanical 
equivalent).
    (F) If applicable, a description of:
    (1) The current and proposed operation of the project;
    (2) Any new facilities or components to be constructed at the 
project;
    (3) The construction history of the project; and
    (4) Any plans for future development or rehabilitation of the 
project.
    (G)(1) The potential applicant should discuss, with respect to each 
of the resources as follows:
    (i) The existing environment to the level of detail indicated in 
this paragraph;
    (ii) Any existing data or studies regarding the resource;
    (iii) Any known or potential adverse impacts and issues associated 
with the construction, operation or maintenance of the proposed 
project;
    (iv) Any project features the potential applicant has already 
constructed and/or maintains, voluntarily, or pursuant to the 
requirements of Federal or state agency or tribe to avoid or minimize 
adverse effects on the resource;
    (v) Any measures the potential applicant believes might reasonably 
be taken to avoid or minimize adverse effects on the resource. The 
potential license applicant should consider providing photographs or 
other visual aids, as appropriate, to supplement its written 
presentation of information.
    (ii) Geology and Soils. A description of the existing geology, 
topography, and soils of the proposed project and surrounding area, to 
the extent known and available, including:
    (A) A description of geological features, including bedrock 
lithology, stratigraphy, structural features, glacial features, 
unconsolidated deposits, and mineral resources;
    (B) A description of the soils, including the types, occurrence, 
physical and chemical characteristics, erodability and potential for 
mass soil movement;
    (C) A description showing the location of existing and potential 
geological and soil hazards and problems, including earthquakes, 
faults, seepage, subsidence, solution cavities, active and abandoned 
mines, erosion, and mass soil movement, and an identification of any 
large landslides or potentially unstable soil masses which could be 
aggravated by reservoir fluctuation;
    (D) The existence of any disposal sites especially those listed 
under Comprehensive Environmental Response, Compensation and Liability 
Act (CERCLA), Resource Conservation and Recovery Act (RCRA) and the 
National Priorities List (NPL); and
    (E) A description of the anticipated erosion, mass soil movement 
and other impacts on the geological and soil resources due to 
construction and operation of the proposed project.
    (iii) Water Resources. A description of the water resources of the 
proposed project and surrounding area. The applicant should address the 
quantity and quality (chemical/physical parameters) of all waters 
affected by the project including but not limited to the project's 
reservoir(s), tributaries to the reservoir, the bypassed reach, and 
tailrace. To the extent known, available, and applicable, this section 
should include:
    (A) Drainage area, the monthly minimum, mean, and maximum recorded 
flows in cubic feet per second of the stream or other body of water at 
the powerplant intake or point of diversion, with a specification of 
any adjustment made for evaporation, leakage minimum flow releases 
(including duration of releases) or other reductions in available flow; 
a flow duration curve indicating the period of record and the location 
of gauging station(s), including identification number(s), used in 
deriving the curve; and a specification of the critical streamflow used 
to determine the project's dependable capacity;
    (B) A description of existing instream flow uses of streams in the 
project area that would be affected by construction and operation; 
estimated quantities of water discharged from the proposed project for 
power production; and any existing and proposed uses of project waters 
for irrigation, domestic water supply, industrial and other purposes, 
including any upstream or downstream requirements or constraints to 
accommodate those purposes;
    (C) A description of the seasonal variation of existing water 
quality data for any stream, lake, or reservoir that would be affected 
by the proposed project, including measurements of: significant ions, 
heavy metals, hazardous organic compounds, chlorophyll a, nutrients, 
specific conductance, pH, total dissolved solids, total alkalinity, 
total hardness, dissolved oxygen, bacteria, temperature, suspended 
sediments, turbidity and vertical illumination;
    (D) A description of any existing lake or reservoir and any of the 
proposed project reservoirs including surface area, volume, maximum 
depth, mean depth, flushing rate, shoreline length, substrate 
classification, and gradient for streams directly affected by the 
proposed project;
    (E) A description of the anticipated impacts of any proposed 
construction and operation of project facilities on downstream flows, 
including stream geomorphology, and water quality, such as temperature, 
turbidity and nutrients;
    (F) A description of groundwater in the vicinity of the proposed 
project, including water table and artesian conditions, the hydraulic 
gradient, the degree to which groundwater and surface water are 
hydraulically connected, aquifers and their use as water supply, and 
the location of springs, wells, artesian flows and disappearing 
streams.
    (iv) Fish and Aquatic Resources. A description of the fish and 
other aquatic resources, including invasive species, of the proposed 
project and surrounding area. The section should address the existing 
fish and macroinvertebrate communities, including the presence or 
absence of anadromous or catadromous fish and any known impacts on the 
aquatic community. To the extent known and available, this section 
should include:
    (A) A description of existing fish and aquatic communities of the 
proposed project area and its vicinity, including any upstream and 
downstream areas that may be affected by the proposed project;
    (B) The temporal and spacial distribution of fish and aquatic 
communities and any associated trends on;
    (1) Species and life stage composition;
    (2) Standing crop;
    (3) Age and growth data;
    (4) Run timing;
    (5) The extent and location of spawning, rearing, feeding, and 
wintering habitat; and
    (6) Essential fish habitat as defined under the Magnuson-Stevens 
Fishery Conservation and Management Act.
    (v) Wildlife and Botanical Resources. A description of the wildlife 
and botanical resources, including invasive species, of the proposed 
project and surrounding area, to the extent known and available, 
including:

[[Page 14028]]

    (A) A description of the upland habitat(s) within and around the 
project area, including the area within the transmission line corridor 
or right-of-way, and a listing of plant and animal species that use the 
habitat(s); and
    (B) The temporal or spacial distribution of species considered 
important because of their commercial or recreational value.
    (vi) Wetlands and Riparian Habitat. A description of the 
floodplain, wetlands and riparian habitats, including invasive species, 
of the proposed project and surrounding area, to the extent known and 
available, including a listing of plant and animal species, including 
invasive species, that use the habitat.
    (vii) Rare, Threatened and Endangered Species. A description of any 
Rare, Threatened and Endangered Species that may be present in the 
vicinity or surrounding area of the proposed project, to the extent 
known and available, include:
    (A) A listing of both Federal- and state-listed, or proposed to be 
listed, threatened and endangered species present in the project area;
    (B) Identification of habitat requirements;
    (C) A reference to any known biological opinion, status reports, or 
recovery plans pertaining to listed species; and
    (D) The extent and location of any critical habitat, or other 
habitat for listed species in the project area;
    (vii) Recreation and Land Use. A description of the recreation uses 
(including public use), facilities or measures as well as land uses, 
ownership and management of the proposed project and surrounding area. 
This section should address recreation opportunities associated with 
the reservoir(s), river, and project lands; conservation of shore lands 
and riparian areas; and public access, flow, facilities, aesthetics, 
reservoir levels, and safety measures. In preparing this section the 
applicant should consider the needs of persons with disabilities. The 
section should distinguish between different kinds of recreational 
opportunities (e.g., various types of boating--challenge white water or 
scenic canoeing or power boating; and fishing activities--drift boat 
fishing or wading or bank fishing). To the extent known and available, 
this section should include:
    (A) A consideration of whether the river on which the project is 
located is:
    (1) Within the same basin, as a designated part of, or under study 
for inclusion in the National Wild & Scenic River System;
    (2) Listed on the Nationwide Rivers Inventory (NRI); and/or
    (3) Part of a state river protection program;
    (B) A consideration of whether any project lands are designated as 
part of, or under study for inclusion in, the National Trails System or 
designated as, or under study for inclusion as, a Wilderness Area;
    (C) A detailed description of the existing recreational facilities 
(i.e. type, location, capacity, usage, condition, ownership and 
management) within the project vicinity;
    (D) A detailed description of other recreational uses of project 
lands, waters, and riparian areas (i.e. types number, locations 
capacity information);
    (E) Any provision for a shoreline buffer zone around the reservoir 
and/or river shoreline that must be within the project boundary, above 
the normal maximum surface elevation of the project reservoir, and of 
sufficient width to allow public access to project lands and waters and 
to protect the scenic, public recreational, cultural, and other 
environmental values of the reservoir and river shoreline;
    (F) Any existing measures required by any local, State, Tribal, or 
Federal permit or license, any measure voluntarily constructed, 
operated or maintained, by the applicant, to protect recreation 
opportunities or land uses of the proposed project and surrounding 
area;
    (G) Any future recreation needs identified in the current State 
Comprehensive Outdoor Recreation Plans, other plans on file with the 
Commission, or other relevant local, State, and regional conservation 
and recreation plans and activities; and
    (H) A description of the applicant's policy, if any, with regard to 
permitting development of piers, docks, boat landings, bulkheads, and 
other shoreline facilities on project lands and waters.
    (ix) Aesthetic Resources. A description of the visual 
characteristics of the lands and waters affected by the project. To the 
extent known and available, this section should include a description 
of the dam, natural water features, and other scenic attractions of the 
project and surrounding vicinity.
    (x) Cultural Resources. A description of the known cultural or 
historical resources of the proposed project and surrounding area, to 
the extent known and available, including:
    (A) An identification of any historic or archaeological site in the 
proposed project area, with particular emphasis on sites or properties 
either listed in, or recommended by the State Historic Preservation 
Officer or Tribal Historic Preservation Officer for inclusion in, the 
National Register of Historic Places that could be affected by the 
construction or operation of the proposed project; and
    (B) A description of any existing discovery measures, such as 
surveys, inventories, and limited subsurface testing work, for the 
purpose of locating, identifying, and assessing the significance of 
historic and archaeological resources that have been undertaken at the 
project or on project lands; and
    (C) Identification of Indian tribes that may attach religious and 
cultural significance to historic properties within the project 
boundary or in the surrounding area; as well as available information 
on Indian traditional cultural and religious properties. (Note: 
National Historic Preservation Act regulations include a reminder that 
tribal concerns relating to cultural and historic properties are not 
limited to reservation lands. Frequently, historic properties of 
religious and cultural significance are located on ancestral, 
aboriginal or ceded lands of Indian Tribes.) An applicant must delete 
from any information made available under this section, specific site 
or property locations the disclosure of which would create a risk of 
harm, theft, or destruction of archaeological or Native American 
cultural resources or to the site at which the resources are located, 
or would violate any Federal law, including the Archaeological 
Resources Protection Act of 1979, 16 U.S.C. 470w-3, and the National 
Historic Preservation Act of 1966, 16 U.S.C. 470hh.
    (xi) Socio-economic Resources. A description of the socio-economic 
resources of the proposed project and surrounding area, to the extent 
known and available, including:
    (A) A description of the employment, population, housing, personal 
income, local governmental services, local tax revenues and other 
factors within the towns and counties in the vicinity of the proposed 
project;
    (B) A description of employment, population and personal income 
trends in the project vicinity ; and
    (C) Identification of any environmental justice issues.
    (xii) Tribal Resources. This section should include information on 
Indian tribes, tribal lands, resources, and interests that may be 
affected by the project, to the extent known. Tribal resources to be 
addressed here will generally include some or all of the resources 
discussed or listed in the other resource related sections. For 
example, erosion affecting tribal cultural sites may be discussed in 
multiple

[[Page 14029]]

resource sections. To the extent known, the applicant should also 
identify certain tribal-specific issues that do not neatly fit into the 
other discrete resource sections. Such issues may include 
identification of tribal fishing practices at the project, land use, or 
agreements between the applicant and an Indian Tribe.
    (H) Copies of any approved Exhibit F showing all major project 
structures in sufficient detail to provide a full understanding of the 
project, including:
    (1) Plan view;
    (2) Elevation view; and
    (3) Section view.
    (I) Copies of any approved Exhibit G showing:
    (1) The location of the project and principle project features;
    (2) Project boundary, if required under the current license;
    (3) Recreation facilities or areas; and
    (4) Federal, tribal, state lands.
    (J) A list of issues, by resource area, in the form of a scoping 
document. The applicant should identify:
    (1) Resource issues by resource area, including any issues raised 
during any initial contact with the entities identified in paragraph 
(b)(1) of this section;
    (2) Resource management plans and objectives related to the project 
area and prepared by the potential applicant or any resource agency;
    (3) Existing studies that have already been completed; and
    (4) Preliminary information or studies needed.
    (K) The following construction and operation information, if 
applicable:
    (1) The original license application and the order issuing the 
license and any subsequent license application and subsequent order 
issuing a license for an existing project, including approved Exhibit 
drawings not listed in paragraphs (c)(2)(xii)(H) and (I) of this 
section, including as-built exhibits; any order issuing amendments or 
approving exhibits, and any order issuing annual licenses for the 
existing project; and
    (2) A copy of any state issued water quality certificate under 
section 401 of the Clean Water Act;
    (3) All data relevant to whether the project is and has been 
operated in accordance with the requirements of each license article, 
including minimum flow requirements, ramping rates, reservoir elevation 
limitations, and environmental monitoring data;
    (4) A compilation of project generation and respective outflow with 
time increments not to exceed one hour, unless use of another time 
increment can be justified, for the period beginning five years before 
the filing of a notice of intent;
    (5) Any report on the total actual annual generation, the total 
value of annual generation, and annual operation and maintenance costs 
for the period beginning five years before the filing of a notice of 
intent;
    (6) Any reports on original project costs, current net investment, 
and available funds in the amortization reserve account; and
    (7) A current and complete electrical single-line diagram of the 
project showing the transfer of electricity from the project to the 
area utility system or point of use.
    (L) If applicable, the applicant must also provide the following 
safety and structural adequacy information in the PAD:
    (1) The most recent emergency action plan for the project or a 
letter exempting the project from the emergency action plan 
requirement;
    (2) Any independent consultant's reports required by part 12 of 
this chapter and filed on or after January 1, 1981;
    (3) Any report on operation or maintenance problems, other than 
routine maintenance, occurring within the five years preceding the 
filing of a notice of intent or within the most recent five-year period 
for which data exists, and associated costs of such problems under the 
Commission's Uniform System of Accounts;
    (4) Any construction report for an existing project; and
    (5) Any public correspondence relating to the safety and structural 
adequacy of the existing project.
    (M) If applicable, the applicant must also provide the following 
energy conservation information under section 10(a)(2)(C) of the 
Federal Power Act, related to the licensee's efforts to conserve 
electricity or to encourage conservation by its customers including 
any:
    (1) Plan of the licensee;
    (2) Public correspondence; and
    (3) Other pertinent information relating to a conservation plan.
    (O) If applicable, the applicant must also provide a statement of 
whether or not it will seek benefits under section 210 of the Public 
Utility Regulatory Policies Act of 1978 (PURPA) by satisfying the 
requirements for qualifying hydroelectric small power production 
facilities in Sec.  292.203 of this chapter. If benefits under section 
210 of PURPA are sought, a statement of whether or not the applicant 
believes the project is located at a new dam or diversion (as that term 
is defined in Sec.  292.202(p) of this chapter), and a request for the 
agencies' view on that belief, if any.
    (P) A plan and schedule for all pre-application activity that 
includes any time frames for pre-application actions set forth in this 
part, that to the extent reasonably possible maximizes coordination of 
Federal, state, and tribal permitting and certification processes 
(process plan), and which contemplates finalization of the applicant's 
information-gathering and study plan provided for in Sec. Sec.  5.9-
5.14, including any dispute resolution, within one year of the 
applicant's notification of intent, and approximately two years for 
studies and application development.


