[Federal Register Volume 68, Number 164 (Monday, August 25, 2003)]
[Rules and Regulations]
[Pages 51070-51143]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-20999]



[[Page 51069]]

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Part II





Department of Energy





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Federal Energy Regulatory Commission



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18 CFR Parts 2, et al.



Hydroelectric Licensing Under the Federal Power Act; Final Rule

  Federal Register / Vol. 68 , No. 164 / Monday, August 25, 2003 / 
Rules and Regulations  

[[Page 51070]]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 2, 4, 5, 9, 16, 375 and 385

[Docket No. RM02-16-000; Order No. 2002]


Hydroelectric Licensing Under the Federal Power Act

July 23, 2003.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Final rule.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) is 
revising its regulations pertaining to hydroelectric licensing under 
the Federal Power Act. The revisions 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) are conducted concurrently, rather than sequentially. The 
revised 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 of informal resolution of 
study disagreements, followed by dispute resolution, and schedules and 
deadlines.
    The traditional licensing process is being retained, and modified 
by increased public participation and additional time before an 
application for water quality certification must be filed. No changes 
are being made to the Alternative Licensing Process (ALP).
    For a period of two years from the date of issuance of the new 
rule, potential license applicants will be permitted to elect to use 
the traditional or the integrated licensing process, or to request 
authorization to use the ALP. Thereafter, the integrated process will 
become the default, and Commission approval will be required to use the 
traditional process or the ALP.
    Under the revised rules, a new part 5 will be added to Title 18 of 
the Code of Federal Regulations and 18 CFR parts 2, 4, 9, 16, 375, and 
385 will be amended to implement the new procedures.

EFFECTIVE DATE: The rule will become effective October 23, 2003.

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

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Introduction
II. Background
III. Discussion
    A. Need for New Integrated Process Confirmed
    B. Number of Processes
    C. Pre-NOI Activity
    1. Filing Date for NOI and PAD
    2. Advance Notice
    D. Process Selection
    1. Default Process
    2. Standard for Approval of Traditional Process
    3. Timing Issues
    E. Pre-Application Document
    1. In General
    2. PAD Contents, Format, and Distribution
    a. Contents
    b. Distribution
    F. NEPA Scoping and Study Plan Development
    1. In General
    2. Study Criteria
    a. General Comments
    b. Criterion (2)
    c. Criterion (3)
    d. Criterion (5)
    e. Criterion (7)
    f. Proposed Additional Criteria
    3. Progress and Study Reports and Additional Study Requests
    a. Progress Reports and Initial and Updated Study Reports
    b. Modified Study Requests
    c. New Study Requests
    d. Comments on Study Reports
    G. Study Dispute Resolution Process
    1. Informal Dispute Resolution
    2. Formal Dispute Resolution--Subject Matter and Eligibility
    3. Advisory Panel
    a. Need for Panel
    b. Panel Membership
    c. Non-Member Participation
    d. Technical Conference
    e. Activities of the Advisory Panel
    5. Timing Issues
    6. Third Party Technical Expert
    7. Multiple Panels and Multi-Issue Panels
    8. Panel Recommendation
    9. Director's Determination
    10. Study Plan Implementation
    H. Compliance with Study Plan
    I. Other Uses for Dispute Resolution
    J. Evidentiary Hearings
    K. Draft License Application Replaced
    1. Need for Draft Application
    2. Contents of Draft Application
    3. Preliminary Draft Terms and Conditions
    L. License Applications
    1. Contents
    2. Post-Application Study Requests
    M. Consultation and Coordination with States
    1. General Comments
    2. Timing of Water Quality Certification Application
    3. Coastal Zone Management Act
    N. Tribal Issues
    1. Consultation Policy
    2. Tribal Liaison
    3. NHPA Section 106
    4. Other Matters
    O. Environmental Document Preparation
    1. Cooperating Agencies Policy
    2. NEPA Document Contents
    3. Endangered Species Act Consultation
    4. Fish and Wildlife Agency Recommendations
    P. Time Frame for Integrated Process
    Q. Settlement Agreements
    1. Time Outs
    2. Other Matters Pertaining to Settlements
    R. Original License Applications
    S. Competition for New Licenses
    T. Summary of Changes to Integrated Process--Regulation Text
    U. Changes to Traditional Process and ALP
    1. Traditional Process--Public Participation
    2. Traditional Process--Mandatory, Binding Dispute Resolution
    3. Traditional Process--Other Recommendations
    4. Streamlined Process for Small Projects
    5. Draft Applicant-Prepared Environmental Analyses
    6. ALP--Applicability of Dispute Resolution
    V. Ancillary Matters
    1. Intervention by Federal and State Agencies
    2. Information Technology
    3. Project Boundaries and Maps
    4. Miscellaneous Filing Requirements
    5. Technical Changes
    W. Delegations of Authority
    X. Critical Energy Infrastructure Information
    1. Order No. 630
    2. Conforming Rulemaking
    3. CEII in the Integrated Process
    Y. Transition Provisions
IV. Environmental Analysis
V. Regulatory Flexibility Act
VI. Information Collection Statement
VIII. Document Availability
Appendix

    Before Commissioners: Pat Wood, III, Chairman; William L. Massey, 
and Nora Mead Brownell.

I. Introduction

    1. In this final rule, the Federal Energy Regulatory Commission 
(Commission) amends its regulations for licensing of hydroelectric 
power projects by establishing a new licensing process. The amendments 
are the culmination of efforts 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 new licensing process is designed to create efficiencies by 
integrating a potential license applicant's pre-filing consultation 
with

[[Page 51071]]

the Commission's scoping pursuant to the National Environmental Policy 
Act (NEPA).\1\ Highlights of this ``integrated'' process include:
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    \1\ 42 U.S.C. 4321, et seq.
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    [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] Opportunities for 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 study dispute resolution; and
    [sbull] Issuance of public schedules.
    3. In response to oral and written comments on the Notice of 
Proposed Rulemaking (NOPR),\2\ public drafting workshops, and 
additional consultations with other Federal agencies, the following 
significant modifications have been made to the integrated process in 
the final rule:
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    \2\ 68 FR 13988 (Mar. 21, 2003); IV FERC Stats. & Regs. ] 32,568 
(Feb. 20, 2003).
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    [sbull] The content and distribution requirements for the Pre-
Application Document (PAD) have been changed to make it less burdensome 
on potential applicants and easier for recipients to use;
    [sbull] More time has been provided for potential applicants and 
participants to develop and informally resolve differences concerning 
study needs;
    [sbull] A technical conference open to all participants has been 
added to the formal dispute resolution process;
    [sbull] The draft license application has been replaced by a less 
burdensome ``Preliminary Licensing Proposal'';
    [sbull] The deadline for filing a water quality certification 
application has been extended to 60 days after the ready for 
environmental analysis notice;
    [sbull] The integrated process will become the default process in 
two years; in the interim license applicants may choose the integrated 
process or the traditional process as it is currently constituted; and
    [sbull] We are withdrawing our proposal to permit a cooperating 
agency for NEPA document preparation to also intervene in the relevant 
proceeding.

We believe that the changes we are adopting will significantly improve 
the integrated licensing process.
    4. We also proposed in the NOPR to modify the traditional process 
by increasing public participation in pre-filing consultation, adding 
mandatory, binding dispute resolution, and extending the deadline for 
filing an application for water quality certification. We have decided 
not to include mandatory, binding pre-filing dispute resolution, but 
are adopting the other proposals.\3\
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    \3\ For the convenience of commenters on the proposed rule, a 
redline/strikeout version of the affected regulatory text will be 
posted on the hydroelectric page of the Commission's website.
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    5. To improve consultation with Indian tribes, we are establishing 
the position of tribal liaison, providing in the regulations for a 
meeting between the Commission and interested Indian tribes at the 
beginning of the licensing process, and issuing simultaneously with 
this final rule a Tribal Consultation Policy applicable to the 
hydroelectric, gas, and electric programs.
    6. No changes will be made to the alternative licensing procedures 
(ALP).
    7. The Commission appreciates the active participation and 
thoughtful comments provided by the industry representatives, Federal 
and state resource agencies, Indian tribes, and members of the public 
in this proceeding. We believe the provisions of the final rule, 
discussed below, fully take into consideration the interests of all of 
the stakeholders and will establish an integrated licensing process 
that serves the public interest.

II. Background

    8. The background of this proceeding was set forth in detail in the 
NOPR, and need not be repeated here. Since the NOPR was issued on 
February 21, 2003, the Commission has held public and tribal regional 
workshops to hear and consider stakeholder concerns about the proposed 
rule, and to find stakeholder consensus on recommendations to resolve 
those concerns.\4\ Written comments were due by April 21, 2003.\5\ 
Thereafter, we held a four-day stakeholder drafting session from April 
29, 2003 to May 2, 2003, at Commission headquarters. At the stakeholder 
drafting sessions, participants were divided into four groups: Studies, 
Overall Process, Dispute Resolution, and Tribal issues, with each group 
including members from all the major stakeholder groups. The goal of 
the drafting sessions was to develop consensus recommendations on final 
rule language.
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    \4\ The regional workshops were held in Portland, Oregon; 
Sacramento, California; Charlotte, North Carolina; Manchester, New 
Hampshire; Milwaukee, Wisconsin; and Washington, D.C.
    \5\ Entities that filed comments in response to the NOPR are 
listed in the Appendix to the preamble. For administrative ease, the 
commenters' names are abbreviated in the preamble, as indicated on 
the Appendix. On April 21, 2003, the California Public Utilities 
Commission filed a notice of intervention. However, rulemaking 
proceedings do not have parties.
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    9. Following the drafting sessions, the Commission staff held 
additional discussion and drafting sessions with other Federal agencies 
before preparing the final rule.

III. Discussion

A. Need for New Integrated Process Confirmed

    10. Many commenters commended the Commission for undertaking the 
rulemaking and indicated that the proposed integrated licensing process 
holds strong promise of accomplishing its objectives.\6\ The commenters 
also provided hundreds of general and specific recommendations 
regarding how the proposed rule might be improved. After careful review 
of these comments, we affirm the need for the proposed rule and 
conclude that we should finalize it with certain modifications 
discussed below.
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    \6\ Virginia DEQ, WGA, WPPD, Interior, PCWA, EPA, Advisory 
Council, VANR, WPPD, Alabama Power, AmRivers, PG&E, Long View, NHA.
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    11. A few commenters \7\ question the need for an integrated 
process. They are not convinced that it will simplify matters or reduce 
the time needed for licensing, and think it is certain to be more 
expensive for license applicants. WPSR is disappointed that the rule 
does not resolve their concerns about the exercise by federal and state 
agencies of mandatory conditioning authority. WPSR adds that the 
integrated process will be overly burdensome for small projects and 
that the dispute resolution provisions and proposed change in the 
cooperating agencies policy unreasonably diminish the role of the 
applicant. SCE and Georgia DNR state that the objectives of the 
integrated process could be achieved by modifying the traditional 
process, the consensus-based ALP,\8\ or both.\9\ These concerns are 
addressed in the following pages.\10\
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    \7\ SCE, NEU, Xcel, Georgia DNR
    \8\ See 18 CFR 4.34(i).
    \9\ SCE's detailed recommendations for improvements to the 
traditional process are discussed in Section III.T.
    \10\ Some commenters, such as WPSR, state that the rulemaking 
should have focused on a perceived unreasonable exercise of 
authority by agencies with mandatory conditioning authority. As we 
explained in the NOPR, this is a matter that should be addressed 
elsewhere.
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    12. We are committed to making the integrated process a success. 
Potential applicants who choose this process during the transition 
period may rest assured that the Commission will

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dedicate the resources necessary to meet our goals for the process. To 
this end, the Office of Energy Projects has established outreach and 
training teams to promote the integrated process and educate 
participants in its implementation.
    13. It is also our intention to conduct an effectiveness study of 
the integrated process in order to quantify the resulting reductions in 
processing time and costs.

B. Number of Processes

    14. The NOPR proposed to retain both the traditional process and 
the ALP in light of comments by industry that a single process is not 
suitable for all projects and that the integrated process and ALP might 
be too time constrained or resource intensive for small projects. We 
also proposed to retain the ALP in light of its demonstrated track 
record of reducing license application processing times and fostering 
settlement agreements.\11\
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    \11\ 68 FR 13988 at p. 13991-992; IV FERC Stats. & Regs. ] 
32,568 at pp. 34,698-699.
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    15. We discussed the concerns of environmental groups, and some 
agencies and Indian tribes, that multiple processes would confuse 
participants with modest resources, particularly those that rely on 
volunteers. We concluded that the benefits of having different 
processes that can be applied to differing circumstances outweighs this 
concern. We also proposed to require any potential applicant wishing to 
use the traditional process to obtain Commission authorization to do 
so, and to provide an opportunity for all stakeholders to comment on 
the request.\12\
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    \12\ The requirement for a consensus to support approval of a 
request to use the ALP would be unchanged. See 18 CFR 4.34(i).
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    16. Industry commenters and a few others continue to support 
retaining the traditional process and ALP. They state that flexibility 
is required by the diversity of project circumstances, issues, and 
stakeholders; the traditional process and ALP have both been shown to 
be effective under the right circumstances; the integrated process is 
too costly and labor-intensive for many small projects and for small 
stakeholders; and the integrated process is not suitable where 
stakeholders and the potential applicant are very polarized. They add 
that the integrated process is untested and that the traditional 
process needs to be retained as a backstop if an ALP or the integrated 
process break down.\13\
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    \13\ NHA, Idaho Power, EEI, WUWC, SCE, Alabama Power, NEU, WPPD, 
WPSC, Snohomish, CSWC, FWS, CHI, Maryland DNR, Minnesota DNR. NF 
Rancheria states that the rules should clarify what would happen if 
the ALP or integrated process break down, and that any change of 
process should consider impacts to participants other than the 
potential applicant.
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    17. Agency and non-governmental organization (NGO) commenters 
continue overwhelmingly to favor one integrated process sufficiently 
flexible to accommodate the diverse circumstances of license 
applications. They, along with SCE, reiterate that the existing two 
processes are already confusing, making participants unclear about 
their rights and duties, and making it difficult for parties with few 
human and financial resources to effectively participate. A third 
process, they say, will make matters worse. Some also question the 
logic of retaining a traditional process which they say stakeholders 
agree does not achieve the goals of the integrated process.\14\ Several 
note that one process would obviate the need for time in the process to 
comment on the potential applicant's process proposal.\15\
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    \14\ MDEP, HRC, CRITFC, Nez Perce.
    \15\ Wisconsin DNR, PFMC, CHRC, Whitewater, SC League, IRU, 
Interior, CRITFC, RAW, Georgia DNR, HRC.
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    18. California adds that there is no reason to retain the 
traditional process because the information requirements and scope and 
level of analysis are essentially the same as those of the integrated 
process, so costs should be similar; that polarization is irrelevant if 
both processes have mandatory, binding study dispute resolution; and 
project size is no indicator that the issues will be relatively simple 
or few.
    19. SCE also asserts that the revised traditional process, if 
supplemented by the PAD, more early identification of issues and study 
design, study request criteria, and study dispute resolution, would 
differ from the integrated process and the ALP only with respect to the 
timing of NEPA process. This, says SCE, would make the integrated 
process needless, so the Commission should just make appropriate 
modifications to the traditional process.
    20. Upon review of the comments, we remain convinced that having 
three processes is the most effective means of ensuring that the 
licensing process used is suited to the circumstances of the project, 
consistent with our intention to reduce the time required for the 
process without sacrificing resource protection standards. The process 
selection for each licensing proceeding will be made at the outset, so 
stakeholders should not be confused about which process they are in. We 
designed the integrated process 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. To the 
extent stakeholders are concerned about process ambiguities in the ALP, 
they can negotiate the terms of participation. The Commission staff 
also stands ready to assist in clearing up any remaining ambiguities 
about what the regulations may require.
    21. We also disagree with those who imply that the traditional 
process never works well. About one third of traditional license 
process proceedings are concluded before the existing license expires. 
The most common reason for delay in the remaining cases is lack of 
state water quality certification. As discussed below,\16\ the 
integrated licensing process addresses this by providing opportunities 
and inducements for water quality certification agencies and tribes to 
participate from the beginning of pre-filing consultation.
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    \16\ See Sections III.F, G, and M.2.
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    22. Some commenters recommend that we consider establishing a 
sunset provision to eliminate or phase out the traditional process, 
ALP, or both when the integrated process has become sufficiently 
established and fine-tuned in light of experience.\17\ We agree this 
idea may have merit. It is our intention to conduct an ongoing review 
of the progress being made in realizing the goals of the integrated 
process. If it becomes clear in the future that the integrated process 
is substantially meeting these goals and the traditional process is 
not, then it may be appropriate to eliminate the traditional process at 
that time.
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    \17\ HRC, AmRivers, Washington, RAW, AMC, NPS, Georgia DNR.
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C. Pre-NOI Activity

1. Filing Date for NOI and PAD
    23. In the NOPR we rejected California's recommendation that the 
regulations be modified to move the deadline date for the notification 
of intent to seek a license (NOI) forward to 6.5 years before license 
expiration because it would be inconsistent with our goal of developing 
a more timely process. We stated that in the great majority of cases, a 
license applicant should be able to complete the pre-filing aspects of 
the integrated process in the three and one-half year period provided 
for in the regulations.\18\
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    \18\ 68 FR 13988 at pp. 13992-993; IV FERC Stats. & Regs. ] 
32,568 at p. 34,701.
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    24. Several commenters request that we reconsider our position, and 
specifically authorize licensees to voluntarily issue the NOI and 
circulate

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the PAD prior to 5.5 years before license expiration.\19\ They 
reiterate that the FPA requires only that the NOI be filed no later 
than five years before the license expires and that some cases simply 
take longer. They cite the diversity of stakeholder interests, 
development of complex study plans, and unpreventable gaps between 
approval of a study plan and commencement of studies owing to seasonal 
considerations and the time needed to negotiate contracts with 
consultants. They state that adding three to six months at the front 
end will, in many cases, permit an additional field season of studies 
before the application deadline, thus increasing the likelihood that 
the application will be complete when filed. They stress that the goal 
should be to conclude the licensing proceeding and put into place 
improved terms and conditions before an existing license expires, and 
that maintaining an unrealistic time frame for commencing the process 
will result in the continued issuance of unnecessary annual 
licenses.\20\
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    \19\ California, Long View, MWH, PG&E, VANR, MHW, NOAA 
Fisheries, Process Group. VANR states that the NOI deadline date 
should be moved to six years before the license expires.
    \20\ PG&E adds that in Order No. 513, Hydroelectric Licensing 
Regulations under the Federal Power Act, 54 FR at p. 31384 (June 2, 
1989), FERC Stats. & Regs., Regulations Preambles 1986-1990 ] 30,854 
(May 17, 1989), which promulgated the existing time frame for filing 
the NOI, the Commission specifically encouraged pre-NOI 
consultation. The rule we are promulgating today does not discourage 
pre-NOI activity. Indeed, the PAD cannot be prepared without it. 
Rather, we are declining to require provisions that could be 
construed to require or encourage consultation before the NOI is 
filed.
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    25. NHA and Longview suggest that an alternative would be to permit 
the applicant to issue the PAD before the earliest date the NOI can be 
filed if resource agencies and stakeholders approve. They state however 
that this is much less desirable because stakeholders could decline to 
participate before the NOI is filed, forcing the potential applicant to 
repeat steps already completed with some stakeholders after the NOI is 
filed.
    26. These advocates of commencing the licensing process before the 
NOI is issued are correct that some proceedings will exceed 5.5 years, 
notwithstanding the best efforts of all participants. They base their 
comments however on experience under the traditional process, which 
lacks the crucial features of the integrated process designed to 
minimize delays. If all stakeholders work together in good faith, the 
integrated process should minimize the number of instances where a new 
license application proceeding cannot be concluded before the existing 
license expires by integrating pre-filing consultation and development 
of the Commission's NEPA document and resolving study disputes early in 
the process.
2. Advance Notice
    27. In the NOPR we proposed to issue to licensees an advance notice 
of license expiration. This would be done sufficiently in advance of 
the NOI deadline date to ensure that the existing licensee is alerted 
to the requirements for the NOI, PAD, and any potential request to use 
the traditional process or ALP. We noted that because the advance 
notice is an administrative action which requires no action on the part 
of any other entity, and which will be undertaken regardless of the 
process selected, there is no need to include this action in the 
regulations. \21\
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    \21\ 68 FR at pp. 13992-993; IV FERC Stats. & Regs. ] 32,568 at 
pp. 34,700-701.
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    28. Some commenters state that the advance notice should be 
included in the regulations because it notifies stakeholders as well as 
the existing licensee. Barring that, some request publication of a 
written policy on when the notice will be issued and its contents.\22\ 
Suggestions in this regard include reminding the licensee that seasonal 
study considerations may be relevant to timely application development 
\23\ and giving directions to contact resource agencies and assemble a 
list of entities to be consulted and potential issues to address.\24\ 
CHRC and Whitewater similarly recommend that the Commission issue 
public notice when the advance notice is issued.
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    \22\ NOAA, HRC, NHA, NEU, CRITFC, Interior, SCE.
    \23\ PG&E.
    \24\ Wisconsin DNR.
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    29. There is no need to put the advance notice in the regulations. 
The Commission has for many years published in its annual report and 
annually in the Federal Register a table showing the projects for which 
the license will expire during the succeeding six years and providing 
essential information about each project's physical and geographical 
characteristics.\25\ The Commission's annual report is posted on the 
Commission's Web site.
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    \25\ See 18 CFR 16.3.
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    30. A written policy on the content of the notice would be 
superfluous. As stated above, the purpose of the notice is to alert 
licensees to the requirements for the NOI, PAD, and any potential 
request to use the traditional process or ALP. These requirements are 
found in the regulations.
    31. Recommendations for when the advance notice should be made 
range from one to three years before the NOI deadline date.\26\ We 
intend to issue the notice approximately 1.5 years before the NOI 
deadline date. This should provide adequate time for existing licensees 
to make decisions concerning process selection and to gather existing 
information for the PAD.
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    \26\ Wisconsin DNR, SCE.
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D. Process Selection

1. Default Process
    32. The NOPR proposed to make the integrated process the default 
process. A potential applicant would have to request Commission 
approval to use the traditional process or ALP when it files the NOI 
and PAD.\27\
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    \27\ 68 FR at pp. 13992, 14009; IV FERC Stats. & Regs. ] 32,568 
at pp. 34,699, 34,730.
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    33. Licensee commenters question the need for a default process and 
Commission approval of the potential applicant's choice of the 
integrated and traditional process.\28\ PG&E, SCE, and WUWC state that 
no rationale has been offered for eliminating the applicant's existing 
right to choose the traditional process and others say that applicants 
should not have to show good cause to use the traditional process 
because it has been tested and shown to be effective in many cases.\29\ 
Licensee commenters also emphasize that the integrated process is 
untested, and that the ALP was formally adopted by the Commission only 
after several years of case-by-case experience based on requests for 
waiver of the of the traditional process requirements.
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    \28\ Troutman, Snohomish, WPPD, Idaho Power, EEI, Alabama Power, 
Xcel, NEU, WUWC, SCE, NHA. No commenter appears to advocate a change 
in the requirements for use of the ALP, and the Process Group at the 
drafting sessions agreed that the existing criteria are 
satisfactory.
    \29\ WUWC, Snohomish, EEI, SCE.
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    34. WPPD suggests that stakeholders will threaten to withhold 
support for the applicant's potential process proposal in order to 
pressure potential applicants into making other procedural or 
substantive concessions, and that there would be more certainty if 
potential applicants had unfettered process choice.
    35. Several licensees state that the potential applicant has the 
most knowledge of the complexity, level of stakeholder involvement, and 
the resources available to itself and others, so the Commission should 
defer to its judgment.\30\ Other reasons offered in support of 
applicant choice are that the applicant bears the cost of the process, 
a lack of choice will inhibit

[[Page 51074]]

commitment of the potential applicant to the success of the process, 
and the cooperation of stakeholders can be achieved without Commission 
approval.\31\
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    \30\ NHA, EEI, SCE, Long View, PG&E, B&B.
    \31\ NHA, EEI, SCE, Long View, PG&E, B&B, M&H.
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    36. Several of these commenters suggest that if the integrated 
process is to be made the default, that it be done only after a 5-6 
year test period, during which there would be a presumption that the 
applicant's choice is appropriate. If the potential applicant chooses 
the traditional process, proponents of the integrated process would 
have the burden of showing that the integrated process would be 
significantly better or significantly disadvantage non-applicant 
stakeholders. If, at the end of this period, the integrated process 
appeared successful, it would be made the default process, with any 
modifications needed in light of experience.\32\ In this regard, AEP 
and GKRSE state that the goal should be to use the process that is 
likely to yield the best results, procedurally, economically and 
environmentally, and that if the integrated process appears to satisfy 
this goal, potential applicants and stakeholders will use it.
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    \32\ NHA, Long View, PG&E, B&B.
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    37. A few industry commenters assert that the traditional process, 
either in its current form or with the proposed modifications, should 
be the default because it has been tested by years of experience and is 
satisfactory in most cases.\33\ They add that it works best for small 
projects, which are a substantial portion of licensed projects.\34\
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    \33\ Xcel, WPSR, Alabama Power. Other industry commenters, while 
not recommending the traditional process as a default, also assert 
that it generally works well. GKRSC, AEP, CHI, Long View, Consumers, 
WPSC.
    \34\ Approximately half of Commission-licensed projects are 5 MW 
or less.
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    38. Several non-industry commenters favor making the integrated 
process the default with the potential applicant's choice requiring 
Commission approval.\35\ The Minnesota DNR, while not apparently 
objecting to the integrated process as the default, states that there 
should also be a means for other entities to oppose an applicant's 
election to use the default process.
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    \35\ RAW, ADK, CHRC, Whitewater, SC League, IRU, California, 
AmRivers. PFMC recommends that approval of the applicant's process 
proposal should remain with the full Commission, rather than be 
delegated to the Director of the Office of Energy Projects. 
California states that an applicant may show good cause to use the 
traditional process, yet other reasons may exist to deny the 
request, so the regulation should read ``may'' approve, instead of 
``shall.'' Any good cause determination will take account of any 
objections raised by commenters.
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    39. We continue to think the integrated process should be the 
default because it addresses as fully as we can within the confines of 
the statutory scheme the problems that participants in licensing from 
every perspective have identified with the traditional process. It 
merges pre-filing consultation and the NEPA process, brings finality to 
pre-filing study disputes, and maximizes the opportunity for the 
Federal and state agencies to coordinate their respective processes.
    40. The best means of gaining acceptance for the integrated process 
however is to demonstrate that it works. We agree with commenters that 
some period of transition is appropriate. Accordingly, we have decided 
that the integrated process should become the default process on July 
23, 2005. During this two year period, potential license applicants 
will be able to select the integrated process or the traditional 
process as it currently exists, or request authorization to use the 
ALP. At the end of the two-year period, the integrated process will 
become the default process, and potential applicants will have to 
obtain approval to use the traditional process.
    41. We disagree with those who believe we should defer to the 
potential applicant's process choice on the ground that it has the most 
relevant knowledge. The comprehensive development standard of the FPA 
requires us to consider all issues pertaining to the public interest 
and establishes important roles and responsibilities for other federal 
and state agencies. We also have a trust responsibility to Indian 
tribes. The appropriate process must be selected with the interests of 
these entities and other members of the public, not simply those of the 
potential applicant, in mind.
2. Standard for Approval of Traditional Process
    42. The NOPR proposed to grant requests to use the traditional 
process upon a showing of ``good cause.'' \36\ Several commenters state 
that this standard should be replaced by specified criteria, or at 
least that certain factors should be considered before the Director 
acts on a request to use the traditional process.\37\ Alabama Power and 
WUWC, however, state that ``good cause'' is sufficient if construed 
liberally and with deference to the potential applicant.
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    \36\ Proposed 18 CFR 5.2(f)(5). The criteria for approval of the 
ALP would not change. Proposed 18 CFR 5.2(f)(5) states that requests 
to use the traditional process or ALP will be granted ``for good 
cause shown.'' NHA asserts that the good cause standard is something 
new and unnecessary as applied to the ALP. While the regulatory text 
of 18 CFR part 4, from which the requirements for support of a 
request to use the ALP were transposed, do not explicitly state that 
a good cause standard applies, it should be obvious that good cause 
is the minimum standard for Commission approval of any authorization 
not subject to a more specific standard. We are merely making 
explicit what is plainly implicit.
    \37\ Interior, PG&E, NF Rancheria, NPS, Washington, AmRivers, 
Wisconsin DNR, CHRC, Whitewater, NOAA Fisheries, HRC, SC League, TU, 
VANR, PFMC, AW/FLOW.
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    43. The recommended criteria predictably differ depending on 
whether they come from industry commenters or others. Industry 
commenters suggest that the traditional process should be readily 
approved for small projects with relatively few issues. This, they 
suggest, includes some or all of: a project operated in run-of-river 
mode; no substantial changes are proposed in operations or structures; 
there are no anadromous fish; generating capacity is modest; or the 
existing project boundary includes little or no land above the high 
water mark.\38\ Other recommended criteria for approving the 
traditional process include where the potential applicant and 
stakeholders are too polarized to work well together; \39\ if, all 
things considered, it appears likely that the licensing process can be 
completed before the license expires; \40\ and the potential applicant 
thinks the integrated process would be too costly.\41\
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    \38\ GKRSC, AEP, CHI, Long View, Consumers, WPSC.
    \39\ NHA, Idaho Power, EEI, WUWC, SCE.
    \40\ Consumers.
    \41\ M&H.
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    44. Non-licensees contend that the bar for approval of the 
traditional process should be set high. Criteria for approval 
recommended by these commenters include: (1) A consensus favoring the 
traditional process; \42\ (2) lack of opposition from any Federal or 
state agency; \43\ (3) the public or resources affected by the project 
will benefit from using the traditional process compared to the 
integrated process; \44\ (4) the traditional process will maximize 
coordination of all pertinent regulatory processes and more timely 
resolve potential disputes; \45\ (5) it will be the most efficient 
process with the highest level of resource protection; \46\ (6) the 
project does not have significant environmental impacts; \47\ or (7) 
the

[[Page 51075]]

licensing is uncontroversial.\48\ Others factors identified by 
Washington and American Rivers for consideration include the potential 
for time savings, benefits to the environment, and public participation 
needs.\49\
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    \42\ CHRC, Interior, Whitewater, NOAA Fisheries, AmRivers.
    \43\ HRC. HRC, consistent with its recommendation for one 
flexible process, would also apply these criteria to requests to use 
the ALP.
    \44\ SC League, Wisconsin DNR.
    \45\ TU, VANR.
    \46\ PFMC, HRC.
    \47\ NOAA Fisheries. California agrees that the bar for using 
the traditional process should be very high, but makes no specific 
recommendations in this regard.
    \48\ AW/FLOW.
    \49\ Washington, AmRivers.
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    45. Regarding original license applications, Consumers contends 
that the traditional process is appropriate because there is likely to 
be little relevant data available, which will cause the information 
gathering and study period to be extended, which is incompatible with 
the compressed time frames of the integrated process. NOAA Fisheries 
states that the same circumstances cited by Consumers should bar an 
applicant from using the traditional process.
    46. The Process Group agreed that the ``good cause'' standard is 
vague, but did not identify criteria that would favor or disfavor use 
of the traditional process. Instead, they identified various factors 
for the Director to consider in each case in light of the goal of a 
timely, well-informed decision that protects the public interest. These 
factors include:
    [sbull] Project size; \50\
    [sbull] Characteristics of the river basin, including the presence 
or absence of other dams; \51\
    [sbull] The likely level of controversy, including disputes over 
studies;
    [sbull] The level of involvement and interest by resource agencies, 
any expressed intent on their part to exercise applicable mandatory 
conditioning authority, and the anticipated resource issues, including 
ESA;
    [sbull] Whether there are tribal issues;
    [sbull] The physical characteristics of the project and known 
biological impacts of project operations;
    [sbull] Stakeholder and tribal views on process choice; \52\
    [sbull] Resource constraints on Commission staff and participants;
    [sbull] Reasonableness of project costs; \53\
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    \50\ Also suggested by NF Rancheria and NPS.
    \51\ Also suggested by Wisconsin DNR.
    \52\ Also suggested by Washington and AmRivers.
    \53\ Also suggested by Washington, AmRivers, and PG&E.
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    [sbull] Whether the potential applicant has a history of positive 
or negative relationships with stakeholders and Indian tribes; and
    [sbull] The amount and usefulness of existing, relevant 
information.
    47. Although there was general agreement in the Process Group about 
which factors should be considered, this does not reflect a consensus 
on how the factors should be considered. For instance, industry 
commenters tend to think small projects are better suited to the 
traditional process because they are likely to have fewer environmental 
impacts, be less controversial, and be less well able to bear the 
transaction costs of relicensing. Agencies, NGOs, and Indian tribes, 
tend to think project size is only coincidently related to 
environmental impacts and controversy, and view transaction costs as a 
cost of doing business and a much lower concern than development of a 
complete record and improvements in environmental protection.
    48. This fundamental difference of viewpoints leads us to conclude 
that the Process Group approach, somewhat modified, is the most 
sensible approach to this issue. We conclude that five factors are most 
likely to bear on whether use of the traditional process is 
appropriate. These are: (1) Likelihood of timely license issuance; (2) 
complexity of the resource issues; (3) level of anticipated 
controversy; (4) the amount of available information and potential for 
significant disputes over studies, and (5) the relative cost of the 
traditional process compared to the integrated process. The more likely 
it appears from the participants' filings that an application will have 
relatively few issues, little controversy, can be expeditiously 
processed, and can be processed less expensively under the traditional 
process, the more likely the Commission is to approve such a request. 
In recognition of the uniqueness of licensing proceedings, participants 
who comment on requests to use the traditional process may identify 
other factors they think are pertinent to the proceeding in 
question.\54\
---------------------------------------------------------------------------

    \54\ See 18 CFR 5.3(d)(1). PFMC states that this decision should 
be made by the Commission rather than delegated to the Office 
Director.
---------------------------------------------------------------------------

3. Timing Issues
    49. The NOPR proposed to require a potential applicant to serve a 
copy of its request, if any, to use the traditional process or ALP on 
all affected resource agencies, Indian tribes, and members of the 
public likely to be interested in the proceeding, and to give 
appropriate newspaper notice to the general public. Responses would be 
due to the Commission within 15 days.\55\
---------------------------------------------------------------------------

    \55\ Proposed 18 CFR 5.1(f).
---------------------------------------------------------------------------

    50. Many commenters respond that this is insufficient time to 
respond on a matter of such importance.\56\ We agree that additional 
time may be appropriate for this step because it relies in part on 
newspaper notice and occurs at the commencement of the proceeding. 
Accordingly, we have increased the time allowed to respond to these 
requests to 30 days.
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    \56\ NPS, NYSDEC, Interior, AmRivers, Wisconsin DNR, Consumers.
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E. Pre-Application Document

    51. The NOPR concluded that NEPA scoping will be greatly assisted 
by the availability to the participants of as much relevant existing 
information as possible when scoping begins. To this end, we proposed 
to supplant the current requirements for existing licensees to make 
project information available to the public when the NOI is filed, and 
for all potential license applicants to provide an initial consultation 
document (ICD) to consulted entities during first stage consultation, 
with the PAD.\57\
---------------------------------------------------------------------------

    \57\ 68 FR at pp. 13993-994; IV FERC Stats. & Regs. ] 32,568 at 
pp. 34,699, 34,730.
---------------------------------------------------------------------------

    52. The PAD should include all engineering, economic, and 
environmental information relevant to licensing the project that is 
reasonably available when the NOI is filed. It is a tool for 
identifying issues and information needs, including NEPA scoping, 
developing study requests and study plans, and providing information 
for the Commission's NEPA document. The PAD would be a precursor to 
Exhibit E, the environmental exhibit in the license application. In the 
integrated process, the PAD would evolve directly into a new Exhibit E 
that has the form and contents of an applicant-prepared draft NEPA 
document.\58\
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    \58\ See proposed 18 CFR 5.16(b). Applicants using the 
traditional process would continue to use the existing Exhibit E in 
their license application, and applicants using the ALP could use 
the existing Exhibit E or file with their application in lieu 
thereof an applicant-prepared environmental analysis. As discussed 
in Section III.U.5, we are changing our policy to permit applicant 
using the traditional process to file an applicant-prepared 
environmental assessment.
---------------------------------------------------------------------------

    53. The PAD proposal was widely supported, and many comments were 
received concerning the appropriate contents, format, and distribution 
requirements.\59\
---------------------------------------------------------------------------

    \59\ A great many specific recommendations regarding the 
detailed requirements of the PAD were filed. All of these have been 
considered, but it would be needless and impractical to discuss each 
comment individually.
---------------------------------------------------------------------------

1. In General
    54. Industry commenters generally agree that the PAD is a good idea 
in principle, but that the requirements need to be significantly 
reduced to ensure that the contents are relevant to the licensing 
proceeding and useful to the participants. Some industry commenters 
believe the PAD requires significantly more information and a

[[Page 51076]]

higher level of effort than the existing public information and ICD 
requirements,\60\ and suggest that the incremental burden on applicants 
is unnecessary.\61\ Several commenters also indicate that much or all 
of the historical information currently required to be made available 
to the public is never requested and represents a needless burden and 
expense.\62\
---------------------------------------------------------------------------

    \60\ The initial consultation document is required by 18 CFR 
4.38(b) and 16.8(b)(1). The public information requirement for 
existing licensees seeking a new license is at 18 CFR 16.7(d).
    \61\ SCE, Alabama Power, NEU, Xcel, Consumers, Oroville.
    \62\ PG&E, SCE, Consumers.
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    55. Consumers recommends that we allow any applicant that uses the 
traditional process to meet only the existing public information and 
ICD requirements instead of filing the PAD. NEU makes the same 
recommendation for existing projects of 5 MW or less. Consumers also 
recommends that information requirements be made flexible to 
accommodate different types of projects; for instance, some data that 
is useful for unconstructed projects greater than 5 MW may not be 
needed to evaluate a smaller existing project. MWH and WPSR similarly 
indicate the PAD requirements should be reduced for small projects 
because of the asserted connection between small projects with minor 
impacts.
    56. Various industry commenters also seek affirmation or 
clarification of our intention that only existing information relevant 
to project impacts is required, and that the scope of and level of 
effort to obtain existing data should be commensurate with project 
impacts.\63\
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    \63\ Consumers, Long View, MWH, WPSR, EEI, NHA, Xcel, NEU, SCE, 
CHI.
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    57. Resource agencies and NGOs support the PAD and state that a 
high quality PAD is essential to the success of the integrated process 
in light of the short time frames contemplated in the NOPR, and that an 
applicant's failure in this connection would interfere with the ability 
of other parties to timely and effectively participate in 
licensing.\64\
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    \64\ VANR, WUWC, Interior, California, CHRC, Whitewater, SC 
League, IRU, NYSDEC, CSWRCB, Long View, HRC, AmRivers, SC League, 
Oregon, AMC.
---------------------------------------------------------------------------