Sec.  5.5  Commission notice.

    (a) Notices. Within 30 days of the notification required under 
Sec.  5.3, filing of the Pre-Application Document pursuant to Sec.  
5.4, and filing of any request to use the traditional licensing process 
or alternative procedures, the Commission will provide notice by:
    (1) Publishing notice in the Federal Register;
    (2) Publishing notice once in a daily or weekly newspaper published 
in the county or counties in which the project or any part thereof or 
the lands affected thereby are situated; and
    (3) Notifying the appropriate Federal and state resource agencies, 
state water quality agencies, Indian tribes, and non-governmental 
organizations by mail; of:
    (i) The decision of the Director of the Office of Energy Projects 
on any request to use the traditional licensing process or alternative 
procedures.
    (ii) If the potential license application is to be developed and 
filed pursuant to this part:
    (A) The applicant's intent to file a license application;
    (B) The filing of the Pre-Application Document;
    (C) Assignment of a project number and commencement of a 
proceeding;
    (D) A request for comments on the Pre-Application Document 
(including the proposed process plan and schedule);
    (E) A statement that all communications to or from the Commission 
staff related to the merits of the proceeding shall be placed into the 
record;
    (F) Any request for other Federal or state agencies or Indian 
tribes to be cooperating agencies for purposes of developing an 
environmental document;
    (G) The Commission's intent with respect to preparation of an 
environmental impact statement; and
    (H) A public meeting and site visit to be held within 30 days of 
the notice.
    (b) Scoping meeting and site visit. The purpose of the public 
meeting and site visit is to:

[[Page 14030]]

    (1) Initiate environmental issues scoping pursuant to the National 
Environmental Policy Act;
    (2) Review and discuss existing conditions and resource management 
objectives;
    (3) Review and discuss existing information and make preliminary 
identification of information needs;
    (4) Develop a process plan and schedule for pre-filing activity 
that to the extent reasonably possible maximizes coordination of 
Federal, state, and tribal permitting and certification processes;
    (5) Discuss the appropriateness of the license applicant for 
designation as the Commission's non-Federal representative for purposes 
of consultation under the Endangered Species Act or Magnuson-Stevens 
Fishery Conservation and Management Act; and
    (6) Discuss the appropriateness of any Federal or state agency or 
Indian tribe acting as a cooperating agency for development of an 
environmental document pursuant to the National Environmental Policy 
Act.
    (c) Method of Notice. The public notice provided for in this 
section, and the public notice of application tendering and notice that 
the application is accepted and ready for environmental analysis 
provided for in Sec.  5.18 and Sec.  5.21, respectively, will given by:
    (1) Publishing notice in the Federal Register;
    (2) Publishing notice once every week for four weeks in a daily or 
weekly newspaper published in the county or counties in which the 
project or any part thereof or the lands affected thereby are situated, 
and, as appropriate, tribal newspapers;
    (3) Notifying appropriate Federal, state, and interstate resource 
agencies, Indian tribes, and non-governmental organizations by mail.


Sec.  5.6  Comments and information requests.

    (a) Filing requirements. Comments on the Pre-Application Document, 
and requests for information by all participants, including Commission 
staff, must be filed with the Commission within 60 days following the 
Commission's notice pursuant to Sec.  5.5 of the notification of intent 
and Pre-Application Document. Comments may include initial information 
requests and study requests.
    (b) Applicant seeking PURPA benefits; estimate of fees. If an 
applicant has stated that it intends to seek PURPA benefits, comments 
on the Pre-Application document by a fish and wildlife agency must 
provide the applicant with a reasonable estimate of the total costs the 
agency anticipates it will incur and set mandatory terms and conditions 
for the proposed project. An agency may provide an applicant with an 
updated estimate as it deems necessary. If any agency believes that its 
most recent estimate will be exceeded by more than 25 percent, it must 
supply the applicant with a new estimate and submit a copy to the 
Commission.


Sec.  5.7  Revised pre-application document.

    (a) Within 45 days following the receipt of comments on the Pre-
Application Document, including information and study requests, the 
Applicant shall file with the Commission a revised Pre-Application 
Document and proposed study plan.
    (b) The revised Pre-Application Document shall include copies of 
comments on the initial Pre-Application Document, a description of 
consultation between the Applicant and the participants with respect to 
information and study proposals and, if the Applicant does not agree to 
an information or study request, shall explain why the information is 
unnecessary.


Sec.  5.8  Applicant's proposed study plan.

    (a) The Applicant's proposed study plan to accompany the revised 
Pre-Application Document shall include with respect to each proposed 
study:
    (1) A detailed description of the study and the methodology to be 
used;
    (2) A schedule; and
    (3) Provisions for status reports and opportunities for a meeting 
or periodic meetings to evaluate the data being collected.
    (b) The applicant's proposed study plan must:
    (1) Describe the goals and objectives of the study and the 
information to be obtained;
    (2) Address any known resource management goals of the agencies 
with jurisdiction over the resource to be studied;
    (3) Describe existing information concerning the subject of the 
study proposal, and the need for additional information;
    (4) Explain any nexus between project operations and effects 
(direct, indirect, and/or cumulative) on the resource to be studied;
    (5) Explain how any proposed study methodology (including any 
preferred data collection and analysis techniques, or objectively 
quantified information, and a schedule including appropriate field 
season(s) and the duration) is consistent with generally accepted 
practice in the scientific community or, as appropriate, considers any 
known tribal interests;
    (6) Describe considerations of cost and practicality, and why any 
proposed alternatives would not be sufficient to meet the stated 
information needs.


Sec.  5.9  Scoping document and study plan meeting.

    (a) Within 30 days following submittal of the revised Pre-
Application Document and proposed study plan, the Commission will issue 
Scoping Document 1 and public notice of a study plan meeting to be held 
within 60 days for the purpose of discussing the Applicant's proposed 
study plan.
    (b) Scoping Document 1 will include:
    (1) An introductory section describing the purpose of the scoping 
document, the date and time of the study plan meeting, procedures for 
submitting written comments, and a request for information from state 
and Federal resource agencies, Indian tribes, non-governmental 
organizations, and individuals;
    (2) Identification of the proposed action, including a description 
of the project's location, facilities, and operation, and any proposed 
protection and enhancement measures, and other alternatives to the 
proposed action, including alternatives considered but eliminated from 
further study and the no-action alternative;
    (3) Identification of resource issues to be analyzed in the 
environmental document, including those that would be cumulatively 
affected along with a description of the geographic and temporal scope 
of the cumulatively-affected resources;
    (4) A list of qualifying Federal and state comprehensive waterway 
plans;
    (5) A process plan and schedule and draft outline of the 
environmental document;
    (6) A list of recipients; and
    (7) The applicant's proposed study plan in an appendix.


Sec.  5.10  Comments and information-gathering or study requests.

    (a) Comments on SD1 and study plan. Comments on Scoping Document 1 
and the Applicant's proposed study plan, including any information or 
study requests, must be filed within 30 days from the issuance of 
Scoping Document 1.
    (b) Content of study request. Any information or study request 
must:
    (1) Describe the goals and objectives of the study and the 
information to be obtained;
    (2) If applicable, explain the relevant resource management goals 
of the agencies or tribes with jurisdiction over the resource to be 
studied;

[[Page 14031]]

    (3) If the requester is not a resource agency, explain any relevant 
public interest considerations in regard to the proposed study;
    (4) Describe existing information concerning the subject of the 
study proposal, and the need for additional information;
    (5) Explain any nexus between project operations and effects 
(direct, indirect, and/or cumulative) on the resource to be studied;
    (6) Explain how any proposed study methodology (including any 
preferred data collection and analysis techniques, or objectively 
quantified information, and a schedule including appropriate filed 
season(s) and the duration) is consistent with generally accepted 
practice in the scientific community or, as appropriate, considers 
relevant tribal values and knowledge;
    (7) Describe considerations of cost and practicality, and why any 
proposed alternatives would not be sufficient to meet the stated 
information needs.


Sec.  5.11  Study plan meeting.

    A study plan meeting shall be held within 30 days of the deadline 
date for filing of information-gathering and study requests for the 
purpose of clarifying such requests as necessary and resolving any 
outstanding issues with respect to the proposed study plan.


Sec.  5.12  Revised study plan and preliminary determination.

    (a) Within 30 days following the study plan meeting provided for in 
Sec.  5.11, the Applicant shall file a revised study plan for 
Commission approval. The revised study plan shall include the comments 
on the proposed study plan and a description of the efforts made to 
resolve differences over study requests. If the applicant does not 
adopt a requested study, it shall explain why the request was not 
adopted, with reference to the criteria set forth in Sec.  5.10.
    (b) Within 30 days from the date the Applicant files its revised 
study plan, the Commission will issue a Preliminary Determination with 
regard to the Applicant's study plan, including any modifications 
determined to be necessary in light of the record.
    (c) If no notice of study dispute is filed pursuant to Sec.  5.13 
within 20 days of the Preliminary Determination, the study plan as 
approved in the Preliminary Determination shall be deemed to be 
approved and final, and the Commission will issue an order directing 
the Applicant to proceed with the approved studies.


Sec.  5.13  Study dispute resolution process.

    (a) Within 20 days of the Preliminary Determination, any Federal 
agency with authority to provide mandatory conditions on a license 
pursuant to FPA section 4(e), 16 U.S.C. 797(e), or to prescribe 
fishways pursuant to FPA section 18, 16 U.S.C. 811, or any state agency 
or Indian tribe with authority to issue a water quality certification 
for the project license under section 401 of the Clean Water Act, 42 
U.S.C. 1341, may file a notice of study dispute with regard to the 
preliminary determination.
    (b) The notice of study dispute shall explain how the criteria set 
forth in section 5.10 of this part have been satisfied.
    (c) Studies and portions of study plans approved in the Preliminary 
Determination that are not the subject of a notice of dispute shall be 
deemed to be approved and final, and the Applicant shall proceed with 
those studies or portions thereof.
    (d) Within 20 days of a notice of study dispute, the Commission 
will convene one or more three-person Dispute Resolution Panels, as 
appropriate to the circumstances of each proceeding. Each such panel 
will consist of:
    (1) A person from the Commission staff or a contractor in the 
Commission's employ who is not otherwise involved in the proceeding;
    (2) One person designated by the Federal or state agency or Indian 
tribe that filed the notice of dispute who is not otherwise involved in 
the proceeding; and
    (3) A third person selected by the other two panelists from a pre-
established list of persons with expertise in the resource area. If no 
third panel member has been selected by the other two panelists within 
15 days, those two panel members will carry out the duties of the 
panel, as described herein.
    (e) If more than one agency or tribe files a notice of dispute with 
respect to the decision in the Preliminary Determination on any 
information-gathering or study request, the disputing agencies or 
tribes shall select one person to represent their interests on the 
panel.
    (f) The list of persons available to serve as a third panel member 
will be posted, as revised from time-to-time, on the hydroelectric page 
of the Commission's website. Persons willing to serve in this capacity 
should serve on the Director of the Office of Energy Projects a 
statement of their qualifications with respect to the resource with 
which they have applicable expertise. A person on the list who is 
requested and willing to serve with respect to a specific dispute will 
be required to file with the Commission at that time a current 
statement of their qualifications and a statement that they have had no 
prior involvement with the proceeding in which the dispute has arisen, 
or other financial or other conflict of interest.
    (g) All costs of the panel members representing the Commission 
staff and the agency or Tribe which served the notice of dispute will 
be borne by the Commission or the agency or Tribe, as applicable. The 
third panel member will serve without compensation, except for certain 
allowable travel expenses as defined in 31 CFR part 301.
    (h) To facilitate the delivery of information to the dispute 
resolution panel, the identity of the panel members and their addresses 
for personal service with respect to a specific dispute resolution will 
be posted on the hydroelectric page of the Commission's web site.
    (i) No later than 25 days following the notice of study dispute, 
the Applicant may file with the Commission and serve upon the panel 
members comments and information regarding the dispute.
    (j) The panel will make a finding, with respect to each information 
or study request in dispute, as to whether the criteria set forth in 
Sec.  5.10 are met or not met, and why, and provide to the Director of 
the Office of Energy Projects a recommendation based on its findings. 
No later than 50 days following the notice of study dispute, the panel 
shall file that recommendation with the Commission, a written 
recommendation to the Director of Energy Projects with respect to each 
information or study request in dispute, including all of the materials 
received by the panel. Any recommendation for the Applicant to provide 
information or a study shall include the technical specifications, 
including data acquisition techniques and methodologies.
    (k) No later than 70 days from the date of filing of the notice of 
study dispute, the Director of Energy Projects will review and consider 
the recommendations of the panel, and will issue a written decision. 
The Director's decision will be made with reference to the study 
criteria set forth in Sec.  5.10 and any applicable law or Commission 
policies and practices. The Director's decision shall constitute an 
amendment to the approved study plan.
    (l) The Commission will, if necessary, issue a Scoping Document 2 
within 30 days following the Director's decision or, if no dispute 
resolution is required, the Preliminary Decision.