    58. California agencies and a few other commenters believe that the 
PAD contents should not be limited to existing information, but should 
include all information needed to evaluate potential effects of project 
operations, and that the applicant should be required to conduct 
whatever studies or information searches are necessary to fill in any 
gaps in the existing information before the PAD is filed. They assert 
generally that NEPA scoping cannot be done unless there already exists 
a complete baseline of existing environmental data, and suggest that 
existing licensees should have acquired such data during the term of 
the existing license.\65\
---------------------------------------------------------------------------

    \65\ CDWR, Cal A-G, CSWRCB, AMC.
---------------------------------------------------------------------------

    59. HRC similarly states that the PAD should include a systematic 
discussion of the project's resource impacts, so that post-NOI 
information gathering and studies are minimal, even if that requires 
potential applicants to conduct environmental monitoring or original 
studies not required under the existing license.
    60. Agency and NGO commenters generally recognize however that 
complete information on all resource impacts attributable to a project 
is unlikely to be available when the NOI is issued and the PAD is 
filed. These commenters recommend that potential applicants be subject 
to a due diligence standard with respect to obtaining existing 
information; that is, make a good faith effort to determine what 
relevant information is available and to obtain it.\66\
---------------------------------------------------------------------------

    \66\ CDFG, HRC. At least one licensee, PG&E, agrees that a due 
diligence standard is reasonable.
---------------------------------------------------------------------------

    61. We agree that a due diligence standard will apply to the 
development of the PAD. The regulations we are adopting provide some 
guidance on what constitutes due diligence, but we are not able to 
provide a detailed definition. Rather, the determination of whether due 
diligence is exercised will have to be made on case-by-case basis.
2. PAD Contents, Format, and Distribution
a. Contents
    62. There is a considerable gap between the industry and other 
commenters on the range and level of detail that should be required in 
the PAD. PG&E and Georgia Power for instance, suggest that instead of 
specific requirements, the content requirements should be stated as 
broad subject matter categories, with information required to the 
extent reasonably known, available, and applicable. Troutman similarly 
recommends that specific requirements in the regulations be replaced by 
a policy statement or guidance document from which applicants would 
determine what information is relevant and appropriate.
    63. In contrast, agencies and NGOs generally prefer explicit and 
detailed requirements. For example, Wisconsin DNR and VANR recommend 
that the PAD include the original license order and all amendment 
orders and management plans; any document that explains the existing 
license requirements; a layman's summary of all of the license and 
management plan requirements; and a list of every entity consulted by 
the potential applicant prior to filing the NOI and the issues those 
entities raised. Another recommendation is that the PAD include study 
plans for restoration of essential fish habitat; data needed for water 
quality certification; information on cumulative environmental impacts 
throughout the river basin; and studies of fish passage conditions and 
plans for improvements thereto, including restoration of historic fish 
habitat. CHRC states that flow data should be provided on the finest 
available scale, even to daily or hourly flow for the entire historical 
record.
    64. HRC suggests that licensee compliance with the requirements can 
best be ensured by having the Commission evaluate whether the PAD meets 
certain standards for completeness and commiting to taking measures to 
enforce compliance with the standards beyond finding that an 
application is deficient. These might include requiring the applicant 
to file a revised PAD before the proceeding continues, and interim 
environmental measures in annual licenses, or civil penalties.
    65. Because these disagreements relate to how the document is 
formatted and distributed, we will defer their resolution to the 
conclusion of the following section concerning those matters.
b. Distribution
    66. Several industry commenters made recommendations with respect 
to the format and distribution requirements for the PAD.\67\ NHA 
proposes that the PAD be reformatted, some of the content requirements 
be deferred to the license application, and the distribution 
requirements modified. The PAD itself would contain basic information 
about the licensee, project description and existing and proposed 
operations, a general description of the river basin, including 
pertinent information about land use, other dams, and management plans, 
a discussion of environmental impacts based on existing information, a 
list of issues in the form of a scoping document, and a plan and 
schedule for pre-application activities.\68\ Exhibits showing project 
structures and features, historical information on amendments,

[[Page 51077]]

compliance, and generation, and information pertaining to dam and 
project safety would be located in the potential applicant's project 
files and would be provided to anyone who requested it at a reasonable 
cost of production.\69\ Distribution of other generally uncontroversial 
information would be deferred until the license application is 
filed.\70\ NHA contends that these changes would reduce the burden on 
applicants, make the document better suited to its purpose, and make it 
more accessible to stakeholders. Georgia Power and Duke support NHA's 
proposal.
---------------------------------------------------------------------------

    \67\ Duke, PG&E, Troutman, WPPD, Xcel, CHI, Sullivan, NHA, SCE.
    \68\ See proposed 18 CFR 5.4(c)(2)(A)-(B), (D)-(G), (J) and (P).
    \69\ See proposed 18 CFR 5.4(c)(2)(H), (I), (K), and (L). NHA 
adds that critical energy infrastructure information (CEII) would be 
viewable only at the potential applicant's offices. CEII is 
discussed in Section III. X below.
    \70\ See proposed 18 CFR 5.4(c)(2) (M) and (O), and (G)(xi).
---------------------------------------------------------------------------

    67. NHA's concerns are shared and the essence of its proposal 
supported by many licensees. They acknowledge the importance of 
explaining the current license requirements based on the original 
license and any amendments, existing management plans, and other 
requirements, but state that the expense of producing, packaging and 
distributing the underlying licensing documents and existing studies to 
many recipients will be burdensome in general and enormous in some 
cases. They say that study results are generally useful only to a few 
stakeholders with appropriate expertise, such as resource agencies. The 
common thread of these comments is that general information about 
existing project facilities and operations would be broadly 
distributed, while more detailed information would be identified and 
made available on request, via the internet or another means of 
distribution.\71\
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    \71\ PG&E, Suloway, Normandeau, M&H, Consumers, Long View, 
Reliant, AEP, Oroville, SCE.
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    68. SCE has a somewhat different proposal. It recommends that the 
PAD be limited to: (1) A general description of the project, similar to 
existing Exhibit A;\72\ (2) monthly energy data for the prior five 
years;\73\ (3) five years of existing streamflow data;\74\ (4) a 
description of existing recreation facilities and use based on the most 
recent Form 80, and of the applicant's policies, if any, with respect 
to management of project lands and waters; (5) a single line diagram 
showing the electrical path between all project components; (6) 
existing and available environmental data obtainable from resource 
agencies or in the applicant's possession.\75\
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    \72\ See e.g., 18 CFR 4.41(b).
    \73\ SCE states that licensee's methods of maintaining 
information on dependable capacity are not consistent and would 
therefore be misleading if required to be included. At the least, 
SCE suggests, the term should be defined if it is required to be 
reported.
    \74\ SCE does not specify how the required information would be 
reported; for instance the vintage of the data or its periodicity 
(e.g., hourly, daily, monthly).
    \75\ SCE's rewrite of proposed 18 CFR 5.4 is at pp. 8-18 of its 
comments. SCE would also have us put language in the regulations 
encouraging agencies to cooperate in the development of the PAD by 
providing available environmental data to the applicant. Given the 
concerns expressed by agency commenters about the potential for an 
incomplete PAD and, in general, the importance of a quality 
evidentiary record, we think agencies and other potential 
participants have sufficient incentive to assist potential 
applicants in this regard.
---------------------------------------------------------------------------

    69. Long View and Xcel recommend that the PAD have the same format 
as license application requirements for the classification of the 
project; e.g., major unconstructed project, major project-existing dam, 
or major water power project-5 megawatts or less, with the gaps to be 
filled in as the prefiling consultation and information gathering 
process proceeds.\76\
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    \76\ Long View, Xcel.
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    70. Agency and NGO commenters appear to be less concerned with the 
format of the document than with its contents. They generally contend 
that the range of data and level of detail set forth in the NOPR should 
be affirmed in the final rule.
    71. WPSR opposes having to provide the PAD at all. It recommends 
instead that the existing requirement to make public information 
viewable by the public in various locations, such as company 
headquarters and public libraries, be retained.
    72. AW/FLOW states that internet or CD distribution is good in 
theory, but that people attending meetings generally have paper, so 
this means of distribution would unfairly force cash-strapped NGOs to 
bear the cost of printing materials.
    73. The Documents Group agreed that it makes sense for a potential 
applicant to incorporate into the PAD by reference voluminous 
information such as raw data and existing studies. They agreed that the 
substantial effort and expense does not necessarily make the document 
more useful and may, owing to sheer volume, make it less useful. This 
information could be summarized in the relevant section of the PAD 
using appropriate methods. In addition, the PAD would contain an 
appendix describing all materials summarized in the text, and 
explaining how to obtain those materials from the potential applicant.
    74. The Documents Group agreed that the goal is to target insofar 
as is practicable the needs of various stakeholders, agencies, and 
Indian tribes. To that end, the potential applicant would have to 
deliver the summarized information upon request to any agency, Indian 
tribe, NGO, or other stakeholder within 20 days of the request, in a 
mutually agreeable format that does not require conversion by the 
potential applicant from paper to an electronic format. Potential 
applicants would have to be able to deliver electronically formatted 
materials in a variety of formats.
    75. We are adopting requirements for the PAD that substantially 
incorporate the recommendations of the Documents Group. The purpose of 
the PAD is to provide the Commission and the consulted entities with 
existing information relevant to the project proposal that is in the 
potential applicant's possession or that it can obtain with the 
exercise of due diligence. Distribution of the information will enable 
the consulted entities to identify issues and related information 
needs, develop study requests and study plans, and help the Commission 
to analyze any application that may be filed. We will not require a 
potential applicant to conduct studies in order to generate information 
for inclusion in the PAD. The basic content requirements will be a 
description of the existing and proposed project facilities and 
operations, a description of the existing environment, existing data or 
studies relevant to the existing environment, and any known and 
potential impacts of the proposed project on relevant resources.
    76. A potential applicant will not be required to include all of 
the studies and information sources on which the descriptions in the 
PAD are based, but will be required to provide these materials upon 
request to recipients of the PAD. Potential applicants and participants 
in pre-filing consultation are encouraged to accomplish such 
distribution by electronic means, including compact disks, but a 
requester is entitled to receive such materials in hard copy form. The 
PAD will also be required to include a process plan and schedule, a 
preliminary issues and studies list, and an appendix summarizing any 
contacts with agencies, Indian tribes, and others in obtaining relevant 
information. We think that the foregoing format, content, and 
distribution provisions should result in PADs that serve the purpose 
for which this document is established and

[[Page 51078]]

reasonably balance the competing interests of the participants.\77\
---------------------------------------------------------------------------

    \77\ We cannot do away with the ``library'' requirement, as it 
is required by FPA Section 15(b)(2). In part 5, it appears at 18 CFR 
5.2(a).
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F. NEPA Scoping and Study Plan Development

1. In General
    77. Most commenters support having a Commission-approved study plan 
in the integrated process,\78\ but many request clarifications of or 
modifications to the proposed study plan development process. Only 
Idaho Power objects to this feature. It asserts that the current study 
planning and dispute resolution provisions generally work well, and are 
less costly and labor-intensive than what is included in the integrated 
process. We do not dispute that there are instances where the current 
study planning and dispute resolution processes are adequate. They 
undeniably contribute in many cases however to the undue length of the 
licensing process by deferring identification and resolution of 
fundamental issues about what information gathering and studies are 
necessary until after the application is filed. The integrated process 
is designed to eliminate that problem.
    78. HRC requests that we affirm that the purpose of an approved 
study plan is to develop a record that allows for the adequate 
evaluation of reasonable alternatives to mitigate ongoing impacts to 
resources from project operations, and not to prejudge potential 
mitigation measures. The purpose of an approved study plan is to bring, 
to the extent possible, pre-filing finality to the issue of what 
information gathering and studies will be required by the Commission to 
provide a sound evidentiary basis on which the Commission and other 
participants in the process can make recommendations and provide terms 
and conditions. The study plan is developed in conjunction with NEPA 
scoping, and the latter inevitably involves judgments about which 
potential alternatives are reasonable to consider, and which 
alternatives will be eliminated from detailed consideration. It 
therefore follows that the Commission-approved study plan will reflect 
those determinations.
---------------------------------------------------------------------------

    \78\ E.g., NYSDEC, S-P, California, Interior. S-P states that 
approved study plans are needed to ensure confidential treatment of 
tribal cultural practices. This matter is addressed in Section 
III.N.
---------------------------------------------------------------------------

    79. Washington states that study requests should not be rejected 
merely because they do not employ generally accepted practices, because 
new methodologies or techniques may be appropriate in some cases. We 
agree. As noted elsewhere, with the exception of the establishment of a 
nexus between the study request and operation of the project, no one 
criteria establishes a ``litmus test'' for study requests.
    80. Georgia DNR states that study plans should be project-specific 
and that the study criteria should not be interpreted so as to mandate 
standard form study plans. We agree. Although we would expect specific 
study plans for projects with features identical or similar to one 
another to have the same or similar components, every project is likely 
to have unique features that need to be accounted for in the 
development of the study plan.
    81. NYSDEC states that the unique aspects of individual projects 
make extrapolated data acceptable, if at all, only if it is technically 
infeasible to produce site-specific data. We do not agree with blanket 
assertions of this nature. We agree with Oregon that the 
appropriateness of extrapolated data is a decision properly made on a 
case-by-case and issue-by-issue basis.
    82. Under the proposed rule, the NEPA scoping meeting and site 
visit would be followed by an opportunity for participants to make 
comments and preliminary study requests before the potential applicant 
files its draft study plan.\79\ Interior would insert after the 
comments and preliminary study requests a six-month period for the 
participants to negotiate a mutually agreeable study plan. Interior 
reasons that this might permit elimination of the following steps up to 
the potential applicant filing a revised study plan for approval,\80\ 
and thereby minimize the need for formal dispute resolution, 
eliminating as much as 200 days from the pre-filing process. PG&E and 
SCE think the proposed study plan development process is weighted too 
heavily toward notice and comment and not enough toward interaction 
between the participants. PG&E and SCE would also like to see more time 
for the participants to resolve their study differences. The Process 
Group agreed in general with these commenters that there should be more 
time in the process for such interaction.
---------------------------------------------------------------------------

    \79\ Proposed 18 CFR 5.5 and 5.6.
    \80\ Interior refers to proposed 18 CFR 5.7 through 5.12.
---------------------------------------------------------------------------

    83. As discussed below, we have modified the process to extend the 
time for participants to discuss the potential applicant's proposed 
study plan and to provide more flexibility concerning interactions 
during that period.\81\
---------------------------------------------------------------------------

    \81\ See Section III.T below, and 18 CFR 5.12.
---------------------------------------------------------------------------

2. Study Criteria
    84. The NOPR proposed that an information-gathering or study 
request be required to address seven criteria:
    (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 Indian 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 field 
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.\82\
---------------------------------------------------------------------------

    \82\ See proposed 18 CFR 5.10.
---------------------------------------------------------------------------

a. General Comments
    85. Commenters generally approved of the proposed study criteria 
subject to various recommendations for minor changes.\83\ With the 
exception of issues concerning what consideration should be given to 
study costs, few had criterion-specific comments. Commenters also 
offered a variety of more general comments on how the study criteria 
should be applied. We consider the general comments first.
---------------------------------------------------------------------------

    \83\ VANR, Normandeau, HRC, NHA, Long View, Duke, PG&E, Advisory 
Council, Oregon. In contrast to the broad expression of support from 
all stakeholder perspectives, Minnesota DNR states that Criteria 
(2), (5), (6), and (7) are either exceedingly general or unduly 
specific and speculates that they were designed to obstruct or limit 
resource agency study requests.
---------------------------------------------------------------------------

    86. PG&E, SCE, and Duke request that we affirm in the preamble that 
the study criteria are not a check list; rather, they need to be 
considered as a whole, with each criterion addressed, and that no 
single criterion is determinative. The Studies Group agreed. We so 
stated in

[[Page 51079]]

the NOPR,\84\ and affirm that statement here.
---------------------------------------------------------------------------

    \84\ 68 FR at p. 13995; IV FERC Stats. & Regs. ] 32,568 at p. 
34,705.
---------------------------------------------------------------------------

    87. Long View states that the preamble should clarify that 
requesters' desires for information must be tempered by practical 
considerations of relevancy, the value of the information sought in the 
context of the proceeding, and the complexity and effort required to 
obtain the information. NHA states that requesters should be required 
to explain the merits of their requests in the context of the case and 
the FPA. We think a practical application of the proposed criteria, 
with the minor modifications we are making in this rule, should result 
in the adoption of study requests that have merit, and the exclusion of 
those that do not. As we stated in the NOPR, ``the * * * criteria 
implicitly require that study requests not be frivolous and add some 
appreciable evidentiary value to the record.'' \85\
---------------------------------------------------------------------------

    \85\ 68 FR at p. 13996; IV FERC Stats. & Regs. ] 32,568 at p. 
34,706.
---------------------------------------------------------------------------

    88. HRC asks us to clarify how ongoing environmental impacts will 
be considered in light of our policy that the baseline for 
environmental analysis is current conditions.\86\ The study criteria 
should be applied in the same manner regardless of whether an impact 
from project operations on a resource is characterized as ongoing or 
otherwise. The requesting party would have to reasonably demonstrate 
the nexus between project operations and resource impacts and, in the 
context of addressing the other criteria, show how the proposed study 
reasonably relates to the development of potential mitigation or 
enhancement measures.
---------------------------------------------------------------------------

    \86\ S-P and PFMC state that the environmental baseline for 
studies should be pre-project conditions. Georgia DNR states that 
pre-project baseline studies may be appropriate in some cases. SCE, 
Duke, and PG&E ask us to restate in the regulations our policy that 
the baseline is current conditions. We are not changing our well-
established and judicially approved policy, and see no need for it 
to be written into our procedural regulations.
---------------------------------------------------------------------------

    89. Duke wants us to emphasize that decisions on study requests 
will be consistent with Commission policy and practice. We think the 
regulation text is sufficiently clear in this regard.\87\
---------------------------------------------------------------------------

    \87\ See 18 CFR 5.14(l).
---------------------------------------------------------------------------

    90. The Advisory Council states that it would be helpful to include 
a more complete definition of what cultural resources studies are 
needed. The Advisory Council makes no specific suggestions in this 
connection, and we continue to believe that the best forum for 
determining appropriate data needs and study requirements is in 
individual cases.
    91. Oregon suggests, particularly in light of the time frames, that 
participants' study requests should only need to be general in nature, 
with the burden on potential applicants to produce detailed study 
plans. We disagree. As discussed below,\88\ we have modified the 
process in response to comments by moving NEPA scoping, including the 
issuance of Scoping Document 1, to a place prior to the participants' 
submittal of their study requests. Under the revised process, these 
study requests should be as detailed as possible.
---------------------------------------------------------------------------

    \88\ See Section III.T and 18 CFR 5.8(c).
---------------------------------------------------------------------------

    92. The NOPR states that judgment calls on study requests will 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 Indian 
tribes with mandatory conditioning authority can carry out their 
responsibilities.''\89\ Duke states that this is inconsistent with a 
prior order in which Duke asserts that the Commission stated that it 
will not require data that other agencies deem necessary to support the 
exercise of their mandatory conditioning authority. In fact, in the 
order cited by Duke, Curtis/Palmer Hydroelectric Company LP and 
International Paper Company,\90\ we merely restated our judicially 
affirmed position that the Commission has no statutory obligation to 
provide a record to support other agencies' decision making, or to 
require studies that it does not deem necessary to evaluate the public 
interest in light of the record evidence and argument provided by other 
parties.\91\ The principle underlying the integrated process expressed 
above is not inconsistent with that position.
---------------------------------------------------------------------------

    \89\ 68 FR at p. 13995; IV FERC Stats. & Regs. ] 32,568 at p. 
34,705.
    \90\ 92 FERC ] 61,037 (2000).
    \91\ 92 FERC at p. 61,089.
---------------------------------------------------------------------------

    93. No comments were filed on proposed criteria (1), (4), and (6). 
Comments on the other proposed criteria are considered below.
b. Criterion (2)
    (2) If applicable, explain the relevant resource management goals 
of the agencies or Indian tribes with jurisdiction over the resource to 
be studied.
    94. NYSDEC states that the relationship of a study request to 
agency management goals should not be the sole or even the primary 
measure of the need for a study because agencies may request studies 
that do not relate directly to agency management objectives, but do 
relate to mandates established in law or regulation or derive from 
agency policy. A statement by an agency connecting its study request to 
a legal, regulatory, or policy mandate is, of course, entitled to 
appropriate consideration. Any requester should however appreciate that 
the more broadly stated the legal, regulatory, or policy mandate is, 
the more clearly the requester needs to explain how the mandate relates 
to the study request and, in turn, project impacts.
    95. Massachusetts DER states that only a resource agency may 
appropriately determine what study requests apply to its management 
goals, so neither the Commission nor potential applicants should make 
determinations of applicability. As explained in the NOPR, the 
Commission does not intend to second guess the appropriateness or 
applicability of resource agency management goals.\92\ A requesting 
agency is required however to establish the connection, if any, between 
its study request and its management goals. In the great majority of 
cases, the connection should be obvious.
---------------------------------------------------------------------------

    \92\ 68 FR at p. 13995; IV FERC Stats. & Regs. ] 32,568 at p. 
34,705.
---------------------------------------------------------------------------

c. Criterion (3)
    (3) If the requester is not a resource agency, explain any relevant 
public interest considerations in regard to the proposed study.
    96. NYSDEC states that the requirement to explain relevant public 
interest considerations should also apply to agencies. It would be 
desirable for any entity requesting a study to explain how its study 
request relates to the public interest, but it should suffice for an 
agency requester to explain the connection of the study request to its 
resource management goals.
d. Criterion (5)
    (5) Explain any nexus between project operations and effects 
(direct, indirect, and/or cumulative) on the resource to be studied.
    97. EEI requests us to state that a nexus between project 
operations and effects on the resource in question is a threshold 
requirement that must be demonstrated in every case.\93\ This issue was 
discussed by the Studies Group, which agreed with EEI's request, as do 
we. Otherwise, the door would be open

[[Page 51080]]

to study requests having nothing to do with project impacts.\94\
---------------------------------------------------------------------------

    \93\ Duke and PG&E similarly state that the Commission should 
affirm that it will strictly apply this criterion.
    \94\ Geosyntec appears to state that a requester should only 
have to show a nexus between the study request and an issue, rather 
than a nexus between a study request and the project. We think this 
is a distinction without a difference, because the impacts of the 
project on resources creates the issues, which in turn are the basis 
for study requests.
---------------------------------------------------------------------------

    98. CHRC counters that a study might be required to establish the 
existence of a nexus. Taken to its extreme, CHRC's position would have 
us approving study proposals that amount to mere speculation. We think 
a common sense approach to demonstrating a nexus between project 
operations and resource impacts, informed by the professional judgment 
of qualified agency, Commission, and tribal staff, should ensure that 
this criterion is reasonably applied.
    99. Oregon approaches the nexus issue from a different perspective; 
that is, if a nexus is demonstrated between project operations and 
resource impacts (e.g., fish entrainment mortality), then related study 
requests must be approved. We do not agree. As stated above, the 
criteria are to be considered as a whole, in light of the circumstances 
of the individual proceeding, and any applicable Commission policies 
and practices.
    100. NHA and PG&E also request that we add an additional criterion 
requiring requesters to describe how the information would be used in 
the proceeding in relation to resource management measures. This 
proposed criterion appears to be intended to elicit an explanation how 
the information could be used to develop protection, mitigation, or 
enhancement measures by the Commission or agencies with conditioning 
authority. The Studies Group discussed this matter and recommended that 
the following phrase be added to the end of Criterion (5): ``and how 
study results would inform the development of license conditions.'' We 
agree that this is an important aspect of study requests and are 
adopting the proposed modification.
e. Criterion (7)
    (7) Describe considerations of cost and practicality, and why any 
proposed alternatives would not be sufficient to meet the stated 
information needs.\95\
---------------------------------------------------------------------------

    \95\ See proposed 18 CFR 5.10.
---------------------------------------------------------------------------

    101. This proposed criterion received the most comments. Several 
state agencies state that resource agencies should not be required to 
provide detailed cost estimates of proposed studies because specific 
knowledge concerning study costs lies with applicants or their 
contractors. They contend that potential applicants should have the 
burden of addressing cost and practicality. They also add that this may 
be a difficult matter on which to reach a merits conclusion, because 
the value of the information developed is not always known until after 
a study is completed.\96\
---------------------------------------------------------------------------

    \96\ Georgia DNR, Minnesota DNR, NCWRC, PFBC, MPRB. MPRB would 
eliminate this criterion altogether on the ground that once a need 
for information is established, cost is irrelevant. We rejected such 
assertions in the NOPR. 68 FR at p. 13995; IV FERC Stats. & Regs. ] 
32,568 at p. 34,705.
---------------------------------------------------------------------------

    102. NYSDEC states that the criterion should be modified to require 
a requester to address the proposed study's scope and level of effort. 
We conclude the proposed modification is not necessary because there is 
a built-in incentive for requesters to do so. It is implicit that cost 
and practicality can be addressed only to the extent the study request 
includes a description of the scope and level of effort. The less 
specificity a requester provides, the more difficult it will be to 
apply the criterion in its favor.
    103. Finally, various Indian tribes and agencies state that where 
protection of tribal trust resources is at issue, the Commission's 
trust responsibility prohibits it from considering factors of cost and 
practicality, or that such factors are entitled to minimal weight. They 
state that the only applicable considerations are consistency with 
treaties, statutes, and case law defining obligations to protect the 
trust resources. Some add that the FPA requires the Commission to 
protect non-developmental resources, so matters of study cost and 
practicality are entitled under that Act to minimum weight.\97\ As we 
stated in the NOPR, our responsibility to balance all aspects of the 
public interest with respect to any project proposal necessarily 
encompasses the exercise of independent judgment concerning the 
relative cost and value of obtaining information.\98\
---------------------------------------------------------------------------

    \97\ Menominee, Wisconsin DNR, MPRB, Interior, Skokomish.
    \98\ 68 FR at p. 13995; IV FERC Stats. & Regs. ] 32,568 at p. 
34,705.
---------------------------------------------------------------------------

    104. The NOPR also discussed certain additional criteria proposed 
by NHA and SCE,\99\ and requested comments on whether their proposed 
criterion (3) (``The cost of the study must be justified relative to 
the value of the incremental information provided'') or the 
Commission's proposed Criterion (7) more appropriately deals with the 
issue of study costs.\100\
---------------------------------------------------------------------------

    \99\ 68 FR at pp. 13995-996; IV FERC Stats. & Regs. ] 32,568 at 
p. 34,706.
    \100\ 68 FR at p. 13995; IV FERC Stats. & Regs. ] 32,568 at p. 
34,706.
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    105. Industry commenters preferred the NHA/SCE language because it 
requires a conclusion concerning whether the cost of the study is 
justified by the expected value of the information.\101\ Agency and NGO 
commenters aver that the NHA/SCE language is more theoretical than 
practical and likely to cause more disputes than it prevents because 
the full value of a study cannot be known until it is completed. They 
add that any criterion that purports to measure study results against 
dollars is an apples to oranges comparison and prejudices everyone's 
interests but the applicant's. They therefore favor the Commission's 
Criterion (7).\102\ Interior and MPRB state that scientific standards 
should be paramount. Interior adds that cost and practicality can be 
assessed by the proposed Advisory Panel, if the study request goes to 
dispute resolution.
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    \101\ NHA, Normandeau, WPPD, SCE, PFMC, EEI, NEU, Duke, PG&E, 
CSWC.
    \102\ California, Oregon, HRC, NCWRC, Interior, MPRB.
---------------------------------------------------------------------------

    106. California recommends that if Criterion (7) is not adopted, a 
better alternative than the NHA/SCE language would be to follow 
California's requirement that the burden of studies, including their 
costs, must bear a reasonable relationship to the need for the study 
and the benefits to be obtained therefrom. PG&E and NHA in their 
comments also attempt to find some middle ground by recommending that 
NHA/SCE criterion (3) be revised to require the requester to ``Assess 
the relative value of the anticipated incremental information compared 
to the effort, including time and cost, required to obtain it.'' There 
is clearly no agreement between the industry on the one hand, and 
agencies, Indian tribes, and NGOs on the other hand about how to 
consider cost and practicality.
    107. The Studies Group considered this question at length and 
agreed that this criterion is not concerned solely with cost, but also 
generally with the level of effort the potential applicant should have 
to make to gather information or conduct studies with respect to an 
issue. They proposed to insert the words ``and/or level of effort'' 
after the word ``cost'' to reflect that agreement. After considering 
all the comments, we conclude Criterion (7), modified as recommended by 
the Studies Group, provides an appropriate basis for consideration of 
cost and

[[Page 51081]]

practicality in weighing the merits of any study request.\103\
---------------------------------------------------------------------------

    \103\ See 18 CFR 5.9(b)(7).
---------------------------------------------------------------------------

f. Proposed Additional Criteria
    108. Various industry commenters recommend that we add a criterion 
requiring a requester to discuss whether or a not a resource problem 
has been identified that relates to the request.\104\ This proposed 
criterion is too subjective. A principal feature of hydroelectric 
licensing in recent decades has been disagreements between license 
applicants and others concerning the extent to which proposed or 
existing projects have negative effects on natural and other resources. 
Whether an identified impact is or is not a problem, and the extent of 
the problem, are often matters of perspective. Moreover, the finding of 
a ``problem'' is not a required predicate for Commission action under 
the comprehensive development standard of FPA Section 10(a)(1). Rather, 
that standard contemplates license conditions for the ``protection, 
mitigation, and enhancement'' of fish and wildlife * * *, and for other 
beneficial public uses, including irrigation, flood control, water 
supply, and recreational and other resources.'' [emphasis supplied] 
\105\
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    \104\ PG&E, SCE, NHA, WPPD, EEI. Other additional criteria were 
suggested, which were considered above in the context of 
modifications to the existing proposed criteria.
    \105\ 16 U.S.C. 803(a)(1).
---------------------------------------------------------------------------

    109. Normandeau suggests that we consider adding a criterion that 
requires a requester to address the effect the information gathering or 
study would have on timely completion of the overall process. Criterion 
(6) requires each proposed study to include a schedule, including 
appropriate field season(s) and the study duration, so all parties 
should be able to assess the potential effect of the request on the 
timeliness of the proceeding. The appropriate length of a proposed 
study will, of course, be a matter best determined in the context of 
the specific case.
    110. Menominee recommends that we add a criterion to recognize 
study requests made in connection with the Federal government's trust 
responsibility to protect the resources of Indian tribes. This does not 
appear to be necessary because the relationship between a study request 
and the trust responsibility can be addressed in Criteria (2) or (6).
    111. The study criteria, modified in accordance with the foregoing 
discussion and as set forth in the regulations we are adopting, are set 
forth here:
    (1) Describe the goals and objectives of each study proposal and 
the information to be obtained;
    (2) If applicable, explain the relevant resource management goals 
of the agencies or Indian tribe with jurisdiction over the resource to 
be studied;
    (3) If the requester is a not 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, 
and how the study results would inform the development of license 
requirements;
    (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; and
    (7) Describe considerations of level of effort and cost, as 
applicable, and why any proposed alternative studies would not be 
sufficient to meet the stated information needs.
3. Progress and Study Reports and Additional Study Requests
a. Progress Reports and Initial and Updated Study Reports
    112. The proposed rule would have required the potential applicant 
to file an initial status report with study results and analyses 
following the first season of studies, or at another appropriate time 
following the date of the study plan order. The report would be 
followed by a meeting with parties and Commission staff. The potential 
applicant would file a meeting summary and, if necessary, a request to 
modify the study plan and schedule. The request to modify the plan, if 
any, would be deemed approved unless any party filed a notice of 
disagreement. Disagreements would be resolved based on written 
submissions to the Director. Any request for new information or studies 
following the initial status report would have to address the study 
criteria and show good cause why the request should be approved.\106\
---------------------------------------------------------------------------

    \106\ Proposed 18 CFR 5.14 (Conduct of studies).
---------------------------------------------------------------------------

    113. An updated status report would follow after a second season of 
studies or at another appropriate time. It would be subject to the same 
review, comment, and disagreement resolution procedures, except that 
any request for new information or studies must address the study 
criteria and show extraordinary circumstances why the request should be 
approved.\107\
---------------------------------------------------------------------------

    \107\ Id.
---------------------------------------------------------------------------

    114. SCE states that this is unduly burdensome for all 
participants. It questions the practicality of one report at a 
specified time because of the likelihood of multiple studies conducted 
on different schedules, and states that preliminary results could lead 
participants to false conclusions. SCE also objects to sending study 
results to entities that have not previously requested to be involved 
in the issue under study. SCE and NHA would instead require the 
potential applicant to distribute a status report explaining actions 
taken to date, any unexpected findings, and a schedule for completing 
the studies.
    115. SCE adds that the meeting following the initial status report 
would be unworkable because of the large numbers of studies required to 
be reported in detail, and because most participants will be interested 
in a limited number of studies. SCE would have the potential applicant 
determine the need for study review meetings based on comments received 
on the abbreviated status report, unless a majority of participants 
requested a meeting with respect to a particular study. NHA would also 
make the meeting optional for the potential applicant. If participants 
wanted a meeting not proposed by the potential applicant, they would so 
request in their comments on the initial status report, and the 
Commission staff would decide if it is needed.
    116. Long View shares NHA's and SCE's concerns about the status 
reports and meetings. It would modify the rule to allow potential 
applicants to issue study-specific status reports and hold study-
specific meetings at appropriate times with appropriate people.
    117. NYSDEC would modify the rule to state that the potential 
applicant's meeting summary must include a brief statement that the 
meeting summary is deemed to be approved unless a party files a notice 
of disagreement.
    118. These and other concerns about the status report proposal were 
considered at length by the Studies Group, including the fundamental 
issue of whether it makes more sense to have one status report and 
meeting, or to issue separate reports for each study or group of 
related studies at different

[[Page 51082]]

times. The Studies Group concluded that it would be best for the 
participants to negotiate the timing of periodic progress reports on 
studies,\108\ including the manner and extent to which information will 
be shared, which may include meetings, and sufficient time for 
technical review of the analysis and results, when the study plan and 
schedule is developed. The progress reports would have to describe the 
study progress and data collected to date in a manner that enables 
participants to determine if the study plan is being followed, and to 
describe any proposed changes. Documentation of study results would be 
provided to participants upon request. An annual study report would be 
issued, but would be in the form of a summary of the overall progress 
of study plan implementation and would serve as a trigger point for 
requests, if any, to modify existing studies or conduct additional 
studies.
---------------------------------------------------------------------------

    \108\ For clarification, here and in the regulations we are 
referring to the potential applicant's comprehensive annual report 
as the ``study report,'' and to other periodic reports on studies as 
``progress reports.''
---------------------------------------------------------------------------

    119. These modifications should make it easier for individual 
participants to focus on issues of concern to them, should result in 
early identification of any implementation issues, and should ease the 
distribution and consultation burden on the potential applicant. 
Accordingly, this is a reasonable approach to the matter of study plan 
implementation and is reflected in the final rules.\109\
---------------------------------------------------------------------------

    \109\ 18 CFR 5.11 and 5.15.
---------------------------------------------------------------------------

    120. Finally, the Studies Group and Minnesota DNR recommend that 
parties have 30 days to respond to the initial and updated study 
reports, instead of the 15 days proposed. We have so provided.\110\
---------------------------------------------------------------------------

    \110\ 18 CFR 5.15.
---------------------------------------------------------------------------

b. Modified Study Requests
    121. NHA also addressed the standard for requesting modifications 
to the approved study plan in response to the initial study report. NHA 
would require a requester to address each of the study criteria and 
subject the request to the same good cause standard as a request for 
new information or new studies. We think such a requirement is 
unnecessary. Requests for modifications to an ongoing study are likely 
to be focused on specific concerns about how the study was conducted, 
or straight forward matters such as whether to extend the study for an 
additional field season because of drought conditions. A participant 
with such concerns should not have to reestablish the need for the 
study in the first instance. Rather, it should only be required to show 
good cause for the proposed modification.
    122. We also think good cause standard should apply to proposals to 
modify ongoing studies following the updated study report. The proposed 
regulation text was not clear on the distinction between the standards 
applicable to requests for modifications to existing studies versus 
requests for new information gathering or studies. We have modified the 
regulation text to make the applicable standards clear.\111\
---------------------------------------------------------------------------

    \111\ See 18 CFR 5.15.
---------------------------------------------------------------------------

c. New Study Requests
    123. We requested comments on whether participants should 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 study 
report.\112\
---------------------------------------------------------------------------

    \112\ 68 FR at p. 14010; IV FERC Stats. & Regs. ] 32,568 at p. 
34,731.
---------------------------------------------------------------------------

    124. NHA and Long View would like the rules to provide more 
certainty regarding the potential applicant's study obligations. They 
propose that after the updated study report participants would be 
permitted to make recommendations regarding the implementation of 
previously approved studies, but not permitted to make new information 
gathering or study requests. They state that participants should know 
when the initial study report is made whether any new studies are 
needed, and allowing new study requests after the updated study report 
would make participants less likely to focus their efforts on 
developing study requests at the beginning of the process.
    125. Other licensees share the desire for certainty, but support 
the ``extraordinary circumstances'' standard as an alternative to a 
prohibition on new study requests.\113\ SCE would permit a new study 
request only if: first year studies reveal unexpected results that 
require further review not possible under the current study plan; a 
change in applicable law that requires another goal to be considered; 
or there is a valid dispute regarding implementation of the plan.
---------------------------------------------------------------------------

    \113\ PG&E, Springer, NEU, Idaho Power, EEI.
---------------------------------------------------------------------------

    126. Agencies and NGOs support the opportunity to request new 
studies at this point.\114\ Interior and MPRB state that many 
unanticipated events could cause a change in circumstances or that 
study results could show that more information is needed. Oregon and 
PFBC similarly state that studies may reveal specific sources of 
project impacts, and that follow-up studies may be needed to determine 
if negative impacts can be corrected without extensive mitigation.
---------------------------------------------------------------------------

    \114\ California, Oregon, PFMC, Menominee, Interior, MPRB, 
Skagit.
---------------------------------------------------------------------------

    127. Some agencies and NGOs accept the premise that the standard 
for new study requests should increase as the proceeding progresses, 
and do not oppose an extraordinary circumstances standard at this 
point.\115\ Examples of extraordinary circumstances proffered by these 
entities include:
---------------------------------------------------------------------------

    \115\ California, HRC, NYSDEC, NCWRC.
---------------------------------------------------------------------------

    [sbull] A finding late in the study of a listed species in the area 
affected by the project; \116\
---------------------------------------------------------------------------

    \116\ NCWRC, PFBC, Georgia DNR.
---------------------------------------------------------------------------

    [sbull] Initial studies uncover information that must be considered 
to ensure agency mandates and important management objectives are 
met.\117\
---------------------------------------------------------------------------

    \117\ NCWRC, PFBC, Georgia DNR.
---------------------------------------------------------------------------

    [sbull] A nexus between project impacts and the study request is 
shown;
    [sbull] A good reason is offered why the study was not previously 
requested;
    [sbull] Circumstances have changed;
    [sbull] Study results indicate a new study is necessary; or
    [sbull] There are changes in laws, regulations, or 
environment.\118\
---------------------------------------------------------------------------

    \118\ The last five examples were provided by NYSDEC. Minnesota 
DNR states that study requests should not be foreclosed simply 
because they may not have been identified early in the consultation 
process, and MPRB contends that the proposed limitations should be 
relaxed to ensure that project proposals are fully understood.
---------------------------------------------------------------------------

    128. After considering the comments, we have decided to adopt the 
proposed rule in this regard. We appreciate the desire of potential 
applicants for certainty when the study plan is approved, but until the 
study plan is completed, it appears premature to prohibit any 
additional study requests. An extraordinary circumstances standard, 
conscientiously applied, is sufficiently strict to provide ample 
incentive for participants to make their study requests early on, 
during development of the study plan. We will not attempt to further 
specify in the rules what constitutes extraordinary circumstances. This 
is the kind of decision that needs to be made in the context of a 
specific proceeding.\119\
---------------------------------------------------------------------------

    \119\ New study requests made at later points in the process are 
considered in Section III.L.2 below.
---------------------------------------------------------------------------

    129. Finally, HRC, apparently fearing that the ``good cause'' 
standard will be too restrictive, requests clarification of that term. 
Troutman, apparently fearing that ``good cause'' and ``extraordinary 
circumstances,'' will be interpreted too broadly, requests 
clarification of both terms. We think it inadvisable to attempt more 
specificity at this point. The only practical approach is to apply

[[Page 51083]]

these standards in the light of case-specific facts.
d. Comments on Study Reports
    130. We also requested comments on whether parties should be 
required to file written comments on the potential applicant's initial 
and updated study reports prior to the required meeting to discuss the 
report(s).\120\ Most commenters oppose such a requirement. Long View, 
Oregon, and ADK say that the written comments are likely to reflect 
misunderstandings or misinterpretations and the best place to clear 
such things up is in a face-to-face meeting. These parties suggest that 
written comments be filed after the meeting. California, PFBC, ADK, 
Georgia DNR also think it would be unproductive and would allow anyone 
who cannot attend the meeting to file their comments in lieu thereof. 
On the other hand, HRC, PFMC, and NEU think such a requirement would 
encourage effective preparation by the potential applicant for the 
meeting. Interior and Skokomish think pre-meeting comments should be 
optional.
---------------------------------------------------------------------------

    \120\ 68 FR at p. 14010; IV FERC Stats. & Regs. ] 32,568 at pp. 
34,732-733.
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    131. In light of these comments, we will not impose such a 
requirement. Instead, we will leave it to the parties to determine 
individually whether they think the time and effort to file comments 
before the meeting will be beneficial in the circumstances of the 
proceeding.
    132. Finally, S-P seeks assurance that the study development 
process will include consultation on means of keeping confidential 
sensitive Indian cultural practices. Our regulations and practices 
ensure that Indian tribes' confidentiality concerns will be 
appropriately addressed.\121\
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    \121\ See discussion of this issue in the NOPR; 68 FR at 
p.14002; IV FERC Stats. & Regs. ] 32,568 at p. 34,717.
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G. Study Dispute Resolution Process

    133. The NOPR proposed to establish a dispute resolution process 
that serves two purposes. In the informal stage, 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 (study plan order).\122\
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    \122\ This was referred to in the NOPR as the ``Preliminary 
Determination.'' We have change the name to Study Plan Order to 
recognize that it is not preliminary with respect to study requests 
that do not directly involve the exercise by agencies or Indian 
tribes of mandatory conditioning authority.
---------------------------------------------------------------------------

    134. In the formal dispute resolution process, resource agencies 
with mandatory conditioning authority under FPA sections 4(e) and 18, 
and states or Indian tribes with water quality certification authority 
under Clean Water Act section 401, would be able to file a notice of 
study dispute with respect to studies pertaining directly to the 
exercise of their authorities under the aforementioned sections of the 
FPA or CWA. An Advisory Panel considers the dispute and makes 
recommendations to the Director of Energy Projects, who resolves the 
dispute.
    135. We also proposed 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 study 
dispute resolution, and should be afforded the opportunity to submit to 
the panel information and arguments with respect to a dispute.\123\
---------------------------------------------------------------------------

    \123\ Proposed 18 CFR 5.1213(i).
---------------------------------------------------------------------------

    136. The NOPR requested comments on what modifications, if any, 
should be made to the proposed study dispute resolution process and, in 
particular, the proposed advisory panel.\124\ Responses were received 
on nearly every aspect of the proposed process. Most commenters 
supported the proposed study dispute resolution process, but nearly all 
requested clarifications or modifications to cure perceived 
deficiencies. A few commenters opposed the panel and made alternative 
recommendations. All of these comments are considered in this section.
---------------------------------------------------------------------------

    \124\ 68 FR at p. 13998; IV FERC Stats. & Regs. ] 32,568 at p. 
34,711.
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1. Informal Dispute Resolution
    137. NHA and WPPD recommend that a peer review process be added for 
study disagreements prior to issuance of the study plan determination, 
to provide unbiased expert opinion on establishment of study request 
goals and objectives, technical design in relation to goals and 
objectives and the state of the art, and the anticipated utility of the 
study results to meeting the study goals and objectives. If the 
disagreement was not resolved as a result of consultation with the peer 
reviewers, the peer reviewers' comments would become part of the 
record, which would be available to the panel in formal dispute 
resolution, if any.
    138. We will not adopt this recommendation. A peer review process 
would add additional time and expense to the process, and would largely 
replicate the formal dispute resolution process, which would be 
inconsistent with our goal of having a study plan development process 
that ensures, as best the Commission can, that the participants come 
together for the purpose of resolving study disagreements themselves.
2. Formal Dispute Resolution--Subject Matter and Eligibility
    139. Many commenters recommend that the formal process be made 
available to any participant for study requests regarding any 
matter.\125\ California states that the formal process should be 
available for all study disputes raised by agencies and Indian tribes. 
Some agencies suggest that the fact that they have a statutorily 
established role in licensing process, such as making fish and wildlife 
agency recommendation pursuant to FPA Section 10(j), establishes an 
obligation on the part of the Commission to ensure that the record 
contains information to support their recommendations.\126\ Others 
suggest that eligibility for informal dispute resolution only 
undermines state agency management of state fish and wildlife 
resources.\127\
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    \125\ Interior, ODFW, Duke, Nez Perce, S-P, AW/FLOW, AMC, MDEP, 
Washington, AmRivers, ADK, RAW, EPA, MPRB, PFBC, CRITFC, SC League, 
MPRB, WGA, Skagit.
    \126\ Interior, IDFG, Oregon, Washington.
    \127\ Oregon, IDPR, PFMC, WGA, California, IDFG.
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    140. The NOPR explained that agencies and Indian tribes with 
mandatory conditioning authority, to extent they are exercising that 
authority, are differently situated than participants whose role is to 
make recommendations pursuant to FPA sections 10(a) and 10(j), National 
Historic Preservation Act (NHPA) Section 106,\128\ or other applicable 
statutes. The former have a duty to make reasoned decisions based on 
substantial evidence, and their decisions are subject to judicial 
review. Those making recommendations have no such responsibility.\129\ 
None of the proponents of broadening eligibility for the formal process 
addresses this fundamental distinction. They also gloss over the fact 
that the study plan determination is the culmination of the study plan 
development process in which potential applicants, study requesters, 
and the Commission staff consult intensively on what information 
gathering and studies are needed, study requests and responses thereto 
are accompanied by discussion of the study criteria, and the study plan 
determination must explain its decision

[[Page 51084]]

on each disputed study with reference to the study criteria and any 
applicable Commission policies and practices. We think this provides 
ample opportunity for development of the record and consideration of 
study requests related to recommendations.
---------------------------------------------------------------------------

    \128\ 16 U.S.C. 470f.
    \129\ See 68 FR at p. 13998; IV FERC Stats. & Regs. ] 32,568 at 
p. 34,710.
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    141. Interior contends that the National Park Service should be 
eligible for formal dispute resolution with respect to study 
recommendations that relate to potential project impacts on a unit of 
the National Park System or other areas of special management concern, 
such as National Recreation Areas. Interior offers no basis for 
distinguishing these studies related to FPA Section 10(a) 
recommendations from those of other entities, and we see none.
    142. GLIFWC, Menominee, and Nez Perce suggest that the Commission's 
trust responsibility requires Indian tribes to be eligible for formal 
dispute resolution with respect to studies related to impacts to 
reservation lands within the project boundary and ceded lands on which 
tribes have treaty reserved rights. We do not agree. The study plan 
development and formal dispute resolution components of the integrated 
process are not required by any treaty or statute, and are being 
created solely to provide a means of creating an evidentiary record to 
support, to the extent reasonably possible, the actions of agencies or 
Indian tribes with decisional authority.
    143. Finally, NHA and PG&E request that the regulations make more 
clear that the formal process is available only to agencies or Indian 
tribes with respect to their study requests related directly to 
exercise of their mandatory conditioning authority, and not for study 
requests relating to matters wherein these entities may only make 
recommendations, such as FPA Section 10(j) fish and wildlife agency 
recommendations. We have clarified the regulatory text in this 
regard.\130\
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    \130\ See 18 CFR 5.14(a). EPA requests that we modify the 
regulation text to make eligible any agency that has water quality 
certification authority, so as to permit EPA to file notices of 
dispute in instances where it, rather than the state, is responsible 
for issuing water quality certification. We agree to this 
modification, and modified the regulatory text accordingly.
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3. Advisory Panel
a. Need for Panel
    144. Several commenters object to, or express concerns about, the 
efficacy of, the Advisory Panel. Some licensee commenters assert that 
the existing dispute resolution provisions work well enough.\131\ They 
assert generally that allowing the disputing agency to be represented 
on the panel violates fundamental fairness, accepted notions of due 
process, and the Administrative Procedure Act (APA).\132\
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    \131\ EEI, Idaho Power, Alabama Power, Xcel, NEU.
    \132\ 5 U.S.C. 551-559.
---------------------------------------------------------------------------

    145. Some commenters also fear that the panel proposal is not 
practical, citing the lack of monetary compensation for the third-party 
panelist's time and effort; and the short time frames, particularly in 
light of the panelists' lack of familiarity with the project and 
background of the issues.\133\ They recommend instead a technical 
conference, narrowly focused on the specific dispute, with input from 
the potential applicant and any other interested participant, and that 
the record of the technical conference be filed with Director to inform 
his decision on the dispute. The Skokomish Tribe fears that the panel 
process will be unwieldy, take longer than the existing process, and 
increase costs. VANR recommends that eligible study disputes be 
resolved by the Director using the existing process and, if the panel 
is used at all, it be only as a forum for appeals from the Director's 
decision. Duke recommends instead a modified version of the existing 
dispute resolution process; written submissions followed by a technical 
conference including Commission staff, or a panel including a 
representative of the applicant. PFBC recommends that the formal 
process be used only after the disputants have first attempted to 
resolve the matter using the ALP dispute resolution process.
---------------------------------------------------------------------------

    \133\ Suloway, NPS, Long View, VANR.
---------------------------------------------------------------------------

    146. These alternative recommendations generally have the virtue of 
being less complicated than the Advisory Panel proposal. They lack 
however the presence of a third party technical expert and panelists 
from Commission staff and the disputing agency who have no prior 
connection to the proceeding, and must work cooperatively with the 
third party expert and one another. We have also provided for a 
technical conference, discussed below, at which the potential applicant 
may directly address the Advisory Panel. For these reasons, we will 
adopt the Advisory Panel proposal.
b. Panel Membership
    147. Many comments were received on the membership of the Advisory 
Panel. Various licensee commenters contend that the Advisory Panel is 
unfair because it includes a panelist from the disputing agency, but 
not the potential applicant.\134\ They assert that requiring the agency 
representative to be someone not previously involved with the 
proceeding,\135\ or even from another agency, will not obviate an 
institutional bias that resource agency staff have in favor of other 
resource agency staff.\136\ Others contend that the panel would be more 
fair without a disputing agency representative because the disputing 
agency is a party to the dispute, while the Commission is the 
decisional authority.\137\ Troutman expresses skepticism that resource 
agencies will be able to find qualified representatives who have not 
been involved in the proceeding and suggests that agency 
representatives will be unwilling to act independently of higher level 
agency officials who support the agency's position in the dispute.
---------------------------------------------------------------------------

    \134\ Duke, Long View, Xcel, Snohomish. These entities reiterate 
assertions previously made that the Advisory Panel abdicates the 
Commission's responsibility to decide the issues before it. The 
Advisory Panel has no decisional authority; it is limited to making 
recommendations concerning the consistency of the study request with 
the study criteria.
    \135\ This is required by 18 CFR 5.14(d).
    \136\ WPSC, WPSR.
    \137\ Duke, Progress, Troutman.
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    148. Suggested remedies for this alleged bias include having two 
Commission staff members not previously associated with the proceeding 
and one third party expert,\138\ replacing the disputing agency on the 
panel with a licensee representative,\139\ adding a licensee 
representative to the panel,\140\ and replacing the third party expert 
with a third member designated by the potential applicant.\141\
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    \138\ Duke, Progress, Troutman.
    \139\ WPSR.
    \140\ Xcel.
    \141\ Snohomish.
---------------------------------------------------------------------------

    149. We do not agree that the proposal for panel membership is 
unfair to potential applicants. Again we remind industry commenters 
that the purpose of the Advisory Panel is to help resolve a dispute 
between the Commission staff and an agency or Indian tribe with 
mandatory conditioning authority concerning the adequacy of the record 
to support agency decision-making. Potential applicants will have ample 
opportunity through their written submission and participation in the 
technical conference to make their case to the Advisory Panel and the 
Office Director. A potential applicant that believes the Advisory Panel 
recommendation and study plan determination are not based on 
substantial evidence or are otherwise improper may file a request for 
rehearing.
    150. EEI states that the agency representatives are not bound by 
the

[[Page 51085]]

Commission's ex parte rules and suggest that they will consult in 
private with the agency staff who filed the dispute. The Process Group 
considered this issue and agreed that as a condition of serving on a 
panel, all panelists would have to agree to be strictly bound by the 
Commission's prohibition on ex parte communications. This is 
unnecessary however, as the regulations state that all communications 
to and from the Commission staff concerning the merits of the potential 
application shall be filed with the Commission.\142\
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    \142\ 18 CFR 5.8(b)(3)(v).
---------------------------------------------------------------------------

    151. The few agency commenters on panel membership state that 
fairness and balance require the disputing agency to be on the panel 
because that is the only way to ensure that its position on biological 
and technical issues is properly represented.\143\ Their principal 
concern is that the panel members have appropriate technical expertise 
relative to the specific issues in dispute.\144\ NOAA Fisheries, for 
instance, contends that the expertise must be very specific to the 
issues; for instance, a study dispute involving gas bubble disease in 
fish would require experts on that topic, not merely general expertise 
in fisheries or other related specialized knowledge. Wisconsin DNR 
similarly argues that regional-specific expertise is needed; for 
instance, an expert in west coast anadromous fish would be unsuitable 
for a dispute concerning the study of resident, freshwater fish in 
Wisconsin.
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    \143\ Catawba, SC League, Wisconsin DNR.
    \144\ Interior, Oregon, NOAA Fisheries.
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    152. We think it would be a sterile exercise to try to craft 
regulatory language that more precisely defines the type or degree of 
expertise that may be necessary for the myriad of potential dispute 
resolution issues. The most practical approach is to leave the 
selection of an appropriate third party expert from the list of 
technical experts to the agency or tribe and Commission staff panel 
members in light of the facts of the case.
    153. Interior requests that the requirement that the Commission and 
disputing agency panel members be ``not otherwise involved in the 
proceeding'' \145\ be modified to bar only persons not ``directly'' 
involved. In this way, Interior would make eligible a supervisor in the 
same office as the agency staff who invoked the formal dispute 
resolution process. California would exclude only those who have not 
been ``actively involved in the proceeding as an advocate or negotiator 
for the agency or tribe's position.'' \146\ This, too, would allow 
supervisory employees with direct responsibility for the agency's 
participation in the case to serve as a panel member. We decline to add 
this qualification because it would blur the line between those who are 
eligible to serve and those who are not, and would undercut the 
appearance, and probably the reality, that the panel is composed of 
technical experts using their independent judgment. The best way to 
ensure acceptance of the Advisory Panel approach is to ensure that the 
panel members are working on a clean slate with respect to the specific 
proceeding.
---------------------------------------------------------------------------

    \145\ 18 CFR 5.14(d).
    \146\ California, p. 13.
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    154. Oregon and IDPR state that the Advisory Panel should not be 
limited to three members because every agency that objects to the study 
plan determination on a particular study needs to have its own 
representative. We have limited the panel to three for two reasons. 
First, we seek to minimize the possibility of deadlock. Second, the 
larger the panel is, the greater are the logistical challenges 
associated with the panel convening, meeting, and making a 
recommendation. To these we add the concern that the panel not appear 
to be weighted in favor of disputing agencies. We see moreover no 
reason why two Federal agencies with disputes concerning the same or 
similar study requests cannot be represented by one individual with the 
requisite expertise.
    155. The NOPR proposed that if there is no timely agreement on a 
third party expert, the two existing panel members carry out the 
panel's functions.\147\ Mr. Groznik recommends that in such a case the 
Director should be required to appoint a third party expert. Interior 
contends that three panel members are needed to ensure that there is 
either a majority or unanimous recommendation. Oregon states that the 
panel should not be allowed to proceed in the absence of a technically-
qualified third party, principally to ensure that there is appropriate 
technical expertise on the panel.
---------------------------------------------------------------------------

    \147\ Proposed 18 CFR 5.13(d).
---------------------------------------------------------------------------

    156. We expect instances where a third panel member cannot timely 
be selected by the Commission staff and disputing agency 
representatives to be rare. We recognize however the importance of the 
third panel member in providing assurance that the impartiality of the 
panel's recommendations. We have therefore amended the rule to provide 
that in such an event, an appropriate third panel member will be 
selected at random from the list of experts maintained by the 
Commission.\148\
---------------------------------------------------------------------------

    \148\ 18 CFR 5.14(d).
---------------------------------------------------------------------------

    157. Washington thinks a state agency expert should be able to 
serve on the Advisory Panel. We agree. A Federal agency or Indian tribe 
that initiates a dispute resolution could request a state agency expert 
to represent it on the Advisory Panel. Likewise, for instance, a state 
water quality certification agency could certainly appoint as its 
representative a member from its own ranks, or from another state or 
Federal agency, or Indian tribe. There is also no reason a qualified 
state agency employee could not serve as a third party expert if that 
person was selected by the other panel members and the state's 
regulations and policies permit that person to engage in such 
activities. We think this flexibility should make it easier to quickly 
assemble panels with the right expertise.
    158. The Studies Group agreed that it would be appropriate for the 
Commission staff representative to initially organize the Advisory 
Panel and serve as chair. We think this makes sense because the notice 
of dispute will first be filed with the Commission, which will maintain 
the list of eligible technical experts, and some individual needs to be 
responsible to ensure that the process starts quickly and stays on 
track. We have so provided in the regulation text.\149\
---------------------------------------------------------------------------

    \149\ See 18 CFR 5.14(d)(1). To further assist the rapid 
formation of the panel, the disputing agency is required to identify 
its panel member in its notice of dispute. 18 CFR 5.14(b).
---------------------------------------------------------------------------

c. Non-Member Participation
    159. Some commenters contend that parties other than the potential 
applicant should be allowed to respond to the notice of dispute, even 
if they cannot initiate a dispute resolution, because they may have an 
interest in the outcome of the process not represented by the disputing 
agency or the potential applicant.\150\ To do otherwise, suggests HRC, 
violates fundamental due process. SCE asserts that a potential 
applicant should be permitted to meet face-to-face with the Advisory 
Panel instead of being limited to written submissions. We believe the 
concerns of these parties are addressed by our decision in the 
following section to include the technical advisory meeting in the 
formal dispute resolution process.
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    \150\ HRC, CHRC, Whitewater, Advisory Council, TU.
---------------------------------------------------------------------------

    160. The Advisory Council, citing 36 CFR 800.4, seeks assurance 
that State Historic Preservation Officers (SHPO), Tribal Historic 
Preservation Officers (THPO), and Indian tribes have an

[[Page 51086]]

opportunity to participate in formal dispute resolution before any 
dispute pertaining to implementation of NHPA Section 106 is resolved. 
Subsection 800.4(a) provides for the action agency to determine whether 
the action could result in changes to any historic properties located 
in the area of potential effects. If so, the agency is to review 
existing information on potentially affected historic properties, 
request the views of the SHPO or THPO on further action to identify 
historic properties that may be affected, and seek relevant information 
from local governments, Indian tribes and others. Based on its 
assessment, the action agency is to determine the need for further 
actions, such as field surveys, to identify historic properties. 
Subsection 800.4(b) requires the action agency to make a good faith 
effort to identify potentially affected historic properties and to 
evaluate their eligibility for the National Register in consultation 
with the SHPO or THPO.
    161. The integrated process is fully consistent with this 
requirement. The study plan and schedule development process discussed 
above contemplates the active participation of the SHPO or THPO, local 
governments, Indian tribes, and any interested agency or member of the 
public in determining what information needs to be gathered or studies 
conducted with respect to historic properties. Because these entities 
do not have mandatory conditioning authority, they would not be 
eligible to initiate the formal dispute resolution process. They would 
however have the benefit of informal dispute resolution and be eligible 
to participate in the technical conference.
    162. We emphasize in this connection that the study plan 
development process merely determines, in consultation with the 
participants in the Section 106 process, which information gathering 
and studies the potential applicant should undertake. It assists the 
Commission in obtaining the information needed to identify what 
historic properties may be present. It makes no determination whether 
any aspect of the potential license application or reasonable 
alternatives would have an adverse effect on historic properties. That 
determination is made later in the context of the environmental 
document and other elements of the Section 106 process; specifically, 
the Commission must, when applying the criteria of effect and, if 
necessary, consult with the SHPO/THPO on ways to avoid or mitigate 
these effects, usually by entering into a PA.
d. Technical Conference
    163. NHA recommended inclusion of an ``Advisory Technical 
Conference (ATC),'' which would convene just prior to the meeting of 
the Advisory Panel. The ATC would include representatives of the 
Commission staff, the agency or Indian tribe with the dispute, the 
potential applicant, and a neutral expert or experts. It is not clear 
from NHA's submission how the Advisory Panel would interact with the 
conferees. Commission staff with appropriate expertise would moderate 
the ATC,\151\ and the Commission staff would be responsible for 
maintaining a conference record.
---------------------------------------------------------------------------

    \151\ It is not clear if NHA intends for the Commission staff 
moderator to be someone other than the Commission staff panel 
member.
---------------------------------------------------------------------------

    164. Prior to the ATC, the potential applicant and the resource 
agency that filed the dispute would file information and arguments. 
During the ATC, the agency or Indian tribe would summarize its 
arguments based on the study criteria, the potential applicant would 
respond, and the conferees would then discuss the issue in dispute 
relative to the study criteria. NHA would, to the extent feasible, have 
all studies in dispute addressed at one ATC. Following the ATC, the 
Advisory Panel would meet without the applicant, then make its 
recommendation to the Director, who would also have available the 
record of the ATC, including the opinions of the third party technical 
experts.
    165. The Studies Group agreed that it would assist the formal 
dispute resolution process to add a technical conference, to be 
presided over by the Advisory Panel. This meeting would be held after 
the written submissions to the Advisory Panel by the disputing agency 
and the potential applicant are made by disputing agencies and the 
Commission staff, and just prior to the deliberative meeting(s) of the 
Advisory Panel. The meeting would be open to all parties, but the 
topics would be restricted to the specific studies in dispute and the 
applicability to them of the study criteria. The Advisory Panel would 
determine how it wished to receive information, but we anticipate that 
a question and answer format would work well.
    166. The NHA proposal has merit in the sense that it would bring in 
additional technical expertise, but it also would entail additional 
steps requiring more time, additional Commission resources to provide a 
moderator and to keep a record, and would add to the overall burden by 
creating additional written record material of questionable incremental 
utility. NHA's proposal also does not provide an avenue for other 
participants with an interest in the outcome of the dispute to 
participate in the process.
    167. We conclude that a technical conference based on the Studies 
Group's recommendation would benefit the process. The opportunity for 
the members of the Advisory Panel to hear directly from and be able to 
question the disputing agency or Indian tribe, the potential applicant, 
or other participants who have an interest in the outcome of the 
dispute should enable them to clear up any questions about the written 
submissions and quickly focus on the most important elements of the 
dispute. This should, in turn, assist the Advisory Panel to develop its 
recommendation in a timely fashion.\152\
---------------------------------------------------------------------------

    \152\ See 18 CFR 5.14(j). EEI recommended that we consider 
turning over disputes to the Commission's Dispute Resolution Service 
(DRS). The DRS is not an appropriate alternative to the formal 
dispute resolution process because the DRS is not a decision-making 
body and cannot ensure a resolution of the dispute through voluntary 
mediation. The DRS' role as a mediator or facilitator is more 
appropriate at other points in the process.
---------------------------------------------------------------------------

e. Activities of the Advisory Panel
    168. Various comments were received about the role of the Advisory 
Panel and how it should go about its work. EEI urges us to require the 
Advisory Panel to specifically address the potential applicant's 
submissions. An explicit direction in this regard is unnecessary; 
particularly in light of our decision to include the technical 
conference.
    169. Troutman and Oregon request generally more definition of how 
the Advisory Panel will do its work, including with whom it will 
communicate, and how. The technical conference proposal and 
clarification that strict application of the prohibition on ex parte 
communications will apply should address these commenters' concerns. 
Also, as discussed above, we have determined that the Commission staff 
panel member should chair the panel. These provisions provide 
sufficient guidance to panelists and assurance to others that the panel 
will make its recommendations through procedures that are fair and 
reasonable.
    170. EEI believes the disputing agency representative should be 
barred from writing the Advisory Panel's report on the ground that this 
person is likely to be biased in favor the disputing agency's position 
and, by having control over the drafting, will wield undue influence. 
We reject this suggestion. First, we trust that the panelists will 
apply their expertise in a professional manner consistent with the 
purpose of the

[[Page 51087]]

panel. We are moreover confident that no single panelist will be able 
to dictate the recommendation to the other panelists. The panel chair 
should have the leeway to make this assignment in consultation with the 
other panelists.
    171. California contends that it is important for the Advisory 
Panel to convene in the vicinity of the project (and perhaps to visit 
the project) in order for the panel to better understand the disputed 
issues and so that state agencies and local entities with limited 
budgets are more likely to be able to appear before the panel. Whether 
it is necessary for the panel to meet in the project vicinity or visit 
the project is a matter best determined in light of the facts and 
circumstances of each case.
5. Timing Issues
    172. Some commenters state that some or all of the time frames for 
the formal dispute resolution process are insufficient.\153\ OWRC is 
particularly concerned that if more than one agency brings the same 
dispute, insufficient time is allowed for the agencies to agree on who 
should represent both of them. We disagree. This is a matter that 
agencies should be able to quickly settle over the telephone.
---------------------------------------------------------------------------

    \153\ OWRC, California, NYSDEC, IDEQ, HRC.
---------------------------------------------------------------------------

    173. HRC suggests that the response times can be alleviated and the 
panel's deliberations better focused if the notice of dispute and 
potential applicant's responsive comments, if any, are required to 
include proposed findings and recommendations. The agency or Indian 
tribe's notice of dispute is already required to address the study 
criteria, which we expect would encompass its proposed findings and 
recommendations, but only from its own perspective. Any response from 
the potential applicant is likely to similarly address the criteria 
from its perspective. The task of the Advisory Panel will be to discuss 
and attempt to resolve differences between the submissions. The 
addition of the technical conference is also likely to result in 
clarifications to the written submissions that will influence the 
opinions of individual panelists. Thus, the proposed findings and 
recommendations are largely included in the record. Although we are not 
inclined to require the disputing agency or Indian tribe, or the 
potential applicant, to separately state its proposed findings and 
recommendations, they are encouraged to do so if they think it will 
benefit the record.
    174. The NOPR proposes to require a notice of study dispute 
resolution to be filed within 20 days of the study plan 
determination.\154\ NYSDEC and Interior state that this is not 
sufficient time to assemble the supporting evidence. NYSDEC would give 
the disputing agency at least the 25 days afforded to the potential 
applicant to submit responsive comments.\155\ Interior recommends 30-60 
days. Twenty days is not a great deal of time, but a disputing agency 
will have written out the support for its notice of dispute when it 
makes its study request prior to the study plan determination.
---------------------------------------------------------------------------

    \154\ Proposed 18 CFR 5.13(a).
    \155\ The 25-day period for potential applicants to respond to 
the notice was not selected to give the potential applicant an 
advantage, but to provide time following convening of the panel for 
the service addresses of the panelists to be posted on the 
Commission's Web site in order that the potential applicant will be 
able to serve the panel members. See proposed 18 CFR 5.13(h).
---------------------------------------------------------------------------

    175. IDEQ recommends a 90-day period for the participants to 
informally resolve remaining differences after the study plan 
determination before a notice of dispute must be filed. We decline to 
adopt this recommendation. As discussed below, we have modified the 
rules to provide a 90-day period before comments are filed on the 
potential applicant's draft study plan for this purpose.\156\ 
Participants in the formal dispute resolution process may also try to 
resolve differences during that process as a result of reviewing one 
another's written submissions, or following the technical conference.
---------------------------------------------------------------------------

    \156\ 18 CFR 5.12 and Section III.T.
---------------------------------------------------------------------------

6. Third Party Technical Expert
    176. The principal concern raised about the third party technical 
expert is whether qualified persons will be willing to serve. Some 
commenters think the absence of compensation for professional time 
beyond reimbursement of expenses will make recruiting difficult.\157\ 
Washington states that this is inequitable, but does not explain why, 
in light of the fact that panelists would be volunteers. Others suggest 
that unpaid panelists won't invest the necessary time and effort to 
result in a well-reasoned recommendation. They also think that a 
compensated third party expert is more likely to be truly neutral. 
These commenters recommend that third party experts be paid for their 
services as part of the cost of the hydropower program.\158\ SCE 
recommends that the Commission and the disputing agency share the cost 
to compensate the third party expert.
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    \157\ Wisconsin DNR, Washington, HRC, Idaho Power, EEI, NEU, 
SCE.
    \158\ HRC, Washington.
---------------------------------------------------------------------------

    177. We believe potential third party technical experts may be 
motivated to volunteer their services for reasons other than financial 
gain. One reason would be that service on the panel would enhance that 
person's professional standing as a technical expert, or in the area of 
alternative dispute resolution. It would also be an opportunity to 
provide a public service.
    178. IDFG is concerned that there may not be a sufficient number of 
qualified people in the pool for certain issues due to lack of 
familiarity with local resources or limited field level experience with 
the resources. We think the Commission staff and disputing agency 
panelists will be competent to determine who among the pool of experts 
is qualified to serve.
    179. The other principal concern of commenters is how to ensure 
that third party experts are truly neutral. Minnesota DNR indicates 
that technical experts employed by consulting firms are biased in favor 
of the industry and recommends using only experts from academia who 
have no recent ties to the industry. EEI, on the other hand, would have 
us prohibit the use of academics, on the ground that they are biased in 
favor of expansive and expensive studies. We decline to make any such 
blanket characterizations about large and very diverse classes of 
persons. This is the kind of concern that is best dealt with by the 
Commission staff and agency representatives to the panel in the context 
of a specific proceeding.
7. Multiple Panels and Multi-Issue Panels
    180. A few commenters favor the use of multiple panels. NOAA 
Fisheries, for instance, states that there should be a separate panel 
for each issue relating to each study dispute; e.g., if NOAA Fisheries 
and the U.S. Fish and Wildlife Service each had different issues with 
respect to the same study, they would file separate notices and there 
would be separate panels.
    181. We hope that the formal dispute resolution process will rarely 
be invoked, but must take care to structure it so as to ensure that 
when it is, it can accomplish its purpose of timely bringing finality 
to study disputes. The regime favored by NOAA Fisheries is simply not 
practical. A contentious case with multiple study requests and disputes 
could paralyze the dispute resolution process for months. The more 
resources, studies, and agencies involved in a proceeding, and the more 
integrated processes being undertaken in the same general time frame, 
the more panels would be required, and the more difficult it would be 
to timely recruit panel members.

[[Page 51088]]

    182. The majority of commenters on this issue, and the Process 
Group, support the use of a single panel to deal with related resource 
issues in the same proceeding, subject to various caveats. They 
indicate that it may be necessary to reduce costs, avoid delay, and 
prevent sequential disputes over the same study. For instance, one 
panel would consider all issues relating to fishery studies in a single 
proceeding or, perhaps, in a multi-project proceeding.\159\ A few 
commenters suggest that one panel ought to suffice for all disputes in 
a proceeding, without regard to resource differences.\160\ In this 
regard, Troutman likens the role of the panelists to that of judges in 
a court, and states that expertise is less important than a good 
record.
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    \159\ HRC, NYSDEC, NCWRC, PFMC, NEU, SCE, Alabama Power, GLIFWC, 
IDFG, Troutman, Interior, California.
    \160\ B&B, Troutman, Alabama Power.
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    183. The most frequent caveat of those who agree that a single 
panel may consider more than one dispute is that the panelists have 
appropriate expertise.\161\ Interior adds that the decision to have one 
panel for multiple disputes needs to be made on a case-by-case basis, 
and that it needs to be clear at the outset what issues the panel will 
consider so that disputing agencies can appoint an appropriate 
representative and identify appropriate technical experts. We agree.
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    \161\ Interior, IDFG, NYSDEC, NCWRC.
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    184. California would have the panel chair determine which disputes 
the panel will hear. In light of the goal of expeditious resolution, we 
think it falls to the Commission staff, under the direction of the 
Director of Energy Projects, to quickly assess the disputes and 
determine how many panels are needed and which issues each will 
consider.
    185. Oregon requests clarification as to whether there will be 
standing panels for various resources that are likely to be the subject 
of many study requests at many projects, such as anadromous fisheries, 
or project-specific panels. Oregon does not appear to support this, but 
rather to recommend project-specific panels in order to help ensure 
that appropriate technical expertise is brought to bear. We agree.\162\
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    \162\ We note however that the concept of standing panels is 
worth considering, as it may be more administratively efficient. As 
experience is gained with the integrated process we will further 
consider this idea and, if experience indicates that it would be 
beneficial, will consult with stakeholders concerning whether 
modifications to the rule are necessary.
---------------------------------------------------------------------------

    186. GLIFWC indicates that if a panel is to consider issues 
pertaining to different resources, it should be supplemented with a 
technical expert for each resource. We do not envision that the same 
panel would consider issues relating to, for instance, the need for a 
requested turbine entrainment study and the need for additional or 
modified recreational use surveys. The same panel might however 
consider disputes concerning studies requested on turbine entrainment 
and bypass reach flows for fishery habitat purposes. It would be a 
matter for the Commission staff and agency or tribal panel members to 
determine which persons on the list of potential technical experts are 
qualified and able to serve with respect to the subject of the 
dispute(s).
8. Panel Recommendation
    187. The proposed rule provides for the Advisory Panel to make a 
finding ``as to whether the criteria * * * are met or not, and 
why.''\163\ PG&E and GLIFWC state that the Advisory Panel should be 
required to determine whether each of the study criteria has been met. 
This is a reasonable recommendation, and we are modifying the 
regulation text accordingly. We make however two observations. First, 
not all the criteria necessarily apply to all the requesters. For 
instance, a requester may not be an agency or Indian tribe with 
established resource management goals for the relevant resource 
(Criterion 2). There is moreover no bright line by which to determine 
if some of the criteria have been met.
---------------------------------------------------------------------------

    \163\ Proposed 18 CFR 5.13(j).
---------------------------------------------------------------------------

    188. PG&E also suggests that the Advisory Panel should address, in 
addition to the study criteria, ``any other relevant 
consideration.''\164\ SCE recommends that panel's recommendation be 
explicitly limited to whether the criteria have been satisfied. We 
agree with SCE. The study criteria were carefully developed with the 
intention that every participant in a dispute resolution proceeding 
would understand the criteria by which study requests should be 
formulated and would be judged. PG&E's recommendation would introduce 
substantial uncertainty into the process.
---------------------------------------------------------------------------

    \164\ PG&E, p. 24.
---------------------------------------------------------------------------

    189. NEU states that if all three panelists do not support a 
recommendation, the disagreeing panel member should be required to 
provide a statement of the reason for their disagreement, in order to 
ensure a more complete record. We think this decision is best left to 
individual panelists. We could not, in any case, require compliance 
with such a provision.
9. Director's Determination
    190. The Director's determination is to be made ``with reference to 
the study criteria * * * and any applicable law or Commission policies 
and practices.''\165\ Several commenters think the Director has too 
much discretion regarding whether or not to accept a panel's 
recommendation.\166\ NOAA Fisheries, Interior, and MPRB would have the 
Director bound by a majority vote of the panel. GLIFWC indicates that a 
requirement for deference to panel recommendations should be written 
into the rules. The commenters identify no deficiency with these 
requirements or other specific concern, but evince only a desire to 
make the panel recommendation binding. The Commission cannot delegate 
its decisional authority to the Advisory Panel. We have however 
modified the regulations to clarify that the Director will take into 
account the technical expertise of the panel, and will explain why any 
panel recommendation was rejected if that occurs.
---------------------------------------------------------------------------

    \165\ See proposed 18 CFR 5.13(k).
    \166\ NOAA Fisheries, Interior, MPRB, GLIFWC, FWS.
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    191. Some licensee commenters suggest that a potential applicant 
should be permitted to file a response to the panel recommendation 
before the Director's determination is made.\167\ We think that the 
study plan development process, plus the right in formal dispute 
resolution to make a written submission to the Advisory Panel and to 
participate in the technical conference provide sufficient 
opportunities for potential applicants to plead the merits of their 
study proposals.
---------------------------------------------------------------------------

    \167\ CWRC, NEU, SCE.
---------------------------------------------------------------------------

    192. Interior recommends that the Director be required to obtain 
Commission approval before issuing a decision that does not adopt the 
Advisory Panel's recommendation. We see no reason why such a decision 
needs to be elevated to the full Commission.
    193. Interior also states that it does not know which technical 
experts the Director may consult before the decision is issued, which 
could result in the Director's objectivity being compromised. The 
regulations provide that all communications to or from the Commission 
staff, which includes the Director, related to the merits of the 
potential application shall be placed into the record.\168\
---------------------------------------------------------------------------

    \168\ 18 CFR 5.8(b)(3)(v).
---------------------------------------------------------------------------

    194. Finally, several states request that we reaffirm that the 
Commission's dispute resolution process does not bind state water 
quality certification agencies

[[Page 51089]]

in the sense that participation by a such agencies in the Commission's 
processes does not affect whatever independent authority it has to 
require a potential license applicant to produce data or information in 
the context of the water quality certification application.\169\ Alaska 
states that this holds for state CZMA processes as well. We affirm our 
prior statement.\170\
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    \169\ Washington, Massachusetts DER, Georgia DNR, NYSDEC, 
California, WGA.
    \170\ California requested that this statement be included in 
the regulations. We think it is unnecessary to do so, as the 
authority of states and Indian tribes in this connection is not 
affected by anything in our regulations.
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10. Study Plan Implementation
    195. Several commenters \171\ state that a dispute resolution panel 
should be convened to resolve any disagreements over the interpretation 
of study results, whether study plans need to be modified, and whether 
any additional studies are needed. They contend that such disagreements 
are no less important than disputes over what the study plan 
requirements should be in the first instance. Interior and RAW add that 
disagreements concerning a matter which was previously the subject of a 
panel recommendation should be considered by the same panel.
---------------------------------------------------------------------------

    \171\ HRC, AmRivers, Wisconsin DNR, Interior, and RAW.
---------------------------------------------------------------------------

    196. Our decision to limit formal study dispute resolution to 
development of the study plan does not imply that any subsequent 
decisions with respect to studies are less important. Rather, it 
reflects the fact that convening an Advisory Panel at every point in 
the overall process where there are likely to be disagreements would 
severely hamper the timely conclusion of the proceeding. Subsequent 
resolution of disagreements over study results, modifications to the 
approved plan, and additional study needs are also not likely to result 
in substantial changes to the overall study plan. Interior's and RAW's 
recommendation to reconvene an Advisory Panel for later disagreements 
pertaining to matters previously considered by that panel is 
impractical. There is no assurance that the same panelists would be 
available in a timely manner, or at all, and it would likely hamper the 
recruitment of third party technical experts if by committing to serve 
on one panel they were also committing to serve on an undetermined 
number of future panels at undetermined times.