[[Page 14032]]

Sec.  5.14  Conduct of studies.

    (a) Initial Status Report. (1) At an appropriate time following the 
first season of studies or other appropriate time, the applicant shall 
prepare and file with the Commission an initial status report 
containing study results and analyses to date.
    (2) Promptly following the filing of the initial status report, the 
applicant shall hold a meeting with the parties and Commission staff to 
discuss the study results and the applicant's and or other party's 
proposals, if any, to modify the study plan in light of study results 
and analyses to date.
    (3) Promptly following the meeting provided for in paragraph (a)(2) 
of this section, the applicant shall file a meeting summary and request 
to amend the approved study plan, as necessary.
    (4) Any party or the Commission staff may file a disagreement 
concerning the applicant's meeting summary and request to amend the 
approved study plan within 15 days, setting forth the basis for the 
dispute, and explaining what modifications, if any, should be made to 
the approved study plan.
    (5) Responses to any filings made pursuant to paragraph (a)(4) of 
this section shall be filed within 15 days.
    (6) No later than 15 days following the due date for responses 
provided for in paragraph (a)(5) of this section, the Director will 
issue an order resolving the disagreement, amending the approved study 
plan as appropriate, and directing the applicant to complete the study 
plan as amended.
    (7) If no party or the Commission staff files a disagreement 
concerning the applicant's meeting summary and request to amend the 
approved study plan within 15 days, the proposed amendment shall be 
deemed to be approved.
    (b) Additional information. Any request for additional information 
or study in response to the initial status report must be accompanied 
by a showing of good cause why the request should be approved, and 
which must provide, as appropriate to the facts of the case, a:
    (1) Demonstration that approved studies were not conducted as 
provided for in the approved study plan;
    (2) Demonstration that the study was conducted under anomalous 
environmental conditions or that environmental conditions have changed 
in a material way;
    (3) Statement of material changes in the law or regulations 
applicable to information request;
    (4) Statement explaining why the objectives of any approved study 
to which the information request relates cannot be achieved using 
existing data;
    (5) Statement explaining why the request was not made earlier;
    (6) Statement explaining significant changes in the project 
proposal or that significant new information material to the study 
objectives has become available; and
    (7) In the case of a new study, an explanation why the study 
request satisfies the study criteria in Sec.  5.12.
    (c) Updated Status Report. After the second field season of studies 
or other appropriate time following the initial status report, the 
applicant shall prepare and file an updated status report. The review, 
comment, and disagreement resolution provisions of paragraphs (a)(4)-
(7) of this section shall apply to the updated status report, and any 
request for additional information or study in response to the updated 
report must be accompanied by a demonstration of extraordinary 
circumstances warranting approval of the request, and must address the 
criteria set forth in paragraphs (b)(1)-(7) of this section, as 
appropriate to the facts of the case. The applicant shall promptly 
proceed to complete any remaining undisputed information-gathering or 
studies under its proposed amendments to the study plan, if any, and 
shall proceed to complete any information-gathering or studies that are 
the subject of a disagreement upon the Director's order resolving the 
disagreement.


Sec.  5.15  Draft license application.

    (a) Following the filing of the updated status report, but no later 
than 150 days prior to the deadline for filing a new or subsequent 
license application, if applicable, the Applicant shall file for 
comment a draft license application.
    (b) The draft license application shall contain, to the extent 
practicable, the contents required for license applications by part 4, 
subpart E, F, or G and Sec. Sec.  16.9 and 16.10 of this chapter, 
except that the Exhibit E required to be included with an application 
filed under this part must meet the form and contents of Exhibit E set 
forth in Sec.  5.17(b).
    (c) An applicant that has been designated as the Commission's non-
Federal representative may include a draft Biological Assessment, 
Essential Fish Habitat Assessment, and draft Historic Properties 
Management Plan with its draft license application.
    (d) Within 90 days of the date the Applicant files the draft 
license application, parties and the Commission staff may file comments 
on the draft application, which may include recommendations on whether 
the Commission should prepare an Environmental Assessment (with or 
without a draft Environmental Assessment) or an Environmental Impact 
Statement. Any party whose comments request new information, studies, 
or other amendments to the approved study plan must include a 
demonstration of extraordinary circumstances, pursuant to the 
requirements of Sec.  5.14(b).


Sec.  5.16  Filing of application.

    (a) Timing of application. An application for a new or subsequent 
license shall be filed no later than 24 months before the existing 
license expires.
    (b) Subsequent licenses. An applicant for a subsequent license must 
file its application under part I of the Federal Power Act. The 
provisions of section 7(a) of the Federal Power Act do not apply to 
licensing proceedings involving a subsequent license.
    (c) Applicant notice. An applicant for a subsequent license that 
proposes to expand an existing project to encompass additional lands 
must include in its application a statement that the applicant has 
notified, by certified mail, property owners on the additional lands to 
be encompassed by the project and governmental agencies and 
subdivisions likely to be interested in or affected by the proposed 
expansion.
    (d) Filing and service. (1) Each applicant for a license under this 
part must submit to the Commission's Secretary for filing an original 
and eight copies of the application. The applicant must serve one copy 
of the application or petition on the Director of the Commission's 
Regional Office for the appropriate region and on each resource agency, 
Indian tribe, or member of the public consulted pursuant to this part.
    (2)(i) An applicant must make information regarding its project 
reasonably available to the public for inspection and reproduction, 
from the date on which the applicant files its application for a 
license until the licensing proceeding for the project is terminated by 
the Commission. This information includes a copy of the complete 
application for license, together with all exhibits, appendices, and 
any amendments, pleadings, supplementary or additional information, or 
correspondence filed by the applicant with the Commission in connection 
with the application.
    (ii) An applicant must delete from any information made available 
to the public under this section, specific site or property locations 
the disclosure of which would create a risk of harm, theft,

[[Page 14033]]

or destruction of archeological or native American cultural resources 
or to the site at which the sources are located, or would violate any 
Federal law, include the Archeological Resources Protection Act of 
1979, 16 U.S.C. 470w-3, and the National Historic Preservation Act of 
1966, 16 U.S.C. 470hh.
    (3)(i) An applicant must make available the information specified 
in paragraph (c)(2) of this section in a form that is readily 
accessible, reviewable, and reproducible, at the same time as the 
information is filed with the Commission or required by regulation to 
be made available.
    (ii) An applicant must make the information specified in paragraph 
(c)(2) of this section available to the public for inspection:
    (A) At its principal place of business or at any other location 
that is more accessible to the public, provided that all of the 
information is available in at least one location:
    (B) During regular business hours; and
    (C) In a form that is readily accessible, reviewable, and 
reproducible.
    (iii) The applicant must provide a copy of the complete application 
(as amended) to a public library or other convenient public office 
located in each county in which the proposed project is located.
    (iv) An applicant must make requested copies of the information 
specified in paragraph (c)(2) of this section available either:
    (A) At its principal place of business or at any other location 
that is more accessible to the public, after obtaining reimbursement 
for reasonable costs of reproduction; or
    (B) Through the mail, after obtaining reimbursement for postage 
fees and reasonable costs of reproduction.
    (4) Anyone may file a petition with the Commission requesting 
access to the information specified in paragraph (c)(2) of this section 
if it believes that the applicant is not making the information 
reasonably available for public inspection or reproduction. The 
petition must describe in detail the basis for the petitioner's belief.
    (5) An applicant must publish notice twice of the filing of its 
application, no later than 14 days after the filing date in a daily or 
weekly newspaper of general circulation in each county in which the 
project is located. The notice must disclose the filing date of the 
application and briefly summarize it, including the applicant's name 
and address, the type of facility applied for, its proposed location, 
and the places where the information specified in paragraph (c)(2) of 
this section is available for inspection and reproduction. The 
applicant must promptly provide the Commission with proof of the 
publication of this notice.
    (e) PURPA benefits. (1) Every application for a license for a 
project with a capacity of 80 megawatts or less must include in its 
application copies of the statements made under Sec.  4.38(b)(1)(vi) of 
this chapter.
    (2) If an applicant reverses a statement of intent not to seek 
PURPA benefits:
    (i) Prior to the Commission issuing a license, the reversal of 
intent will be treated as an amendment of the application under Sec.  
4.35 and the applicant must:
    (A) Repeat the pre-filing consultation process under this part; and
    (B) Satisfy all the requirements in Sec.  292.208 of this chapter; 
or
    (ii) After the Commission issues a license for the project, the 
applicant is prohibited from obtaining PURPA benefits.
    (f) Limitations on submitting applications. The provisions of 
Sec. Sec.  4.33(b), (c), and (e) of this chapter apply to license 
applications filed under this section.
    (g) Rejection or dismissal. If the Commission rejects or dismisses 
an application for a new or subsequent license filed under this part 
pursuant to the provisions of Sec.  5.19, the application may not be 
refiled after the new or subsequent license application filing deadline 
specified in paragraph (a) of this section.


Sec.  5.17  Application content.

    (a) Each license application filed pursuant to this part must:
    (1) Identify every person, citizen, association of citizens, 
domestic corporation, municipality, or state that has or intends to 
obtain and will maintain any proprietary right necessary to construct, 
operate, or maintain the project;
    (2) Identify (providing names and mailing addresses):
    (i) Every county in which any part of the project, and any Federal 
facilities that would be used by the project, would be located;
    (ii) Every city, town, or similar local political subdivision:
    (A) In which any part of the project, and any Federal facilities 
that would be used by the project, would be located; or
    (B) That has a population of 5,000 or more people and is locate 
within 15 miles of the project dam;
    (iii) Every irrigation district, drainage district, or similar 
special purpose political subdivision:
    (A) In which any part of the project, and any Federal facilities 
that would be used by the project, would be located; or
    (B) That owns, operates, maintains, or uses any project facilities 
that would be used by the project;
    (iv) Every other political subdivision in the general area of the 
project that there is reason to believe would likely be interested in, 
or affected by, the application; and
    (v) All Indian tribes that may be affected by the project.
    (3)(i) For a license (other than a license under Section 15 of the 
Federal Power Act) state that the applicant has made, either at the 
time of or before filing the application, a good faith effort to give 
notification by certified mail of the filing of the application to:
    (A) Every property owner or record of any interest in the property 
within the bounds of the project, or in the case of the project without 
a specific project boundary, each such owner of property which would 
underlie or be adjacent to any project works including any 
impoundments; and
    (B) The entities identified in paragraph (a)(2) of this section, as 
well as any other Federal, state, municipal or other local government 
agencies that there is reason to believe would likely be interested in 
or affected by such application.
    (ii) Such notification must contain the name, business address, and 
telephone number of the applicant and a copy of Exhibit G contained in 
the application, and must state that a license application is being 
filed with the Commission.
    (4)(i) As to any facts alleged in the application or other 
materials filed, be subscribed and verified under oath in the form set 
forth in paragraph (a)(3)(ii) of this section by the person filing, an 
officer thereof, or other person having knowledge of the matters set 
forth. If the subscription and verification is by anyone other than the 
person filing or an officer thereof, it shall include a statement of 
the reasons therefor.
    (ii) This application is executed in the

State of---------------------------------------------------------------
County of--------------------------------------------------------------
By:--------------------------------------------------------------------
(Name)-----------------------------------------------------------------
(Address)--------------------------------------------------------------

being duly sworn, depose(s) and say(s) that the contents of this 
application are true to the best of (his or her) knowledge or belief. 
The undersigned applicant(s) has (have) signed the application this----
----day----------, 2----.
-----------------------------------------------------------------------
(Applicant(s))

By:--------------------------------------------------------------------
    Subscribed and sworn to before me, a [Notary Public, or title of 
other official

[[Page 14034]]

authorized by the state to notarize documents, as appropriate] this --
------day of ----------, 2------.
/SEAL [if any]

-----------------------------------------------------------------------
(Notary Public, or other authorized official)