H. Compliance With Study Plan

    197. As proposed, the study plan order would require the potential 
applicant to proceed with the approved study plan. The Director's order 
in formal dispute resolution could amend the study plan order and, if 
so, would require the potential applicant to carry out the study plan 
as modified.\172\
---------------------------------------------------------------------------

    \172\ Proposed 18 CFR 5.13(k).
---------------------------------------------------------------------------

    198. SCE and others \173\ request that we clarify in the rules 
whether the proposed study plan order (if no dispute resolution is 
initiated) and the proposed Director's order following formal dispute 
resolution are final orders to which rehearing applies. SCE seeks 
certainty on this point so that it may know whether a potential license 
applicant is subject to the compliance provisions of FPA Section 31. 
Duke and SCE request that we make these orders non-binding so that 
potential applicants are not forced to file requests for rehearing or 
judicial review to protect themselves against the possibility of 
sanctions under Section 31 \174\ or, at least, that we permit the plan 
and schedule to be modified based on unforeseen circumstances. PG&E 
suggests that the rules state that an application lacking the required 
information ``may'' be found deficient, rather than ``will'' be found 
deficient, since an existing licensee might want to avoid doing pre-
filing studies to prevent potential competitors from copying the 
results. WUWC similarly requests that we make clear that any failure to 
comply with a study plan determination will not result in civil 
penalties, but will be treated as a deficiency in the application.
---------------------------------------------------------------------------

    \173\ Long View and PG&E recommend that the Director's decision 
in formal study dispute resolution be appealable to the Commission 
or an administrative law judge. PG&E would extend this right to 
agencies, tribes, and the potential applicant, but states that it 
should be limited to alleged errors of fact. Long View would allow 
an appeal in ``extraordinary circumstances,'' which it indicates 
would include a study recommendation that significantly increases 
the cost of the study plan over the applicant's budget.
    \174\ Duke adds that if rehearing is requested, the Commission 
would have to suspend the study requirements in dispute pending 
rehearing or judicial review in order to preserve the potential 
applicant's rights.
---------------------------------------------------------------------------

    199. California, Interior, and AmRivers request that the rule be 
amended to ensure that there are consequences for the potential 
applicant if study requirements, objectives, and expectations are not 
met. Menominee requests that applicants be required to develop a 
``Quality Assurance Project Plan'' prior to implementation of the study 
plan.
    200. Orders regarding studies plans will be binding on potential 
license applicants, and we expect that they will comply with them. 
Failure to do so will put potential applicants at risk of having their 
applications, when filed, found to be deficient or rejected. The 
question of whether such orders are subject to rehearing and appellate 
review may have differing answers, based on the facts of individual 
cases. In addition, review of study plan orders could significantly 
lengthen the licensing process, and thus is to be avoided to the extent 
possible.
    201. More to the point, it is crucial to the success of the 
integrated process that issues regarding development of the record be 
identified and resolved at an early stage in the licensing proceeding. 
To this end, the process has been designed to give all participants the 
opportunity to examine existing information, make proposals regarding 
necessary studies, work with other participants to achieve consensus 
regarding information-gathering and, on matters that cannot otherwise 
be resolved, to obtain the opinion of a three-person panel of experts 
and a determination from the Director based on the record compiled by 
the participants. It is our hope and expectation that this consensus-
building process will succeed, as has the collaborative alternative 
licensing process, in keeping disputes regarding studies to an absolute 
minimum, such that all participants can meet their information needs 
with the study plan as approved by the Director, without the need for 
further proceedings.
    202. Some licensee commenters \175\ state that it is unfair that an 
existing licensee which is a potential applicant could be sanctioned 
under Section 31 for failing to comply with study plan determinations, 
while non-licensee potential competitors for the same project license 
could not.\176\ PG&E and others fear that non-licensee potential 
competitors might fail to comply with the study orders, then submit an 
application that relies on the studies undertaken by the existing 
licensee. They recommend that the Commission address this imbalance by 
specifying that the penalty for failure to comply with the study plan 
determinations will be the same for licensee and non-licensee potential 
applicants; that is, the application will be found deficient.\177\ 
Alternatively, SCE states that a non-licensee potential competitor 
should also be required to have a formal study plan and schedule, and 
that its

[[Page 51090]]

application should be found deficient and rejected if it attempts to 
use the licensee's studies for that purpose.
---------------------------------------------------------------------------

    \175\ Duke, PG&E, NHA, SCE.
    \176\ SCE evidently has in mind Wolverine Power Co. v. FERC, 963 
F.2d 446 (D.C. Cir. 1992), which holds that the civil penalty 
provisions of FPA section 31 apply only to licensees, permittees, 
and exemptees, not to unlicensed project operators.
    \177\ They refer to 18 CFR 4.38(b)(6)(I) and 16.8(b)(6)(I).
---------------------------------------------------------------------------

    203. Given that the thrust of Section 31 is the enforcement of 
Commission requirements with respect to the construction, operation, 
and maintenance of licensed projects, and not the license application 
process, it is not clear that the section is applicable to licensees as 
potential applicants. In any event, we consider imposing civil 
penalties to be inappropriate in this context and do not propose to do 
so.
    204. With respect to the concern raised by PG&E about the unfair 
use by a competitor of another competitor's work product, the 
Commission has pointed out that any improper use of a copyrighted 
filing is subject to remedy in an appropriate judicial forum.\178\ 
There has not been an instance of a potential competitor copying 
another applicant's license application since the late 1980s,\179\ and 
since ECPA was enacted in 1986, there have been but two instances of 
competing applications for a new license.\180\ We are aware of only one 
instance where a potential competitor and an existing licensee have 
been involved in a dispute over whether an existing licensee should 
have to share with a potential competitor information required to be 
made public.\181\
---------------------------------------------------------------------------

    \178\ See WV Hydro, Inc. and the City of St. Mary's, WV, 45 FERC 
] 61,220 (1988).
    \179\ Id.
    \180\ One case was N.E.W. Hydro, Inc. and City of Oconto Falls, 
WI, 81 FERC ] 1,238 (1997), order on reh'g, 85 FERC ] 61,222 (1998), 
aff'd, sub nom. City of Oconto Falls, WI v. FERC, 204 F.3d 1154 
(D.C. Cir. 2000). The other was Holyoke Water and Power Co., et al., 
88 FERC ] 61,186 (1999). In neither case did the competitor prevail.
    \181\ See P.U.D. No. 2 of Grant County, WA, 96 FERC ] 61,211 
(2001) and ] 61,362 (2001). In that instance, the non-licensee 
potential competitor elected not to file a license application.
---------------------------------------------------------------------------

    205. In any event, as discussed below, we are requiring non-
licensee potential applicants for a new license to file the NOI and PAD 
no later than the statutory deadline for an existing licensee to file 
its NOI.\182\ Under these circumstances, it will be difficult for a 
potential non-licensee competitor to game the regulations.
---------------------------------------------------------------------------

    \182\ See Section III.S and 18 CFR 5.5(a).
---------------------------------------------------------------------------

    206. NHA similarly requests that we add to the regulations a 
requirement that as a condition of invoking the formal dispute 
resolution process agencies must agree to be bound by the Director's 
decision. This, NHA states, would ensure that the cost and effort of 
formal dispute resolution is not wasted. As just stated, we cannot bind 
states or Indian tribes with respect to the administration of their 
water quality certification programs under the Clean Water Act. NHA 
does not moreover speak for a united industry on this issue. Several 
licensee commenters indicate that they may feel compelled to seek 
rehearing of the Director's decision, and we can see no distinction 
between a potential applicant, agency, or Indian tribe in this regard.
    207. Finally, PG&E and SCE request that we modify the proposed rule 
to make clear that agencies and Indian tribes with mandatory 
conditioning authority may not invoke the Commission's dispute 
resolution processes and then use authorities they have under other 
statutes to require potential applicants to do information gathering or 
studies in addition to those the Commission requires. We cannot do 
this, for we have no authority to control the activities of these 
entities under other statutes. We do however fully expect these 
entities to participate in the integrated process in good faith in 
order that the Commission's decisional record will, to the extent 
reasonably possible, serve as the basis for the decisions of entities 
with conditioning authority, and that any additional information these 
entities may require is known early in the process.

I. Other Uses for Dispute Resolution

    208. Washington DNR recommends that the Commission establish a 
conflict resolution process for disputes between potential applicants 
and the owners of lands on which a project would be located, and that 
the license application not be accepted until the conflict resolution 
process has run its course. Such a conflict is likely to occur only in 
the case of a new project proposal. We think it is inappropriate to 
hold processing of the application in abeyance until the concerns of 
one party are resolved. Affected landowners, like all interested 
entities, are encouraged to participate in the pre-filing consultation 
process and to intervene if a license application is filed. If the 
potential applicant and the landowner are not able to resolve any 
differences,\183\ the Commission will do so in the context of its 
public interest analysis under the FPA.
---------------------------------------------------------------------------

    \183\ We note that the Commission's Dispute Resolution Service 
is available to assist willing parties to resolve disagreements.
---------------------------------------------------------------------------

    209. Skagit recommends that we require tribal approval of 
consultants engaged by potential applicants for tribal cultural 
resources analysis. Nez Perce recommends that a dispute resolution 
process be made available for disagreements between Indian tribes and 
potential applicants over the identity of consultants engaged by the 
potential applicant to do information gathering or studies related to 
tribal cultural resources because potential applicants sometimes engage 
persons who are not acceptable to the Indian tribe. As discussed in the 
NOPR, we agree that it is appropriate for potential applicants to 
consult with interested tribes concerning the identity of consultants 
and, indeed, it is in their best interest to do so, but we also think 
that applicants need flexibility in this regard and should not be 
required to obtain tribal approval before engaging a consultant.\184\ 
We note however that our regulations require potential applicants and 
those in their service to protect sensitive cultural resources 
information from disclosure.\185\
---------------------------------------------------------------------------

    \184\ 68 FR at p. 14003; IV FERC Stats. & Regs. ] 32,568 at p. 
34,718.
    \185\ See discussion of this issue in the NOPR; 68 FR at p. 
14002; IV FERC Stats. & Regs. ] 32,568 at p. 34,717.
---------------------------------------------------------------------------

J. Evidentiary Hearings

    210. A few licensee commenters \186\ want the rules to provide that 
a party is entitled to an evidentiary hearing before an administrative 
law judge (ALJ) whenever there are disputed issues of fact.\187\ They 
indicate that such hearings would not be for resolving study disputes, 
but for ``disputed issues of fact material to disputed mandatory terms 
and conditions.''\188\ They state that such hearings would help foster 
settlements, and improve the quality and probative value of the record 
by encouraging resource agencies to support their terms and conditions, 
and help to limit post-license litigation. They add that such hearings 
should not delay the process because they would be narrowly focused on 
specified factual disputes and an ALJ decision could be rendered in 
about six months.
---------------------------------------------------------------------------

    \186\ NHA, WPPD, Idaho Power, EEI, NEU.
    \187\ EEI recommends that the regulations include the following 
language from APA Section 556(d): ``a party is entitled to present 
his case or defense by oral or documentary evidence, and to conduct 
such cross-examination as may be required for a full and true 
disclosure of the facts.''
    \188\ EEI, p.15. Such a rule would however also logically apply 
to disputed facts pertaining to license conditions originating with 
the Commission staff.
---------------------------------------------------------------------------

    211. Substantially the same recommendation was made by some of the 
same commenters prior to the NOPR. We there stated that while we do not 
intend to change our general practice of resolving most hydroelectric 
licensing matters by means of notice and comment procedures, we are 
open to setting discrete issues of fact for hearing before an ALJ in 
appropriate circumstances, and will give due

[[Page 51091]]

consideration to such requests.\189\ We also included a provision in 
the proposed rules providing for such hearings.\190\
---------------------------------------------------------------------------

    \189\ 68 FR at p. 13998; IV FERC Stats. & Regs. ] 32,568 at p. 
34,711.
    \190\ See proposed 18 CFR 5.28(e). The provision is now at 18 
CFR 5.29(e).
---------------------------------------------------------------------------

    212. In the Final Rule, we retain the proposed language on this 
issue. Resolving factual disputes before an ALJ is a time-tested means 
of decision making; factual records developed in such hearings are 
useful to courts which may be called upon to review the final decision 
on the license.

K. Draft License Application Replaced

    213. The integrated process was proposed to include the filing for 
comment of a draft license application containing, insofar as possible, 
the same contents as a final license application.\191\ 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.\192\ Any entity requesting additional information or studies 
in its comments on the draft application would be required to show 
extraordinary circumstances, and to address in its request certain 
criteria, as applicable to the facts of that case.\193\
---------------------------------------------------------------------------

    \191\ Proposed 18 CFR 5.15 (Draft license application).
    \192\ Proposed 18 CFR 5.17 (Application content).
    \193\ Proposed 18 CFR 5.15.
---------------------------------------------------------------------------

1. Need for Draft Application
    214. We requested 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.\194\
---------------------------------------------------------------------------

    \194\ 68 FR at p. 14010; IV FERC Stats. & Regs. ] 32,568 at p. 
34,732.
---------------------------------------------------------------------------

    215. Several industry commenters state that the potential applicant 
should decide if a draft license application is needed, because many 
potential applicants feel the time and effort devoted to it would be 
better spent on other matters such as settlement discussions and 
completing study requirements.\195\ They state that the draft 
application requirement is burdensome and redundant because of the cost 
of creating, reproducing and distributing the document to many 
stakeholders, and then quickly revising and again reproducing and 
distributing a final application. Some state that other Federal 
agencies, such as the U.S. Army Corps of Engineers, do not require 
draft applications, and that it causes no problems.
---------------------------------------------------------------------------

    \195\ NHA, Suloway, Long View, SCE, Snohomish.
---------------------------------------------------------------------------

    216. These commenters contend that the other participants do not 
need to see the potential applicant's proposed resource protection, 
mitigation, and enhancement (PM&E) measures until the application is 
filed, and that they should have a good general idea of what the 
potential applicant is likely to propose from the PAD, NEPA scoping, 
and study plan requirements. NHA would have the potential applicant 
consult with the parties with the objective of an agreement on whether 
a draft application should be circulated.\196\ NHA and Long View also 
suggest that the draft license application may be eliminated for 
relatively simple cases, such as small projects that operate run-of-
river or have no anadromous fish issues.
---------------------------------------------------------------------------

    \196\ PFBC, viewing the matter from the opposite side of the 
coin, would eliminate the draft license application only if most or 
all parties agree.
---------------------------------------------------------------------------

    217. Resource agencies and NGOs urge us to retain the draft license 
application. They state that it is the first time the potential 
applicant's whole proposal, including PM&E measures, is consolidated 
and revealed to agencies, which helps them to understand the entire 
effect of the project and to prepare for filing of the application in 
final. Some indicate that the draft application is necessary to ensure 
that potential applicants consider all participants' comments. Others 
state that it is an important last pre-filing chance to influence the 
potential applicant's proposed PM&E measures, and to identify areas 
where additional information may be needed, including for water quality 
certification purposes. Some also suggest that the draft license 
application fosters settlement negotiations. Finally, some commenters 
indicate that the time required to review a draft license application 
will not prevent parties from continuing to work on outstanding issues, 
such as settlements or the completion of studies.\197\
---------------------------------------------------------------------------

    \197\ MDEP, FWS, ADK, Wisconsin DNR, IDFG, VANR, NEU, Oregon, 
HRC, PFMC, NCWRC, California, Interior, GLIFWC, Skokomish, Skagit. 
One industry commenter, PG&E recommends against eliminating the 
draft application, at least Exhibit E. PG&E states that the comment 
deadline on the draft application tends to focus participants on the 
matters most important to them.
---------------------------------------------------------------------------

    218. Agency and NGO commenters also suggest that the cost of a 
draft application should be modest because it is circulated so close to 
the filing deadline that the draft must very closely resemble the final 
application, and some favor permitting control of costs by e-
filing.\198\ AMC would retain the draft application if there are no 
settlement negotiations taking place when it would otherwise be due. 
Interior suggests that the burden entailed by a draft license 
application could be minimized by permitting the potential application 
to incorporate by reference information from the PAD or study results 
that have not changed.
---------------------------------------------------------------------------

    \198\ Oregon, HRC, PFMC, NCWRC, ADK, California, Interior, VANR, 
GLIFWC, Skokomish.
---------------------------------------------------------------------------

    219. As indicated above, much of the disagreement about whether to 
require a draft license application turns on the contrast between the 
industry view that it is burdensome and of questionable utility, and 
the agency and NGO view that it is helpful to the participants. Our 
task then is to devise a document that reduces the burden imposed on 
the potential applicant but retains the features of the draft license 
application that the agencies and NGOs find useful. To that end, we 
must consider the commenters' views on the appropriate contents of a 
draft license application.
2. Contents of Draft Application
    220. The NOPR requested comments on whether a draft application, if 
required to be filed, should track the contents of the final license 
application, or whether it would be preferable to require it only to 
include a revised Exhibit E or other materials.\199\
---------------------------------------------------------------------------

    \199\ 68 FR at p. 14010; IV FERC Stats. & Regs. ] 32,568 at p. 
34,732.
---------------------------------------------------------------------------

    221. NHA and others \200\ state that if a draft application is 
required it should be limited to a description and analysis of the 
potential applicant's proposal, plus Exhibit E or an abbreviated 
version thereof. They state that most recipients are only interested in 
those parts of the draft application and rarely comment on any other 
part of it.\201\ They add that any other information in the record will 
already have been filed with the Commission and served on the parties, 
and may be incorporated in a draft application or comments by 
reference.\202\ They conclude that the comments are seldom useful 
because of

[[Page 51092]]

the limited time available to review the draft, but the potential 
applicant nonetheless must revise the draft application to respond to 
them before it files the application in final form.\203\
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    \200\ Oregon, HRC, PFMC, NCWRC, ADK, California, Interior, VANR, 
GLIFWC, Skokomish, Long View, Acres.
    \201\ Long View, Acres. Acres indicates that Exhibits A (project 
description) and B (description of proposed project operation and 
alternatives considered) may also be appropriate if the potential 
applicant for a new license is proposing material changes in project 
operation.
    \202\ Longview, Acres. These commenters state that the contents 
of Exhibits A, B, C (proposed construction schedule), and G (project 
map) would already have been circulated in the PAD or a PAD 
supplement, or already provided for in the study plan and schedule. 
They recommend reference to the Commission's EA Handbook as the 
guidance for preparing Exhibit E.
    \203\ Long View, NPS, SCE.
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    222. Long View states that if a draft license application contains 
the potential applicant's specific proposal, then commenting agencies 
should be required to provide preliminary terms and conditions. This, 
it states, would allow the potential applicant to refine its proposal 
and help make Commission action more timely.
    223. Agencies and NGOs, on the other hand, recommend that the draft 
license application continue to follow the format and content of the 
final application. They wish particularly to have a requirement for a 
specific operating proposal, and stress the need for a quality Exhibit 
E.\204\ They contend that these are essential for a thorough review and 
opportunity to comment, and emphasize the importance of the potential 
applicant's response to comments in the final application. One of the 
few industry proponents of the existing draft license application 
format, NEU adds that having a consistent format between draft and 
final license applications will make reading and comprehension of the 
documents easier than if the draft application is in a different 
format.
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    \204\ HRC, NCWRC, PFBC, Georgia DNR, California, NYSDEC, 
Interior.
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    224. Several commenters also state that the draft license 
application should include all the data and information needed for the 
state to consider the potential applicant's clean water act 
certification application.\205\ Oregon states that its process is 
complex and iterative, so this requirement would help to expedite the 
state process. IDEQ states that if a state has specific information 
requirements for the application, the information should be included in 
the draft application, or the potential applicant should be required to 
explain when the information will be supplied.
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    \205\ Oregon, HRC, PFMC, NCWRC, ADK, California, Interior, VANR, 
GLIFWC, Skokomish.
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    225. Clearly, there is no meeting of the minds on this issue in the 
written comments. The Process Group however discussed this issue at 
length and agreed that, in lieu of a draft license application, an 
applicant could be permitted to file a document discussing its proposal 
for operation of the project facilities, a range of PM&E measures under 
consideration by the potential applicant,\206\ and a summary of the 
environmental analysis of the impacts of the range of PM&E's and 
proposed project operations. This document would be called the 
potential applicant's ``Preliminary Licensing Proposal.''
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    \206\ As we understand the Process Group's recommendation, a 
``range'' of PM&E measures encompasses measures with respect to each 
of the affected resources, and could include potential alternative 
PM&E measures with respect to a particular issue. An example of the 
latter might be enhancing bypassed reach flows to benefit aquatic 
resources or, alternatively, providing enhancements to wetlands in 
the project reservoir.
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    226. The underlying premise of the Process Group's compromise is 
that sufficient information is available through the PAD and completion 
of information gathering and studies under the approved study plan to 
support development of a range of PM&E measures and a draft 
environmental document.\207\ The Process Group further agreed that, if 
the participants are amenable, this filing could be waived by the 
Commission. The issue of whether to request a waiver would be initially 
considered in the development of the study plan and schedule.\208\ A 
potential applicant would also have the option to prepare a complete 
draft license application with the format and contents of the final 
application.
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    \207\ In recognition of the fact that information gathering and 
studies will not always be complete at this stage of the proceeding, 
we have moved acceptance of the application to the point were the 
study plan is completed.
    \208\ The Preliminary Licensing Proposal is issued for comments, 
which could include requests for new or modified studies. The 
Process Group's expectation appeared to be that this opportunity 
would be preserved even if the Preliminary Licensing Proposal were 
waived. We disagree. Since the purpose of that document is to obtain 
comments with respect to the potential applicant's proposal, waiver 
of the requirement to distribute that document should likewise 
eliminate the opportunity to request new or modified studies at this 
point.
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    227. We think the Process Group's agreement is by and large a 
reasonable attempt to bridge the gap between license applicants and 
other participants because the proposed document should be less 
burdensome for potential applicants, yet provide the specificity sought 
by agencies and NGOs with respect to the potential applicant's proposal 
and environmental impacts analysis. We have two concerns with this 
recommendation however. First, a document which contains a ``range'' of 
potential PM&E measures will not be very helpful to commenters, who 
will not know which of the potential PM&E measures the potential 
applicant is seriously considering. It would also needlessly complicate 
commenting on the draft environmental analysis. We will therefore 
require the Preliminary Licensing Proposal to include one set of 
proposed PM&E measures. Second, the utility of the Preliminary 
Licensing Proposal would also be compromised if the potential applicant 
merely provided a ``summary'' of its draft environmental analysis. The 
term ``summary'' is quite elastic and we do not intend to further 
complicate the process by trying to specify the contents of the 
summary. Instead, we will require the Preliminary Licensing Proposal to 
include the potential applicant's draft environmental analysis of its 
preliminary licensing proposal.
3. Preliminary Draft Terms and Conditions
    228. The NOPR states that in most cases the updated study report 
should 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 
at the draft application stage. We suggested that in such 
circumstances, it may be appropriate for the parties to file 
preliminary draft 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. Modified recommendations, and terms and conditions would 
be filed in response to the Commission's ready for environmental 
analysis (REA) notice.\209\ In this regard, we requested comments on 
whether we should in each case make a determination following the 
updated study report of whether the record is sufficiently complete to 
require the filing of preliminary draft recommendations and terms and 
conditions with comments on the draft license application.\210\
---------------------------------------------------------------------------

    \209\ 68 FR at p. 14010; IV FERC Stats. & Regs. ] 32,568 at p. 
34,732. The proposed regulation test inadvertently states that the 
modified PM&E measures would be final.
    \210\ 68 FR at p. 14010; IV FERC Stats. & Regs. ] 32,568 at p. 
34,732.
---------------------------------------------------------------------------

    229. A few licensee commenters responded affirmatively. SCE states 
that under these circumstances we should require draft PM&E measures to 
be filed 45 days after the license application is filed because the 
record will be complete. SCE would have final PM&E measures filed 60 
days after the REA notice. Idaho Power and EEI suggest that if parties 
are not required to provide recommendations and terms and conditions 
when the studies are completed, the goals of the integrated process 
will not be realized. NEU also supports earlier filing of draft PM&E 
measures.

[[Page 51093]]

    230. One state agency, IDFG also supports this idea, at least with 
respect to fish and wildlife agency recommendations made pursuant to 
FPA Section 10(j).\211\ Under IDFG's proposal, the Commission staff 
would not respond to the preliminary 10(j) recommendations. IDFG states 
that this would enable potential applicants to consider the preliminary 
10(j) measures without being influenced by the Commission staff's 
preliminary response. IDFG thinks this might provide an incentive to 
the parties to enter into settlement negotiations.
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    \211\ 16 U.S.C. 803(j).
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    231. Nearly all respondents however opposed this idea for various 
reasons. Wisconsin DNR and NCWRC state that the potential applicant 
needs to make its licensing proposal, at least in draft, in order for 
agencies to assess the potential impacts so that they can develop 
mitigation measures or craft water quality certification 
conditions.\212\ NCWRC adds that the time frames provided in the 
proposed rule are already too tight, and it would be unreasonable to 
require another document from the commenters in the same overall time 
frame.\213\
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    \212\ Wisconsin DNR, NOAA Fisheries, and HRC also indicate that 
this would needlessly create an additional step in the process, and 
Wisconsin DNR states that it does not have the necessary resources.
    \213\ PFMC suggests that the Commission and the agencies should 
negotiate dates for filing of PM&E measures. That would be 
inconsistent with a central goal of the integrated process, reducing 
the time required to process license applications.
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    232. NOAA Fisheries and HRC indicate that completion of the study 
plan does not complete the record because, at a minimum, the license 
application including the applicant's proposal needs to be filed.\214\ 
NOAA Fisheries indicates that the lack of complete information would 
require it to file prescriptions and recommendations based on a worst 
case scenario. California and PG&E agree that it would be unproductive 
for parties to file anything before the Commission declares that the 
application is ready for environmental analysis. California adds that, 
in any event, if the studies are complete, parties will soon be making 
the same filing in response to an REA notice and after the Commission 
has reviewed the application.\215\ NHA similarly indicates that 
agencies would need to respond on a case-by-case basis, depending on 
their view of whether the record is complete.
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    \214\ HRC adds that if preliminary PM&E measures are required, 
then the record should also be complete enough for the Commission 
staff to provide draft license articles. Draft license articles are 
however based on the Commission's evaluation of the reasonable 
alternatives, which may consist largely of the alternatives 
recommended by agencies, Indian tribes, and NGOs.
    \215\ California adds that in the context of its water quality 
certification, state law requires a final environmental document 
before its final certification conditions can be issued, and that it 
would have to repeat the entire water quality certification process. 
We did not however suggest that the state should issue water quality 
certification at this juncture.
---------------------------------------------------------------------------

    233. GLIFWC and Skokomish state that preliminary draft conditions 
before the REA notice would not afford Indian tribes sufficient time to 
consult with Federal agencies that have authority pursuant to FPA 
Section 4(e) to require mandatory conditions for projects located on 
Indian reservations.
    234. Among agencies and NGOs, only NYSDEC and Oregon do not object 
to filing preliminary draft PM&E measures. Oregon's tentative assent 
however assumes a period of one year between the draft and final 
license applications, in contrast to the approximate period of 150 days 
in the proposed rule.\216\ We are not inclined, particularly in light 
of our decision to adopt the Preliminary Licensing Proposal, to extend 
the comment period.
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    \216\ 90 days to comment on the Preliminary Licensing Proposal 
or draft license application, followed by 60 days for the applicant 
to file the final application.
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    235. Finally, Interior states that this might be acceptable, but 
only at the option of the entity filing the PM&E measures. Interior 
also questions the purpose of this proposal on the ground that the 
Commission's draft environmental document is likely to provide 
significant information and analysis not found in the studies or 
applicant's proposal. Interior adds that filing preliminary PM&E 
measures before the REA notice is pointless since modified PM&E 
measures are not due until 60 days after the comments are due on the 
draft NEPA document.\217\
---------------------------------------------------------------------------

    \217\ Proposed 18 CFR 5.22.
---------------------------------------------------------------------------

    236. We conclude that the arguments against requiring preliminary 
draft PM&E measures are persuasive and will not require them to be 
filed.

L. License Applications

1. Contents
    237. Only a few comments were filed on the contents of the final 
license application. Long View seeks clarification that Exhibit C 
(proposed construction schedule) applies only to proposed construction, 
and need not discuss any previous construction. Long View's 
understanding is correct.
    238. Long View requests an explanation of why the maps required in 
Exhibit G need to be stamped by a Registered Land Surveyor. This 
ensures accuracy in the maps because Registered Land Surveyors are 
accountable for the accuracy of their work.
    239. Nez Perce indicates that the license application should 
include a map showing the political boundaries of any Indian 
reservation that may be affected, and identifying ceded and non-ceded 
territories where treaty rights apply. In our view, this is information 
that can best be provided to a potential applicant by the Indian tribe 
itself or with the assistance of Interior.
    240. Nez Perce also states that the Exhibit E should be prepared 
after consultation with affected Indian tribes on the scope of 
cumulative environmental impacts, and should be prepared on a watershed 
basis. The integrated process provides ample opportunity for Indian 
tribes to participate in pre-filing consultation and NEPA scoping. In 
addition, the Commission staff's Scoping Document 1 will state what the 
Commission staff considers to be the geographical and temporal scope of 
the analysis.
    241. Some commenters requested changes to the license application 
requirements that touch on economic analysis. Nez Perce and NOAA 
Fisheries request that Exhibit E include, in addition to discussion of 
the cost of PM&E measures, a dollar valuation of the benefits of 
environmental and cultural resources PM&E measures. This analysis would 
include, among others things, potential increases in revenues from 
commercial and sport fishing, increased non-fishing recreation, and 
potential property value increases resulting from better environmental 
protection.
    242. Our views concerning the attachment of dollar values to 
natural and cultural resource benefits are set forth in Great Northern 
Paper, Inc.\218\ and City of Tacoma, Washington.\219\
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    \218\ 85 FERC ] 61,316 (1998), reconsideration denied, 86 FERC ] 
61,184 (1999), aff'd, Conservation Law Foundation v. FERC, 216 F.3d 
41 (DC Cir. 2000) (nothing in the FPA requires the Commission to 
place a dollar value on nonpower benefits; nor does the fact that 
the Commission assigned dollar figures to the licensee's economic 
costs require it to do the same for nonpower benefits.). See also, 
Namekegon Hydro Co., 12 FPC 203, 206 (1953), aff'd, Namekegon Hydro 
Co. v. FPC, 216 F.2d 509 (7th Cir. 1954) (when unique recreational 
or other environmental values are present such as here, the public 
interest cannot be evaluated adequately only by dollars and cents); 
and Eugene Water & Electric Board, 81 FERC ] 61,270 (1997) aff'd, 
American Rivers v. FERC, 187 F.3d 1007 (9th Cir. 1999) (rejecting 
request for economic valuation of environmental resources that were 
the subject of 10(j) recommendations).
    \219\ 84 FERC ] 61,107 (1998), order on reh'g, 86 FERC ] 61,311 
(1999), appeal pending, City of Tacoma v. FERC, DC Cir. No. 99-1143, 
et al.
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    The public-interest balancing of environmental and economic impacts 
cannot be done with mathematical

[[Page 51094]]

precision, nor do we think our statutory obligation to weigh and 
balance all public interest considerations is served by trying to 
reduce it to a mere mathematical exercise. Where the dollar cost of 
enhancement measures, such as diminished power production, can be 
reasonably ascertained, we will do so. However, for non-power resources 
such as aquatic habitat, fish and wildlife, recreation, and cultural 
and aesthetic values, to name just a few, the public interest cannot be 
evaluated adequately only by dollars and cents.\220\
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    \220\ 85 FERC at p. 62,244-245. Interior states that 
environmental and cultural resource benefits of PM&E measures need 
to be better articulated by the Commission to counter the cost 
arguments of applicants, but does not seek to have them translated 
into dollar values. We agree that it is important to explain the 
benefits, economic or otherwise, of the PM&E measures we approve, 
and believe our NEPA documents and orders do so. By the same token, 
agencies that provide mandatory conditions or recommendations have 
the same obligation with respect to the PM&E measures they sponsor.
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* * * * *
    In the context of public interest balancing for long-term 
authorizations, it is inappropriate to rely too heavily on the accuracy 
of current dollar estimates of non-power resource values, calculated 
using any number of reasonably disputable assumptions and methods.\221\
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    \221\ 84 FERC at pp. 61,571-72.
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    243. AW/FLOW and FWS state that the final application should 
include projections of project revenues for the purpose of testing 
applicant assertions that proposed PM&E measures are too costly. That 
would be inconsistent with the fundamental determination underlying our 
policy of using current costs to value project power; that is, the 
futility of attempts to estimate power values on a long-term 
basis.\222\
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    \222\ See Mead Corporation, Publishing Paper Division., 72 FERC 
] 61,027 (1995), order on reh'g, 76 FERC ] 61,352 (1996).
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    244. Long View and PG&E state that Exhibit E (which is in the form 
of a draft environmental document) which requires an economic analysis 
of ``any other action alternative'' \223\ would unreasonably require an 
applicant to conduct an economic analysis of every PM&E measure 
recommended by any participant in pre-filing consultation. They would 
like for the applicant to determine which such measures are reasonable 
to analyze.
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    \223\ See proposed 18 CFR 5.17(b)(1)(E).
---------------------------------------------------------------------------

    245. The action alternatives typically include PM&E measures 
proposed by agencies, Indian tribes, and NGOs. If such measures are not 
provided before the application is filed, the potential applicant has 
little to work with and a commensurately minor obligation in this 
regard. In such cases Exhibit E then will contain an economic analysis 
of the existing project as it currently operates and the license 
applicant's proposal. We expect however there will also be cases in 
which preliminary action alternatives or individual PM&E measures will 
exist when the application is filed. We share PG&E's concern about 
license applicants being held responsible for developing cost 
information about or analyses of PM&E measures of varying specificity 
and practicality, or those that involve long-term activity not easily 
translated into current costs. We would only expect a potential 
applicant to provide an analysis of preliminary PM&E measures if they 
were sufficiently specific to make that possible.\224\ We have modified 
the regulation text to reflect this view.\225\
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    \224\ For instance, the cost of a specific recommendation for 
instream flows in a bypassed reach can be determined. A fishway 
prescription, on the other hand, may be too vague, particularly as a 
preliminary measure, for the costs to be reasonably determined. See 
the discussion in Section III.O.2.
    \225\ 18 CFR 5.18(b)(5)(i)(B).
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2. Post-Application Study Requests
    246. The proposed rule makes no provision for new information-
gathering or study requests after a license application is filed, based 
on the premise that participants are provided ample opportunity before 
the application is filed and during the study period to make such 
requests. Industry commenters agree with this proposal.\226\
---------------------------------------------------------------------------

    \226\ We infer this from the fact that the only industry member 
to comment on the matter was NHA, which endorsed the proposal.
---------------------------------------------------------------------------

    247. Some agency and NGO commenters do not agree. They appear to 
concede that if such requests are permitted, the bar should be set 
high, but assert that to prohibit them entirely would exclude from the 
record information warranted by unforeseen circumstances. They cite as 
examples unexpected study results which establish a need for a new 
study; failure of the applicant to meet document production and 
disclosure obligations during the pre-filing period or in the 
application; and material changes in circumstance with respect to the 
environment, the applicant's license proposal or information contained 
therein, and applicable laws or regulations.\227\
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    \227\ NYSDEC, HRC, Interior, MPRB, NJDEP.
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    248. The mere fact that study results are unexpected does not 
indicate that a new study is needed. It is possible for study results 
to be so different from what was expected that questions arise 
concerning whether it was properly conducted, but such events are 
exceedingly rare in our experience. The failure of an applicant to 
satisfy the terms of the study plan or filing requirements is not a 
cause for new study requests. It is rather the cause of a deficiency 
that must be remedied, and may also raise compliance issues.
    249. It is also possible for a material change in circumstances to 
occur between the completion of the study plan and the conclusion of a 
licensing proceeding that requires additional information to be 
provided. That has always been the case, and the Commission has always 
exercised its authority to require applicants to provide additional 
information for the record in appropriate cases. We will continue to do 
so. However, we remain convinced that the multiple opportunities to 
request information and studies and to resolve any study disputes 
during the pre-filing phase of the integrated process will ensure that 
the application will include all information needs.

M. Consultation and Coordination With States

1. General Comments
    250. PFMC requests that we clarify the relationship between 
licensing and other Federal and state processes. The relationships 
between licensing and state and tribal water quality certification and 
consistency certification under the Coastal Zone Management Act (CZMA) 
are discussed in this section.\228\
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    \228\ The relationship of ESA consultation to the licensing 
process is discussed in Section III.O.3.
---------------------------------------------------------------------------

    251. Minnesota DNR asks us to affirm that the changes we are 
adopting are not designed to weaken the authority of state fish and 
wildlife agencies. We have carefully developed the final rule to ensure 
that the rights and views of all participants, including all state 
agencies, are accorded the full consideration to which they are 
entitled by law, and in many instances have provided procedural rights 
exceeding any legal requirements.\229\ Indeed, our expansive approach 
to stakeholder participation in this rulemaking, which greatly exceeds 
the notice and comment requirements of the APA, is indicative of our 
approach to stakeholder participation in our processes.
---------------------------------------------------------------------------

    \229\ Georgia DNR states that all state agencies should receive 
equal consideration in the licensing process. If, by this, Georgia 
DNR means each agency should receive the full consideration to which 
it is entitled by the law and implementing regulations, we agree.
---------------------------------------------------------------------------

    252. Long View requests that the Commission designate specific 
members of staff to be familiar with the water quality certification 
requirements of

[[Page 51095]]

each state for the purpose of coordinating with the state at various 
milestones in the process to ensure that its information needs are 
being met. Long View expects that this would minimize post-application 
requests by states for additional information. We decline to adopt this 
recommendation. State or tribal officials are the persons responsible 
for administering water quality certification programs, and the 
integrated process we are establishing includes opportunities and 
inducements for them to participate in the licensing process and make 
their information gathering and study needs known early. We also expect 
the water quality certification process will be coordinated with the 
licensing process through the development of the process plan and 
schedule.\230\
---------------------------------------------------------------------------

    \230\ See 18 CFR 5.8(d)(4).
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2. Timing of Water Quality Certification Application
    253. The existing regulations require license applicants to file an 
application for a water quality certification for both the traditional 
process and ALP no later than the date on which the application is 
filed.\231\ In the NOPR, we noted that this assumes that the potential 
applicant has consulted with the water quality certification agency, 
determined what data is required, and obtained that data before the 
license application is filed.\232\ This premise however frequently does 
not reflect reality.
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    \231\ 18 CFR 4.38(f)(7) and 16.8(f)(7).
    \232\ 68 FR at p. 14010; IV FERC Stats. & Regs. ] 32,568 at p. 
34,714.
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    254. We proposed to make the license application date the deadline 
date for filing the water quality certification application in the 
integrated process because the integrated process is designed to better 
ensure that water quality certification data needs are timely 
identified and met.\233\ We proposed to change the deadline date for 
the traditional process from the license application date to 60 days 
after the REA notice is issued because there is less assurance under 
the traditional process that water quality certification matters will 
be resolved when the application is filed. We requested comments on 
that proposal and on an appropriate deadline date for this filing in 
the ALP.\234\
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    \233\ Proposed 18 CFR 5.17(f) and 68 FR at p. 14000; IV FERC 
Stats. & Regs. ] 32,568 at p. 34,714.
    \234\ Proposed 18 CFR 4.34(b)(5) and 68 FR 13988 at p. 14000; IV 
FERC Stats. & Regs. ] 32,568 at p. 34,714.
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    255. Commenters on this issue seldom distinguished between 
processes, and opined that it would be confusing for participants to 
have a different deadline date depending on the process selection. They 
recommended a deadline date for all processes based on their views of 
how the Commission's processes should be coordinated with state water 
quality certification processes.
    256. Only PFMC, NEU, and NJDEP recommended that the deadline date 
continue to be the filing date of the license application. Several 
commenters recommended that the deadline for filing of the water 
quality certification application should be 30-60 days following the 
Commission's REA notice.\235\ The rationale for this recommendation is 
that the REA notice establishes that the record is complete, so there 
is sufficient data to support the water quality certification 
application, and the state should be able to act on the application 
within one year. NHA also suggests that allowing additional time after 
the license application is filed would afford time for the state and 
the applicant to work together in ways that may lead to earlier 
issuance of water quality certification.
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    \235\ NHA, PG&E, MDEP, SCE, EPA, NYSDEC.
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    257. In this connection, the Process Group agreed that the 
integrated process will work best when states and Indian tribes 
recognize and are actively involved throughout the pre-filing process, 
and that the Commission, state or Indian tribe, and applicant should 
discuss schedules and procedures for their respective processes early 
on. We wholeheartedly agree, and if this is done the integrated process 
should result in all parties knowing what water quality-related data 
the Commission will require the potential applicant to produce when the 
study plan determination is issued or, at the latest, the conclusion of 
any relevant formal dispute resolution process. This should leave ample 
time before the license application is filed, about two and one-half 
years, for the potential applicant to consult with the state regarding 
what, if any, additional data is required for certification, and to 
collect that data. If the potential applicant and the state or Indian 
tribe are diligent in this regard, the potential applicant should be 
able to file the water quality certification application by the time 
the license application is filed.\236\
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    \236\ We hasten to add that this is a minimum time. We are aware 
of no reason why a potential applicant cannot consult with the water 
quality certification agency when the NOI and PAD are filed and 
begin collecting required data before the Commission's study plan 
determination is issued.
---------------------------------------------------------------------------

    258. There may however be instances where the license application 
is required to be filed, but some information required by the 
Commission-approved study plan or by the water quality certification 
agency has not yet been obtained. In these circumstances, the REA 
notice will not be issued until the study plan is completed, so using 
the REA notice as the triggering date to file the water quality 
certification application allows an additional increment of time past 
the license application date in case there is also outstanding water 
quality data.\237\
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    \237\ The Process Group agreed that the license application 
should include the information required by the water quality 
certification agency. That would of course be desirable, but we 
cannot impose such a requirement since new license applications must 
be filed on a schedule determined by the FPA, and we cannot control 
the timing of the state's process. We likewise decline to tie 
issuance of the REA notice to a state's determination that the 
record in its separate process is complete. The Commission cannot 
delegate its procedural or substantive responsibilities to other 
entities.
---------------------------------------------------------------------------

    259. California, VANR, and the Process Group propose that the 
deadline date be negotiated by the state or Tribe and the license 
applicant. As a default in the event there is no agreement, California 
proposes a deadline of 60 days following issuance of the Commission's 
draft NEPA document.\238\ EPA thinks there may be merit in California's 
proposal. This recommendation is based on the concept that one 
environmental document should serve for all Federal and state 
authorizations; e.g., water quality certification, CZMA consistency 
certification, and Clean Water Act Section 404 \239\ dredge and fill 
permits issued by the U.S. Army Corps of Engineers. California explains 
that it must prepare an environmental document akin to the Federal NEPA 
document after an opportunity for public notice and comment (SEQA 
analysis). It does not consider a water quality certification 
application to be complete until its SEQA analysis is complete, and it 
would prefer that the SEQA analysis be the same document as the 
Commission's NEPA document. It states that by waiting until after the 
Commission's draft NEPA document is issued, it may be able to use the 
comments filed on that document to satisfy its own public notice and 
comment requirements, and still have sufficient time to take 
substantive action on the water quality certification application 
within a one-year period.\240\ Although VANR supports the single 
environmental document concept, it

[[Page 51096]]

concludes that either the license application or REA notice deadline 
should generally be late enough to ensure that its processes can be 
concluded before an existing license expires.
---------------------------------------------------------------------------

    \238\ Alaska suggests that for projects in that state an even 
later time may be appropriate if at some time it exercises water 
quality certification authority, because a CZMA consistency 
certification in that state would have to precede issuance of water 
quality certification.
    \239\ 33 U.S.C. 1344.
    \240\ California, WGA, EPA.
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    260. Oregon and HRC similarly recommend that the deadline date 
should be established by agreement between the participants and the 
state on a project-by-project basis. They state that the best time to 
file the water quality certification application is when the studies 
are sufficiently complete to provide reasonable assurance of a 
supportable decision, so long as there is sufficient remaining time to 
complete the Commission's NEPA analysis and other steps and issue a new 
license before an existing license expires. Other factors Oregon would 
take into account include whether the state has public participation 
and SEPA requirements that rely on the federal environmental analysis.
    261. We cannot accept an open-ended deadline date to be negotiated 
in each proceeding. That would introduce an enormous element of 
uncertainty into the process and subordinate the Commission's license 
process to the convenience of the parties or the processes of the water 
quality certification agency. Neither can we accept a deadline of 60 
days following issuance of the draft NEPA document. First, this would 
be well over three years after the Commission-approved study plan is 
finalized. Second, in some states the potential license applicant may 
learn from pre-filing consultation with the certifying agency or tribe 
all of the data it will be required to produce, but in others this is 
not determined until an application has been filed. The draft NEPA 
document is issued at a point approximately 14 months prior to 
expiration of an existing license. Even if the state promptly 
determines what additional information is required, it is highly 
unlikely that the data could be gathered and a certification issued 
within the remaining time before license expiration. If the state does 
not act promptly, as much as a year could be lost from the remaining 
time.
    262. California does not explain how the Commission's draft NEPA 
document could serve that state's public notice and comment 
requirements when there is no application pending for water quality 
certification. Absent that application, there would be no reason to 
think the state would consider the evidentiary record complete, or that 
the alternatives considered in the Commission's NEPA document would 
resemble the contents of a water quality certification. In this 
connection, New York states that it requires water quality 
certification applicants to submit studies or data based on pre-project 
conditions. Maine states that its water quality certification agency 
will not participate in the Commission's study dispute resolution 
process because of state sovereignty concerns and because an 
unfavorable decision in the Commission's process would make it more 
difficult to require the requested data through its own processes.
    263. California indicates that the Commission need not establish a 
water quality application deadline because states have an incentive to 
informally consult with the potential applicant before the water 
quality application is filed to ensure that they have the data 
necessary to issue water quality certification before the existing 
license expires and thereby ensure that the environmental improvements 
included in the certification will timely go into effect. That 
incentive exists now, yet the single most common cause of new licenses 
not being issued prior to expiration of the existing license is the 
absence of water quality certification.
    264. In sum, the latest date we can accept for filing of the water 
quality certification application is 60 days following the REA notice 
for all processes. This provides two to two and one-half years 
following issuance of the Commission-approved study plan for the 
potential applicant and the state agency or Indian tribe to determine 
what, if any, additional information will be required for a complete 
water quality certification application, and for the applicant to 
collect the data and file an application before the Commission issues 
its REA notice.\241\ If an application is filed at that point and the 
state has not yet determined what additional information it will 
require, it is highly unlikely that the certification will be issued 
before an existing license expires.
---------------------------------------------------------------------------

    \241\ As discussed above in this section, this is a minimum time 
that assumes the certification agency has not previously made its 
information requirements known to the potential applicant.
---------------------------------------------------------------------------

    265. Since 1991, our policy has been to deem a water quality 
certification agency to have waived certification if it has not denied 
or granted a request for certification within one year after the 
request is filed. A few commenters recommend that we change the policy 
so that the statutory one-year period for action established by CWA 
Section 401 is deemed to begin when the state deems the application to 
be complete.\242\ We decline to do so. This was our practice prior to 
1991, but it was found to be unduly burdensome because it put the 
Commission in the frequently difficult posture of trying to ascertain 
and construe the requirements of many and divergent state statutes and 
regulations. The existing rule, in contrast, is clear and simple.\243\
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    \242\ VANR, PFBC, IDEQ, EPA.
    \243\ See Order No. 533, Regulations Governing Submittal of 
Proposed Hydropower License Conditions and other Matters, 55 FR 
23108 (May 20, 1991); FERC Stats. & Regs. Regulations Preambles 
1991-1996 ] 32,921 at p. 30,135 (May 8, 1991).
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3. Coastal Zone Management Act
    266. Alaska seeks assurance that our consideration of coordination 
and consultation with states includes CZMA issues. Coordination with 
state agencies that issue consistency certifications under the states' 
approved Coastal Zone Management Plans should begin with development of 
the process plan and schedule, in the same manner as coordination with 
the water quality certification process. We have added state agencies 
with CZMA authorities to the list of agencies with which a potential 
applicant must consult,\244\ and strongly encourage such agencies to 
participate in the pre-filing consultation process.
---------------------------------------------------------------------------

    \244\ 18 CFR 5.1(d).
---------------------------------------------------------------------------

N. Tribal Issues

    267. In the NOPR we proposed to establish the position of Tribal 
Liaison as a single, dedicated point of contact and a resource to which 
Native Americans can turn for assistance in dealing with the Commission 
regardless of the proceeding or issue. We also proposed to contact 
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.\245\
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    \245\ 68 FR at p. 14002; IV FERC Stats. & Regs. ] 32,568 at p. 
34,717.
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1. Consultation Policy
    268. Indian tribes offered many comments on the Commission's trust 
responsibility as it relates to treaty rights, legislation, and 
executive orders. Several tribes state that as sovereign entities, they 
have government-to-government consultation rights which differ from 
those applicable to agencies and the general public, because they must 
be determined by mutual agreement between the Commission and individual 
tribes in a case-specific and issue-specific context.\246\
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    \246\ S-B, S-P, CRITFC, NW Indians, Nez Perce, Umatilla, GLIFWC, 
NF Rancheria.

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[[Page 51097]]

    269. Many commenters \247\ also noted their appreciation for the 
Commission's discussion, but stated that the government-to-government 
consultation process should be specifically defined in the regulations, 
so as to clarify the role of tribes in the licensing process and to 
prevent confusion between tribal consultation and consultation with 
other entities. They state that the rules should be sufficiently 
flexible to accommodate case-specific circumstances and incorporate 
recognition of treaty rights into decisions on studies, resource impact 
analyses, and license conditions.
---------------------------------------------------------------------------

    \247\ Nez Perce, Menominee, NF Rancheria, Maidu, NW Indians, 
CRITFC, S-P, CRITFC. NHA and Interior agree.
---------------------------------------------------------------------------

    270. Various specific suggestions were also made regarding tribal 
consultation. For instance, the Tribal Group indicates that tribal 
consultation should begin when the Commission sends the licensee the 
advance notice of license expiration. GLIFWC, citing tribal government 
decision-making processes, and NF Rancheria, asserting a need for as 
complete a record as possible when the NOI is filed, support pre-NOI 
contacts between the Tribal Liaison and the potentially affected 
tribes. Catawba and Choctaw state that consultation needs to begin with 
the chief or governing body, rather than other tribal members or 
employees. Catawba also recommends that Commission staff visit tribal 
lands in order to understand local issues. The Tribal Group recommends 
including in the regulations a requirement for a meeting between the 
Commission, potentially affected tribes, and other concerned Federal 
agencies shortly after notice of the NOI and PAD is issued. The Tribal 
Group and others \248\ also recommend that certain points in the 
licensing process be designated at which the Commission and tribes 
would assess consultation to date and seek agreement on next steps to 
ensure that appropriate communication takes place throughout the 
process.\249\ Maidu states that the regulations must specifically 
recognize the tribes' right to comment on cultural and historical 
resources study proposals.
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    \248\ Nez Perce, Umatilla, Interior.
    \249\ Interior recommends that, in addition to a pre-NOI check, 
there should be a check point when the parties receive the potential 
applicant's proposed study plan and another when the application has 
been filed.
---------------------------------------------------------------------------

    271. Concerns were also expressed about the timing of consultation. 
One example is that some tribes require any agreement with another 
entity to be ratified by an executive board, while some require only 
the agreement of the tribal chief.\250\ Another concern is that tribal 
councils don't meet according to Commission schedules, but have their 
own schedules. This may involve meetings on a monthly, quarterly, or 
other basis, so that advance notice of schedules is very 
important.\251\
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    \250\ Fort Peck, NF Rancheria.
    \251\ Catawba, Choctaw.
---------------------------------------------------------------------------

    272. S-P states that tribal sovereignty requires issues scoping to 
be separate for tribes. NW Indians, on the other hand, suggest that 
tribes need to be in the same scoping process with other entities 
because they are likely to have overlapping issues and because the 
interests of other participants (such as recreational users of project 
lands) may be adverse to those of the tribes.
    273. In light of these comments, we have decided to take a three-
pronged approach to better fulfill our trust responsibility. The first 
prong is to publish in our regulations a policy statement on tribal 
consultation. The policy statement was developed from our review of the 
written policies of other Federal agencies concerning the trust 
responsibility and government-to-government consultation.\252\ The 
policy statement is being issued contemporaneous with this final rule 
in a separate docket \253\ and will appear in part 2 of the 
Commission's regulations, ``General Policy and Interpretations.'' \254\ 
The policy statement will apply to all of the Commission's program 
areas and, for hydroelectric licensing, to all licensing proceedings, 
regardless of which process is used.
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    \252\ We reviewed the policies of other independent agencies, 
including the Federal Communications Commission, FCC No. 00-207 
(June 8, 2000), 16 FCC Rcd 4078; 2000 FCC LEXIS 3245; 20 Comm. Reg. 
(P&F) 1316; the Federal Emergency Management Agency, ``Final Agency 
Policy for Government-to-Government Relations with American Indian 
and Alaska Native Tribal Governments (Sept. 25, 1998), 64 Fed. Reg. 
2096 (Jan. 12, 1999); the Environmental Protection Agency (EPA), 
Memorandum to all EPA Employees from Christine Todd Whitman, EPA 
Administrator, dated July 12, 2001; and the Nuclear Regulatory 
Commission (NRC), Memorandum to NRC Commissioners from William D. 
Travers, Executive Director for Operations, dated February 2, 2001.
    \253\ Order No. 635 Policy Statement on Consultation with Indian 
Tribes in Commission Proceedings (PL03-4-000), III FERC Stats. & 
Regs., Regulations Preambles 104 FERC ] 61,108 (July 23, 2003).
    \254\ 18 CFR 2.1(c).
---------------------------------------------------------------------------

    274. The policy statement recognizes the unique relationship 
between the Federal government and Indian tribes as defined by 
treaties, statutes, and judicial decisions. It acknowledges the 
Commission's trust relationships. It states that the Commission will 
endeavor to work with the tribes on a government-to-government basis 
pursuant to trust responsibilities, the FPA, and any other statutes 
governing the Commission's authority. It notes that the Commission 
functions as a neutral, quasi-judicial body and as such is bound by the 
APA and Commission rules regarding off-the-record communications. It 
states that the Commission will assure tribal issues and interests are 
considered in making decisions. Specifically to the hydroelectric 
program, it states that the Commission will notify tribes at the time 
of the NOI and will consider comprehensive plans prepared by tribes or 
intertribal organizations.
    275. The second prong of our approach is to establish the Tribal 
Liaison position, discussed below. The third prong is inclusion in the 
regulations of a meeting with willing Indian tribes no later than 30 
days after filing of the NOI.\255\
---------------------------------------------------------------------------

    \255\ 18 CFR 5.7.
---------------------------------------------------------------------------

    276. NW Indians and S-B state that the Commission's rules must 
acknowledge that the trust responsibility supersedes public interest 
balancing under the FPA. We do not agree. The Commission carries out 
its trust responsibility towards Indian tribes in the context of the 
FPA, and the trust responsibility does not require the Commission to 
afford tribes greater rights than they would otherwise have under the 
FPA.\256\
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    \256\ City of Tacoma, WA, 71 FERC ] 61,381 at p. 62,493 (1995); 
Skokomish Indian Tribe, 72 FERC ] 61,268 (1995); See also FPC v. 
Tuscarora Indian Nation, 362 U.S. 99 at p. 118 (1960), reh. denied, 
362 U.S. 956; and City of Tacoma, WA, 89 FERC ] 61,275 (1999). In 
this regard, we note particularly that the Tribal Group agreed that 
government-to-government consultation must be consistent with the 
Commission's ex parte regulations.
---------------------------------------------------------------------------

    277. We will not attempt to further define the government-to-
government consultation process in the regulations. The review of 
tribal comments above makes clear that there is no consensus on what 
such specific provisions might be. The one consistent comment is that 
an effective process needs to be established in consultation with 
individual tribes. Under these circumstances, we conclude that the most 
effective way to move forward is to issue the policy statement; include 
a provision in the integrated process regulations to ensure that tribal 
consultation begins, at the latest, no later than 30 days after 
issuance of the NOI; and establish the Tribal Liaison.
    278. Although some other Federal agencies have done so, we will 
also not include a more general definition of tribal consultation in 
the regulations. BIA, for instance, is guided by the definition of the 
Advisory Council in the latter's regulations governing

[[Page 51098]]

consultation under Section 106 of the NHPA, 36 CFR 800.16(f). This 
regulation, which is not specific to tribal consultation, defines 
consultation as ``the process of seeking, discussing and considering 
the views of other participants, and, where feasible, seeking agreement 
with them regarding matters arising in the Section 106 process.'' It 
adds that ``[The Secretary of Interior's] `Standards and Guidelines for 
Federal Agency Preservation Programs pursuant to the National Historic 
Preservation Act' provide further guidance on consultation.''
    279. In our view, tribal consultation pursuant to our trust 
responsibility encompasses far more than implementation of NHPA Section 
106. It includes every issue of concern to an Indian tribe related to a 
treaty, statute, or executive order where the Commission can, through 
the exercise of its authorities under the FPA, fulfill its trust 
responsibility. That is a very broad concept, and we are convinced that 
establishing the consultation process with respect to any particular 
case through direct communications with the affected tribes will be 
more meaningful than any general language we could put in the 
regulations.\257\
---------------------------------------------------------------------------

    \257\ S-P states that the rules should require each license 
proceeding to include an assessment of treaty rights and an 
agreement with the tribe on how those rights will be honored. 
Although treaty rights need to be considered, S-P appears to suggest 
that the Commission and the tribe must reach agreement on the 
substantive disposition of the license application. That is 
something we cannot do consistent with our statutory 
responsibilities.
---------------------------------------------------------------------------

2. Tribal Liaison
    280. Our proposal to establish a Tribal Liaison was supported by 
all of the commenting tribes and the Advisory Council.\258\ There is a 
consensus among the commenters that the liaison should not be merely a 
clerical position, but should also not have decisional authority.\259\
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    \258\ S-P, Nez Perce, NW Indians, CRITFC, Umatilla, GLIFWC, HRC, 
Advisory Council, Menominee, Skokomish, Interior, NF Rancheria.
    \259\ S-P, Nez Perce, NW Indians, CRITFC, Umatilla, GLIFWC, 
Menominee.
---------------------------------------------------------------------------

    281. Commenters suggest various roles and responsibilities for the 
Tribal Liaison. These include facilitating government-to-government 
consultation by directing tribes to the right person or persons to deal 
with substantive or policy issues; ensuring that communications are 
maintained between tribal representatives and Commission staff 
throughout the proceeding; \260\ assisting tribal knowledge of and 
participation in the Commission's processes; \261\ educating Commission 
staff about tribes and the trust responsibility and treaty 
obligations,\262\ assisting tribes in learning how to access and 
effectively use the informational resources of the Commission's Web 
site; \263\ and informing tribes of activities at a project during 
licensing and throughout the term of a license that may affect tribal 
resources on or off the reservation.\264\
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    \260\ NW Indians, Nez Perce, Umatilla, GLIFWC, Menominee. They 
indicate that the correct person would depend on the issues under 
consideration; e.g., a technical issue dealing with a fisheries 
study would be dealt with by a fishery biologist, while an issue 
concerning the appropriate elements of government-to-government 
consultation with the tribe might be directed to senior Commission 
staff. We agree.
    \261\ SCE.
    \262\ GLIFWC, Menominee.
    \263\ GLIFWC.
    \264\ Interior.
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    282. GLIFWC and Menominee state that because the process for 
government-to-government consultation needs to be developed in 
agreement with each tribe, the roles and responsibilities of the Tribal 
Liaison cannot be fully determined at the outset, but must evolve in 
response to the development of tribal-specific agreements.
    283. The Tribal Group essentially endorsed all of these recommended 
responsibilities and added the following:
    [sbull] Coordinate with tribal liaisons at other agencies;
    [sbull] Help determine which tribes may be affected by likely 
future relicensing applications or original license applications;
    [sbull] Inform potentially affected tribes about potential future 
relicensing applications and facilitate tribal participation in 
rulemaking proceedings;
    [sbull] Become educated about the rights of Indians;
    [sbull] Assist tribes in making known their issues and views on 
compliance with treaties and the trust responsibility;
    [sbull] Ensure that tribes are informed of studies and information 
with cultural resources or treaty rights implications;
    [sbull] Manage communications between the Commission and tribes 
when the ex parte rule is in effect;
    [sbull] Facilitate communications between applicants and tribes; 
and
    [sbull] Facilitate informal dispute resolution between the 
applicant and a tribe.
    284. Only Skokomish and NW Indians suggest that the Tribal Liaison 
should play an active role in the substantive resolution of licensing 
proceedings. NW Indians recommend that the Tribal Liaison or Liaisons 
should be educated about individual tribes and their interests in 
specific proceedings and act as their advocate within the Commission.
    285. We agree with the majority of the commenters that the Tribal 
Liaison should be a facilitator of government-to-government 
consultation, and should not be responsible for resolution of 
substantive issues. The latter requires expertise with specific 
resources, plus a thorough knowledge of the facts relevant to a 
specific case. The Commission employs technical experts for such 
matters, as do many tribes. The Tribal Liaison will provide expertise 
with respect to matters of process.
    286. Regarding the specific responsibilities of the position, the 
Tribal Liaison will seek to educate Commission staff about tribal 
governments and cultures and to educate tribes about the Commission's 
various statutory functions and programs. The Tribal Liaison will work 
with the tribes during Commission proceedings, to ensure that the 
tribes' views are appropriately considered at every step of the 
process. The Tribal Liaison will act as a guide for the tribes to 
Commission processes, and will strive to ensure that consultation 
requirements are met The Tribal Liaison will have considerable 
flexibility in carrying out these responsibilities, consistent with the 
evolving nature of tribal consultation.
    287. Various commenters indicate that there are too many tribes and 
too many tribe-specific, case-specific, and interrelated regional or 
watershed issues for one person to understand and act upon. Some 
suggestions in this regard include multiple liaison positions based on 
regions of the country, watersheds or river basins, or sub-regions 
within a state.\265\ Pacific Legacy suggests that the efforts of the 
Commission's liaison should be complemented by a liaison from each 
tribe for each project, to be funded by the applicant. The Tribal Group 
stated that the Tribal Liaison should be a regional position, with an 
overall coordinator position at the Commission's headquarters.
---------------------------------------------------------------------------

    \265\ Pacific Legacy, GLIFWC, Menominee, CRITFC, S-P, 
California, Interior.
---------------------------------------------------------------------------

    288. Our decision on the number of Commission staff serving as 
Tribal Liaison involves two basic considerations; the responsibilities 
of the position and the level of effort necessary to effectively carry 
out the responsibilities. At this point we can define the 
responsibilities of the position, but only time and experience will 
tell us with certainty what level of effort is necessary.

[[Page 51099]]

3. NHPA Section 106
    289. In response to licensee requests, the NOPR clarified how the 
Commission meets its responsibilities to Indian tribes under NHPA 
Section 106.\266\ The Advisory Council states that this discussion is 
accurate. NHA however states that while the Historic Resources 
Management Plan (HPMP) guidance document issued jointly by the 
Commission and the Advisory Council \267\ is useful, the documentation 
requirements for license applications are inconsistently applied. It 
states that some staff require a draft Programmatic Agreement (PA) when 
the application is filed, others want the HPMP to be complete before 
the application and prior to the PA, and in other cases these documents 
are allowed to be completed after the license is issued. NHA states 
that the proposed integrated process regulations are clear that a draft 
HPMP needs to be filed with the application when the potential 
applicant has been designated as the Commission's non-Federal 
representative, but that the traditional process and ALP regulations 
need to provide the same clarity.
---------------------------------------------------------------------------

    \266\ 68 FR at pp. 14001-003; IV FERC Stats. & Regs. ] 32,568 at 
pp. 34,716-718.
    \267\ This document provides guidance to applicants and 
licensees for preparing their historic resource management plans. It 
is available on the Commission's Web site at http://www.ferc.gov/hydro/docs/hpmp.pdf.
---------------------------------------------------------------------------

    290. NHA and others \268\ also request that we explain how the 
Section 106 consultation process relates to the overall licensing 
process. Section 106 consultation begins at the same time as the 
licensing process; that is, when the NOI and PAD are filed and 
distributed. 18 CFR Sec.  5.8(b)(2) provides for the license applicant 
to request to initiate consultation at the beginning the pre-filing 
consultation or, if it is not designated as the Commission's 
representative for this purpose, for the Commission to initiate 
consultation.\269\ The Commission-approved study plan and schedule 
provided for in 18 CFR 5.11 through Sec.  5.13 should include studies 
pertaining to issues raised pursuant to Section 106. The PA must be 
completed prior to license issuance, but the HPMP can be prepared prior 
to or following issuance of the license.
---------------------------------------------------------------------------

    \268\ E.g., Spiegel.
    \269\ The Advisory Council and NHA requested this provision.
---------------------------------------------------------------------------

    291. They also request that the Commission undertake in such 
circumstances to do any necessary studies itself. The fact that a 
potential applicant does not become the Commission's non-Federal 
representative, for whatever reason, does not relieve it, as the 
project proponent, of the responsibility to undertake the information 
gathering or studies the Commission determines are necessary to provide 
the evidentiary record to support a reasoned decision.
4. Other Matters
    292. The Tribal Group recommended that the regulations require each 
potential applicant to designate one person as its point of contact for 
Indian tribes. We think this is a matter best worked out via 
consultation between potential applicants and individual tribes.
    293. Finally, Washington, Maidu, and Skagit indicate that 
participation in licensing is costly and that the Commission should 
work with states and tribes to identify and develop sources for funding 
of tribal participation that will foster consistent, active 
participation and rapid turn-around times by tribes. CRITFC recommends 
that the Commission require applicants to fund liaisons under the 
control and direction of tribes. NW Indians add that even if the 
Commission cannot require applicants to fund tribal participation, it 
should encourage them to do so.
    294. The Commission is aware that participation in licensing 
proceedings can entail significant expense. Federal funding for Indian 
tribes is however the responsibility of other Federal agencies. We note 
however that some applicants have found such funding to be beneficial 
in specific circumstances, and we encourage applicants to consider 
whether it may be beneficial in the context of their potential 
applications.

O. Environmental Document Preparation

1. Cooperating Agencies Policy
    295. The NOPR proposed to modify, as to federal agencies, the 
Commission's policy that an agency which has served as a cooperator in 
the preparation of a NEPA document may not thereafter intervene in the 
same proceeding, and to make conforming revisions to our ex parte rule. 
The rationale for the existing policy is that cooperating agency staff 
will necessarily engage in off-the-record communications with the 
Commission staff concerning the merits of issues in the proceeding, so 
that, if the agency is allowed to become an intervenor, it will then 
have access to information that is not available to other parties, in 
violation of the prohibition in the APA and our rule against on ex 
parte communications.\270\
---------------------------------------------------------------------------

    \270\ See, e.g., Rainsong Company, 79 FERC ] 61,338 at 62,457 
n.18 (1997).
---------------------------------------------------------------------------

    296. In the NOPR, we concluded that the likely benefits of better 
coordination between federal agencies in the exercise of their 
responsibilities, a more complete record, and reduced duplication of 
effort outweighed 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. To minimize the 
potential for prejudice to other parties, we proposed to require that 
any cooperating agency that provides the Commission with study results 
or other information also serve such materials on parties to the 
proceeding.
    297. State agencies and NGOs generally support this proposal, and 
request that we also reverse the policy for state agencies, including 
water quality certification agencies.\271\ SCE also supports the 
proposed change, provided that cooperating agencies are precluded from 
challenging the content and completeness of a jointly-prepared 
environmental document.
---------------------------------------------------------------------------

    \271\ Washington, Georgia DNR, Wisconsin DNR, Washington DNR, 
California, CSWRCB, Interior, NOAA, HRC. California asserts that the 
prohibition on ex parte communications would not be an issue with 
respect to states if the Commission were to change its practice of 
preparing NEPA documents that include, in addition to an 
environmental impact analysis, analysis and recommendations to the 
Commission concerning which of the reasonable alternatives 
considered is the preferred alternative. California would have us 
put all such analysis in a separate document. California further 
suggests that the ex parte issue could be obviated if the Commission 
staff who process the application and prepare the NEPA document were 
separate from the decisional staff that advised the Commission. We 
will not adopt California's suggestions because preparing two 
environmental documents in each case and requiring that two separate 
sets of Commission staff be assigned to every proceeding would 
likely add expense and delay to proceedings, and would place an 
undue burden on our resources. Moreover, given that decisions about 
the scope and conduct of the environmental analysis may have a 
significant bearing on the ultimate outcome of a proceeding, we are 
unsure that California's proposals would obviate concerns about 
fairness and ex parte requirements.
---------------------------------------------------------------------------

    298. NHA does not take a position on the proposed policy change, 
but suggests that any change in policy occur after the transition 
period, so as not to disrupt ongoing proceedings. PG&E and Duke assert 
that if the policy change is to apply to gas certification proceedings 
as well, the Commission should first provide public notice and an 
opportunity for comment.
    299. Several commenters strongly oppose the proposed change in 
policy.\272\ They assert that the changed policy would make cooperating 
agencies who also intervene ``super parties'' with

[[Page 51100]]

access to more information than others, and thus would violate the 
APA's prohibition against ex parte communications.\273\ In support of 
their contentions, these commenters cite the Commission's statement 
when it amended its ex parte rule that ``a hearing is not fair when one 
party has private access to the decision maker and can present evidence 
or argument that other parties have no opportunity to rebut,''\274\ as 
well as case law. See e.g., Home Box Office v. FCC, 567 F.2d 9 (D.C. 
Cir. 1997) (HBO); Portland Audubon Society v. Endangered Species 
Committee, 984 F.2d 1534 (9th Cir. 1993) (Audubon); Professional Air 
Traffic Controllers Organization v. Federal Labor Relations Authority, 
685 F.2d 547 (D.C. Cir. 1982) (PATCO).\275\
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    \272\ See, e.g., Alabama, Duke, EEI, Idaho, Spiegel.
    \273\ See 5 U.S.C. 557(d)(1)(A) & (B).
    \274\ Order No. 607, Regulations Governing Off-the-Record 
Communications, 64 FR 51222 (Sept. 22, 1999); FERC Stats. & Regs. ] 
31,079 at 30,878 (Sept.15, 1999).
    \275\ APA Section 557(d)(1) bans ex parte communications to or 
from ``interested persons'' outside the agency. The PATCO court held 
that the ban is not intended to have limited application and that 
``[t]he term `interested person' is intended to be a wide, inclusive 
term covering any individual or other person with an interest in the 
agency proceeding that is greater than the general interest the 
public as a whole may have.'' 685 F.2d at 562. Audubon, which holds 
that the President and White House staff are not exempt from Section 
557(d)(1), similarly notes that the legislative history of the 
provision confirms the ban is to be broadly construed in order to 
achieve the appearance and reality of open decision-making. 984 F.2d 
at 1543-44. HBO holds that all relevant information must be 
disclosed in order to ensure the efficacy of judicial review. 567 
F.2d at 54.
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    300. We continue to believe strongly that maximizing cooperation 
between the Commission and the federal resource agencies will lead to 
optimal results in the licensing process. However, we conclude that 
precedent indicates that allowing federal agencies to serve both as 
cooperators and intervenors in the same case would violate the APA. Our 
proposal to change the existing policy rested on a plain meaning 
reading of the APA provisions which the courts have not adopted. 
Rather, the courts have interpreted the APA more broadly on this point 
in order to ensure that the purposes of the statute are fulfilled. We 
therefore will not change the policy precluding cooperating agencies 
from also being intervenors.
2. NEPA Document Contents
    301. California and PFBC state that the filing requirements for 
license applications include information on the costs of the 
applicant's proposed PM&E measures, but not information on the economic 
benefits of those measures. They assert that the NEPA document should 
contain a much expanded discussion of the latter. Our policy concerning 
this matter was discussed above.\276\
---------------------------------------------------------------------------

    \276\ See Section III.L.1.
---------------------------------------------------------------------------

    302. NOAA Fisheries recommends that the regulations include a 
standard methodology ``to calculate project economics.''\277\ Economic 
evaluations in the context of our public interest analysis cannot be 
reduced to a formula. For example, one component is a comparison of the 
current cost of project power under each reasonable alternative to the 
current cost of the most likely alternative source of power. The 
comparison helps to support an informed decision concerning what is in 
the public interest.\278\ The estimated current cost of project power 
under each alternative is of course the sum of many other estimates, 
principally of the costs of PM&E measures proposed by applicants, 
agencies, Indian tribes, and NGOs. PM&E measures are moreover not 
standardized in any way, but are made on a site-specific basis, and 
often require, in addition to capital cost estimates, annualized 
estimates of long-term operation and maintenance expenses. Such 
estimates rest on myriad debatable assumptions upon which reasonable 
people often disagree.
---------------------------------------------------------------------------

    \277\ NOAA Fisheries, p. 8.
    \278\ See Mead Corporation, Publishing Paper Division, 72 FERC ] 
61,027 at pp. 61,068-069 (1995).
---------------------------------------------------------------------------