    (5) Contain the information and documents prescribed in the 
following sections of this chapter, except as provided in paragraph (b) 
of this section, according to the type of application:
    (i) License for a minor water power project and a major water power 
project 5 MW or less: Sec.  4.61 of this chapter;
    (ii) License for a major unconstructed project and a major modified 
project: Sec.  4.41 of this chapter;
    (iii) License for a major project--existing dam: Sec.  4.51 of this 
chapter; or
    (iv) License for a project located at a new dam or diversion where 
the applicant seeks PURPA benefits: Sec.  292.208.
    (b) The specifications for Exhibit E in Sec. Sec.  4.41, 4.51, or 
4.61 of this chapter shall not apply to applications filed under this 
part. The Exhibit E included in any license application filed under 
this part shall meet the following format and content requirements: 
Exhibit E is an Environmental Document. Information provided in the 
document must be organized according to paragraphs (b)(1) and (2) of 
this section, as appropriate. The Environmental Document must address 
resources listed in the Pre-Application Document provided for in Sec.  
5.3. In preparing the Environmental Document, the applicant shall 
follow the Commission's ``Preparing Environmental Assessments: 
Guidelines for Applicants, Contractors, and Staff.'' The Environmental 
Assessment Guidelines may be viewed on the Commission's Web site or 
through its Public Reference Room.
    (1) Environmental Document Contents:
    (i) General Description of the River Basin. Describe the river 
system, including relevant tributaries; give measurements of the area 
of the basin and length of stream; identify the project's river mile 
designation or other reference point; describe the topography and 
climate; and discuss major land uses and economic activities
    (ii) Cumulative Effects. List cumulatively affected resources based 
on the Commission's Scoping Document, consultation, and study results. 
Discuss the geographic and temporal scope of analysis for those 
resources. Describe how resources are cumulatively affected and explain 
the choice of the geographic scope of analysis. Include a brief 
discussion of past, present, and future actions, and their effects on 
resources based on the new license term (30-50 years). Highlight the 
effect on the cumulatively affected resources from reasonably 
foreseeable future actions. Discuss past actions' effects on the 
resource in the Affected Environment section.
    (iii) Applicable Laws. Include a discussion of the status of 
compliance with or consultation under the following laws, if 
applicable:
    (A) Section 401 of the Clean Water Act. The applicant must file a 
request for a water quality certification (WQC), required by section 
401 of the Clean Water Act, as provided for in this section. Describe 
the conditions of the water quality certificate, if known.
    (B) Endangered Species Act (ESA). Briefly describe the consultation 
process used to address project effects on Federally listed or proposed 
species in the project vicinity. Summarize any anticipated 
environmental effects on these species and provide the status of the 
consultation process. If the applicant is the Commission's non-Federal 
designee for informal consultation under the ESA, the applicant's draft 
biological assessment shall be included.
    (C) Magnuson-Stevens Fishery Conservation and Management Act. 
Document from the National Marine Fisheries Service (NMFS) and/or the 
appropriate Regional Fishery Management Council any essential fish 
habitat (EFH) that may be affected by the project. Briefly discuss each 
managed species and life stage for which EFH was designated. Include, 
as appropriate, the abundance, distribution, available habitat, and 
habitat use by the managed species. If the project may affect EFH, 
prepare an ``EFH Assessment'' of the impacts of the project. The EFH 
Assessment should contain the information outlined in 50 CFR 
600.920(e).
    (D) Coastal Zone Management Act (CZMA). Section 307(c)(3) of the 
CZMA requires that all Federally licensed and permitted activities be 
consistent with approved state Coastal Zone Management Programs. If the 
project is located within a coastal zone boundary or if a project 
affects a resource located in the boundaries of the designated coastal 
zone, the applicant must certify that the project is consistent with 
the state Coastal Zone Management Program. If the project is within or 
affects a resource within the coastal zone, provide the date the 
applicant sent the consistency certification information to the state 
agency, the date the state agency received the certification, and the 
date and action taken by the state agency (for example, the agency will 
either agree or disagree with the consistency statement, waive it, or 
ask for additional information). Describe any conditions placed on the 
state agency's concurrence and assess the conditions in the appropriate 
section of the license application. If the project is not in or would 
not affect the coastal zone, state so and cite the coastal zone program 
office's concurrence.
    (E) National Historic Preservation Act (NHPA). Section 106 of NHPA 
requires the Commission to take into account the effect of licensing a 
hydropower project on any historic properties, and allow the Advisory 
Council on Historic Preservation (Advisory Council) a reasonable 
opportunity to comment on the proposed action. ``Historic Properties'' 
are defined as any district, site, building, structure, or object that 
is included in or eligible for inclusion in the National Register of 
Historic Places (NRHP). If there would be an adverse effect on historic 
properties, the applicant shall include a Historic Properties 
Management Plan (HPMP) to avoid or mitigate the effects. The applicant 
shall include documentation of consultation with the Council, the State 
Historic Preservation Officer, and affected tribes on the HPMP.
    (F) Pacific Northwest Power Planning and Conservation Act (Act). If 
the project is not within the Columbia River Basin, this section shall 
not be included. The Columbia River Basin Fish and Wildlife Program 
(Program) developed under the Act directs agencies to consult with 
Federal and state fish and wildlife agencies, appropriate Indian 
tribes, and the Northwest Power Planning Council (Council) during the 
study, design, construction, and operation of any hydroelectric 
development in the basin. Section 12.1A of the Program outlines 
conditions that should be provided for in any original or new license. 
The program also designates certain river reaches as protected from 
development. The applicant shall document consultation with the 
Council, describe how the act applies to the project, and how the 
proposal would or would not be consistent with the program.
    (G) Wild and Scenic Rivers and Wilderness Acts. Include a 
description of any areas within or in the vicinity of the proposed 
project boundary that are included in, or have been designated for 
study for inclusion in, the National Wild and Scenic Rivers System, or 
that have been designated as wilderness area, recommended for such 
designation, or designated as a

[[Page 14035]]

wilderness study area under the Wilderness Act.
    (iv) Proposed Action and Action Alternatives. (A) Explain the 
effects of the applicant's proposal on environmental resources. For 
each resource area addressed include:
    (1) A discussion of the affected environment;
    (2) An analysis of the proposed action and any other recommended 
alternatives or measures; and
    (3) Any unavoidable adverse impacts.
    (B) The Environmental Document must contain, with respect to the 
resources listed in the Pre-Application Document provided for in Sec.  
5.3, and any other resources identified in the Commission's 
environmental scoping document prepared pursuant to the National 
Environmental Policy Act and Sec.  5.3, the following information, 
commensurate with the scope of the project:
    (1) Affected Environment. The applicant must provide a detailed 
description of the affected environment or area(s) to be affected by 
the proposed project by each resource area. This information should be 
consistent with the information provided in the revised Pre-Application 
Document, plus any additional information on affected environment that 
the applicant has identified through implementation of its approved 
study plan.
    (2) Environmental Analysis. The applicant must present the results 
of its studies conducted under the approved study plan by resource area 
and use the data generated by the studies to evaluate the beneficial 
and adverse environmental effects of its proposed project. This section 
shall also include, if applicable, a description of any anticipated 
continuing environmental impacts of continued operation of the project, 
and the incremental impact of proposed new development of project works 
or changes in project operation.
    (3) Proposed Environmental Measures. The applicant must provide, by 
resource area, any proposed new environmental measures, including, but 
not limited to, changes in the project design or operations, to address 
the environmental effects identified above and its basis for proposing 
the measures. This section shall also include a statement of existing 
measures to be continued for the purpose of protecting and improving 
the environment and any proposed preliminary environmental measures 
received from the consulted resource agencies or tribes. If an 
applicant does not adopt a preliminary environmental measure proposed 
by a resource agency, Indian tribe, or member of the public, it shall 
include its reasons, based on project-specific information.
    (4) Unavoidable Adverse Impacts. Based on the environmental 
analysis, discuss any adverse impacts that would occur despite the 
recommended environmental measures. Discuss whether any such impacts 
are short or long-term, minor or major, cumulative or site-specific.
    (5) Developmental Analysis. (i) Discuss the economic benefits of 
the proposed action, the estimated costs of various alternatives, and 
environmental recommendations and their effect on project economics. 
Evaluate the cost of each measure considered and give the total and 
annual levelized costs and net benefits of:
    (A) The existing conditions--the way the project operates now;
    (B) As proposed by the applicant (the proposed action); and
    (C) Any other action alternatives.
    (ii) Estimate the value of the developmental resources--power 
generation, water supply, irrigation, navigation, and flood control--
under each alternative considered. Discuss economic benefits of the 
project or project capacity expansion. For those measures that reduce 
the amount of project power or the value of the project power, estimate 
the cost to replace these power benefits. Provide separate economic 
information for each recommended measure so that the approximate cost 
of any reasonable combination of measures can be calculated.
    (v) Consistency with Comprehensive Plans. Identify relevant 
comprehensive plans and explain how and why the proposed project would, 
would not, or should not comply with such plans and a description of 
any relevant resource agency or Indian tribe determination regarding 
the consistency of the project with any such comprehensive plan.
    (vi) Consultation Documentation. Include a list containing the 
name, and address of every Federal, state, and interstate resource 
agency, Indian tribe, or member of the public with which the applicant 
consulted in preparation of the Environmental Document.
    (vii) Literature cited. Cite all materials referenced including 
final study reports, journal articles, other books, agency plans, and 
local government plans.
    (2) The applicant must also provide in the Environmental Document:
    (i) Functional design drawings of any fish passage and collection 
facilities or any other facilities necessary for implementation of 
environmental measures, indicating whether the facilities depicted are 
existing or proposed (these drawings must conform to the specifications 
of Sec.  4.39 of this chapter regarding dimensions of full-sized 
prints, scale, and legibility);
    (ii) A description of operation and maintenance procedures for any 
existing or proposed measures or facilities;
    (iii) An implementation or construction schedule for any proposed 
measures or facilities, showing the intervals following issuance of a 
license when implementation of the measures or construction of the 
facilities would be commenced and completed;
    (iv) An estimate of the costs of construction, operation, and 
maintenance, of any proposed facilities, and of implementation of any 
proposed environmental measures, including a statement of the sources 
and extent of financing; and
    (v) A map or drawing that conforms to the size, scale, and 
legibility requirements of Sec.  4.39 of this chapter showing by the 
use of shading, cross-hatching, or other symbols the identity and 
location of any measures or facilities, and indicating whether each 
measure or facility is existing or proposed (the map or drawings in 
this exhibit may be consolidated).
    (c) Information to be provided by an applicant for new license: 
Filing requirements.
    (1) Information to be supplied by all applicants. All applicants 
for a new license under this part must file the following information 
with the Commission:
    (i) A discussion of the plans and ability of the applicant to 
operate and maintain the project in a manner most likely to provide 
efficient and reliable electric service, including efforts and plans 
to:
    (A) Increase capacity or generation at the project;
    (B) Coordinate the operation of the project with any upstream or 
downstream water resource projects; and
    (C) Coordinate the operation of the project with the applicant's or 
other electrical systems to minimize the cost of production.
    (ii) A discussion of the need of the applicant over the short and 
long term for the electricity generated by the project, including:
    (A) The reasonable costs and reasonable availability of alternative 
sources of power that would be needed by the applicant or its 
customers, including wholesale customers, if the applicant is not 
granted a license for the project;
    (B) A discussion of the increase in fuel, capital, and any other 
costs that would be incurred by the applicant or its customers to 
purchase or generate

[[Page 14036]]

power necessary to replace the output of the licensed project, if the 
applicant is not granted a license for the project;
    (C) The effect of each alternative source of power on:
    (1) The applicant's customers, including wholesale customers;
    (2) The applicant's operating and load characteristics; and
    (3) The communities served or to be served, including any 
reallocation of costs associated with the transfer of a license from 
the existing licensee.
    (iii) The following data showing need and the reasonable cost and 
availability of alternative sources of power:
    (A) The average annual cost of the power produced by the project, 
including the basis for that calculation;
    (B) The projected resources required by the applicant to meet the 
applicant's capacity and energy requirements over the short and long 
term including:
    (1) Energy and capacity resources, including the contributions from 
the applicant's generation, purchases, and load modification measures 
(such as conservation, if considered as a resource), as separate 
components of the total resources required;
    (2) A resource analysis, including a statement of system reserve 
margins to be maintained for energy and capacity; and
    (3) If load management measures are not viewed as resources, the 
effects of such measures on the projected capacity and energy 
requirements indicated separately;
    (C) For alternative sources of power, including generation of 
additional power at existing facilities, restarting deactivated units, 
the purchase of power off-system, the construction or purchase and 
operation of a new power plant, and load management measures such as 
conservation:
    (1) The total annual cost of each alternative source of power to 
replace project power;
    (2) The basis for the determination of projected annual cost; and
    (3) A discussion of the relative merits of each alternative, 
including the issues of the period of availability and dependability of 
purchased power, average life of alternatives, relative equivalent 
availability of generating alternatives, and relative impacts on the 
applicant's power system reliability and other system operating 
characteristics; and
    (D) The effect on the direct providers (and their immediate 
customers) of alternate sources of power.
    (iv) If an applicant uses power for its own industrial facility and 
related operations, the effect of obtaining or losing electricity from 
the project on the operation and efficiency of such facility or related 
operations, its workers, and the related community.
    (v) If an applicant is an Indian tribe applying for a license for a 
project located on the tribal reservation, a statement of the need of 
such tribe for electricity generated by the project to foster the 
purposes of the reservation.
    (vi) A comparison of the impact on the operations and planning of 
the applicant's transmission system of receiving or not receiving the 
project license, including:
    (A) An analysis of the effects of any resulting redistribution of 
power flows on line loading (with respect to applicable thermal, 
voltage, or stability limits), line losses, and necessary new 
construction of transmission facilities or upgrading of existing 
facilities, together with the cost impact of these effects;
    (B) An analysis of the advantages that the applicant's transmission 
system would provide in the distribution of the project's power; and
    (C) Detailed single-line diagrams, including existing system 
facilities identified by name and circuit number, that show system 
transmission elements in relation to the project and other principal 
interconnected system elements. Power flow and loss data that represent 
system operating conditions may be appended if applicants believe such 
data would be useful to show that the operating impacts described would 
be beneficial.
    (vii) If the applicant has plans to modify existing project 
facilities or operations, a statement of the need for, or usefulness 
of, the modifications, including at least a reconnaissance-level study 
of the effect and projected costs of the proposed plans and any 
alternate plans, which in conjunction with other developments in the 
area would conform with a comprehensive plan for improving or 
developing the waterway and for other beneficial public uses as defined 
in section 10(a)(1) of the Federal Power Act.
    (viii) If the applicant has no plans to modify existing project 
facilities or operations, at least a reconnaissance-level study to show 
that the project facilities or operations in conjunction with other 
developments in the area would conform with a comprehensive plan for 
improving or developing the waterway and for other beneficial public 
uses as defined in section 10(a)(1) of the Federal Power Act.
    (ix) A statement describing the applicant's financial and personnel 
resources to meet its obligations under a new license, including 
specific information to demonstrate that the applicant's personnel are 
adequate in number and training to operate and maintain the project in 
accordance with the provisions of the license.
    (x) If an applicant proposes to expand the project to encompass 
additional lands, a statement that the applicant has notified, by 
certified mail, property owners on the additional lands to be 
encompassed by the project and governmental agencies and subdivisions 
likely to be interested in or affected by the proposed expansion.
    (xi) The applicant's electricity consumption efficiency improvement 
program, as defined under section 10(a)(2)(C) of the Federal Power Act, 
including:
    (A) A statement of the applicant's record of encouraging or 
assisting its customers to conserve electricity and a description of 
its plans and capabilities for promoting electricity conservation by 
its customers; and
    (B) A statement describing the compliance of the applicant's energy 
conservation programs with any applicable regulatory requirements.
    (xii) The names and mailing addresses of every Indian tribe with 
land on which any part of the proposed project would be located or 
which the applicant reasonably believes would otherwise be affected by 
the proposed project.
    (2) Information to be provided by an applicant licensee. An 
existing licensee that applies for a new license must provide:
    (i) The information specified in paragraph (c)(1) of this chapter.
    (ii) A statement of measures taken or planned by the licensee to 
ensure safe management, operation, and maintenance of the project, 
including:
    (A) A description of existing and planned operation of the project 
during flood conditions;
    (B) A discussion of any warning devices used to ensure downstream 
public safety;
    (C) A discussion of any proposed changes to the operation of the 
project or downstream development that might affect the existing 
Emergency Action Plan, as described in subpart C of part 12 of this 
chapter, on file with the Commission;
    (D) A description of existing and planned monitoring devices to 
detect structural movement or stress, seepage, uplift, equipment 
failure, or water conduit failure, including a description of the 
maintenance and monitoring programs used or planned in conjunction with 
the devices; and
    (E) A discussion of the project's employee safety and public safety 
record, including the number of lost-time accidents involving employees 
and