    303. The means of determining the current cost of the most likely 
alternative source of power also cannot be reduced to a formula. It is 
based on the project-specific operating regime (e.g., run-of-river or 
peaking) and is made in the context of regional power markets. For 
instance, the most likely alternative to baseload hydroelectric 
capacity in some regions is baseload power from a coal-fired plant. The 
most likely alternative to hydroelectric energy is typically a combined 
cycle gas-fired combustion turbine. The value of such power varies from 
region-to-region and time-to-time. Each NEPA document fully explains 
the determination of the most likely alternative source of power and 
the basis for its valuation.
    304. The NOPR proposed to accompany draft NEPA documents and 
environmental assessments with draft special license articles (i.e., 
articles specific to a project).\279\ NHA supports this, but states 
that standard form license articles should also be included in order to 
enable the U.S. Forest Service to address concerns it purportedly has 
about the Commission's administration of projects on National Forest 
lands. The U.S. Forest Service did not raise this issue. In any event, 
the standard form license articles are a matter of public record \280\ 
and anyone may request the Commission to modify them.
---------------------------------------------------------------------------

    \279\ 68 FR at pp. 14004-005; IV FERC Stats. & Regs. ] 32,568 at 
p. 34,722.
    \280\ The current standard form articles are published at 54 FPC 
1799-1928 (1975).
---------------------------------------------------------------------------

    305. The NOPR proposed to revise our practice in preparing NEPA 
documents to more clearly separate resource impact analysis from 
decisional analysis.\281\ California reiterates its prior assertion 
that we should issue NEPA documents containing only resource impact 
analysis on the ground that it would eliminate any ex parte problem 
associated with state agencies acting as cooperating agencies. We 
rejected this argument in the NOPR \282\ and above.\283\
---------------------------------------------------------------------------

    \281\ 68 FR at p. 14004; IV FERC Stats. & Regs. ] 32,568 at pp. 
34,721-722.
    \282\ 68 FR p. 14004; IV FERC Stats. & Regs. ] 32,568 at p. 
34,721.
    \283\ Section III.O.1.
---------------------------------------------------------------------------

    306. NHA, SCE, HRC and others support our proposal to better 
separate the environmental impact analysis from decisional analysis; 
that is, decisional analysis will appear only in the comprehensive 
development section of the NEPA document. NHA and SCE ask that we make 
clear that discussion of alternatives and potential mitigation measures 
in the NEPA document is part of the resource impact analysis under 
NEPA. We are not entirely clear what these commenters are requesting. 
We think it is self-evident that the environmental impact analysis 
under NEPA will cover alternatives and potential mitigation measures. 
These things are however also likely to be considered, or at the least 
referred to, in the decisional analysis.
    307. HRC requests that a NEPA document prepared in cooperation with 
another agency include in the environmental analysis the views of each 
agency where there is a disagreement in the agencies' conclusions 
concerning impacts to resources. We think the cooperating agencies 
should decide how best to present the resource impact analysis in such 
a case.
    308. RAW continues to assert that the baseline for environmental 
analysis on relicensing should be pre-project conditions. We rejected 
such assertions in the NOPR,\284\ and RAW offers no new arguments that 
would cause us to change our well-established and judicially-approved 
policy in this regard.
---------------------------------------------------------------------------

    \284\ 68 FR at p. 13995; IV FERC Stats. & Regs. ] 32,568 at p. 
34,706.
---------------------------------------------------------------------------

    309. Finally, VANR opposes our practice of issuing a single

[[Page 51101]]

environmental assessment in some cases. VANR believes this increases 
the likelihood of process delay in the form of requests for rehearing. 
A single environmental assessment is issued only when the Commission is 
able to make a finding of no significant impacts, which is generally in 
cases where there is little or no controversy. The parties are in any 
event afforded an opportunity to comment before the order acting on the 
license application is issued. The integrated process makes no change 
in this practice.\285\
---------------------------------------------------------------------------

    \285\ See 18 CFR 5.24(d).
---------------------------------------------------------------------------

3. Endangered Species Act Consultation
    310. NOAA Fisheries and Interior state that the integrated process 
regulations should clearly identify points at which ESA consultation 
occurs, such as initiation of formal and informal consultation.\286\ 
NOAA Fisheries also recommends language to encourage either the 
potential applicant or the Commission staff to initiate informal or 
formal consultation when the process begins.
---------------------------------------------------------------------------

    \286\ Washington and Washington DNR state that ESA consultation 
should begin with the NOI and be completed before the application is 
accepted for filing.
---------------------------------------------------------------------------

    311. The part 5 regulations are replete with references to ESA 
consultation. The section on the NOI states that the NOI may include a 
request by the potential applicant to be the Commission's designated 
non-Federal representative for this purpose.\287\ The notice of 
commencement of proceeding will contain, if appropriate, a request by 
the Commission to initiate informal consultation and, if applicable, 
designate a non-Federal representative.\288\ The PAD must include 
existing information on threatened and endangered species.\289\ One of 
the specified topics for the scoping meeting is a schedule for ESA 
consultation in the process plan and schedule.\290\ Study requests 
following this meeting should include requests related to threatened 
and endangered species.\291\ The application contents include a 
discussion of the status of ESA consultation.\292\ The tendering notice 
will update the processing schedule, if required, including ESA 
consultation.\293\
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    \287\ 18 CFR 5.5(e).
    \288\ 18 CFR 5.8(b)(2).
    \289\ 18 CFR 5.6(d)(3)(v).
    \290\ 18 CFR 5.8(b)(3)(viii).
    \291\ 18 CFR 5.9(a).
    \292\ 18 CFR 5.18(b)(3)(ii).
    \293\ 18 CFR 5.19(b).
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    312. In addition, although it is not reflected in the regulations, 
our well-established practice is to issue a biological assessment with 
the draft NEPA document, and the joint agency ESA regulations \294\ are 
clear concerning how and when Interior and Commerce are to respond to 
that document. In sum, we think the regulations we are adopting provide 
sufficient clarity concerning the interaction between the licensing 
process and ESA consultation.
---------------------------------------------------------------------------

    \294\ 50 CFR part 402.
---------------------------------------------------------------------------

    313. Interior, citing the Interagency Task Force report on ESA 
consultation,\295\ also implies that information gathering and studies 
for ESA purposes should be conducted independent of the rules for 
information gathering and studies in the licensing process. Interior 
offers no reason why this should be so, and it would be inconsistent 
with the entire thrust of the integrated process, which is to maximize 
coordination of Federal, state, and tribal processes.
---------------------------------------------------------------------------

    \295\ This report provides guidance for integrating and 
coordinating the procedural steps of the licensing and ESA Section 7 
consultation processes. The intent of the agreement report is to 
incorporate ESA issues into prefiling consultation on study needs, 
the filing of a draft biological assessment with the license 
application when possible, and integrating ESA issues with the NEPA 
document and 10(j) negotiations, so that all processes are on the 
same track. The ITF's guidance documents are posted on the 
Commission's Web site at http://www.ferc.gov on the hydro page.
---------------------------------------------------------------------------

    314. Finally, Washington DNR states a license or license amendment 
might be inconsistent with an existing Habitat Conservation Plan (HCP) 
approved by the USFWS and NOAA Fisheries for various species in 
Washington State and, if that were the case, the HCP would have to be 
amended.\296\ Washington DNR indicates that the Commission should 
require the licensee in such circumstances to reimburse Washington 
State for any costs associated with the HCP amendment. Decisions 
concerning funding of state agencies are however a legislative 
responsibility.
---------------------------------------------------------------------------

    \296\ The PAD is required to describe any applicable HCPs, so 
that any potential conflicts with a license or amendment proposal 
are brought to light early.
---------------------------------------------------------------------------

4. Fish and Wildlife Agency Recommendations
    315. The NOPR proposed to modify our regulations which set forth 
procedures for consideration under FPA Section 10(j)\297\ of 
recommendations made by Federal and state fish and wildlife agencies 
pursuant to the Fish and Wildlife Coordination Act.\298\ The proposed 
modifications would, with one minor exception, not change the existing 
procedures, but would simply restate the existing practices with more 
clear reference to the statutory standards. The only change in 
procedure would be that Federal and state fish and wildlife agencies 
would no longer receive separate notice by letter of the preliminary 
consistency determination that is made in the Commission's draft NEPA 
document (or single environmental assessment). In the future, service 
of the draft NEPA document would serve as notice.
---------------------------------------------------------------------------

    \297\ 16 U.S.C. 803(j).
    \298\ 16 U.S.C. 661 et seq.
---------------------------------------------------------------------------

    316. Oregon objects to the proposal to give notice of preliminary 
consistency determination in the draft NEPA document. Oregon suggests 
that notice by letter is necessary to ensure that state agencies do not 
miss the opportunity for 10(j) negotiations.\299\ This should not be a 
matter of concern. We are not aware of any case in which a Federal or 
state fish and wildlife agency has failed to receive the Commission's 
draft or final NEPA document.
---------------------------------------------------------------------------

    \299\ Oregon also urges us to defer to state agency 
recommendations instead of requesting additional support for 
recommendations that the Commission staff believes are not 
adequately supported on the record. Such deference would be 
inconsistent with the Commission's obligation to independently 
analyze all public interest issues. Our approach to consideration of 
10(j) recommendations is moreover long-established and judicially 
approved. See National Wildlife Federation v. FERC, 912 F.2d 1471 
(D.C. Cir. 1990); accord, American Rivers v. FERC, 187 F.3d 1007 
(9th Cir. 1999).
---------------------------------------------------------------------------

    317. Interior proposes that the regulations include criteria for 
the acceptance of 10(j) recommendations, based on a ``team'' approach 
in which the Commission staff and fish and wildlife agencies would 
confer before issuance of any preliminary consistency determination. 
However, at the point where the draft NEPA document or single 
environmental assessment is ready to be issued there has already been 
substantial consultation on these matters. Interior's proposal would 
also, for all practical purposes, be a pre-draft NEPA document 10(j) 
negotiation procedure. It would be inconsistent with our goal of 
expeditious resolution of licensing applications to provide an 
additional, duplicative process step.\300\
---------------------------------------------------------------------------

    \300\ Implementation of section 10(j) has been discussed by the 
Interagency Task Force on hydropower, which consists of staff from 
the Commission and other Federal agencies. Additional discussions 
may be conducted in the future, if necessary.
---------------------------------------------------------------------------

    318. Snohomish states that the regulations should specify the step 
in the integrated process at which the 10(j) process begins. The 
regulations state that the process begins when federal and state 
agencies submit their 10(j) recommendations in response to the REA 
notice.\301\
---------------------------------------------------------------------------

    \301\ 18 CFR 5.26(a).
---------------------------------------------------------------------------

    319. California asserts that it cannot reasonably be asked to make 
final 10(j)

[[Page 51102]]

recommendations without the benefit of the Commission's NEPA analysis. 
It recommends that we provide for preliminary 10(j) recommendations, 
which would be due 60 days after the REA notice, and final 
recommendations, which would accompany the agency's comments on the 
draft NEPA document. The 10(j) process however already includes a 
response by Commission staff to the 10(j) recommendations (the 
preliminary consistency determination), which initiates an opportunity 
for agencies to file responsive comments, including modifications to 
their 10(j) recommendations.\302\ That is not changed. We see no need 
to burden the process with a second opportunity to modify these 
recommendations.
---------------------------------------------------------------------------

    \302\ Although the process has always been conducted in a manner 
that contemplates modifications to 10(j) recommendations, the 
regulations may not be entirely clear in this respect. We have 
therefore clarified the regulation text. See 18 CFR 5.25(c).
---------------------------------------------------------------------------

    320. The NOPR proposes that modified mandatory terms and conditions 
be filed 60 days following the deadline date for comments on the draft 
NEPA document or environmental assessment. Washington suggests that the 
time frames for the 10(j) process should be on the same track as the 
track for mandatory conditions because there may be related issues. It 
states, for example, that a modified fishway prescription might be 
inconsistent with an earlier-filed 10(j) recommendation. The 10(j) 
recommendations and the Commission's preliminary consistency 
determination are in the public record and served on all parties to the 
proceeding. If a Federal or state agency or Indian tribe with mandatory 
conditioning authority elects to impose a condition inconsistent with a 
state agency's 10(j) recommendation, the mandatory condition would 
prevail.
    321. NOAA Fisheries states that the Commission's determinations 
that 10(j) recommendations are inconsistent with the FPA often rest on 
the conclusion that a recommended measure is too costly relative to the 
expected environmental benefits. NOAA Fisheries states that these 
determinations appear to be arbitrary because there is no standard 
formula for determining the cost of 10(j) recommendations. It asks that 
we establish a standard methodology for these determinations and 
include it in the regulations. NOAA Fisheries' concerns in this regard 
were addressed above.\303\
---------------------------------------------------------------------------

    \303\ Section III.O.2.
---------------------------------------------------------------------------

    322. In a related vein, Interior recommends that the regulations 
specify in detail procedures for determining pursuant to the 
comprehensive development standard of FPA Section 10(a) whether to 
accept the recommendations of parties to licensing proceedings, 
including 10(j) recommendations. The procedures for processing all 
aspects of a license application are set forth in the integrated 
process rules or in parts 4 and 16, as applicable. To the extent 
Interior may be requesting the establishment of a formula for 
determining the public interest, public interest determinations are 
made with reference to a myriad of statutory and regulatory provisions 
and case-specific factual circumstances and cannot be reduced to a 
formula.
    323. HRC does not request the establishment of a formula for 
acceptance or rejection of 10(j) recommendations, but does request that 
our consistency determinations provide a more specific explanation of 
how cost figures into each decision. The Commission is committed to 
providing a full explanation of how all relevant considerations are 
factored into its decisions.\304\
---------------------------------------------------------------------------

    \304\ HRC suggests that not making formal dispute resolution 
available for study disputes related to possible 10(a) and 10(j) 
recommendations increases the risk of disputes over the 
recommendations themselves. It urges us to increase the use of 
neutrals to resolve such disputes. We have not traditionally used 
neutrals in disputes between Commission staff and the parties to 
proceedings following the issuance of draft NEPA documents, but we 
are not categorically opposed to HRC's suggestion. As experience is 
developed with the formal pre-filing study dispute resolution 
process, it may make sense to further consider whether neutral 
technical experts could play a useful role in this area as well.
---------------------------------------------------------------------------

    324. Georgia DNR requests that we include in the integrated process 
formal guidelines to address state-listed threatened and endangered 
species. We do not believe there is a need for any additional 
guidelines concerning state-listed species, as consideration of them is 
already built into the integrated process. State fish and wildlife 
agencies should participate in development of the study plan and 
schedule, including NEPA scoping, then make recommendations concerning 
protection of state-listed species pursuant to FPA Section 10(j) in 
response to the REA notice.

P. Time Frame for Integrated Process

    325. The NOPR included a detailed, sequential description of the 
process steps in the proposed integrated process, including time frames 
for each of the process steps.\305\ We requested comments on which 
process steps might need to be adjusted, and which time frames, if any, 
should be specified in the regulations for purposes of guiding 
development of a process plan and schedule (including studies), and 
which may not be appropriate for specification in the regulations, but 
should be developed entirely in the context of case-specific 
facts.\306\ Many comments were filed on the proposed time frames. In 
this section we consider comments on the overall process.\307\ Comments 
on the time frames for specific steps are discussed with the relevant 
subject matter.
---------------------------------------------------------------------------

    \305\ NOPR Section III.E.2 and Appendix C.
    \306\ 68 FR at p. 14011; IV FERC Stats. & Regs. ] 32,568 at p. 
34,733.
    \307\ The Commission received several hundred specific 
recommendations regarding modifications to the regulation text. 
These recommendations may be discussed in the preamble in the 
context of a significant issue, but many recommendations are 
redundant of the recommendations of other commenters, or are 
technical corrections, or while meritorious and incorporated into 
revised regulatory text, do not require discussion in the preamble.
---------------------------------------------------------------------------

    326. Many commenters state that the overall process time frame of 
5.5 years is unrealistic.\308\ They cite the complex, multi-party, 
multi-jurisdictional nature of the proceeding; study requirements that 
often require more than one or two years of data; \309\ the likelihood 
of one or more occurrences that could impair the timely development of 
the evidentiary record, such as droughts; weather conditions such as 
heavy snowpack that can cause lengthy delays in the initiation of field 
work or may force the revision of planned studies; newly listed 
threatened and endangered species; the possibility that potential 
applicants may not adequately fulfill the study plan; the likelihood 
that some applications will be considered in the context of multi-
project environmental analyses covering projects in the same river 
basis with different expiration dates; \310\ and potential difficulties 
melding the integrated process with the processes of Indian tribal 
governments, particularly those with modest resources.\311\
---------------------------------------------------------------------------

    \308\ California, SCE, Oregon, PFMC, MPRB, PFMC, VANR, Oregon, 
GLIFWC, NHA, WPPD, S-P, CRITFC, Noe, Wisconsin DNR, Long View, PG&E, 
Snohomish, Xcel, Washington, ADK, IDEQ, Minnesota DNR, Interior, 
HRC, Menominee.
    \309\ California, Oregon, NOAA Fisheries, Interior, PFMC, and 
CRITFC point to such examples as mortality studies of anadromous 
fish, which require multiple release groups over as much as five 
years to obtain data from just one brood year.
    \310\ California.
    \311\ S-P, Menominee, GLIFWC, CRITFC.
---------------------------------------------------------------------------

    327. California and others state that strict adherence to a 5.5-
year time frame emphasizes speed at the expense of sound science and 
quality decision-making, will stifle meaningful public and agency 
participation, and will cause the process to break down, resulting in 
needless rehearings and appeals.

[[Page 51103]]

California recommends that we assume a process requiring at least 6.5 
years. Interior agrees and, if we adopt the 5.5-year process, change 
all of the 15-30 day time frames to 45-90 days. California also 
recommends that we modify the rule to provide for negotiated schedules.
    328. We are aware that there may be instances in which factors such 
as those cited above or others, such as lack of water quality 
certification, will prevent a license application from being developed 
and processed within the 5.5-year time frame, and that there will 
continue to be cases where annual licenses are issued. That said, we 
continue to think the best approach the Commission can take is to 
design a process that, to the greatest extent possible under the 
existing statutory scheme, addresses the causes of delay and disputes 
over the sufficiency of the record. The proposed integrated process was 
designed to do so. We are confident that the integrated process, with 
modifications based on the post-NOPR comments and consultation 
activities, offers the best means of meeting our goals.

Q. Settlement Agreements

1. Time Outs
    329. Many commenters urge us to reconsider our decision not to 
include specific provisions in the regulations for a ``time out'' 
period during which processing of a license application could be 
suspended while settlement discussions take place.\312\ Oregon suggests 
a period of 12-18 months would be appropriate. HRC similarly suggests 
that the processing schedule could be developed to include time for 
settlement discussions, with the schedule for the Commission's NEPA 
document adjusted upon the request of the parties to ensure that any 
settlement agreement which may be filed is one of the action 
alternatives.
---------------------------------------------------------------------------

    \312\ OWRC, Long View, Reliant, Oregon, CRITFC, Xcel, NHA, VANR, 
IDFG, GKRSE, Interior, Process Group. NYSDEC states that explicit 
provisions for time outs are not needed, but that the Commission 
should grant reasonable requests for suspensions that will help 
advance settlement talks. Georgia DNR supports a brief suspension of 
the schedule only where the Commission determines it is ultimately 
likely to expedite the licensing process. Only Alabama Power opposes 
a time out provision.
---------------------------------------------------------------------------

    330. These commenters do not disagree that the integrated process 
should help to foster settlements by ensuring early issue 
identification and production of information. They contend however that 
the labor intensive nature of the integrated process and settlement 
discussions, and the tight time frames in the integrated process, will 
prevent participants from participating simultaneously in both 
activities. They add that settlement agreements enhance the strength 
and durability of the license, help to avoid conflicting Federal and 
state license conditions, and minimize litigation.
    331. They also challenge our statement that the pressure a firm 
processing schedule places on the parties is an incentive to reach 
settlement. They argue that time outs increase the likelihood of 
settlements because it often takes significant time for all parties to 
fully understand the implications of various potential provisions, 
which is needed for complete buy-in to an agreement. They add that 
enforcement of strict deadlines, such as for responses to REA notices, 
will force parties to take adversarial positions.\313\ We continue to 
adhere to our conclusion in this regard, which is based on our 
experience.
---------------------------------------------------------------------------

    \313\ Interior states in this connection that it cannot engage 
in settlement negotiations that compromise its authorities, 
presumably by causing it to lose its conditioning authority by 
failing to meet deadlines in the licensing process. It states that 
if it agrees to participate in settlement discussions, the 
Commission must agree to accept as mandatory conditions any 
resulting settlement provisions, or to accept as timely filed any 
conditions that Interior may file if settlement negotiations fail. 
We cannot strike such a bargain, which would compromise the 
Commission's control of its own processes. Interior must weigh the 
risks of participation in settlement negotiations in each case.
---------------------------------------------------------------------------

    332. In response to the concerns expressed in the NOPR about 
maintaining timeliness, the commenters indicate that reaching 
settlement is more important than strict adherence to a schedule, and 
that the Commission can place reasonable limits on the amount of time 
that processing will be suspended while the parties negotiate and 
require periodic status reports. These comments essentially restate 
comments made prior to the NOPR.
    333. We are not inclined to grant requests for regulatory language 
that guarantees time outs or implies that they should be routinely 
granted. We think however there is benefit to codifying the 
considerations that should be addressed by parties who seek suspension 
of the procedural schedule to pursue settlement agreements. The 
provisions we are adopting in this connection make clear that a lack of 
progress toward the timely filing of a settlement agreement may cause 
the Commission to terminate any suspension of the procedural schedule 
that it has granted.\314\
---------------------------------------------------------------------------

    \314\ 18 CFR 5.29(g).
---------------------------------------------------------------------------

2. Other Matters Pertaining to Settlements
    334. The NOPR responded to many commenters who requested guidance 
in the regulations on what kinds of settlement provisions are or are 
not acceptable, including adaptive management programs, mitigation 
measures in lieu of additional studies, mitigation measures outside of 
existing project boundaries, and confidentiality agreements. In 
declining to adopt this recommendation, we explained our policies and 
practices in this regard, with citations to relevant orders. We further 
explained that it is inappropriate to put general guidance in the 
regulations because each settlement agreement measure must be evaluated 
individually in light of the entire record and factors identified in 
the FPA and other relevant legislation.\315\
---------------------------------------------------------------------------

    \315\ 68 FR at p. 14008; IV FERC Stats. & Regs. ] 32,568 at p. 
34,727-728.
---------------------------------------------------------------------------

    335. Several commenters renew their requests for guidance. Some 
essentially repeat their earlier submissions. Others state that the 
Commission's response in the NOPR, while helpful, is insufficient. 
Interior and Oregon, for example, request that we provide additional 
guidance by compiling case studies and examples of successful 
agreements.\316\ Regarding the second point, Interior and Oregon appear 
to be asking for guidance on the substantive content of settlement 
agreements. The best general guidance we can give is that we strive to 
approve and give effect to all uncontested settlement agreements to the 
maximum feasible extent, within the bounds of the law and consistent 
with the public interest. Instances where the Commission has rejected a 
substantive provision of a hydroelectric licensing settlement that is 
lawful and within our jurisdiction to enforce are quite rare. If there 
is any question concerning whether a potential settlement provision has 
been previously rejected by the Commission or is likely to be rejected, 
we encourage the parties to confer with the Commission staff.
---------------------------------------------------------------------------

    \316\ Interior makes the same request with respect to scientific 
studies and adaptive management plans.
---------------------------------------------------------------------------

    336. HRC acknowledges that decisions on settlement agreements are 
based on the law and the record of individual cases, but requests 
periodically updated guidance on the boundaries of the law concerning 
what is acceptable, formatted similarly to the Council on Environmental 
Quality's ``Forty Most Asked Questions Concerning CEQ's NEPA

[[Page 51104]]

Regulations.'' \317\ We think the statements concerning what the law 
requires are better made in formal orders or regulations than in 
guidance documents. The Commission staff stands ready to assist parties 
if there are questions pertaining to a particular case.
---------------------------------------------------------------------------

    \317\ 55 FR 18026 (Mar. 23, 1981). NYSDEC indicates that generic 
guidance on such matters unnecessary.
---------------------------------------------------------------------------

    337. NHA states that guidance on formats and components of 
acceptable settlement agreements would be beneficial. As a general 
matter, the parties are the persons best able to determine what issues 
they wish to address in a settlement document and to organize the 
document. Parties may find it particularly useful to review other 
settlement documents and use as models those which address the same or 
similar matters to their proceeding and that have a format useful to 
them. As with other matters pertaining to settlement documents, there 
have been several instances in which parties have requested informal 
staff review of draft documents, a practice we encourage.
    338. NOAA Fisheries states that the regulations should require a 
communications protocol and ground rules for settlement discussions, 
and should prohibit discussions until the record is complete. NYSDEC 
disagrees. We responded to NOAA Fisheries' comment in the NOPR \318\ 
and it advances no new facts or arguments.
---------------------------------------------------------------------------

    \318\ 68 FR at p. 14007; IV FERC Stats. & Regs. ] 32,568 at p. 
34,727.
---------------------------------------------------------------------------

    339. The NOPR also explained the various means of dispute 
resolution available to parties to proceedings before the Commission, 
including the use of administrative law judges and Commission staff as 
facilitators, mediators, and neutrals.\319\ ADK states that to succeed 
in these capacities, Commission staff need to be experienced in 
hydroelectric licensing. While prior licensing experience is 
unquestionably beneficial to anyone serving in one of these capacities, 
it is not a prerequisite. What is essential is training and experience 
in the relevant discipline. Our Alternative Dispute Resolution training 
program provides the necessary training to Commission staff.
---------------------------------------------------------------------------

    \319\ 68 FR at p. 14007; IV FERC Stats. & Regs. ] 32,568 at p. 
34,727.
---------------------------------------------------------------------------

    340. We also explained in the NOPR that we include in licenses 
settlement agreement provisions that are beyond our authority to 
enforce if they are included in mandatory terms and conditions.\320\ 
Interior states that there is confusion about how such settlement 
provisions are to be enforced, and that the confusion would be cleared 
up if each approved settlement provision the Commission can enforce was 
incorporated into a numbered license article, and other provisions 
clearly identified. Interior would like to see this done before 
issuance of the license order, and the parties given time to amend the 
settlement agreement in the light thereof.
---------------------------------------------------------------------------

    \320\ 68 FR at p. 14008; IV FERC Stats. & Regs. ] 32,568 at p. 
34,728.
---------------------------------------------------------------------------

    341. In many cases, settlement agreement provisions approved by the 
Commission are reformatted into numbered license articles.\321\ In 
other cases, however, it makes more sense from the standpoint of 
license administration to append the settlement agreement to the 
license order and include numbered license articles which require the 
licensee to provide plans to implement various components of the 
settlement agreement. This is most often the case when the settlement 
agreement is extremely lengthy or complex.\322\
---------------------------------------------------------------------------

    \321\ See, e.g., Hudson River-Black River Regulating District, 
100 FERC ] 61,319 (2002).
    \322\ See, e.g., Central Nebraska Public Power and Irrigation 
District and Nebraska Public Power District, 84 FERC ] 61,077 
(1998).
---------------------------------------------------------------------------

    342. In either case, if there are provisions the Commission cannot 
enforce, they are identified in the body of the license order.\323\ 
Also, as we have pointed out, the parties are free to include in their 
agreements other means of enforcing those provisions the Commission 
itself cannot enforce. Some settlement agreements, for instance, 
include language characterizing the agreement as a contract.
---------------------------------------------------------------------------

    \323\ See, e.g., Avista Corporation, 90 FERC ] 61,167 at p. 
61,512 n.25 (2000).
---------------------------------------------------------------------------

    343. We think it would be inadvisable to amend the regulations to 
add a time period for the parties to renegotiate the settlement 
agreement if it contains provisions the Commission cannot enforce. As 
we have stated, such provisions are almost always procedural and 
involve the conduct of non-jurisdictional entities, and the precedent 
\324\ is clear, so there is little likelihood of the parties being 
surprised by such a finding. We are also aware of no case where the 
settling parties in a hydroelectric licensing proceeding have modified 
the agreement as a result of the Commission's statement that portions 
of it are not enforceable by the Commission. Nevertheless, the 
Commission believes that there may be merit in certain cases to 
allowing parties a limited opportunity to renegotiate before the 
Commission issues a license that would not include a critical component 
of a settlement, or that would include a critical settlement component 
in a mandatory condition, but that the Commission could not enforce. 
Therefore, the Commission remains open to considering this approach on 
a case-by-case basis.
---------------------------------------------------------------------------

    \324\ Erie Boulevard Hydropower, L.P., 88 FERC ] 61,176 (1999).
---------------------------------------------------------------------------

    344. Finally, we requested comments on whether the integrated 
process regulations should encourage potential applicants to include 
with their draft license application a non-binding statement of whether 
or not they intend to engage in settlement discussions.\325\ Most 
commenters agreed that this would be beneficial because it would 
confirm the applicant's intentions with respect to settlement 
negotiations, which would better enable the parties to assess the 
prospects for settlement.\326\ One commenter suggested that it might 
also help the Commission to determine the appropriate processing 
schedule. HRC states that the Commission should also require any such 
statement to be preceded by discussions with the participants so the 
intentions of all parties are made clear. A few commenters responded 
that such encouragement would be meaningless, since it requires the 
applicant to do nothing, a statement of intent does not commit the 
applicant to anything, or because the applicant cannot unilaterally 
decide to conduct negotiations.\327\
---------------------------------------------------------------------------

    \325\ 68 FR at p. 14007; IV FERC Stats. & Regs. ] 32,568 at p. 
34,726.
    \326\ PG&E, Oregon, HRC, IDFG, PFMC, GLIFWC, Menominee, NCWRC, 
PFBC, Georgia DNR, NYSDEC.
    \327\ NHA, Long View, NEU, Interior.
---------------------------------------------------------------------------

    345. We have concluded that this is a matter best left to the 
discretion of the potential applicant because it is likely that there 
will be many situations in which the potential applicant has not 
discussed the possibility of a settlement with the other participants 
when the Preliminary Licensing Proposal or draft license application is 
filed, or is only able to assess the prospects for settlement after 
receiving comments on that document.

R. Original License Applications

    346. We proposed to make the integrated process applicable to 
original as well as new license applications, and requested comments on 
that proposal.\328\ Most of the few commenters who addressed this issue 
responded in the affirmative.\329\ NHA, California, and NOAA Fisheries 
state

[[Page 51105]]

that it is important for the integrated process to be coordinated with 
the issuance of preliminary permits, and offer specific proposals for 
doing so.
---------------------------------------------------------------------------

    \328\ 68 FR at p. 14009; IV FERC Stats. & Regs. ] 32,568 at p. 
34,729.
    \329\ NHA, California, HRC, PFBC, PFMC, GLIFWC, Interior. NEU 
would, however, only apply the integrated process to projects 
greater than 5 MW, which is about one third of all projects.
---------------------------------------------------------------------------

    347. NHA's proposal is detailed. An applicant for a permit for a 
project at an existing non-federal dam would be required to demonstrate 
ownership of the dam or evidence of authorization from the existing dam 
owner to evaluate the dam for potential generation. If the permit 
applicant could not satisfy this requirement, the Commission would 
issue an order to show cause why the permit application should not be 
dismissed. If good cause to issue the permit was not shown, the permit 
application would be declared patently deficient and dismissed. This, 
states NHA, would prevent the issuance of permits to entities that do 
not own the site or who lack real intent to construct a project.
    348. Under NHA's proposal, six months before expiration of a first 
permit, the permit holder would have to file its NOI,\330\ but would 
not have to file a PAD. A public notice of the NOI would be issued 
inviting potential competitors to also file an NOI. Thereafter, the 
permittee and any potential competitors would have to file a skeletal 
PAD, with both documents due on the same day in order to prevent either 
party from copying the other's PAD. The Commission would also bar the 
competitor from using the permittee's materials in any subsequent 
filings.\331\ A PAD that did not meet minimum content standards would 
be declared patently deficient and rejected, with no opportunity to 
remedy the deficiency. The new permittee would have a specified period 
of time to file a new NOI and the same PAD required of all other 
potential license applicants. Thereafter the same integrated process 
applicable to relicenses would apply.
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    \330\ NHA states that the permit regulations would have to be 
modified to permit this.
    \331\ We have previously held that an application will not be 
rejected because it contains materials duplicated from another 
application, even if the material is copyrighted. WV Hydro, Inc. and 
City of St. Mary's, WV, 45 FERC ] 61,220 (1988).
---------------------------------------------------------------------------

    349. NHA's proposal would impede development applications at 
existing dams by entities other than the dam owner. That would be 
fundamentally inconsistent with Congress' intent to promote competition 
in hydropower development.\332\
---------------------------------------------------------------------------

    \332\ Order No. 496, Information to be Made Available by 
Hydroelectric Licenses under Section 4(c) of the Electric Consumers 
Protection Act of 1986, 53 FR 15804 (May 4, 1989), FERC Stats. & 
Regs., Regulations Preambles 1986-1990 ] 30,812 at p. 31,105 (Apr. 
28, 1988).
---------------------------------------------------------------------------

    350. California and NOAA Fisheries make much simpler proposals. 
California would have us require each new permittee to begin prefiling 
consultation within 30 days from issuance of the preliminary permit and 
to file an NOI and PAD within 60 days. NOAA Fisheries would require 
permit applicants to simultaneously file the NOI and PAD.
    351. The California and NOAA Fisheries recommendations do not 
account for the many uncertainties associated with developing an 
unconstructed project, a lack of existing project-specific information 
and studies, or the need to obtain other permits, such as a dredge and 
fill permit under Section 404 of the Clean Water Act. These factors can 
add significant time to the period needed to prepare a new development 
application, or even an original license application for a project at 
an existing dam. For this reason, successive permits are typical in 
such circumstances. Other commenters recognize this,\333\ and some 
suggest that the labor-intensive and time-sensitive integrated process 
may be incompatible with original licenses.
---------------------------------------------------------------------------

    \333\ Long View, Troutman, ADK, Wisconsin DNR.
---------------------------------------------------------------------------

    352. We affirm our proposal to apply the integrated process to 
original license applications. We conclude that the existing 
preliminary permit program and the integrated process can exist side-
by-side and do not need any special provisions for coordination. There 
is no need for the permit term and pre-filing consultation to begin 
contemporaneously because a permit holder can file a license 
application any time during the term of the permit, and pre-filing 
consultation can and does go forward regardless of whether the 
potential applicant has a preliminary permit.

S. Competition for New Licenses

    353. The FPA requires an existing licensee that is a potential 
applicant for a new license to file an NOI.\334\ Neither the FPA nor 
our regulations require a non-licensee that is a potential competitor 
for a new license to file an NOI. In the NOPR we rejected requests from 
some licensees to require a potential non-licensee competitor to file 
an NOI.\335\
---------------------------------------------------------------------------

    \334\ 16 U.S.C. 15(b)(1).
    \335\ 68 FR at p. 14009; IV FERC Stats. & Regs. ] 32,568 at p. 
34,729. PG&E notes that the text of proposed 18 CFR 5.3(a) is 
consistent with the body of the NOPR in this regard, but that 
proposed 18 CFR 5.3(c) appears to require any potential applicant, 
whether or not an existing licensee, to file an NOI. We are 
modifying the language concerning this requirement in accordance 
with our decision here to require any potential applicant for a new 
license to file an NOI.
---------------------------------------------------------------------------

    354. PG&E and NHA state that they are not concerned about this, as 
long as we require a potential non-licensee competitor to file its PAD 
no later than five years prior to license expiration. In effect, this 
would ensure that the potential non-licensee competitor must show its 
hand no later than the existing licensee. Likewise, an existing 
licensee concerned about potential competitors could ensure that any 
potential competitor may not copy its PAD by also issuing its NOI and 
PAD at the statutory deadline.\336\
---------------------------------------------------------------------------

    \336\ This would if adopted, take care of Long View's concern 
that a competing non-licensee applicant could photocopy an existing 
licensee's PAD.
---------------------------------------------------------------------------

    355. Upon further reflection, we have decided that it is 
appropriate for a potential non-licensee competitor to file both the 
NOI and the PAD. We previously rejected the NOI requirement for non-
licensee potential competitors in order to encourage competition on 
relicensing.\337\ Over two hundred new license applications have been 
filed since the current rules were promulgated in 1989, but just a few 
applications have been filed by a non-licensee in competition with a 
timely-filed application by an existing licensee. It is clear that 
relieving non-licensee potential applicants of the NOI requirement has 
not had any effect or competition.
---------------------------------------------------------------------------

    \337\ Order No. 513, IV FERC Stats. & Regs. ] 30,854 at p. 
31,415.
---------------------------------------------------------------------------

    356. More important, the existing policy was developed when only 
the traditional licensing process existed. The adoption of the 
integrated process and the requirement for Commission approval to use 
the traditional process change the landscape considerably. The 
integrated process is based on clearly delineated steps designed to be 
completed before the license application is filed. The traditional 
process is much less prescriptive. If there were competing 
applications, it is mostly likely that we would require them to be 
developed using the same process in the same time frame. In any event, 
we would want to ensure that stakeholders have the same opportunity to 
comment on both potential applicants' process proposals, and the 
process proposal is required to be included with the PAD.\338\
---------------------------------------------------------------------------

    \338\ 18 CFR 5.6(d)(1).
---------------------------------------------------------------------------

    357. The remaining question is whether a non-licensee potential 
competitor should be required to file its NOI and PAD within the same 
six month window applicable to existing licensees. The importance of 
process selection to efficient processing, discussed above, persuades 
us that a potential non-licensee competitor should also be required to 
file its NOI

[[Page 51106]]

and PAD no later than five years before expiration of the existing 
license.\339\
---------------------------------------------------------------------------

    \339\ 18 CFR 5.5(d).
---------------------------------------------------------------------------

T. Summary of Changes to Integrated Process--Regulation Text

    358. In this section, we summarize the changes we are making to the 
integrated process. The changes are discussed in the order in which 
they occur in the part 5 regulations. A flowchart of the integrated 
process with significant modifications in boldface print is posted on 
the Commission's Web site.
    359. The content and distribution requirements for the PAD have 
been substantially modified.\340\
---------------------------------------------------------------------------

    \340\ 18 CFR 5.6 and Section III.E.
---------------------------------------------------------------------------

    360. At the time of the notice of commencement of proceeding, the 
Commission will request commencement of informal ESA consultation if 
the potential applicant is not designated as the Commission's non-
federal representative for this purpose.\341\
---------------------------------------------------------------------------

    \341\ 18 CFR 5.8(b)(2) and Section III.O.3.
---------------------------------------------------------------------------

    361. We are accepting the Tribal Group's request that early tribal 
consultation be specifically acknowledged in the regulations. To that 
end, we have added a new section providing for a meeting no later than 
30 days following the filing of the NOI between each willing Indian 
tribe likely to be affected by the potential license application and 
the Commission staff and other relevant Federal agencies.\342\
---------------------------------------------------------------------------

    \342\ 18 CFR 5.7 and Section III.N.
---------------------------------------------------------------------------

    362. The NOPR proposed to have the Commission's NEPA Scoping 
Document 1 issued following the potential applicant's issuance of a 
revised PAD with a draft study plan. The Process Group concluded that 
because the study plan should be issue-driven, and because the PAD and 
other factors should enable participants to begin issue identification 
from the beginning of the process, the integrated process would work 
better if NEPA scoping begins earlier. Accordingly, we have modified 
the rule to provide for the issuance of Scoping Document 1 at the same 
time the Commission issues the notice that the proceeding has 
commenced.\343\
---------------------------------------------------------------------------

    \343\ See 18 CFR 5.8(c).
---------------------------------------------------------------------------

    363. The proposed rule provided that comments on the PAD ``may'' 
include initial information and study requests. In light of the fact 
that the beginning of NEPA scoping has been advanced to the same date 
as notification that the proceeding has commenced, the regulations have 
been modified to state that comments on the PAD ``shall'' include the 
commenters' information and study requests, and should include 
information and studies needed for consultation under ESA Section 7 or 
water quality certification.\344\ Agencies or Indian tribes with 
authority to issue water quality certification are strongly urged to 
participate in this and all other aspects of the development of a 
Commission-approved study plan and schedule.
---------------------------------------------------------------------------

    \344\ See 18 CFR 5.9(a).
---------------------------------------------------------------------------

    364. The proposed rule would have required the potential applicant 
to file a revised PAD and a proposed study plan. The Process Group 
concluded that there is no need for a revised PAD if the process is 
modified to provide additional time for the participants to address the 
potential applicant's draft study plan. As we are modifying the rule 
for that purpose, as discussed below, the revised PAD has been 
eliminated. We stress once again, however, the importance of potential 
applicant's exercising due diligence in obtaining information and 
preparing all components of the PAD. It is central to the success of 
the enterprise.
    365. At the same time the potential applicant files its draft study 
plan, the Commission staff will issue, if necessary, Scoping Document 
2.\345\ This previously occurred when the study plan determination is 
issued.
---------------------------------------------------------------------------

    \345\ See 18 CFR 5.10 (Scoping Document 2).
---------------------------------------------------------------------------

    366. Comments on the draft study plan were proposed to be due 60 
days after the draft study plan was filed, during which period the 
Commission staff would have issued Scoping Document 1, with the draft 
study plan appended.\346\ As recommended by the Process Group, Scoping 
Document 1 has been advanced, and the draft study plan will be served 
directly on the participants. The comment period on the draft study 
plan has also been extended to 90 days, and provisions made for the 
applicants and participants to hold meetings on the study plan during 
the 90-day period, in order to encourage as much discussion and 
negotiation as possible among the participants.\347\
---------------------------------------------------------------------------

    \346\ Proposed 18 CFR 5.9 and 5.10.
    \347\ 18 CFR 5.11(c).
---------------------------------------------------------------------------

    367. As proposed, the potential applicant would file a revised 
study plan for Commission approval, followed by the Commission's study 
plan order.\348\ The Process Group recommended that we add an 
opportunity for participants to file comments on the revised study plan 
prior to the study plan order. We have added a 15-day period for this 
purpose.\349\
---------------------------------------------------------------------------

    \348\ Proposed 18 CFR 5.12.
    \349\ 18 CFR 5.13(b).
---------------------------------------------------------------------------

    368. The formal dispute resolution rules have been modified to 
include a technical conference open to all parties, before the Advisory 
Panel begins deliberations.\350\
---------------------------------------------------------------------------

    \350\ 18 CFR 5.14(j) and Section III.G.3.d.
---------------------------------------------------------------------------

    369. We have clarified the standards for requesting changes to 
ongoing studies, and for requesting new information gathering or 
studies following the initial and updated study reports.\351\ In brief, 
requests made following the initial study report are subject to a good 
cause standard, and requests made following the updated study report 
are subject to an extraordinary circumstances standard.
---------------------------------------------------------------------------

    \351\ 18 CFR 5.15.
---------------------------------------------------------------------------

    370. The requirement to file for comment a draft license 
application has been replaced by a requirement to file a ``Preliminary 
Licensing Proposal,'' although a potential applicant may elect to file 
a draft application.'' \352\
---------------------------------------------------------------------------

    \352\ 18 CFR 5.16 and Section III.K.
---------------------------------------------------------------------------

    371. The proposed rule provided for comments, interventions, and 
the filing of preliminary recommendations and terms and conditions 60 
days following issuance of the REA notice,\353\ to be followed by the 
issuance of a draft EA or EIS, or an environmental assessment. We have, 
consistent with our current rules, added a 45-day period for reply 
comments, which would not affect the proposed time periods for issuance 
of NEPA documents.\354\
---------------------------------------------------------------------------

    \353\ Proposed 18 CFR 5.22.
    \354\ 18 CFR 5.23(a).
---------------------------------------------------------------------------

U. Changes to Traditional Process and ALP

    372. The NOPR proposed four significant changes to the traditional 
process: (1) Full public participation; (2) mandatory, binding pre-
filing dispute resolution; (3) the requirement to file an NOI and PAD; 
and (4) extending the deadline for filing the water quality 
certification application until 60 days after the REA notice. The NOI 
and PAD and related discussion of process selection and transition 
provisions were discussed above.\355\ The water quality certification 
deadline was also discussed previously.\356\
---------------------------------------------------------------------------

    \355\ See Sections III.D. and III.F.
    \356\ See Section III.M.2.
---------------------------------------------------------------------------

    373. As discussed in this section, we are adopting the changes to 
ensure full public participation, but have decided to maintain the 
existing pre-filing dispute resolution process.

[[Page 51107]]

1. Traditional Process--Public Participation
    374. In the NOPR we proposed to modify the traditional process pre-
filing consultation regulations to require potential applicants to make 
reasonable efforts to bring into pre-filing consultation as early as 
possible NGOs and other members of the public, and for these entities 
to be involved in the development of the potential applicant's study 
plans.\357\
---------------------------------------------------------------------------

    \357\ 68 FR at p. 14011; IV FERC Stats. & Regs. ] 32,568 at p. 
34,734.
---------------------------------------------------------------------------

    375. Non-industry commenters favor this proposal. NHA and SCE 
oppose it. NHA states that it could significantly increase the cost and 
time of the process. It recommends that we maintain the existing 
provisions for public participation, except that the public would be 
encouraged to provide the potential applicant with comments on its 
proposal following the public meeting required during stage one 
consultation,\358\ and the potential applicant and agencies would be 
required to respond contemporaneously to those comments. NHA indicates 
that the availability of the PAD on the Commission's Web site should 
enable the public to effectively participate in the public meeting, and 
the potential applicant could decide what level of pre-filing public 
participation was appropriate for the project. SCE also cites increased 
costs and burdens and states that the public is already adequately 
represented by the Commission and resource agencies.\359\
---------------------------------------------------------------------------

    \358\ See 18 CFR 4.38(b)(3) and 16.8(b)(3).
    \359\ Acres does not oppose the proposal, but states that the 
Commission should help individual members of the public organize 
themselves so that public participation is efficient and structured. 
Participation by individuals may be inconvenient for applicants in 
certain respects, but individuals are capable of determining for 
themselves whether joint action is consistent with their individual 
interests.
---------------------------------------------------------------------------

    376. We are strongly inclined to adopt the rule as proposed. Under 
NHA's proposal, the potential applicant would not be required to 
distribute the PAD to members of the public likely to be interested in 
any license application proceeding or include the public in the joint 
meeting with agencies and Indian tribes. There would also be no 
requirement for the public to provide comments and study requests 
following the joint meeting, and they would not be eligible to 
participate in the joint meeting following comments on the draft 
license application.\360\ This would exacerbate the contribution that 
lack of public input during pre-filing consultation now makes to 
licensing delays. The proposal in the NOPR to include the public in all 
aspects of pre-filing consultation substantially resolves this problem 
for the traditional process.
---------------------------------------------------------------------------

    \360\ See proposed 18 CFR 4.38(b) (1)(3)(4) and (5); 4.38(c)(2) 
and (6); 4.38(d)(2); analagous sections of proposed 18 CFR part 16, 
and proposed 18 CFR 5.4.
---------------------------------------------------------------------------

2. Traditional Process--Mandatory, Binding Dispute Resolution
    377. The principal reasons the existing study dispute resolution 
process is not used are that it is not required to be used and the 
result is advisory only.\361\ We proposed 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.
---------------------------------------------------------------------------

    \361\ 68 FR at p. 13996; IV FERC Stats. & Regs. ] 32,568 at p. 
34,707.
---------------------------------------------------------------------------

    378. We also proposed to make the outcome of dispute resolution 
binding on all participants; that is, the Director's order resolving 
the dispute would, 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. We further proposed to 
eliminate from the traditional process the opportunity to request 
additional scientific studies after the license application is 
filed.\362\
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    \362\ 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) and related NOPR 
discussion, 68 FR at p. 13996; IV FERC Stats. & Regs. ] 32,568 at 
pp. 34,734-735.
---------------------------------------------------------------------------

    379. NHA and EEI support the proposed change.\363\ NHA would also 
modify the proposed rule by requiring study requesters to address the 
study criteria applicable to the integrated process, and by requiring 
the Director to address those criteria in his decision.
---------------------------------------------------------------------------

    \363\ SCE supports mandatory pre-filing dispute resolution, but 
states that it should be the same for all processes and should be 
available only to agencies with mandatory conditioning authority.
---------------------------------------------------------------------------

    380. Agency and NGO commenters were less enthusiastic. HRC and 
Interior contend the proposed change could make the problem of post-
application study disputes worse and, along with TU urge that if pre-
filing binding dispute resolution is adopted, it be the same as formal 
dispute resolution in the integrated process. Interior argues that 
study disputes cannot be resolved without the aid of a panel of 
technical experts and the views of Commission staff, so the goal of 
developing a record during pre-filing consultation that will support 
the actions of all agencies with decisional authority would be 
thwarted. NYSDEC appears to support mandatory, binding dispute 
resolution, but opposes elimination of post-application study requests. 
HRC, echoing the concerns of commenters on binding dispute resolution 
in the integrated process, adds that if the traditional process dispute 
resolution is to be mandatory and binding, then the Commission must 
permit rehearing of the Director's decisions. Finally, Interior and 
NOAA Fisheries state that the Commission does not have authority to 
issue a binding pre-filing dispute resolution in the traditional 
process because in that process no formal proceeding commences until 
the application is filed. We think Interior and NOAA Fisheries are 
correct and will therefore not adopt this proposal.
    381. Finally, NOAA Fisheries recommends that we modify the 
traditional process by requiring applicants to submit for Commission 
approval a study plan under conditions similar to development of the 
study plan in the integrated process. Since we are not adopting 
mandatory, binding dispute resolution in the traditional process, a 
Commission-approved study plan would serve no purpose, and would blur 
the distinction between the integrated and traditional process.
3. Traditional Process--Other Recommendations
    382. Interior recommends that we make no changes in the traditional 
process until the integrated process has become established and shown 
to be effective because it opposes mandatory, binding dispute 
resolution in the traditional process. As just discussed, we are not 
adopting that proposal. Because Interior does not specifically oppose 
increased public participation, we presume it has no objection to that 
aspect of the proposed rule.
    383. SCE states that the best way to streamline the process would 
be to eliminate pre-filing consultation altogether for any project that 
has previously been issued a license in which a NEPA document was 
prepared, or for small projects where no operational or ground-
disturbing changes are contemplated. Under SCE's scenario, the pre-NOI 
notice to the applicant would be published in a local newspaper. The 
potential applicant would file the NOI and an abbreviated version of 
the PAD, then file an application based on whatever pre-filing 
consultation it decides is needed. In support, SCE states that it 
already has relationships with the resource agencies and that anyone is 
welcome to make

[[Page 51108]]

comments before an application is filed. It adds that Interior's Bureau 
of Land Management and the U.S. Forest Service do not require pre-
filing consultation.
    384. We think leaving pre-filing consultation to the discretion of 
potential applicants is unlikely to result in any gains in the 
timeliness or efficiency of the licensing process, and reject the 
qualifying criteria proposed by SCE. A NEPA document issued many years 
before a new license application is filed is likely to be of very 
little value. Nor is a proposal to maintain the status quo as an 
operating regime necessarily a guarantee that a new license application 
will not raise substantial issues. Changes are likely to have occurred 
over the term of the license with respect to recreational use of the 
reservoir and shoreline, threatened and endangered species listings, 
water quality standards, resource agency management goals, standards 
for protection of cultural and historical resources, and others. That 
SCE has established relations with certain agencies has no bearing on 
this issue of general applicability.
    385. SCE adds that if the PAD is required it should be scaled back 
for applications using the traditional process because it is too 
burdensome for small projects and the required amount of information is 
not needed at the beginning because NEPA scoping will follow filing of 
the application. SCE overlooks two important facts. First, the PAD is 
one of the tools used to inform the opinions of the participants and 
the Commission concerning whether to approve use of the traditional 
process. Second, the PAD is only required to include existing relevant 
information that can be obtained with the exercise of due diligence. An 
existing licensee already has a substantially similar obligation to 
produce information under the traditional process regulations.\364\
---------------------------------------------------------------------------

    \364\ See 18 CFR 16.7(d) and 16.8(b).
---------------------------------------------------------------------------

4. Streamlined Process for Small Projects
    386. The NOPR declined to adopt a proposal by NHA under which 
applicants could file a request for waiver of all or part of the pre-
filing consultation requirements. We did so largely because the 
existing regulations already provide for consensual waiver by agencies 
and Indian tribes and owing to concerns about NHA's proposed 
criteria.\365\ Nonetheless, in recognition of the important place of 
small hydropower in the nation's energy infrastructure and in the hope 
of eliminating potentially unnecessary costs of relicensing, we 
requested comments on other approaches to streamlining the licensing 
process for small projects that would not compromise the interests of 
other stakeholders.\366\
---------------------------------------------------------------------------

    \365\ 68 FR at p. 14012; IV FERC Stats. & Regs. ] 32,568 at pp. 
34,735-736.
    \366\ 68 FR at p. 14012; IV FERC Stats. & Regs. ] 32,568 at p. 
34,736.
---------------------------------------------------------------------------

    387. NHA responds that we should not have rejected its proposal 
because no other agency requires pre-filing consultation, it is not 
required by NEPA, and it is less important for licenses issued after 
enactment of the Electric Consumers Protection Act \367\ because such 
licenses were the subject of a recent NEPA document and are likely to 
include many environmental protection measures. NHA adds that it does 
not seek an exemption from NEPA, or to preclude analysis based on new 
issues such as threatened or endangered species listings, but only 
wants recognition that some impacts will already have been adequately 
addressed. NHA also stresses that the existence of the PAD would enable 
interested entities to comment prior to the license application even if 
there is no formal opportunity to comment.
---------------------------------------------------------------------------

    \367\ Public Law 99-495, 100 Stat. 1243 (Oct. 16, 1986) 
(codified at 16 U.S.C. 791a et seq.).
---------------------------------------------------------------------------

    388. We remain unpersuaded. That other agencies may not require 
pre-filing consultation, or that it is not required by NEPA, has no 
bearing on whether it makes sense for license applications. The FPA 
licensing scheme is unique, and commenters were nearly unanimous that 
the key to timely and efficient processing of applications is combining 
pre-filing consultation with NEPA scoping. NHA may be correct that 
post-ECPA licenses are likely to contain a greater level of resource 
protection than pre-ECPA licenses. However, as noted in our response to 
SCE's proposal in the preceding section, many factors are likely to 
change over the term of any license, regardless of when it was 
issued.\368\
---------------------------------------------------------------------------

    \368\ We note in this regard that the minimum term for a new 
license is 30 years, and the first relicenses of projects with post-
ECPA licenses are still approximately 15 years away.
---------------------------------------------------------------------------

    389. NEU recommends that projects under 5 MW with minor licenses 
should have the right to elect the traditional process without 
Commission approval, and to file the initial consultation document 
currently required by the regulations instead of the PAD. We think the 
approval requirement has been framed so that licensees of small 
projects will have a reasonable opportunity to make their case for 
using the traditional process and, as noted, we have made the PAD less 
burdensome for all potential applicants.
    390. Agencies and NGOs continue to recommend that no special 
allowances be made for projects of any size unless there has been 
consultation with agencies, Indian tribes, and the public. They 
reiterate that size is no indicator of environmental impacts, case-by-
case consideration of the issues is not unduly burdensome, and that if 
there really are few issues or little controversy, then the study 
design can reflect that.\369\
---------------------------------------------------------------------------

    \369\ S-P, MPRB, NCWRC, Interior, Georgia DNR, Wisconsin DNR, 
Oregon, California, HRC, NYSDEC.
---------------------------------------------------------------------------

    391. Notwithstanding our rejection of NHA's and NEU's 
recommendations, we think there are likely to be instances where 
relicensing of a small project will be uncontroversial, and for which 
study requirements should be modest. For such cases, waiver of part or 
all of pre-filing consultation may not prejudice the timely and 
thorough consideration of a relicense application. We are therefore 
modifying Section 16.8(e) of the regulations that requires the consent 
of a resource agency or Indian tribe in order to waive pre-filing 
consultation with respect to that entity. We will now permit non-
consensual requests for waivers, but will require any such request to 
be preceded by discussions with these other entities and for the 
request to include documentation of the discussions and a response to 
any objections to the waiver request. We will also provide an 
opportunity for responses to the waiver request.\370\
---------------------------------------------------------------------------

    \370\ 18 CFR 16.8(e).
---------------------------------------------------------------------------

5. Draft Applicant-Prepared Environmental Analyses
    392. Under the current rules, a license applicant may include a 
draft EA with its application if it uses the ALP (applicant-prepared 
EA, or APEA). The NOPR declined to adopt recommendations that we permit 
license applicants to include a draft EA or draft EIS with their 
application even if they use the existing traditional process. We 
stated that the limits on pre-filing public participation and the 
history of post-application continuation of pre-filing study disputes 
would likely make such documents no more useful, or even less useful, 
than the existing Exhibit E. We did however note that by proposing full 
public participation in pre-filing consultation and adding mandatory, 
binding study dispute resolution, the problem of an incomplete record 
when the application is filed should be alleviated. We requested 
comments on whether, in light of these proposed changes, we

[[Page 51109]]

should change our rules in this regard.\371\
---------------------------------------------------------------------------

    \371\ 68 FR at p. 14012; IV FERC Stats. & Regs. Sec.  32,568 at 
p. 34,736.
---------------------------------------------------------------------------

    393. Agencies and NGO commenters opposed this idea.\372\ HRC and 
Interior state that this would not achieve the goals of the rulemaking 
because there would still be no requirement comparable to the ALP or 
even the integrated process to consult on a study plan or the APEA. 
Thus, the APEA would reflect only the positions and interests of the 
applicant, making it highly unlikely that the Commission could adopt it 
without major revisions. California adds that even if the factual 
record was satisfactory, the objectivity of the applicant's analysis 
would be suspect.
---------------------------------------------------------------------------

    \372\ HRC, Interior, PFMC, MPRB, NCWRC, California.
---------------------------------------------------------------------------

    394. EEI and NEU favor this idea. EEI states that APEAs work well 
in the gas pipeline certificates program.
    395. We have decided to permit a license applicant to include a 
draft EA with its application. The agency and NGO commenters may be 
correct that an APEA prepared under the traditional process is less 
likely to account for the views of all participants and may require 
significant revisions pursuant to the Commission's independent review. 
That however is not the central issue. The adequacy of an APEA for 
purposes of filing a license application is determined by whether it 
contains the information required in Exhibit E, the environmental 
exhibit. If it contains that information, we are not concerned that it 
appears in a nontraditional format. The parties will retain the same 
rights they now enjoy to comment on the full application and make any 
additional information requests. Regardless of whether an applicant 
includes an APEA or a traditional Exhibit E in its application, the 
Commission will issue its own independently prepared draft NEPA 
document or single environmental assessment.
6. ALP--Applicability of Dispute Resolution
    396. We proposed to leave the existing, non-mandatory and non-
binding dispute resolution procedures applicable to the ALP in place 
because mandatory, binding dispute resolution appears to be 
incompatible with the collaborative nature of the ALP. We did however 
request comments on whether there may be circumstances in which binding 
dispute resolution could be conducted in a manner that safeguards the 
collaborative process.\373\
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    \373\ 68 FR at p. 14012; IV FERC Stats. & Regs. ] 32,568 at p. 
34,735.
---------------------------------------------------------------------------

    397. SCE recommends that the ALP include binding dispute 
resolution. Most commenters however state that a binding process would 
be inconsistent with the concept of a collaborative process and would 
therefore have a chilling effect on participation.\374\ California and 
PFMC state that there should be a negotiated dispute resolution 
mechanism in the communications protocol for each ALP. PFBC recommends 
that if the existing ALP dispute resolution process \375\ fails, the 
proposed formal dispute resolution process for the integrated licensing 
process should be used, modified to make it available to all parties. 
\376\
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    \374\ Interior, HRC, NYSDEC, NEU.
    \375\ Under 18 CFR 4.34(i)(6)(vii), participants in an ALP may 
file a request with the Commission to resolve any disagreement 
concerning the ALP (i.e., not limited to studies) after reasonable 
efforts have been made by the participants to resolve the dispute.
    \376\ CSWC recommends that numerous elements of the integrated 
process be incorporated into ongoing ALP processes. Imposing such 
requirements would be inconsistent with the collaborative nature of 
these processes and would upset the settled expectations of the 
potential applicants and stakeholders who have already established 
the means by which they will work together.
---------------------------------------------------------------------------

    398. After considering the comments, we have decided not to change 
the existing ALP dispute resolution provision. Mandatory, binding 
dispute resolution still seems to us inconsistent with the 
collaborative process. For the same reason we decline to import into 
the ALP the formal dispute resolution procedures of the integrated 
process. The negotiated dispute resolution procedure contemplated by 
California and PFMC could however be encompassed within a 
communications protocol, if the participants agreed to request waiver 
of the process provided for in the regulations.

V. Ancillary Matters

1. Intervention by Federal and State Agencies
    399. We proposed to permit Federal agencies that commonly intervene 
in Commission proceedings, and state fish and wildlife and water 
quality certification agencies, to intervene by filing a notice instead 
of the current requirement to file a motion to intervene.\377\
---------------------------------------------------------------------------

    \377\ 68 FR at p. 14013; IV FERC Stats. & Regs. ] 32,568 at p. 
34,737, and proposed 18 CFR 385.214.
---------------------------------------------------------------------------

    400. No commenter objected to this proposal. Various commenters 
request that we clarify that the intervention by notice policy extends 
to, or will be expanded to include, state water rights agencies \378\ 
and Indian tribes with authority to issue water quality 
certification.\379\ These requests are reasonable and will be 
granted.\380\
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    \378\ Alaska DNR, EPA.
    \379\ Interior, EPA.
    \380\ See 18 CFR 385.214.
---------------------------------------------------------------------------

    401. NYSDEC requests that late interventions also be allowed by 
notice unless there is prejudice to others. We deny this request. The 
best means of determining whether other parties would be prejudiced is 
for the entity seeking untimely intervention to address that issue and 
for potentially prejudiced parties to respond. Our regulations on this 
matter make clear that this is one of the matters the Commission may 
consider in acting on a late motion to intervene.\381\
---------------------------------------------------------------------------

    \381\ 18 CFR 385.214(d)(1)(iv).
---------------------------------------------------------------------------

    402. NOAA Fisheries and Interior renew their request for automatic 
intervenor status, or for the ability to file one notice of 
intervention good for all proceedings throughout the term of a license. 
They advance no arguments that were not considered and rejected in the 
NOPR.
2. Information Technology
    403. In the NOPR we denied requests by a few commenters to require 
that documents filed in a proceeding or required to be available to the 
public be served or otherwise made available on the internet. We 
acknowledged that there are many instances where this is very efficient 
and more useful for participants than distribution of paper. We also 
noted that many license applicants and others are taking advantage of 
these benefits. We concluded however that such a requirement might be 
an undue cost burden on licensees that are small enterprises, and noted 
that we have granted waiver of the ``licensing library'' requirement 
where the applicant agreed to make all of the information available on 
the Internet and to provide hard copies by mail on request.\382\
---------------------------------------------------------------------------

    \382\ 68 FR at pp. 14013-014; IV FERC Stats. & Regs. ] 32,568 at 
p. 34,737-738.
---------------------------------------------------------------------------

    404. SCE requests that we reconsider and allow applicants to use 
Web sites and e-mail to disseminate information and effect service in 
the ordinary course.\383\ The applicant would determine whether and to 
what extent to employ this means of service and information 
dissemination. SCE states that entities without access to the internet 
would be accommodated by service of physical documents. HRC notes in a 
similar vein that electronic service is critical to the tight deadlines

[[Page 51110]]

in the integrated process. It requests that we make electronic service 
the presumptive form of service, as long as the potential applicant 
agrees to paper service for anyone who requests it.
---------------------------------------------------------------------------

    \383\ SCE states that oversized documents that are not 
compatible with e-mail would be served by mail, and that critical 
energy infrastructure information could be excluded.
---------------------------------------------------------------------------

    405. We continue to be concerned with the situation of small 
enterprises that operate jurisdictional projects, as well as small NGOs 
or individuals that may lack the sophistication to fully participate 
without physical service. We do however see the potential for great 
savings in electronic service and the Commission is continuously 
reviewing its filing and distribution requirements with a view toward 
maximizing the use of electronic filing and distribution of 
information. Thus, as noted above, the final rule encourages potential 
applicants to distribute on-line information and analyses referenced in 
the PAD, while preserving the right of a participant to receive these 
materials in hard copy form. One recent innovation in this connection 
is the advent of our e-subscription service, in which an entity may 
sign up to receive e-mail notification of, and a link to our 
Commission-wide information database (FERRIS \384\) for, every filing 
made in a specified proceeding.\385\ Finally, we will also continue to 
consider waiver requests in individual cases, and participants in 
collaborative processes are free to negotiate agreements which take 
advantage of e-mail and other Internet capabilities.
---------------------------------------------------------------------------

    \384\ FERRIS stands for Federal Energy Regulatory Records and 
Information System.
    \385\ Entities wishing to establish e-subscriptions can find 
instructions on the Commission's Web site at http://[email protected].
---------------------------------------------------------------------------

    406. ADK states that the Commission should permit meeting notices 
and other short documents to be served by facsimile machine instead of 
by e-mail on the ground that facsimile service is more reliable. This 
would be an extremely inefficient, if not impossible, means for the 
Commission to issue public notices. ADK is however free to request that 
license applicants or other participants in individual proceedings 
serve documents on it in this manner.
    407. GLIFWC states that all documents filed in the licensing 
process should be made available on the Commission's Web site and an 
applicant's Web site in both portable document format (pdf) and a word 
processing format. All documents filed with the Commission are already 
available to the public on the Commission's Web site via FERRIS in 
various formats, including pdf. For this reason, there is no need to 
impose this burden on a potential applicant.
3. Project Boundaries and Maps
    408. The NOPR stated that for historical reasons the current 
regulations do not require minor projects occupying non-federal lands 
to have an established project boundary, although the boundary for such 
projects has been considered to be the reservoir shoreline. We further 
observed that this situation is inconsistent with our ongoing effort to 
modernize project boundary mapping by conversion of such maps into 
highly accurate, georeferenced electronic maps, and therefore proposed 
to require all future license and exemption applicants, regardless of 
license or exemption type, to provide a project boundary with each 
application. We requested comments on this proposal.\386\
---------------------------------------------------------------------------

    \386\ 68 FR at p. 14014; IV FERC Stats. & Regs. ] 32,568 at p. 
34,738.
---------------------------------------------------------------------------

    409. Agencies and NGOs support the proposal. They state that it is 
important for compliance purposes because the Commission has said the 
geographical limit of its compliance authority is the project 
boundary.\387\ They state that the project boundary should include 
generating facilities, bypass reaches, the reservoir to the high water 
mark, all shoreline lands needed to meet project purposes other than 
the generation of power, and all lands needed to implement mitigation 
measures.\388\ All of these are required to be included in the project 
boundary with the exception of bypassed reaches, which we have 
explained may or may not be jurisdictional depending on case-specific 
facts.\389\
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    \387\ See PacifiCorp, 80 FERC ] 61,334 (1997).
    \388\ HRC, IDFG, NCWRC, PFBC, NYSDEC, PFMC, Menominee, Interior, 
MPRB.
    \389\ See Duke Power, a Division of Duke Energy Corporation, 100 
FERC ] 61,294 (2002), in which we stated that where a license 
requires ongoing programs in a bypassed reach (e.g., a habitat 
restoration program) such that continued Commission oversight is 
necessary to meet the program requirements, the reach is considered 
to be part of the project.
---------------------------------------------------------------------------

    410. NHA is not opposed to consistent standards for project 
boundary maps, but objects to imposing the new standards on existing 
minor licenses for which project boundary maps are already on file, or 
on exemptions. NHA states that it would cost thousands of dollars for 
field survey and drafting and that the Commission can obtain all the 
information it needs under the current rules. NHA, SCE, and NEU also 
state that licensees should only be required to revise their project 
boundaries when a new license application is filed or the licensee 
otherwise seeks approval to revise a particular Exhibit G drawing, 
because requiring georeferenced, electronically-formatted maps for all 
projects would be costly and extremely burdensome.
    411. These commenters may misapprehend the proposed rule in this 
regard. It is not our intention to require all existing licensees or 
exemptees to file a georeferenced map of the project boundary. The 
project boundary data would only be required when an application is 
filed for a license or an exemption, or when an application to amend 
either authorization already requires a revised Exhibit G.
    412. SCE adds that standards similar to the electronic standards 
required for project maps should also be established for design 
drawings required in a license application. Duke requests clarification 
of which electronic format is required for Exhibit G maps. It 
recommends widely used formats such as JPG, TIFF, or PDF, which do not 
require specialized software.
    413. The revised regulations do not require Exhibit G maps to be in 
a GIS format. The project boundary is only one feature of Exhibit G 
maps, which also include the location of project features such as the 
reservoir, powerhouse, and other facilities. An applicant can file the 
Exhibit G map in a JPG, TIFF, or PDF file, or any other graphic format, 
the project boundary data however, must be filed in a GIS format.
4. Miscellaneous Filing Requirements
    414. The NOPR proposed minor additions to the application filing 
requirements of Sec. Sec.  4.41, 4.51, and 4.61. These are: monthly 
flow duration curves;\390\ minimum and maximum hydraulic capacities for 
the powerplant;\391\ estimated capital and operating and maintenance 
(O&M) expenses for each proposed PM&E measures;\392\ estimates of the 
costs to develop the license application;\393\ on-peak and off-peak 
values of project power, and the basis for the value 
determinations;\394\ estimated annual increase or decrease in 
generation at existing projects;\395\ remaining undepreciated net 
investment or book value of project;\396\ a single-line electrical 
diagram;\397\ and a statement of

[[Page 51111]]

measures taken or planned to ensure safe management, operation, and 
maintenance of the project.\398\
---------------------------------------------------------------------------

    \390\ See proposed modifications to 18 CFR 4.41(c)(2)(i), 
4.51(c)(2)(i), and 4.61(c)(1)(vii).
    \391\ Proposed modifications to 18 CFR 4.41(c)(4)(iii); 
4.51(c)(2)(iii), and 4.61(c)(1)(vii).
    \392\ Proposed 18 CFR 4.41(e)(4)(v); 4.51(e)(4), and 
4.61(c)(1)(x).
    \393\ Proposed 18 CFR 4.41(e)(9); 4.51(e)(7); and 4.61(c)(3).
    \394\ Proposed 18 CFR 4.41(e)(10); 4.51(e)(8); and 4.61(c)(4).
    \395\ Proposed 18 CFR 4.51(e)(9) and 4.61(c)(5).
    \396\ Proposed 18 CFR 4.61(c)(6).
    \397\ Proposed 18 CFR 4.61(c)(8).
    \398\ Proposed 18 CFR 4.61(c)(9).
---------------------------------------------------------------------------

    415. 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. 
The NOPR found that 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. No 
opposing comments were received on these proposed changes, and we are 
adopting them. A few commenters raised other miscellaneous filing 
requirement issues.
    416. NOAA Fisheries requests a reduction in the number of paper 
copies that are required to be filed, and that we consider allowing 
filings to be made on compact disks (CDs) and by other electronic 
means. The Commission allows, indeed strongly encourages, electronic 
filing. Parties may also request waiver of the filing requirements in 
order to substitute a compact disk or CD-ROM for a hard copy 
filing.\399\ We are also reviewing our filing and distribution 
requirements Commission-wide with a view toward maximizing the use of 
e-filing and distribution of information, but that review is not 
complete at this time.
---------------------------------------------------------------------------

    \399\ Such waivers are granted under the Commission Secretary's 
delegated authority in 18 CFR 375.302(i).
---------------------------------------------------------------------------

    417. Interior requests that we require applicants to provide aerial 
photographs and/or satellite images to provide an overview of the 
project area. We think this is excessive in light of the requirements 
we are already imposing for electronically formatted maps, and the 
ready availability of United States Geological Survey and other maps.
5. Technical Changes
    418. We are also taking this opportunity to correct various 
sections of the regulations to update them, or to cure incorrect cross-
references, misspellings, or misstatements.\400\
---------------------------------------------------------------------------

    \400\ Corrections have been made to 18 CFR 2.1(a)(1); 2.7(b); 
4.30(b)(9)(ii); 4.30(b)(23); 4.32(a)(5)(vi); 4.32(e)(2); 4.32(h); 
4.33(a); 4.33(b); 4.37 introductory text; 4.37(b)(1); 4.39(a); 
4.39(b); 4.40(b); 4.41(f)(6)(v); 4.41(f)(9)(i); 4.60(b); 4.61(f)(2); 
4.70; 4.90; 4.91; 4.92; 4.93; 4.101; 4.200(c); 9.1; 9.10; 
375.308(d)(11), (k)(1), (k)(2)(ii), and (k)(3).
---------------------------------------------------------------------------

W. Delegations of Authority

    419. The proposed rule contemplated certain new delegations of 
authority to the Director, Office of Energy Projects, in the context of 
the proposed integrated process. Specifically, these are authority to 
issue: (1) Act on requests to use the traditional licensing process; 
(2) issue a study plan determination; (3) resolve formal study 
disputes; and (4) resolve disagreements brought during the conduct of 
studies. Consistent with our decision to adopt the integrated process 
as described herein, we are adopting conforming modifications to our 
delegations to the Director.\401\
---------------------------------------------------------------------------

    \401\ 18 CFR 375.308(aa).
---------------------------------------------------------------------------

X. Critical Energy Infrastructure Information

1. Order No. 630
    420. In Order No. 630,\402\ the Commission established standards 
and procedures for the handling of Critical Energy Infrastructure 
Information (CEII) submitted to or created by the Commission. CEII is 
information about existing or proposed critical infrastructure that 
relates to the production, generation, transportation, transmission, or 
distribution of energy; that could be useful to a person planning an 
attack on critical infrastructure; is exempt from mandatory disclosure 
under the Freedom of Information Act;\403\ and that does not simply 
give the location of the critical infrastructure.\404\ Critical 
infrastructure refers to existing or proposed systems and assets, the 
damage or destruction of which would harm the national security of the 
public health and safety.\405\ The purpose of the rule is to protect 
information on critical energy infrastructure that could be used by 
terrorists, while continuing to make public the information necessary 
for participation in the Commission's processes.
---------------------------------------------------------------------------

    \402\ 68 FR 9857 (Mar. 3, 2003); IV FERC Stats. & Regs. ] 31,140 
(Feb. 21, 2003).
    \403\ 5 U.S.C. 552.
    \404\ 18 CFR 388.113(c)(1).
    \405\ 18 CFR 388.113(c)(2).
---------------------------------------------------------------------------

    421. CEII is required to be redacted from filings made with the 
Commission. A hydroelectric license application could contain various 
kinds of information that are CEII. The preamble to the rule gives 
examples of such information, including: (1) General design drawings of 
the principal project works, such as those found in Exhibit F; (2) 
Maps, such as those found in Exhibit G; (3) Drawings showing technical 
details of a project, such as plans and specifications, supporting 
design reports, part 12 independent consultant reports,\406\ facility 
details, electrical transmission systems, communication and control 
center information; and (4) GPS coordinates of any project features.
---------------------------------------------------------------------------

    \406\ See 18 CFR part 12, Subpart D.
---------------------------------------------------------------------------

    422. Of particular concern to the Commission in defining CEII was 
location information. Such information is particularly relevant, for 
example, to participants in the NEPA process. Consequently, the 
following types of location information were not considered to be CEII: 
(1) USGS 7.5-minutes topographic maps showing the location of 
pipelines, dams, or other aboveground facilities; (2) alignment sheets 
showing the location of pipeline and aboveground facilities, right of 
way dimensions, and extra work areas; (3) drawings showing site or 
project boundaries, footprints, building locations and reservoir 
extent; and (4) general location maps. Such information is classified 
as ``non-Internet public access,'' that is, information to be included 
in paper filings with the Commission and made be available in hard copy 
and through the Commission's public reference room, but which will not 
be available for viewing or downloading from Commission databases \407\
---------------------------------------------------------------------------

    \407\ 68 FR at p. 9862.
---------------------------------------------------------------------------

    423. Order No. 630 establishes procedures for persons to request 
CEII that has been filed with the Commission or to challenge CEII 
status.\408\
---------------------------------------------------------------------------

    \408\ 18 CFR 388.113.
---------------------------------------------------------------------------

2. Conforming Rulemaking
    424. Several commenters in the CEII rulemaking and on the NOPR in 
this proceeding \409\ noted that the Commission also requires regulated 
entities to provide directly to agencies, Indian tribes, and the public 
certain information that is CEII. The Commission agreed and stated that 
it would issue conforming rules to ensure consistent treatment of CEII 
by the Commission and regulated entities. A proposed conforming rule 
was issued on April 9, 2003.\410\ Comments were due on May 16, 2003, 
and a final rule is being issued concurrent with this rule.\411\
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    \409\ Consumers, PSE, WPSR, NHA, WPPD, Oroville, EEI.
    \410\ Critical Energy Infrastructure Information (RM02-4-001, 
PL02-1-001), 68 FR 18538-18544 (Apr. 16, 2003); III FERC Stats. & 
Regs. ] 32,569 (Apr. 9, 2003).
    \411\ Order No. 643, III FERC Stats. & Regs. Regulations 
Preambles 104 FERC ] 61,107 (July 23, 2003).
---------------------------------------------------------------------------