[[Page 14037]]

the record of injury or death to the public within the project 
boundary.
    (iii) A description of the current operation of the project, 
including any constraints that might affect the manner in which the 
project is operated.
    (iv) A discussion of the history of the project and record of 
programs to upgrade the operation and maintenance of the project.
    (v) A summary of any generation lost at the project over the last 
five years because of unscheduled outages, including the cause, 
duration, and corrective action taken.
    (vi) A discussion of the licensee's record of compliance with the 
terms and conditions of the existing license, including a list of all 
incidents of noncompliance, their disposition, and any documentation 
relating to each incident.
    (vii) A discussion of any actions taken by the existing licensee 
related to the project which affect the public.
    (viii) A summary of the ownership and operating expenses that would 
be reduced if the project license were transferred from the existing 
licensee.
    (ix) A statement of annual fees paid under part I of the Federal 
Power Act for the use of any Federal or Indian lands included within 
the project boundary.
    (3) Information to be provided by an applicant who is not an 
existing licensee. An applicant that is not an existing licensee must 
provide:
    (i) The information specified in paragraph (c)(1) of this section.
    (ii) A statement of the applicant's plans to manage, operate, and 
maintain the project safely, including:
    (A) A description of the differences between the operation and 
maintenance procedures planned by the applicant and the operation and 
maintenance procedures of the existing licensee;
    (B) A discussion of any measures proposed by the applicant to 
implement the existing licensee's Emergency Action Plan, as described 
in subpart C of part 12 of this chapter, and any proposed changes;
    (C) A description of the applicant's plans to continue safety 
monitoring of existing project instrumentation and any proposed 
changes; and
    (D) A statement indicating whether or not the applicant is 
requesting the licensee to provide transmission services under section 
15(d) of the Federal Power Act.
    (4) Location of information. The information required to be 
provided by this paragraph (c) must be included in the application as a 
separate exhibit labeled ``Exhibit H.''
    (d) Comprehensive plans. An application for license under this part 
shall include an explanation of why the project would, would not, or 
should not, comply with any relevant comprehensive plan as defined in 
Sec.  2.19 of this chapter and a description of any relevant resource 
agency or Indian tribe determination regarding the consistency of the 
project with any such comprehensive plan.
    (e) Response to information requests. An application for license 
under this section shall respond to any requests for additional 
information-gathering or studies filed with comments on the draft 
license application. If the license applicant agrees to do the 
information-gathering or study, it shall provide the information or 
include a plan and schedule for doing so, along with a schedule for 
completing any remaining work under the previously approved study plan, 
as it may have been amended. If the applicant does not agree to any 
additional information-gathering or study requests made in comments on 
the draft license application, it shall explain the basis for declining 
to do so.
    (f) Water quality certification. (1) With regard to certification 
requirements for a license applicant under section 401(a)(1) of the 
Federal Water Pollution Control Act (Clean Water Act), the license 
application must include:
    (i) A copy of the water quality certification;
    (ii) A copy of the request for certification, including proof of 
the date on which the certifying agency received the request; or
    (iii) Evidence of waiver of water quality certification as 
described in paragraph (f)(1)(ii) of this section.
    (2) A certifying agency is deemed to have waived the certification 
requirements of section 401(a)(1) of the Clean Water Act if the 
certifying agency has not denied or granted certification by one year 
after the date the certifying agency received a written request for 
certification. If a certifying agency denies certification, the 
applicant must file a copy of the denial within 30 days after the 
applicant received it.
    (3) Notwithstanding any other provision in Title 18, Chapter I, 
subchapter B, any application to amend an existing license, and any 
application to amend a pending application for a license, requires a 
new request for water quality certification pursuant to Sec.  
4.34(b)(5) of this chapter if the amendment would have a material 
adverse impact on the water quality in the discharge from the project 
or proposed project.
    (g) All required maps and drawings must conform to the 
specifications of Sec.  4.39 of this chapter.


Sec.  5.18  Tendering notice and schedule.

    (a) Within 14 days of the date of any application for a license 
developed pursuant to this part, the Commission will issue public 
notice of the tendering for filing of the application. The tendering 
notice will include a preliminary schedule for expeditious processing 
of the application, including dates for;
    (1) Issuance of the acceptance for filing and ready for 
environmental analysis notice provided for in Sec.  5.21.
    (2) Filing of recommendations, preliminary terms and conditions, 
and fishway prescriptions;
    (3) Issuance of a draft environmental assessment or environmental 
impact statement, or an environmental assessment not preceded by a 
draft;
    (4) Filing of comments on the draft environmental assessment or 
environmental impact statement, as applicable;
    (5) Filing of modified recommendations, mandatory terms and 
conditions, and fishway prescriptions in response to a draft NEPA 
document or Environmental Analysis, if no draft NEPA document is 
issued;
    (6) Issuance of a final NEPA document, if any;
    (7) In the case of a new or subsequent license application, a 
deadline for submission of final amendments, if any, to the 
application; and
    (8) Readiness of the application for Commission decision.
    (b) Within 30 days of the date of any application for a license 
developed pursuant to this part, the Director of the Office of Energy 
Projects will issue an order resolving any requests for a additional 
information-gathering or studies made in comments on the draft license 
application and to which the license applicant has not agreed in its 
application.


Sec.  5.19  Deficient applications.

    (a) Deficient applications. (1) If an applicant believes that its 
application conforms adequately to the prefiling consultation and 
filing requirements of this part without containing certain required 
materials or information, it must explain in detail why the material or 
information is not being submitted and what steps were taken by the 
applicant to provide the material or information.
    (2) Within 30 days of the date of any application for a license 
under this part, the Director of the Office of Energy Projects will 
notify the applicant if, in the Director's judgement, the application 
does not conform to the prefiling consultation and filing requirements 
of this part, and is

[[Page 14038]]

therefore considered deficient. An applicant having a deficient 
application will be afforded additional time to correct the 
deficiencies, not to exceed 90 days from the date of notification. 
Notification will be by letter or, in the case of minor deficiencies, 
by telephone. Any notification will specify the deficiencies to be 
corrected. Deficiencies must be corrected by submitting an original and 
eight copies of the specified materials or information to the Secretary 
within the time specified in the notification of deficiency.
    (3) If the revised application is found not to conform to the 
prefiling consultation and filing requirements of this part, or if the 
revisions are not timely submitted, the revised application will be 
rejected. Procedures for rejected applications are specified in 
paragraph (b)(3) of this section.
    (b) Patently deficient applications. (1) If, within 30 days of its 
filing date, the Director of the Office of Energy Projects determines 
that an application patently fails to substantially comply with the 
prefiling consultation and filing requirements of this part, or is for 
a project that is precluded by law, the application will be rejected as 
patently deficient with the specification of the deficiencies that 
render the application patently deficient.
    (2) If, after 30 days following its filing date, the Director of 
the Office of Energy Projects determines that an application patently 
fails to comply with the prefiling consultation and filing requirements 
of this part, or is for a project that is precluded by law:
    (i) The application will be rejected by order of the Commission, if 
the Commission determines that it is patently deficient; or
    (ii) The application will be considered deficient under paragraph 
(a)(2) of this section, if the Commission determines that it is not 
patently deficient.
    (3) Any application that is rejected may be submitted if the 
deficiencies are corrected and if, in the case of a competing 
application, the resubmittal is timely. The date the rejected 
application is resubmitted will be considered the new filing date for 
purposes of determining its timeliness under Sec.  4.36 of this chapter 
and the disposition of competing applications under Sec.  4.37 of this 
chapter.


Sec.  5.20  Additional information.

    An applicant may be required to submit any additional information 
or documents that the Commission or its designee considers relevant for 
an informed decision on the application. The information or documents 
must take the form, and must be submitted within the time, that the 
Commission or its designee prescribes. An applicant may also be 
required to provide within a specified time additional copies of the 
complete application, or any of the additional information or documents 
that are filed, to the Commission or to any person, agency, or other 
entity that the Commission or its designee specifies. If an applicant 
fails to provide timely additional information, documents, or copies of 
submitted materials as required, the Commission or its designee may 
dismiss the application, hold it in abeyance, or take other appropriate 
action under this chapter or the Federal Power Act.


Sec.  5.21  Notice of acceptance and ready for environmental analysis.

    (a) When the Commission has determined that the application meets 
the Commission's filing requirements as specified in Sec. Sec.  5.16 
and 5.17, the approved study plan has been completed, any deficiencies 
in the application have been cured, and no other additional information 
is needed, it will issue public notice as required in the Federal Power 
Act:
    (1) Accepting the application for filing and specifying the date 
upon which the application was accepted for filing (which will be the 
application filing date if the Secretary receives all of the 
information and documents necessary to conform to the requirements of 
Sec. Sec.  5.1 through 5.17, as applicable, within the time frame 
prescribed in Sec.  5.19;
    (2) Finding that the application is ready for environmental 
analysis;
    (3) Requesting comments, protests, and interventions;
    (4) Requesting recommendations, preliminary terms and conditions, 
and fishway prescriptions; and
    (5) Establishing the date for final amendments to applications for 
new or subsequent licenses; and
    (6) Updating the processing schedule.
    (b) If the project affects lands of the United States, the 
Commission will notify the appropriate Federal office of the 
application and the specific lands affected, pursuant to section 24 of 
the Federal Power Act.
    (c) For an application for a license seeking benefits under section 
210 of the Public Utility Regulatory Polices Act of 1978, as amended, 
for a project that would be located at a new dam or diversion, the 
applicant shall serve the public notice issued under paragraph (a)(1) 
of this section to interested agencies at the time the applicant is 
notified that the application is accepted for filing.


Sec.  5. 22  Response to notice.

    Comments, protests, interventions, recommendations, and preliminary 
terms and conditions or fishway prescriptions will be due 60 days after 
the notice of acceptance and ready for environmental analysis.


Sec.  5. 23  Applications not requiring a draft NEPA document.

    (a) If the Commission determines that a license application will be 
processed with an environmental assessment rather than an environmental 
impact statement and that a draft environmental assessment will not be 
required, the Commission will issue the environmental assessment for 
comment no later than 120 days from the date responses are due to the 
notice of acceptance and ready for environmental analysis. Each 
environmental assessment issued pursuant to this paragraph shall 
include draft license articles, a preliminary determination of 
consistency of each fish and wildlife agency recommendation made 
pursuant to Federal Power Act Section 10(j) with the purposes and 
requirements of the Federal Power Act and other applicable law, as 
provided for in Sec.  5.25, and preliminary mandatory terms and 
conditions and fishway prescriptions.
    (b) Comments on an environmental assessment issued pursuant to 
paragraph (a) of this section, including comments in response to the 
Commission's preliminary determination with respect to fish and 
wildlife agency recommendations and on preliminary mandatory terms and 
conditions or fishway prescriptions must be filed no later than 30-45 
days after issuance of the environmental assessment, as specified in 
the notice accompanying issuance of the environmental assessment.
    (c) Modified mandatory prescriptions or terms and conditions must 
be filed no later than 60 days following the date for filing of 
comments provided for in paragraph (b) of this section, as specified in 
the notice accompanying issuance of the environmental analysis.
    (d) The Commission will act on the license application within 60 
days from the date for filing of modified mandatory prescriptions or 
terms and conditions.


Sec.  5.24  Applications requiring a draft NEPA document.

    (a) If the Commission determines that a license application will be 
processed with an environmental impact statement, or a draft and final 
environmental assessment, the Commission will issue the draft 
environmental impact statement or

[[Page 14039]]

environmental assessment for comment no later than 180 days from the 
date responses are due to the acceptance notice issued pursuant to 
Sec.  5.21.
    (b) Each draft environmental document will include for comment 
draft license articles, a preliminary determination of the consistency 
of each fish and wildlife agency recommendation made pursuant to 
Federal Power Act section 10(j) with the purposes and requirements of 
the Federal Power Act and other applicable law, as provided for in 
Sec.  5.21, and preliminary mandatory terms and conditions and fishways 
prescriptions.
    (c) Comments on an environmental document issued pursuant to 
paragraph (b) of this section, including comments in response to the 
Commission's preliminary determination with respect to fish and 
wildlife agency recommendations and on preliminary mandatory terms and 
conditions or prescriptions must be filed no later than 30 to 60 days 
after issuance of the draft environmental document, as specified in the 
notice accompanying issuance of the draft environmental document.
    (d) Modified mandatory prescriptions or terms and conditions must 
be filed no later than 60 days following the date for filing of 
comments provided for in paragraph (c) of this section.
    (e) The Commission will issue a final environmental document within 
90 days following the date for filing of modified mandatory 
prescriptions or terms and conditions.
    (f) The Commission will act on the license application from 30 to 
90 days from the date the final environmental document is issued.


Sec.  5.25  Section 10(j) process.

    (a) In connection with its environmental review of an application 
for license, the Commission will analyze all terms and conditions 
timely recommended by fish and wildlife agencies pursuant to the Fish 
and Wildlife Coordination Act for the protection, mitigation of damages 
to, and enhancement of fish and wildlife (including related spawning 
grounds and habitat) affected by the development, operation, and 
management of the proposed project. Submission of such recommendations 
marks the beginning of the process under section 10(j) of the Federal 
Power Act.
    (b) The agency must specifically identify and explain the mandatory 
terms and conditions or prescriptions and their evidentiary or legal 
basis. The Commission may seek clarification of any recommendation from 
the appropriate fish and wildlife agency. If the Commission's request 
for clarification is communicated in writing, copies of the request 
will be sent by the Commission to all parties, affected resource 
agencies, and Indian tribes, which may file a response to the request 
for clarification within the time period specified by the Commission. 
If the Commission believes any fish and wildlife recommendation may be 
inconsistent with the Federal Power Act or other applicable law, the 
Commission will make a preliminary determination of inconsistency in 
the draft environmental document or, if none, the environmental 
analysis. The preliminary determination, for those recommendations 
believed to be inconsistent, shall include:
    (1) An explanation why the Commission believes the recommendation 
is inconsistent with the Federal Power Act or other applicable law, 
including any supporting analysis and conclusions, and
    (2) An explanation of how the measures recommended in the 
environmental document would equitably protect, mitigate damages to, 
and enhance, fish and wildlife (including related spawning grounds and 
habitat) affected by the development, operation, and management of the 
project.
    (c) Any party, affected resource agency, or Indian tribe may file 
comments in response to the preliminary determination of inconsistency 
within the time frame allotted for comments on the draft environmental 
document or, if none, the time frame for comments on the environmental 
analysis. In this filing, the fish and wildlife agency concerned may 
also request a meeting, telephone or video conference or other 
additional procedure to attempt to resolve any preliminary 
determination of inconsistency.
    (d) The Commission shall attempt, with the agencies, to reach a 
mutually acceptable resolution of any such inconsistency, giving due 
weight to the recommendations, expertise, and statutory 
responsibilities of the fish and wildlife agency. If the Commission 
decides, or an affected resource agency requests, the Commission will 
conduct a meeting, telephone, or video conference, or other procedures 
to address issues raised by its preliminary determination of 
inconsistency and comments thereon. The Commission will give at least 
15 days' advance notice to each party, affected resource agency, or 
Indian tribe, which may participate in the meeting or conference. Any 
meeting, conference, or additional procedure to address these issues 
will be scheduled to take place within 90 days of the date the 
Commission issues a preliminary determination of inconsistency. The 
Commission will prepare a written summary of any meeting held under 
this subsection to discuss 10(j) issues, including any proposed 
resolutions and supporting analysis, and a copy of the summary will be 
sent to all parties, affected resource agencies, and Indian tribes.
    (e) The section 10(j) process ends when the Commission issues an 
order granting or denying the license application in question.


Sec.  5.26  Amendment of application.

    (a) Procedures. If an applicant files an amendment to its 
application that would materially change the project's proposed plans 
of development, as provided in Sec.  4.35 of this chapter, an agency, 
Indian tribe, or member of the public may modify the recommendations or 
terms and conditions or prescriptions it previously submitted to the 
Commission pursuant to Sec. Sec.  5.20-5.24. Such modified 
recommendations, terms and conditions, or prescriptions must be filed 
no later than the due date specified by the Commission for comments on 
the amendment.
    (b) Original license. The date of acceptance of an amendment of 
application for an original license filed under this part is governed 
by the provisions of Sec.  4.35 of this chapter.
    (c) New or subsequent license. The requirements of Sec.  4.35 of 
this chapter do not apply to an application for a new or subsequent 
license, except that the Commission will reissue a public notice of the 
application in accordance with the provisions of Sec.  4.35 of this 
chapter if a material amendment, as that term is used in Sec.  4.35(f) 
of this chapter, is filed.
    (d) Timing and service. All amendments to an application for a new 
or subsequent license, including the final amendment, must be filed 
with the Commission and served on all competing applicants no later 
than the date specified in the notice issued under Sec.  5.21.


Sec.  5.27  Competing applications.

    (a) Site access for a competing applicant. The provisions of Sec.  
16.5 of this chapter shall govern site access for a potential license 
application to be filed in competition with an application for a new or 
subsequent license by an existing licensee pursuant to this part, 
except that references in Sec.  16.5 of this chapter to the pre-filing 
consultation provisions in parts 4 and 16 of this chapter shall be 
construed in a manner

[[Page 14040]]

compatible with the effective administration of this part.
    (b) Competing applications. The provisions of Sec.  4.36 of this 
chapter shall apply to competing applications for original, new, or 
subsequent licenses filed under this part.
    (c) New or subsequent license applications--final amendments; 
better adapted statement. Where two or more mutually exclusive 
competing applications for new or subsequent license have been filed 
for the same project, the final amendment date and deadlines for 
complying with provisions of Sec.  4.36(d)(2) (ii) and (iii) of this 
chapter established pursuant to the notice issued under Sec.  5.21 will 
be the same for all such applications.
    (d) Rules of preference among competing applicants. The Commission 
will select among competing applications according to the provisions of 
Sec.  4.37 of this chapter.


Sec.  5.28  Other provisions.

    (a) Filing Requirement. Unless otherwise provided by statute, 
regulation or order, all filings in hydropower hearings, except those 
conducted by trial-type procedures, shall consist of an original and 
eight copies.
    (b) Waiver of compliance with consultation requirements. (1) If a 
resource agency, Indian tribe, or member of the public waives in 
writing compliance with any requirement of this part, an applicant does 
not have to comply with the requirement as to that agency, tribe, or 
member of the public.
    (2) If a resource agency, Indian tribe, member of the public fails 
to timely comply with a provision regarding a requirement of this 
section, an applicant may proceed to the next sequential requirement of 
this section without waiting for the resource agency, tribe, or member 
of the public.
    (c) Requests for privileged treatment of pre-filing submission. If 
a potential applicant requests privileged treatment of any information 
submitted to the Commission during pre-filing consultation (except for 
the information specified in Sec.  5.4), the Commission will treat the 
request in accordance with the provisions in Sec.  388.112 of this 
chapter until the date the application is filed with the Commission.
    (d) Conditional applications. Any application, the effectiveness of 
which is conditioned upon the future occurrence of any event or 
circumstance, will be rejected.
    (e) Trial-type hearing. The Commission may order a trial-type 
hearing on an application for a license under this part either upon its 
own motion or the motion of any interested party of record. Any trial-
type hearing will be limited to the issues prescribed by order of the 
Commission. In all other cases, the hearings will be conducted by 
notice and comment procedures.
    (f) Notice and comment hearings. (1) All comments and reply 
comments and all other filings described in this part must be served on 
all persons on the service list prepared by the Commission, in 
accordance with the requirements of Sec.  385.2010 of this chapter. If 
a party or interceder (as defined in Sec.  385.2201 of this chapter) 
submits any written material to the Commission relating to the merits 
of an issue that may affect the responsibility of particular resource 
agency, the party or interceder must also serve a copy of the 
submission on that resource agency.
    (2) Time periods--waiver or modification. The Director of the 
Office of Energy Projects may waive or modify any of the time periods 
provided for in this part. A commenter or reply commenter may obtain an 
extension of time from the Commission only upon a showing of good cause 
or extraordinary circumstances in accordance with Section 385.2008 of 
this chapter.
    (3) Late-filed recommendations by fish and wildlife agencies 
pursuant to the Fish and Wildlife Coordination Act and Federal Power 
Act section 10(j) for the protection, mitigation of damages to, and 
enhancement of fish and wildlife affected by the development, 
operation, and management of the proposed project and late-filed terms 
and conditions or prescriptions will be considered by Commission under 
section 10(a) of the Federal Power Act if such consideration would not 
delay or disrupt the proceeding.
    (g) License conditions and required findings--(1) License 
conditions. (i) All licenses shall be issued on the conditions 
specified in section 10 of the Federal Power Act and such other 
conditions as the Commission determines are lawful and in the public 
interest.
    (ii) Subject to paragraph (f)(3) of this section, fish and wildlife 
conditions shall be based on recommendations timely received from the 
fish and wildlife agencies pursuant to the Fish and Wildlife 
Coordination Act.
    (iii) The Commission will consider the timely recommendations of 
resource agencies, other governmental units, and members of the public, 
and the timely recommendations (including fish and wildlife 
recommendations) of Indian tribes affected by the project.
    (iv) Licenses for a project located within any Federal reservation 
shall be issued only after the findings required by, and subject to any 
conditions that may be timely received pursuant to, section 4(e) of the 
Federal Power Act.
    (v) The Commission will require the construction, maintenance, and 
operation of such fishways as may be timely prescribed by the Secretary 
of Commerce or the Secretary of the Interior, as appropriate, pursuant 
to section 18 of the Federal Power Act.
    (2) Required findings. If, after attempting to resolve 
inconsistencies between the fish and wildlife recommendations of a fish 
and wildlife agency and the purposes and requirements of the Federal 
Power Act or other applicable law, the Commission does not adopt in 
whole or in part a fish and wildlife recommendation of a fish and 
wildlife agency, the Commission will publish the findings and 
statements required by section 10(j)(2) of the Federal Power Act.
    (h) Standards and factors for issuing a new license. (1) In 
determining whether a final proposal for a new license under section 15 
of the Federal Power Act is best adapted to serve the public interest, 
the Commission will consider the factors enumerated in sections 
15(a)(2) and (a)(3) of the Federal Power Act.
    (2) If there are only insignificant differences between the final 
applications of an existing licensee and a competing applicant after 
consideration of the factors enumerated in section 15(a)(2) of the 
Federal Power Act, the Commission will determine which applicant will 
receive the license after considering:
    (i) The existing licensee's record of compliance with the terms and 
conditions of the existing license; and
    (ii) The actions taken by the existing licensee related to the 
project which affect the public.
    (iii) An existing licensee that files an application for a new 
license in conjunction with an entity or entities that are not 
currently licensees of all or part of the project will not be 
considered an existing licensee for the purpose of the insignificant 
differences provision of section 15(a)(2) of the Federal Power Act.
    (i) Fees under Section 30(e) of the Act. The requirements of 
subpart M, part 4 of this chapter, Fees Under Section 30(e) of the Act, 
apply to license applications developed under this part.


Sec.  5.29  Transition provisions.

    (a) This part shall apply to license applications for which the 
deadline for filing a notification of intent to seek a new or 
subsequent license, or for filing a notification of intent to file an 
original license application required by Sec.  5.3, is

[[Page 14041]]

[insert date three months following issuance date of final rule] or 
later.
    (b) Except as provided in paragraph (c) of this section, 
applications for which the deadline for filing a notification of intent 
to seek a new or subsequent license is prior to [insert date three 
months following issuance date of final rule], and potential 
applications for original license for which the potential applicant 
commenced first stage pre-filing consultation pursuant to Sec.  4.38(b) 
of this chapter prior to [insert date three months following issuance 
date of final rule], are not subject to this part, but are subject to 
the Commission's regulations as promulgated prior to [insert date three 
months following issuance date of final rule].
    (c) Potential applicants for an original, new, or subsequent 
license subject to paragraph (b) of this section may seek to apply 
prefiling consultation and application processing procedures provided 
for under this part to the development and processing of their 
application, subject to the provisions of Sec. Sec.  4.38(e)(4) and 
16.8(e)(4) of this chapter.

PART 16--PROCEDURES RELATING TO TAKEOVER AND RELICENSING OR 
LICENSED PROJECTS

    1. The authority citation for part 16 continues to read as follows:

    Authority: 16 U.S.C. 791a-825r, 2601-2645; 42 U.S.C. 7101-7352.

    2. Remove the phrase ``Office of Hydropower Licensing'' throughout 
the part and add in its place ``Office of Energy Projects''.


Sec.  16.1  [Amended]

    3. Amend Sec.  16.1 by adding paragraph (c) to read as follows:
* * * * *
    (c) Any potential applicant for a new or subsequent license for 
which the deadline for the notice of intent required by Sec.  16.6 
falls after [insert date three months following issuance date of final 
rule] and which wishes to develop and file its application pursuant to 
this part, must seek Commission authorization to do so pursuant to the 
provisions of part 5 of this chapter.
* * * * *
    4. Amend Sec.  16.6 as follows:
    a. In paragraph (b)(9), remove the phrase ``16.16'' and add in its 
place the phrase ``16.7''.
    b. In paragraph (d)(3), remove the phrase ``and Indian tribes by 
mail.'' and add in its place the phrase, ``state water quality 
agencies, Indian tribes, and non-governmental organizations likely to 
be interested in the proceedings by mail.''
    c. Paragraph (e) is added.
    The added text reads as follows:


Sec.  16.6  Notification procedures under section 15 of the Federal 
Power Act.

* * * * *
    (e) Transition provisions. (1) This section shall apply to license 
applications for which the deadline for filing a notification of intent 
to seek a new or subsequent license is [insert date three months 
following issuance date of final rule] or later.
    (2) Applications for which the deadline date for filing a 
notification of intent to seek a new or subsequent license is prior to 
[insert date three months following issuance date of final rule] are 
subject to part 16 of this chapter as promulgated prior to [insert date 
three months following issuance date of final rule].
* * * * *
    5. Amend Sec.  16.7 as follows:
    a. Paragraph (d)(1) is revised.
    b. In paragraph (e)(1), remove the word ``information'' and add in 
its place the phrase ``Pre-Application Document''.
    c. In paragraph (g), remove the phrase ``16.16(d)(1)(iv)'' and add 
in its place the phrase ``16.7(d)(1)(iv)''.
    d. Paragraph (h) is added.
    The revised and added text reads as follows:


Sec.  16.7  Information to be made available to the public at the time 
of notification of intent under Section 15(b) of the Federal Power Act.

* * * * *
    (d) Information to be made available. (1) A potential applicant 
must, at the time it files its notification of intent to seek a license 
pursuant to Sec.  5.3 of this chapter, provide a copy of the Pre-
Application Document required by Sec.  5.4 of this chapter to the 
entities specified in Sec.  5.4 of this chapter.
* * * * *
    (h) Transition provisions. (1) This section shall apply to license 
applications for which the deadline for filing a notification of intent 
to seek a new or subsequent license is [insert date three months 
following issuance date of final rule] or later.
    (2) Applications for which the deadline date for filing a 
notification of intent to seek a new or subsequent license is prior to 
[insert date three months following issuance date of final rule] are 
subject to this section as promulgated prior to [insert date three 
months following issuance date of final rule].
    6. Amend Sec.  16.8 as follows:
    a. In paragraph (a)(1), remove everything after the phrase ``33 
U.S.C. 1341(c)(1)),'' and add in its place the phrase any Indian tribe 
that may be affected by the project, and members of the public.''
    b. Paragraph (a)(2) is revised.
    c. Paragraphs (b)-(c) are revised.
    d. In paragraphs (d) (1), remove the phrase ``Indian tribes and 
other government offices'' and add in its place the phrase ``Indian 
tribes, other government offices, and consulted members of the 
public''.
    e. In paragraph (d)(2), remove the phrase ``agency and Indian 
tribe'' and add in its place the phrase ``agency, Indian tribe, and 
member of the public consulted''.
    f. Paragraph (e) is revised.
    g. Paragraph (f) is revised.
    h. In paragraph (h), remove the phrase ``agency or Indian tribe'' 
and add in its place the phrase ``agency, Indian tribe, or member of 
the public''.
    i. In paragraph (i)2(i), remove everything after the word ``until'' 
and add in its place ``a final order is issued on the license 
application.''.
    j. Paragraph (j) is revised.
    The revised and added text reads as follows:


Sec.  16.8  Consultation requirements.

    (a) * * *
    (2) The Director of the Office of Energy Projects will, upon 
request, provide a list of known appropriate Federal, state, and 
interstate resource agencies, and Indian tribes, and local, regional, 
or national non-governmental organizations likely to be interested in 
any license application proceeding.
    (b) First Stage of Consultation. (1) A potential applicant for a 
new or subsequent license must, at the time it files its notification 
of intent to seek a license pursuant to Sec.  5.3 of this chapter, 
provide a copy of the Pre-Application Document required by Sec.  5.4 of 
this chapter to the entities specified in that paragraph.
    (2) A potential applicant for a nonpower license or exemption must 
promptly contact each of the appropriate resource agencies, Indian 
tribes, and members of the public listed in paragraph (a)(1) of this 
section, and the Commission with the following information:
    (i) Detailed maps showing existing project boundaries, if any, 
proper land descriptions of the entire project area by township, range, 
and section, as well as by state, county, river, river mile, and 
closest town, and also showing the specific location of all existing 
and proposed project facilities, including roads, transmission lines, 
and any other appurtenant facilities;
    (ii) A general engineering design of the existing project and any 
proposed

[[Page 14042]]

changes, with a description of any existing or proposed diversion of a 
stream through a canal or penstock;
    (iii) A summary of the existing operational mode of the project and 
any proposed changes;
    (iv) Identification of the environment affected or to be affected, 
the significant resources present and the applicant's existing and 
proposed environmental protection, mitigation, and enhancement plans, 
to the extent known at that time;
    (v) Streamflow and water regime information, including drainage 
area, natural flow periodicity, monthly flow rates and durations, mean 
flow figures illustrating the mean daily streamflow curve for each 
month of the year at the point of diversion or impoundment, with 
location of the stream gauging station, the method used to generate the 
streamflow data provided, and copies of all records used to derive the 
flow data used in the applicant's engineering calculations;
    (vi) Detailed descriptions of any proposed studies and the proposed 
methodologies to be employed; and
    (vii) Any statement required by Sec.  4.301(a) of this chapter.
    (3) Not earlier than 30 days, but not later than 60 days, from the 
date of the potential applicant's letter transmitting the Pre-
Application Document to the agencies, Indian tribes and members of the 
public under paragraph (b)(1) of this section, the potential applicant 
must:
    (i) Hold a joint meeting, including an opportunity for a site 
visit, with all pertinent agencies, Indian tribes and members of the 
public to review the information and to discuss the data and studies to 
be provided by the potential applicant as part of the consultation 
process; and
    (ii) Consult with the resource agencies, Indian tribes and members 
of the public on the scheduling of the joint meeting; and provide each 
resource agency, Indian tribe, member of the public, and the Commission 
with written notice of the time and place of the joint meeting and a 
written agenda of the issues to be discussed at the meeting at least 15 
days in advance.
    (4) The potential applicant must make either audio recordings or 
written transcripts of the joint meeting, and must upon request 
promptly provide copies of these recordings or transcripts to the 
Commission and any resource agency, Indian tribe, or member of the 
public.
    (5) Unless otherwise extended by the Director of Office of Energy 
Projects pursuant to paragraph (b)(6) of this section, not later than 
60 days after the joint meeting held under paragraph (b)(3) of this 
section each interested resource agency, and Indian tribe, and member 
of the public must provide a potential applicant with written comments:
    (i) Identifying its determination of necessary studies to be 
performed or information to be provided by the potential applicant;
    (ii) Identifying the basis for its determination;
    (iii) Discussing its understanding of the resource issues and its 
goals objectives for these resources;
    (iv) Explaining why each study methodology recommended by it is 
more appropriate than any other available methodology alternatives, 
including those identified by the potential applicant pursuant to 
paragraph (b)(2)(vi) of this section;
    (v) Documenting that the use of each study methodology recommended 
by it is a generally accepted practice; and
    (vi) Explaining how the studies and information requested will be 
useful to the agency, Indian tribe, or member of the public in 
furthering its resource goals and objectives.
    (6)(i) If a potential applicant and a resource agency, Indian 
tribe, or member of the public disagree as to any matter arising during 
the first stage of consultation or as to the need to conduct a study or 
gather information referenced in paragraph (c)(2) of this section, the 
potential applicant or resource agency, or Indian tribe, or member of 
the public may refer the dispute in writing to the Director of the 
Office of Energy Projects (Director) for resolution.
    (ii) The entity referring the dispute must serve a copy of its 
written request for resolution on the disagreeing party at the time the 
request is submitted to the Director. The disagreeing party may submit 
to the Director a written response to the referral within 15 days of 
the referral's submittal to the Director.
    (iii) Written referrals to the Director and written responses 
thereto pursuant to paragraphs (b)(6)(i) or (b)(6)(ii) of this section 
must be filed with the Secretary of the Commission in accordance with 
the Commission's Rules of Practice and Procedure, and must indicate 
that they are for the attention of the Director of the Office of Energy 
Projects pursuant to Sec.  16.8(b)(6).
    (iv) The Director will resolve disputes by an order directing the 
potential applicant to gather such information or conduct such study or 
studies as, in the Director's view, is reasonable and necessary.
    (v) If a resource agency, Indian tribe, or member of the public 
fails to refer a dispute regarding a request for a potential applicant 
to obtain information or conduct studies (other than a dispute 
regarding the information specified in paragraph (b)(1) or (b)(2) of 
this section, as applicable), the Commission will not entertain the 
dispute following the filing of the license application.
    (vi) If a potential applicant fails to obtain information or 
conduct a study as required by the Director pursuant to paragraph 
(b)(6)(iv) of this section, its application will be considered 
deficient.
    (7) Unless otherwise extended by the Director pursuant to paragraph 
(b)(6) of this section, the first stage of consultation ends when all 
participating agencies, Indian tribes, and members of the public 
provide the written comments required under paragraph (b)(5) of this 
section or 60 days after the joint meeting held under paragraph (b)(3) 
of this section, whichever occurs first.
    (c) Second stage of consultation. (1) Unless determined otherwise 
by the Director of the Office of Energy Projects pursuant to paragraph 
(b)(6) of this section, a potential applicant must complete all 
reasonable and necessary studies and obtain all reasonable and 
necessary information requested by resource agencies, Indian tribes, 
and members of the public under paragraph (b) of this section to which 
the potential applicant has agreed. The applicant shall also obtain any 
data and conduct any studies required by the Commission pursuant to the 
dispute resolution procedures of paragraph (b)(6) of this section. 
These studies must be completed and the information obtained:
    (i) Prior to filing the application, if the results:
    (A) Would influence the financial (e.g., instream flow study) or 
technical feasibility of a project (e.g., study of potential mass soil 
movement); or
    (B) Are needed to determine the design or location of project 
features, reasonable alternatives to the project, the impact of the 
project on important natural or cultural resources (e.g., resource 
surveys), suitable mitigation or enhancement measures, or to minimize 
impact on significant resources (e.g., wild and scenic river, 
anadromous fish, endangered species, caribou migration routes);
    (ii) After filing the application but before license issuance, if 
the applicant otherwise complied with the provisions of paragraph 
(b)(1) or (b)(2) of this section, as applicable, no later than four 
years prior to the expiration date of the existing license and the 
results:

[[Page 14043]]

    (A) Would be those described in paragraphs (c)(1)(i) (A) or (B) of 
this section; and
    (B) Would take longer to conduct and evaluate than the time between 
the conclusion of the first stage of consultation and the new license 
application filing deadline.
    (iii) After a new license is issued, if the studies can be 
conducted or the information obtained only after construction or 
operation of proposed facilities, would determine the success of 
protection, mitigation, or enhancement measures (e.g., post-
construction monitoring studies), or would be used to refine project 
operation or modify project facilities.
    (2) If, after the end of the first stage of consultation as defined 
in paragraph (b)(7) of this section, a resource agency, Indian tribe, 
or member of the public requests that the potential applicant conduct a 
study or gather information not previously identified and specifies the 
basis for its request, under paragraphs (b)(5)(i)-(vi) of this section, 
the potential applicant will promptly initiate the study or explain to 
the requesting entity why it believes the request is not reasonable or 
necessary. If the potential applicant declines to obtain the 
information or conduct the study, the potential applicant, any resource 
agency, Indian tribe, or consulted member of the public may refer any 
such request to the Director of the Office of Energy Projects for 
dispute resolution under the procedures and subject to the other 
requirements set forth in paragraph (b)(6) of this section.
    (3)(i) The results of studies and information-gathering referenced 
in paragraphs (c)(1)(ii) and (c)(2) of this section will be treated as 
additional information; and
    (ii) Filing and acceptance of an application will not be delayed 
and an application will not be considered deficient or patently 
deficient pursuant to Sec.  4.32(e)(1) or (e)(2) of this section merely 
because the study or information gathering is not complete before the 
application is filed.
    (4) A potential applicant must provide each resource agency, Indian 
tribe, and consulted member of the public with:
    (i) A copy of its draft application that:
    (A) Indicates the type of application the potential applicant 
expects to file with the Commission; and
    (B) Responds to any comments and recommendations made by any 
resource agency, Indian tribe, or consulted member of the public either 
during the first stage of consultation or under paragraph (c)(2) of 
this section;
    (ii) The results of all studies and information-gathering either 
requested by that resource agency, Indian tribe, or consulted member of 
the public in the first stage of consultation (or under paragraph 
(c)(2) of this section if available) or which pertain to resources of 
interest to that resource agency, Indian tribe, or consulted member of 
the public and which were identified by the potential applicant 
pursuant to paragraph (b)(2)(vi) of this section, including a 
discussion of the results and any proposed protection, mitigation, or 
enhancement measure; and
    (iii) A written request for review and comment.
    (5) A resource agency, Indian tribe, or consulted member of the 
public will have 90 days from the date of the potential applicant's 
letter transmitting the paragraph (c)(4) of this section information to 
it to provide written comments on the information submitted by a 
potential applicant under paragraph (c)(4) of this section.
    (6) If the written comments provided under paragraph (c)(5) of this 
section indicate that a resource agency, Indian tribe, or consulted 
member of the public has a substantive disagreement with a potential 
applicant's conclusions regarding resource impacts or its proposed 
protection, mitigation, or enhancement measures, the potential 
applicant will:
    (i) Hold at least one joint meeting with the resource agency, 
Indian tribe, other agencies, consulted member of the public and other 
agencies with similar or related areas of interest, expertise, or 
responsibility not later than 60 days from the date of the written 
comments of the disagreeing agency's, Indian tribe's, or consulted 
member of the public's written comments to discuss and to attempt to 
reach agreement on its plan for environmental protection, mitigation, 
or enhancement measures; and
    (ii) Consult with the disagreeing agency, Indian tribe, other 
agencies with similar or related areas of interest, expertise, and 
responsibility, and consulted member of the public on the scheduling of 
the joint meeting; and provide the disagreeing resource agency, Indian 
tribe, consulted member of the public, or other agencies with similar 
or related areas of interest, expertise, or responsibility, and the 
Commission with written notice of the time and place of each meeting 
and a written agenda of the issues to be discussed at the meeting at 
least 15 days in advance.
    (7) The potential applicant and any disagreeing resource agency, 
Indian tribe, or consulted member of the public may conclude a joint 
meeting with a document embodying any agreement among them regarding 
environmental protection, mitigation, or enhancement measures and any 
issues that are unresolved.
    (8) The potential applicant must describe all disagreements with a 
resource agency, Indian tribe, or consulted member of the public on 
technical or environmental protection, mitigation, or enhancement 
measures in its application, including an explanation of the basis for 
the applicant's disagreement with the resource agency, Indian tribe, 
and consulted member of the public, and must include in its application 
any document developed pursuant to paragraph (c)(7) of this section.
    (9) A potential applicant may file an application with the 
Commission if:
    (i) It has complied with paragraph (c)(4) of this section and no 
resource agency, Indian tribe, or consulted member of the public has 
responded with substantive disagreements by the deadline specified in 
paragraph (c)(5) of this section; or
    (ii) It has complied with paragraph (c)(6) of this section and a 
resource agency, Indian tribe, or consulted member of the public has 
responded with substantive disagreements.
    (10) The second stage of consultation ends:
    (i) Ninety days after the submittal of information pursuant to 
paragraph (c)(4) of this section in cases where no resource agency, 
Indian tribe, or consulted member of the public has responded with 
substantive disagreements; or
    (ii) At the conclusion of the last joint meeting held pursuant to 
paragraph (c)(6) of this section in case where a resource agency, 
Indian tribe, or consulted member of the public has responded with 
substantive disagreements.
* * * * *
    (e) Resource agency, Indian tribe, or member of the public waiver 
of compliance with consultation requirements. (1) If a resource agency, 
Indian tribe, or consulted member of the public waives in writing 
compliance with any requirement of this section, a potential applicant 
does not have to comply with that requirement as to that agency, Indian 
tribe, or consulted member of the public.
    (2) If a resource agency, Indian tribe, or consulted member of the 
public fails to timely comply with a provision regarding a requirement 
of this section, a potential applicant may proceed to the next 
sequential requirement of this section without waiting for the resource 
agency, Indian tribe, or consulted member of the public to comply.

[[Page 14044]]

    (3) The failure of a resource agency, Indian tribe, or consulted 
member of the public to timely comply with a provision regarding a 
requirement of this section does not preclude its participation in 
subsequent stages of the consultation process.
    (4) Following [insert issuance date of final rule] a potential 
license applicant engaged in pre-filing consultation under this part 
may during first stage consultation request to incorporate into pre-
filing consultation any element of the integrated license application 
process provided for in part 5 of this chapter. Any such request must 
be accompanied by a:
    (i) Specific description of how the element of the part 5 license 
application would fit into the pre-filing consultation process under 
this part; and
    (ii) Demonstration that the potential license applicant has made 
every reasonable effort to contact all resource agencies, Indian 
tribes, non-governmental organizations, and others affected by the 
applicant's proposal, and that a consensus exists in favor of 
incorporating the specific element of the part 5 process into the pre-
filing consultation under this part.
    (f) Application requirements documenting consultation and any 
disagreements with resource agencies, Indian tribes, or members of the 
public. An applicant must show in Exhibit E of its application that it 
has met the requirements of paragraphs (b) through (d) and Sec.  
16.8(i), and must include:
    (1) Any resource agency's, Indian tribe's, or member of the 
public's letters containing comments, recommendations, and proposed 
terms and conditions;
    (2) Any letters from the public containing comments and 
recommendations;
    (3) Notice of any remaining disagreements with a resource agency, 
Indian tribe, or consulted member of the public on:
    (i) The need for a study or the manner in which a study should be 
conducted and the applicant's reasons for disagreement;
    (ii) Information on any environmental protection, mitigation, or 
enhancement measure, including the basis for the applicant's 
disagreement with the resource agency, Indian tribe, or consulted 
member of the public.
    (4) Evidence of any waivers under paragraph (e) of this section;
    (5) Evidence of all attempts to consult with a resource agency, 
Indian tribe, or consulted member of the public, copies of related 
documents showing the attempts, and documents showing the conclusion of 
the second stage of consultation.
    (6) An explanation of how and why the project would, would not, or 
should not, comply with any relevant comprehensive plan as defined in 
Sec.  2.19 of this chapter and a description of any relevant resource 
agency or Indian tribe determination regarding the consistency of the 
project with any such comprehensive plan;
    (7) A description of how the applicant's proposal addresses the 
significant resource issues raised by members of the public during the 
joint meeting held pursuant to paragraph (b)(2) of this section.
* * * * *
    (j) Transition provisions. (1) This section shall apply to license 
applications for which the deadline for filing a notification of intent 
to seek a new or subsequent license is [insert date three months 
following issuance date of final rule] or later.
    (2) Applications for which the deadline date for filing a 
notification of intent to seek a new or subsequent license is prior to 
[insert date three months following issuance date of final rule] are 
subject to the provisions of Sec.  16.8 as promulgated prior to [insert 
date three months following issuance date of final rule].
* * * * *


Sec.  16.9  [Amended]

    7. Amend Sec.  16.9 as follows:
    In paragraph (d)(1)(iii), remove the phrase ``agencies and Indian 
tribes'' and add in its place the phrase ``agencies, Indian tribes, and 
non-governmental organizations''.
    8. Amend Sec.  16.10 as follows:
    a. Paragraph (d) is removed.
    b. Paragraph (e) is redesignated as paragraph (d) and is revised.
    c. Paragraph (f) is removed.
    The revised text reads as follows:


Sec.  16.10  Information to be provided by an applicant for new 
license: Filing requirements.

* * * * *
    (d) Inclusion in application. The information required to be 
provided by this section must be included in the application as a 
separate exhibit labeled ``Exhibit H.''
* * * * *


Sec.  16.11  [Amended]

    9. Amend Sec.  16.11 by removing paragraph (a)(2).


Sec.  16.19  [Amended]

    10. Amend Sec.  16.19 by removing paragraphs (b)(3) and (b)(4).


Sec.  16.20  [Amended]

    11. Amend Sec.  16.20 by revising paragraph (c) to read as follows:
* * * * *
    (c) Requirement to file. An applicant must file an application for 
subsequent license at least 24 months before the expiration of the 
existing license.
* * * * *

PART 385--RULES OF PRACTICE AND PROCEDURE

    1. The authority citation for part 385 continues to read as 
follows:

    Authority: 5 U.S.C. 551-557; 15 U.S.C. 717-717z, 3301-3432; 16 
U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42 U.S.C. 7101-7352; 49 
U.S.C. 60502; 49 App. U.S.C. 1-85 (1988).

    2. Amend Sec.  385.214 by revising paragraphs (a)(2) and (a)(3) to 
read as follows:


Sec.  385.214  Intervention (Rule 214).

    (a) * * *
    (2) Any State Commission, the Advisory Council on Historic 
Preservation, and the U.S. Departments of Agriculture, Commerce, and 
the Interior, and any state fish and wildlife or water quality 
certification agency is a party to any proceeding upon filing a notice 
of intervention in that proceeding, if the notice is filed within the 
period established under Rule 210(b). If the period for filing notice 
has expired, a State Commission, the Advisory Council on Historic 
Preservation, and the U.S. Departments of Agriculture, Commerce, and 
the Interior, state fish and wildlife or water quality certification 
agency must comply with the rules for motions to intervene applicable 
to any person under paragraph (a)(3) of this section including the 
content requirements of paragraph (b) of this section.
    (3) Any person, other than the Secretary of Energy or a State 
Commission, the Advisory Council on Historic Preservation, and the U.S. 
Departments of Agriculture, Commerce, and the Interior, and any state 
fish and wildlife or water quality certification agency seeking to 
intervene to become a party must file a motion to intervene.
* * * * *
    3. Amend Sec.  385.2201 by adding paragraph (g)(2) to read as 
follows:


Sec.  385.2201  Rules governing off the record communications (Rule 
2201).

* * * * *
    (g) * * *
    (2) The disclosure requirement of paragraph (g)(1) of this section 
shall apply, with respect to communications with a cooperating agency, 
only to study

[[Page 14045]]

results, data, or other information obtained in writing or orally from 
the cooperating agency. Communications of a deliberative nature, 
including drafts of NEPA documents and related communications, are 
exempt from the disclosure requirement.
* * * * *

    Note: The following Appendices will not be published in the Code 
of Federal Regulations.

Appendix A

List of Commenters

Licensees

Alaska Power & Telephone Co. (APT)
Ameren/UE
American Electric Power Company (AEP)
CHI Energy, Inc. (CHI)
Connecticut Small Power Producers Association (CSPPA)
Domtar, Inc., Madison Paper, and Great Lakes Hydro America (DM&GLH)
Domtar, Inc. (Domtar)
Duke Power Company (Duke)
Edison Electric Institute (EEI)
FAMP
FPL Energy (FPL)
Georgia Power Company (Georgia Power)
Hydroelectric Relicensing Reform Task Force (HLRTC) \299\
---------------------------------------------------------------------------

    \299\ HLRTC members are drawn from the memberships of the 
American Public Power Association, Edison Electric Institute, and 
National Hydropower Association.
---------------------------------------------------------------------------

Idaho Power Company (IPC)
National Hydropower Association (NHA)
National Hydropower Association, American Public Power Association, 
and Edison Electric Institute (NHA)
New York Power Authority (NYPA)
North American Hydro (NAH)
Northeast Utilities (NEU)
PacifiCorp
Pacific Gas & Electric Co. (PG&E)
Puerto Rico Electric Power Authority (PREPA)
Seattle City Light (SCL)
Southern California Edison Company (SCE)
Southern Company (Southern)
Wausau-Mosinee Paper Corp. (Wausau)
WE Energies
Western Public Power Districts (WPPD)
Xcel Energy (Xcel)

Non-Governmental Organizations

Adirondack Mountain Club (ADK)
Alabama River Alliance (Alabama Rivers)
American Rivers (AmRivers)
American Whitewater (AW)
Appalachian Mountain Club (AMC)
Catawba-Wateree Relicensing Coalition (C-WRC)
Connecticut River Watershed Council (CRWC)
Hydropower Reform Coalition (HRC)
Kayak and Canoe Club of New York (KCCNY)
New England FLOW (NE FLOW)
New York Rivers United (NYRU)
Pacific Fishery Management Council (PFMC)
River Alliance of Wisconsin (RAW)

Federal Agencies

Advisory Council on Historic Preservation (ACHP)
Environmental Protection Agency
National Marine Fisheries Service (NMFS)
U.S. Department of the Interior (Interior)

States/State Agencies

Alaska Department of Fish and Game (ADF&G)
Alabama Division of Wildlife and Freshwater Fisheries (Alabama )
California Resources Agency, California EPA, State Water Resources 
Control Board (California)
California Department of Water Resources (CDWR)
California Resources Agency, California EPA, State Water Resources 
Control Board, Department of Fish and Game, State of California 
Office of the Attorney General (California)
Maryland Department of Natural Resources (Maryland DNR)
Michigan Department of Natural Resources (Michigan DNR)
New Hampshire Department of Environmental Services (NHDES)
New York State Department of Environmental Conservation (NYSDEC)
North Carolina Wildlife Resources Commission (NCWRC)
Northeast Utilities (NEU)
Oklahoma Water Resources Board (OWRB)
Placer County Water Agency (PCWA)
Snohomish County PUD and City of Everett (Snohomish)
South Carolina Division of Water Quality (SCDWQ)
State of Oregon
State of Washington
State of Virginia
State of Vermont, Agency of Natural Resources (VANR)
Washington Department of Ecology (WDOE)
Wisconsin Department of Natural Resources (Wisconsin DNR)
Wyoming Game and Fish Department (WGFD)
Wyoming Attorney General, Water and Natural Resources Division 
(Wyoming)

Indian Tribes

Affiliated Tribes of Northwest Indians--Economic Development 
Corporation (NW Indians)
Bad River Band-Lake Superior Tribe (BRB-LST)
Caddo Nation of Oklahoma (Caddo)
Coeur d'Alene Tribe
Confederated Salish-Kootenai Tribes (Salish-Kootenai)
Confederated Tribes of the Umatilla Indian Reservation (CTUIR)
Columbia River Inter-Tribal Fish Commission (CRITFC)
Duck Valley Shoshone Paiute Tribes of Nevada and Idaho (Shoshone)
Great Lakes Indian Fish and Wildlife Commission (GLIFWC)
Haudenosaunee Environmental Task Force (HETF)
Klamath River Inter-Tribal Fish and Water Commission (KRITFWC)
Klamath Tribes (KT)
Menominee Tribe of Wisconsin (Menominee)
Mississippi Band of Choctaw Indians (Choctaw)
North Fork Rancheria (NF Rancheria)
Pit River Tribal Council, Hammawi Tribe (PRT)
Quinault Indian Nation (Quinault)
St. Regis Mohawk Tribe

Individuals

Jerry Atkins
Fred Ayer
A. Williams Cass
Thomas Sullivan, Sullivan & Gomez Engineers (Sullivan)
Nancy Skancke
Doug Spalding
David Wehnes

Other

Kleinschmidt Associates (Kleinschmidt)
Long View Associates (Long View)
Troutman Sanders (Troutman)
Van Ness Feldman (Van Ness)

Appendix B

Specific Requests for Comments

    ] 48 What contents are appropriate for the Pre-Application 
Document?
    ] 66 Does proposed study criterion (7) or NHA's recommended 
study criterion (3) more appropriately deal with the issue of study 
costs?
    ] 90 (a) What modifications, if any, should be made to the 
proposed study dispute resolution process?
    (b) What modifications, if any, should be made to the proposed 
advisory panel?
    ] 105 (a) In light of the proposal to include full public 
participation and mandatory, binding study dispute resolution in the 
traditional process, should the deadline date for filing the water 
quality certification application for this process remain when the 
license application is filed, or is there good reason to make the 
deadline date later?
    (b) Should the deadline date for filing a water quality 
certification application in the ALP remain the application filing 
date, or be moved to a later date?
    ] 163 Should the integrated process regulations encourage 
license applicants to include with their draft license applications 
a non-binding statement of whether or not they intend to engage in 
settlement negotiations?
    ] 172 Should the proposed integrated process apply to original 
license applications?
    ] 181 Are there circumstances in which one study dispute 
resolution advisory panel can make recommendations with respect to 
disputes involving different, but related resources, such as 
fisheries and aquatic resources?
    ] 184 Should participants be permitted to make new information-
gathering or study requests, as opposed to requests for modification 
of, or disputes concerning the implementation of, existing studies, 
following the updated status report?
    ] 185 Should the rules require parties to file written comments 
on the potential applicant's initial and updated status reports 
prior to the required meeting?
    ] 187 (a) After the updated status report, should a draft 
license application be

[[Page 14046]]

circulated for comment, or would it be preferable for the 
participants to continue informally working on resolution of 
outstanding issues?
    (b) If a draft license application is required, should it be 
required to track the contents of the final license application, or 
would it be preferable to require it to include only a revised 
Exhibit E, and/or any other materials?
    ] 190 Should Federal and state agencies be required to provide 
preliminary recommendations, terms and conditions, or prescriptions 
following the updated status report if the Commission determines 
that all necessary information required by the study plan is already 
in the record?
    ] 191 If Federal and state agencies are required to provide 
preliminary recommendations, terms and conditions, or prescriptions 
following the updated status report, how can the Commission ensure 
that they have an adequate opportunity to consider public comment on 
their proposed terms and conditions if such an approach were 
adopted, and how can such an approach best be accommodated where the 
resource agencies are cooperating agencies for development of the 
NEPA document?
    ] 198 (a) Which process steps in the proposed integrated process 
may require adjustment?
    (b) Which time frames, if any, should be specified in the 
regulations for purposes of guiding the development of a process 
plan and schedule (including studies), and which may not be 
appropriate for specification in the regulations, but rather should 
be developed entirely in the context of case-specific facts?
    ] 207 Are there circumstances under which binding study dispute 
resolution could be conducted in the ALP in a manner that safeguards 
the collaborative process?
    ] 211 What approaches to streamlining the licensing process for 
small projects other than non-consensual waiver of filing 
requirements may be viable that also protect the interests of 
stakeholders other than the license applicant?
    ] 212 Should the Commission amend its regulations to permit 
license applicants to file draft applicant-prepared environmental 
analyses with license applications prepared using the traditional 
process, in light of the proposed modifications to that project?
    ] 223 Should project boundaries be required for all licenses and 
exemptions?

Appendix C

[[Page 14047]]

[GRAPHIC] [TIFF OMITTED] TP21MR03.000

[FR Doc. 03-6388 Filed 3-20-03; 8:45 am]
BILLING CODE 6717-01-P