    425. The final conforming rule identifies various sections of 18 
CFR Parts 4 and 16 that require direct disclosure of information that 
could include CEII. Public disclosure requirements in part 4 include: 
(1) Notification of applications to affected

[[Page 51112]]

property owners, which must include Exhibit G to the application; \412\ 
(2) a copy of the application and all exhibits, available to the public 
for inspection and reproduction at specified locations; \413\ (3) an 
applicant using alternative procedures must distribute an information 
package and maintain a public file of all relevant documents, including 
scientific studies; \414\ and (4) in pre-filing consultation for an 
original license application, the requirement to make available for 
public inspection various items,\415\ including detailed maps \416\ and 
a general engineering design.\417\
---------------------------------------------------------------------------

    \412\ 18 CFR 4.32(a)(3)(ii).
    \413\ 18 CFR 4.32(b)(3)(i), (b)(4)(ii)-(iv).
    \414\ 18 CFR 4.34(i)(4)(i) and (i)(6)(iii).
    \415\ 18 CFR 4.38(g).
    \416\ 18 CFR 4.38(b)(1)(i).
    \417\ 18 CFR 4.38(b)(1)(ii).
---------------------------------------------------------------------------

    426. Public disclosure requirements in part 16 include: (1) When 
the NOI is issued, a number of items, including the original 
application, as-built drawings, diagrams, emergency action plans, and 
operation and maintenance reports; \418\ and (2) during pre-filing 
consultation, detailed maps and a general engineering design must be 
made available for public inspection.\419\ Parts 4 and 16 also in 
several instances require applicants to serve CEII on Indian tribes, 
resource agencies, and other government offices.\420\
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    \418\ 18 CFR 16.7(d)(1)-(2).
    \419\ 18 CFR 16.8(b)(2)(i)-(ii).
    \420\ 18 CFR 4.32(b)(1)-(2); 4.38(b)(1), (c)(4), (d); 
16.8(b)(1), (c)(4), (d).
---------------------------------------------------------------------------

    427. The NOPR proposed to provide that regulated entities subject 
to the disclosure requirements of Parts 4 and 16 omit CEII from the 
information made available to agencies, Indian tribes, and the public. 
Instead, they would include with their filing a statement briefly 
describing the omitted information, without revealing CEII, and 
referring the reader to the procedures for challenging CEII claims and 
for requesting CEII under the procedures adopted in Order No. 630.\421\ 
Therefore, a member of the public could still obtain the information, 
but would have to follow procedures different from those applicable 
now. That proposal is adopted in the final rule.
---------------------------------------------------------------------------

    \421\ See proposed 18 CFR 4.32(k), 4.34(i)(10), 4.38(i), 
16.7(d)(7), and 16.8(k).
---------------------------------------------------------------------------

    428. Neither the regulations promulgated in Order No. 630 nor the 
proposals contained in the proposed conforming rule are intended to 
require companies to withhold CEII. Instead, they are intended to 
ensure that the Commission's regulations do not require companies to 
reveal CEII. Consequently, the Commission anticipates that, in most 
instances, companies will share CEII with participants in the licensing 
process without requiring those entities to request access to CEII 
through the Commission.
    429. The rules also do not alter the ability of state agencies to 
obtain data directly from regulated companies pursuant to whatever 
authorities those agencies have. State agencies are also presumed to 
have a need to know information involving issues that are within there 
are of responsibility. They may submit requests for information 
regarding entities outside their jurisdictions with an explanation of 
the need.
3. CEII in the Integrated Process
    430. Several commenters stated that the final rule needs to clarify 
how the information filing and distribution aspects of the license 
application process would work in concert with the CEII 
regulations.\422\ They observe that some of the information in the PAD 
required to be filed and distributed appears to be non-Internet public 
information and CEII.\423\
---------------------------------------------------------------------------

    \422\ Consumers, PSE, WPSR, NHA, WPPD, Oroville, EEI.
    \423\ They cite proposed 18 CFR 5.4(c)(2)(H), (I), (K) and (L).
---------------------------------------------------------------------------

    431. The information filing and disclosure requirements of part 5 
are not covered by Order No. 630, or the proposed conforming rule. We 
are therefore including in the new part 5 regulations a provision 
consistent with the revisions to Parts 4 and 16 promulgated in Order 
Nos. 630 and 630-A.\424\
---------------------------------------------------------------------------

    \424\ 18 CFR 5.30 (Critical Energy Infrastructure Information).
---------------------------------------------------------------------------

    432. Long View recommends that the requirements of Exhibit F to the 
license application be made consistent with the CEII rules. This is not 
a matter of conforming Exhibit F to the CEII rules, but rather making 
Exhibit F subject to the rules, which it is.
    433. One commenter stated that the form which entities requesting 
CEII are to use is not available on the Commission's Web site and that 
the form does not provide a name or office number for the person to 
whom the submission is to be made. These omissions will shortly be 
remedied.\425\
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    \425\ The CEII request form is being developed and will soon be 
posted on the Commission's Web site at http://www.ferc.gov.
---------------------------------------------------------------------------

Y. Transition Provisions

    434. Nearly all the comments on the proposed transition provisions 
were made by industry representatives. Only Idaho Power found the 
three-month transition period to be reasonable, as long as flexibility 
is provided for the few existing licensees who would be immediately 
affected. HRC and NYSDEC agree.
    435. Requests for extension of the transition period range from six 
months to six years, during which time applicants would have complete 
choice of process.\426\ The commenters assert that more time is needed 
to fully consider the rule after it is finalized and to switch from the 
initial consultation document and public information requirements of 
the current rules to the PAD, and that a three-month period reduces the 
six-month window provided by the rules for submittal of the NOI to 
three months for some licensees.\427\ The Process Group recommended a 
one to two year transition period.
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    \426\ Six months to one year (NHA); one year (Troutman, EEI, 
PG&E, SCE, Georgia Power); one to two years (Process Group); and 
five-six years (Long View).
    \427\ This would be the case when the effective date of the rule 
falls within the six-month window. In this regard, Georgia Power and 
Troutman recommend against making the NOI deadline date the trigger 
date for applicability of the rule. They recommend instead the six-
month period of five to five and one-half years before license 
expiration. A licensee for whom the six-month period includes the 
effective date of the rule could choose the traditional process by 
filing its NOI prior to the effective date of the rule, or choose 
the integrated process by filing its NOI after the effective date 
(and not making a request to use the traditional process). 
Alternatively, Georgia Power, Duke, and NEU request that guidance 
and special consideration be given to requests for waiver of the 
rule for the few projects for which the NOI is due very close to the 
effective date of the rule.
---------------------------------------------------------------------------

    436. In light of these comments, we have concluded that the 
integrated process should become the default process on July 23, 2005. 
Until that time, potential license applicants will be able to select 
the integrated process or the traditional process as it currently 
exists (except for increased public participation, changes in 
miscellaneous filing requirements, and a later deadline date for filing 
of the water quality certification application). At the end of the two-
year period, the integrated process will become the default process. 
All potential applicants will have to file the NOI and PAD, and obtain 
Commission authorization to use the traditional process.\428\
---------------------------------------------------------------------------

    \428\ The two-year period is irrelevant for purposes of the ALP 
because the requirements for approval do not change.
---------------------------------------------------------------------------

    437. All other proposed changes to the regulations will, as 
proposed, take effect on October 23, 2003.
    438. EEI requests that changes to the ex parte rule in connection 
with reversal of the policy on intervention by cooperating agencies 
should not apply to any projects for which an NOI has

[[Page 51113]]

already been filed, because those potential applicants relied on the 
existing rules. As we have decided to retain the existing cooperating 
agencies policy, EEI's request is moot.
    439. California asserts that any change in the deadline for 
applying for water quality certification from the date of the 
application to a later time should apply immediately. California states 
that this would give all licensees that have filed an NOI, but not yet 
filed the license application, the benefit of additional time to 
resolve data requirements before filing their certification 
request.\429\ We agree in general that licensee applicants should have 
the benefit of our decision to move back the deadline date to 60 days 
following issuance of the REA notice. To minimize confusion, however, 
we will make that change effective October 23, 2003. Thus, a license 
application filed after that date under any process will benefit from 
the changed deadline date for filing the water quality certification 
application.
---------------------------------------------------------------------------

    \429\ California cites changes to 18 CFR 4.34(j) and 4.38(h).
---------------------------------------------------------------------------

    440. SCE and the Process Group request that we ``grandfather'' any 
potential applicant that has already been authorized to use the ALP, 
even if the NOI date has not arrived. This request is reasonable and we 
will grant it.
    441. Duke requests that we grandfather ``existing licensing 
proceedings,'' by which it apparently means that the potential 
applicant has commenced pre-filing consultation. This request is moot 
with respect to the process selection rules because a potential new 
license applicant by definition begins pre-filing consultation when the 
NOI and PAD are filed, and only those for whom the deadline date is two 
years away will be affected. With respect to the miscellaneous filing 
requirements, we think the three month transition period is sufficient.
    442. Duke also states that potential applicants already engaged in 
the traditional pre-filing process should be permitted to employ 
features of the integrated process in the traditional process. We 
proposed changes to the regulatory text which enable a potential 
applicant to file a request to do so during first stage consultation 
after consulting with potentially affected entities.\430\ No commenter 
opposed the proposed provisions, which we are including in the final 
rule.
---------------------------------------------------------------------------

    \430\ Proposed 18 CFR 4.38(e)(4).
---------------------------------------------------------------------------

IV. Environmental Analysis

    443. 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.\431\ The 
Commission has categorically excluded certain actions 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.\432\ This proposed rule is 
procedural in nature and therefore falls under this exception. 
Consequently, no environmental consideration is necessary.
---------------------------------------------------------------------------

    \431\ Order No. 486, Regulations Implementing the National 
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & 
Regs. Preambles 1986-1990 ]30,783 (Dec. 10, 1987).
    \432\ 18 CFR 380.4(a)(2)(ii).
---------------------------------------------------------------------------

V. Regulatory Flexibility Act

    444. The Regulatory Flexibility Act of 1980 (RFA)\433\ generally 
requires a description and analysis of final rules that will have a 
significant economic impact on a substantial number of small entities, 
or a certification that the rule will not have a significant economic 
impact on a substantial number of small entities.\434\ 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) will benefit small entities by minimizing 
redundancy and waste in the processes of the Commission and the various 
federal and state agencies associated with the hydroelectric licensing 
process.
---------------------------------------------------------------------------

    \433\ 5 U.S.C. 601-612 (2000).
    \434\ 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

    445. The Office of Management and Budget's (``OMB's'') regulations 
require that OMB approve certain information collection requirements 
imposed by agency rule.\435\ This Final Rule does not make any 
substantive or material changes to the information collection 
requirements specified in the NOPR, which was previously submitted to 
OMB for approval. OMB has elected to take no action on the NOPR. Thus, 
the information collection requirements in this rule are pending OMB 
approval.
---------------------------------------------------------------------------

    \435\ 5 CFR part 1320.
---------------------------------------------------------------------------

    446. The following collections of information contained in this 
proposed rule will be submitted to the Office of Management and Budget 
for review under section 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.''
    447. This Final Rule responds to comments concerning the 
information collections requirements specified in the NOPR, and has 
changed the PAD that was previously submitted to OMB. The changes make 
the document less burdensome on potential applicants and easier for all 
recipients to use. OMB did not make substantive comments on the NOPR, 
but directed the Commission to calculate the burden for each of the 
three available licensing processes and to estimate the proportion of 
licensees that would select each process. The burden calculation is 
based on the collection, dissemination of, and recordkeeping for 
information in the licensing process, and does not include any costs of 
license terms and conditions.
    448. Public Reporting Burden: The Commission provided burden 
estimates for the proposed requirements. Several commenters stated that 
the PAD as proposed was unduly burdensome. These comments are addressed 
elsewhere in the Final Rule. In summary, we have clarified that the PAD 
requirements are limited to existing information and do not include any 
requirement to conduct studies, are substantially similar to existing 
requirements, and that the format and content requirements have been 
modified to reduce the burden on potential applicants.\436\
---------------------------------------------------------------------------

    \436\ See Section III.E.
---------------------------------------------------------------------------

    449. Estimated Annual Burden

[[Page 51114]]



                                     Table 1. Traditional Licensing Process
----------------------------------------------------------------------------------------------------------------
                                                No. of                                                  Total
              Data collection                 respondents     No. of       Hours per    Percent use     annual
                                                  \*\        responses     response        \**\         hours
----------------------------------------------------------------------------------------------------------------
FERC-500...................................           26             1        46,000            10       119,600
FERC-505...................................           15             1        10,000            10       15,000
----------------------------------------------------------------------------------------------------------------
\*\ Estimated number of licenses subject to renewal through 2009.
\**\ Estimate of the percentage of applications that may use the Traditional Licensing Process.

    Total Annual Hours for Collection:

(Reporting + Recordkeeping, (if appropriate)) = 1,356,000 hours


                                     Table 2. Alternative Licensing Process
----------------------------------------------------------------------------------------------------------------
                                                                                                        Total
              Data collection                   No. of         No. of       Hours per     Percent       annual
                                            respondents\*\    responses     response      use\**\       hours
----------------------------------------------------------------------------------------------------------------
FERC-500..................................            26              1        39,000            30      304,000
FERC-505..................................            15              1         8,600            30      38,700
----------------------------------------------------------------------------------------------------------------
\*\ Estimated number of licenses subject to renewal through 2009.
\**\ Estimate of the percentage of applications that may use the Alternative Licensing Process.

    Total Annual Hours for Collection:

(Reporting + Recordkeeping, (if appropriate)) = 1,152,000 hours


                                      Table 3. Integrated Licensing Process
----------------------------------------------------------------------------------------------------------------
                                               No. of                                                   Total
              Data collection                respondents     No. of       Hours per     Percent use     annual
                                                 \*\        responses   response\***\      \**\         hours
----------------------------------------------------------------------------------------------------------------
FERC-500..................................           26             1         32,200            60       502,320
FERC-505..................................           15             1          7,000            60       63,000
----------------------------------------------------------------------------------------------------------------
\*\ Estimated no. of licenses subject to renewal through FY 2009.
\**\ Estimate of the percentage of applicants that may use the Integrated Licensing Process.
\***\Based on a 30% reduction through concomitant processes.

    Total Annual Hours for Collection:

(Reporting + Recordkeeping, (if appropriate)) = 942,200 hours

    Information Collection Costs: The Commission requested comments on 
the cost to comply with these requirements. None were received. The 
Commission has projected the average annualized cost per respondent to 
be the following:

Annualized Costs:
(1) Using Traditional Licensing Process
    (a) Projects less than 5 MW (average)-- $500,000.00
    (b) Projects greater than 5 MW (average)--$2,300,000.00.
(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 Process-- $47,110,000 ($41.8 mil. + 
($5.25 mil.)

    The Office of Management and Budget's (OMB) regulations \437\ 
require OMB to approve certain information collection requirements 
imposed by agency rule. The Commission is submitting notification of 
this proposed rule to OMB.
---------------------------------------------------------------------------

    \437\ 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 final rule revises the 
Commission's regulations regarding applications for licenses to 
construct, operate, and maintain hydroelectric projects. Specifically, 
the revisions 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 to be collected is needed to evaluate the license 
application pursuant to the comprehensive development standard of FPA 
Sections 4(e) and 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 revisions are necessary because the hydroelectric 
licensing process is unnecessarily long and costly.
    450. 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

[[Page 51115]]

specific, objective support for the burden estimates associated with 
the information requirements.
    451. 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 Executive Director, 202-502-8415 or 
[email protected]) or from the Office of Management and Budget 
(OMB), Room 10202 NEOB, 725 17th Street, NW., Washington, DC 20503. 
(Attention: Desk Officer for the Federal Energy Regulatory Commission, 
fax: 202-395-7285.)
    452. Comments on the collection of information and the associated 
burden estimates should be submitted to the contact listed above and to 
OMB. (Attention: Desk Officer for the Federal Energy Regulatory 
Commission, fax: 202-395-7285 or by e-mail to 
[email protected].)

VII. Effective Date and Congressional Notification

    453. This final rule will take effect on October 23, 2003. The 
Commission has determined, with the concurrence of the Administrator of 
the Office of Information and Regulatory Affairs of the Office of 
Management and Budget, that this rule is not a ``major rule'' within 
the meaning of Section 251 of Small Business Regulatory Enforcement 
Fairness Act of 1996.\438\ The Commission will submit the Final Rule to 
both houses of Congress and the General Accounting Office.
---------------------------------------------------------------------------

    \438\ 5 U.S.C. 804(2).
---------------------------------------------------------------------------

VIII. Document Availability

    454. 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.
    455. 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. 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 2

    Administrative practice and procedures, Electric power, Natural 
Gas, Pipelines, Reporting, and recordkeeping requirements.

18 CFR Part 4

    Administrative practice and procedure, Electric power, Reporting 
and recordkeeping requirements.

18 CFR Part 5

    Administrative practice and procedure, Electric power, Reporting 
and recordkeeping requirements.

18 CFR Part 9

    Electric power, Reporting, and recordkeeping requirements.

18 CFR Part 16

    Administrative practice and procedure, Electric power, Reporting 
and recordkeeping requirements.

18 CFR Part 375

    Authority delegations (Government agencies).

18 CFR Part 385

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

    By the Commission.
Magalie R. Salas,
Secretary.

0
In consideration of the foregoing, the Commission amends parts 2, 4, 9, 
16, 375, and 385, and adds a new part 5 to, Chapter I, Title 18, Code 
of Federal Regulations, as follows.

Regulatory Text

PART 2--GENERAL POLICY AND INTERPRETATIONS

0
1. The authority citation for part 2 continues to read as follows:


    Authority: 5 U.S.C. 601; 15 U.S.C. 717-717w, 3301-3432; 16 
U.S.C. 792-825y, 2601-2645; 42 U.S.C. 4321-4361, 7101-7352.

0
2. Amend Sec.  2.1 as follows:
0
a. Redesignate existing paragraph (a)(1)(xi)(K) as paragraph 
(a)(1)(xi)(L).
0
b. Add a new paragraph (a)(1)(xi)(K).
    The added text reads as follows:


Sec.  2.1  Initial notice; service; and information copies of formal 
documents.

    (a) * * *
    (1) * * *
    (xi) * * *
    (K) Proposed penalties under section 31 of the Federal Power Act.


Sec.  2.7  [Amended]

0
3. Amend Sec.  2.7 by removing ``physically handicapped individuals'' 
in paragraph (b) and adding ``persons with disabilities'' in its place.

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

0
4. 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.

0
5. Amend Sec.  4.30 as follows:
0
a. Paragraph (a) is revised.
0
b. In paragraph (b)(9)(ii), remove ``Sec. Sec.  4.34(e)(2)'' and add 
``Sec.  4.34(e)(1)'' in its place.
0
c. In paragraph (b)(23), remove ``Sec.  4.31(c)(2)'' and add ``Sec.  
4.31(b)(2)'' in its place.
    The revised text of paragraph (a) reads 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 July 23, 2005 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.
* * * * *

0
6. Amend Sec.  4.32 as follows:
0
a. In Sec.  4.32, remove ``Office of Hydropower Licensing'' each place 
it appears and add ``Office of Energy Projects'' in its place.
0
b. The second sentence of paragraph (b)(1) is revised.
0
c. Paragraph (b)(2) is revised.
0
d. In paragraph (h), remove ``Division of Engineering and Environmental 
Review'' and add ``Division of Hydropower--Environment and 
Engineering'' in its place.
    The revised 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

[[Page 51116]]

Commission's Regional Office for the appropriate region and on each 
resource agency, Indian tribe, and 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 October 23, 2003, 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.
* * * * *

0
7. Amend Sec.  4.33 as follows:
0
a. In paragraph (a), redesignate paragraph (a)(2) as (a)(3), and add a 
new paragraph (a)(2).
0
b. Paragraph (b) is revised.
    The added and revised text reads as follows:


Sec.  4.33  Limitations on submitting applications.

    (a) * * *
    (2) Would interfere with a licensed project in a manner that, 
absent the licensee's consent, would be precluded by Section 6 of the 
Federal Power Act.
* * * * *
    (b) Limitations on submissions and acceptance of a license 
application. The Commission will not accept an application for a 
license or project works that would develop, conserve, or utilize, in 
whole or part, the same water resources that would be developed, 
conserved, and utilized by a project for which there is:
* * * * *
    (1) An unexpired preliminary permit, unless the permittee has 
submitted an application for license; or
    (2) An unexpired license, as provided for in Section 15 of the 
Federal Power Act.
* * * * *

0
8. Amend Sec.  4.34 as follows:
0
a. In paragraph (b)(1), revise the third sentence to read as follows: 
``In the case of an application prepared other than pursuant to part 5 
of this chapter, if ongoing agency proceedings to determine the terms 
and conditions or prescriptions are not completed by the date 
specified, the agency must submit to the Commission by the due date:''
0
b. In paragraph (b)(4)(i): In the first sentence remove ``impact 
statement'' and add ``document'' in its place. In the second sentence 
remove ``statement'' and add ``document'' in its place.
0
c. Paragraph (b)(5) is added.
0
d. Paragraph (e) is revised.
0
e. In paragraph (h), remove ``consist of an original and eight copies'' 
and add ``conform to the requirements of subpart T of part 385 of this 
chapter'' in its place.
0
f. Paragraph (i)(5) is revised.
0
g. Paragraph (i)(9) is removed.
    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 (b)(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, 
subchapter 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 agency must specifically identify and explain the 
recommendations and the relevant resource goals and objectives 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 assessment. The preliminary determination, 
for any recommendations believed to be inconsistent, shall include 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 an explanation 
of how the measures recommended in the environmental document would 
adequately and equitably protect, mitigate damages to, and enhance, 
fish and wildlife (including related spawning grounds and habitat) 
affected by the development, operation, and management of the project.
    (3) Any party, affected resource agency, or Indian tribe may file 
comments in response to the preliminary determination of inconsistency, 
including any modified recommendations, 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.
    (4) The Commission shall attempt, with the agencies, to reach a 
mutually

[[Page 51117]]

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 section 
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.
    (5) The section 10(j) process ends when the Commission issues an 
order granting or denying the license application in question. 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.
* * * * *
    (i) * * *
    (5)(i) If the potential applicant's request to use the alternative 
procedures is filed prior to July 23, 2005, the Commission will give 
public notice in the Federal Register inviting comment on the 
applicant's request to use alternative procedures. The Commission will 
consider any such comments in determining whether to grant or deny the 
applicant's request to use alternative procedures. Such a decision will 
not be subject to interlocutory rehearing or appeal.
    (ii) If the potential applicant's request to use the alternative 
procedures is filed on or after July 23, 2005 and prior to the deadline 
date for filing a notification of intent to seek a new or subsequent 
license required by Sec.  5.5 of this chapter, the Commission will give 
public notice and invite comments as provided for in paragraph 
(i)(5)(i) of this section. Commission approval of the potential 
applicant's request to use the alternative procedures prior to the 
deadline date for filing of the notification of intent does not waive 
the potential applicant's obligation to file the notification of intent 
required by Sec.  5.5 of this chapter and Pre-Application Document 
required by Sec.  5.6 of this chapter.
    (iii) If the potential applicant's request to use the alternative 
procedures is filed on or after July 23, 2005 and is at the same time 
as the notification of intent to seek a new or subsequent license 
required by Sec.  5.5, the public notice and comment procedures of part 
5 of this chapter shall apply.
* * * * *


Sec.  4.35  [Amended]

0
9. Amend Sec.  4.35 as follows:
0
In paragraph (f)(1)(iii) remove the word ``or'' and add the word ``of'' 
in its place.


Sec.  4.37  [Amended]

0
10. Amend Sec.  4.37 as follows:
0
a. In the introductory sentence, remove ``Sec.  4.33(f)'' and add 
``Sec.  4.33(e)'' in its place.
0
b. In paragraph (b)(1), remove ``If both of two'' and add ``If both or 
neither of two'' in its place.
0
11. Amend Sec.  4.38 as follows:
0
a. In Sec.  4.38, remove ``Office of Hydropower Licensing'' each place 
it appears and add ``Office of Energy Projects'' in its place.
0
b. In paragraph (a), redesignate existing paragraphs (a)(2) through 
(a)(7) as paragraphs (a)(4) through (a)(9), add new paragraphs (a)(2) 
and (a)(3), and revise newly redesignated paragraph (a)(4).
0
c. Paragraph (b) is revised.
0
d. In paragraph (c)(1), remove ``(b)(5)'' and add ``(b)(6)'' in its 
place.
0
e. In paragraph (c)(1)(ii), remove ``(b)(1)'' and add ``(b)(2)'' in its 
place.
0
f. In paragraph (c)(2): remove ``(b)(6)'' and add ``(b)(7)'' in its 
place; remove ``(b)(4)(i)-(vi)'' and add ``(b)(5)(i)-(vi)'' in its 
place; and remove ``(b)(5)'' and add ``(b)(6)'' in its place.
0
g. In paragraph (c)(4)(ii), remove ``(b)(1)(vii)'' and add 
``(b)(2)(vii)'' in its place.
0
h. In paragraph (d)(1), remove ``Indian tribes, and other government 
offices'' and add ``Indian tribes, other government offices, and 
consulted members of the public'' in its place.
0
i. In paragraph (d)(2), remove ``resource agency and Indian tribe 
consulted and on other government offices'' and add ``resource agency, 
Indian tribes, and member of the public consulted, and on other 
government offices'' in its place.
0
j. In paragraph (e), a new paragraph (e)(4) is added.
0
k. In paragraph (f), paragraph (7) is removed, and paragraphs (8) and 
(9) are redesignated (7) and (8), respectively, and in newly 
redesignated paragraph (7), remove ``(b)(2)'' and add ``(b)(3)'' in its 
place.
0
l. In paragraph (g)(1), remove the phrase ``(b)(2)'' and add the phrase 
``(b)(3)'' in its place.
0
m. In paragraph (g)(1), ``(b)(2)'' is removed and ``(b)(3)'' is added 
in its place.
0
n. Paragraph (g)(2) is revised.
0
o. Paragraph (h) is removed.
    The revised and added text reads as follows:


Sec.  4.38  Consultation requirements.

    (a) * * *
    (2) Each requirement in this section to contact or consult with 
resource agencies or Indian tribes shall be construed to require as 
well that the potential applicant contact or consult with members of 
the public.
    (3) If a potential applicant for an original license commences 
first stage pre-filing consultation on or after July 23, 2005 it shall 
file a notification of intent to file a license application pursuant to 
Sec.  5.5 and a pre-application document pursuant to the provisions of 
Sec.  5.6.
    (4) 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 that commences pre-filing consultation on or after 
July 23, 2005 must, at the time it files its notification of intent to 
seek a license pursuant to Sec.  5.6 of this chapter and a pre-
application document pursuant to Sec.  5.6 of this chapter and, at the 
same time, provide a copy of the pre-application document to the 
entities specified in Sec.  5.6(a) of this chapter.
    (2) A potential applicant for an original license that commences 
pre-filing consultation under this part prior to July 23, 2005 or 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

[[Page 51118]]

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) of this part.
    (3) (i) A potential exemption applicant and a potential applicant 
for an original license that commences pre-filing consultation;
    (A) On or after July 23, 2005 pursuant to part 5 of this chapter 
and receives approval from the Commission to use the license 
application procedures of part 4 of this chapter; or
    (B) Elects to commence pre-filing consultation under part 4 of this 
chapter prior to July 23, 2005; must:
    (1) 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;
    (2) Consult with the resource agencies, Indian tribes and members 
of the public on the scheduling and agenda of the joint meeting; and
    (3) 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.
    (ii) The joint meeting must be held no earlier than 30 days, but no 
later than 60 days, from, as applicable;
    (A) The date of the Commission's approval of the potential 
applicant's request to use the license application procedures of this 
part pursuant to the provisions of part 5 of this chapter; or
    (B) The date of the potential applicant's letter transmitting the 
information required by paragraph (b)(2) of this section, in the case 
of a potential exemption applicant or a potential license applicant 
that commences pre-filing consultation under this part prior to July 
23, 2005.
    (4) Members of the public must be informed of and invited to attend 
the joint meeting held pursuant to paragraph (b)(3) of this section by 
means of the public notice provision published in accordance with 
paragraph (g) of this section. Members of the public attending the 
meeting are entitled to participate in the meeting and to express their 
views regarding resource issues that should be addressed in any 
application for license or exemption that may be filed by the potential 
applicant. Attendance of the public at any site visit held pursuant to 
paragraph (b)(3) of this section will be at the discretion of the 
potential applicant. 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 (b)(3) 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 and Indian tribe 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)(i) If a potential applicant and a resource agency or Indian 
tribe 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 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 agency or Indian tribe, 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 letter provided to 
the

[[Page 51119]]

potential applicant and all affected resource agencies and Indian 
tribes.
    (v) If a potential applicant does not 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)(2) of this section), or a study to the Director under 
paragraph (b)(6) of this section, or if a potential applicant disagrees 
with the Director's resolution of a dispute regarding a request for 
information (other than a dispute regarding the information specified 
in paragraph (b)(2) of this section) or a study, and if the potential 
applicant does not provide the requested information or conduct the 
requested study, the potential applicant must fully explain the basis 
for its disagreement in its application.
    (vi) 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 part, merely 
because the application does not include a particular study or 
particular information if the Director had previously found, under 
paragraph (b)(6)(iv) of this section, that each study or information is 
unreasonable or unnecessary for an informed decision by the Commission 
on the merits of the application or use of the study methodology 
requested is not a generally accepted practice.
    (7) 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 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.
* * * * *
    (e) * * *
    (4) Following October 23, 2003, a potential license applicant 
engaged in pre-filing consultation under part 4 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.
* * * * *
    (g) * * *
    (2)(i) A potential applicant must make available to the public for 
inspection and reproduction the information specified in paragraph 
(b)(2) of this section from the date on which the notice required by 
paragraph (g)(1) of this section is first published until a final order 
is issued on any 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)(2) of this section.

0
12. Amend Sec.  4.39 as follows:
0
a. Paragraph (a) is revised.
0
b. Paragraph (b), introductory text, is revised.
0
c. Paragraph (e) 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 
this 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.


Sec.  4.40  [Amended]

0
13. Amend Sec.  4.40 as follows:
    In paragraph (b), remove ``Division of Hydropower Licensing'' and 
add ``Office of Energy Projects'' in its place.

0
14. Amend Sec.  4.41 as follows:
0
a. In paragraph (c)(4)(i), remove ``a flow duration curve'' and add 
``monthly flow duration curves'' in its place. After the phrase 
``deriving the'', remove ``curve'' and add ``curves'' in its place.
0
b. In paragraph (c)(4)(iii), add ``minimum and maximum'' between 
``estimated'' and ``hydraulic''.
0
c. In paragraph (e)(4)(iii), remove ``and'' the first place it appears.
0
d. In paragraph (e)(4)(iv), add ``and'' after the word 
``contingencies;''.
0
e. Paragraph (e)(4)(v) is added.
0
f. In paragraph (e)(7), remove ``and'' after ``constructed;''.
0
g. In paragraph (e)(8), remove the period after ``section'' and add a 
semi-colon in its place.
0
h. Paragraphs (e)(9) and (e)(10) are added.
0
i. In paragraph (f)(9)(i), remove ``Soil Conservation Service'' and add 
``Natural Resources Conservation Service'' in its place.
0
j. Paragraph (h), introductory text, is revised.
0
k. In paragraph (h)(2), second sentence, remove ``license'' from ``the 
license application''.
0
l. Paragraph (h)(3)(iv) is added.
0
m. Paragraph (h)(4)(ii) is revised.
    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;
* * * * *

[[Page 51120]]

    (9) An estimate of the cost to develop the license application; and
    (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 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 known 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.

0
15. Amend Sec.  4.51 as follows:
0
a. In paragraph (c)(2)(i), remove ``a flow duration curve'' and add 
``monthly flow duration curves'' in its place and remove ``curve'' the 
second place it appears and add ``curves'' in its place.
0
b. In paragraph (c)(2)(iii), before the word ``maximum'', add ``minimum 
and''.
0
c. Paragraph (e)(4) is revised.
0
d. Paragraphs (e)(7)-(9) are added.
0
e. Paragraph (g) is revised.
0
f. Paragraph (h) is revised.
    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-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; 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) of this chapter.
    (h) Exhibit G. See Sec.  4.41(h) of this chapter.
* * * * *


Sec.  4.60  [Amended]

0
16. Amend Sec.  4.60 as follows:
0
In paragraph (b), remove ``Division of Public Information'' and add 
``Public Reference Room'' in its place.

0
17. Amend Sec.  4.61 as follows:
0
a. In paragraph (c)(1)(vii), after the first appearance of 
``estimated'' add ``minimum and maximum''. After ``1.5 megawatts,'' 
remove ``a'' and add ``monthly'' in its place. Remove ``curve'' and add 
in its place ``curves''.
0
b. Paragraph (c)(1)(x) is added.
0
c. Paragraphs (c) (3) through (9) are added.
0
d. Paragraph (e) is revised.
0
e. Paragraph (f) is revised.
    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) of this chapter.
    (f) Exhibit G. See Sec.  4.41(h) of this chapter.


Sec.  4.70  [Amended]

0
18. In Sec.  4.70, remove ``or other hydroelectric power project 
authorized by Congress''.


Sec.  4.81  [Amended]

0
19. In Sec.  4.81, paragraph (b)(5) is revised to read as follows:
    The revised 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 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

[[Page 51121]]

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;
* * * * *


Sec.  4.90  [Amended]

0
20. In Sec.  4.90, remove ``Sec.  4.30(b)(26)'' and add ``Sec.  
4.30(b)(28)'' in its place.
0
21. Amend Sec.  4.92 as follows:
0
a. In Sec.  4.92 remove ``Sec.  4.30(b)(26)'' wherever it appears and 
add ``Sec.  4.30(b)(28)'' in its place.
0
b. Paragraph (a)(2) is revised.
0
c. In paragraph (c), introductory text, remove ``Exhibit B'' and add 
``Exhibit F'' in its place.
0
d. Paragraph (d) is revised.
0
e. Paragraph (f) is revised.
    The revised 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) of this chapter.
* * * * *
    (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) of this 
chapter.


Sec.  4.93  [Amended]

0
22. In Sec.  4.93, remove from paragraph (a) ``Sec.  4.30(b)(26)(v)'' 
and add ``Sec.  4.30(b)(28)(v)'' in its place.


Sec.  4.101  [Amended]

0
23. In Sec.  4.101, remove ``4.30(b)(27)'' and add ``4.30(b)(29)'' in 
its place.

0
24. Amend Sec.  4.107 as follows:
0
a. Paragraph (d) is revised.
0
b. Paragraph (f) is revised.
    The revised 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) of this chapter.
* * * * *
    (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) of this chapter.


Sec.  4.200  [Amended]

0
25. In Sec.  4.200, remove from paragraph (c) ``on'' and add ``in'' in 
its place.

0
26. Add part 5 to read as follows:

PART 5--INTEGRATED LICENSE APPLICATION PROCESS

Sec.
5.1 Applicability, definitions, and requirement to consult.
5.2 Document availability
5.3 Process selection.
5.4 Acceleration of a license expiration date.
5.5 Notification of intent.
5.6 Pre-application document.
5.7 Tribal consultation.
5.8 Notice of commencement of proceeding and scoping document, or of 
approval to use traditional licensing process or alternative 
procedures.
5.9 Comments and information or study requests.
5.10 Scoping document 2.
5.11 Potential Applicant's proposed study plan and study plan 
meetings.
5.12 Comments on proposed study plan.
5.13 Revised study plan and study plan determination.
5.14 Formal study dispute resolution process.
5.15 Conduct of studies.
5.16 Preliminary licensing proposal.
5.17 Filing of application.
5.18 Application content.
5.19 Tendering notice and schedule.
5.20 Deficient applications.
5.21 Additional information.
5.22 Notice of acceptance and ready for environmental analysis.
5.23 Response to notice.
5.24 Applications not requiring a draft NEPA document.
5.25 Applications requiring a draft NEPA document.
5.26 Section 10(j) process.
5.27 Amendment of application.
5.28 Competing applications.
5.29 Other provisions.
5.30 Critical Energy Infrastructure Information.
5.31 Transition provision.

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


Sec.  5.1  Applicability, definitions, and requirement to consult.

    (a) 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.  4.30(b) of this parte and 
Sec.  16.2 of this part 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 as appropriate the National Marine 
Fisheries Service, the United States Fish and Wildlife Service, Bureau 
of Indian Affairs, 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 or Indian 
tribe under Section 401(a)(1) of the Federal Water Pollution Control 
Act (Clean Water Act), 33 U.S.C. 1341(c)(1)), the agency that 
administers the Coastal Zone Management Act, 16 U.S.C. Sec.  1451-1465, 
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.  5.2 and a pre-
application document pursuant to the provisions of 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) Purpose. The purpose of the integrated licensing process 
provided for in this part is to provide an efficient and timely 
licensing process that continues to ensure appropriate resource 
protections through better coordination of the Commission's processes 
with those of Federal and state agencies and Indian tribes that have 
authority to condition Commission licenses.
    (f) 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 (i.e., 
traditional process), pursuant to paragraph (c) of this section; or
    (2) Section 4.34(i) of this chapter, Alternative procedures.


Sec.  5.2  Document availability.

    (a) Pre-application document. (1) From the date a potential license 
applicant files a notification of intent to

[[Page 51122]]

seek a license pursuant to Sec.  5.5 until any related license 
application proceeding is terminated by the Commission, the potential 
license applicant must make reasonably available to the public for 
inspection at its principal place of business or another location that 
is more accessible to the public, the pre-application document and any 
materials referenced therein. These materials must be available for 
inspection during regular business hours in a form that is readily 
accessible, reviewable, and reproducible.
    (2) The materials specified in paragraph (a)(1) of this section 
must be made available to the requester at the location specified in 
paragraph (a)(1) of this section or through the mail, or otherwise. 
Except as provided in paragraph (a)(3) of this section, copies of the 
pre-application document and any materials referenced therein must be 
made available at their reasonable cost of reproduction plus, if 
applicable, postage.
    (3) A potential licensee must make requested copies of the 
materials specified in paragraph (a)(1) of this section available to 
the United States Fish and Wildlife Service, the National Marine 
Fisheries Service, the state agency responsible for fish and wildlife 
resources, any affected Federal land managing agencies, and Indian 
tribes without charge for the costs of reproduction or postage.
    (b) License application. (1) From the date on which a license 
application is filed under this part until the licensing proceeding for 
the project is terminated by the Commission, the license applicant must 
make reasonably available to the public for inspection at its principal 
place of business or another location that is more accessible to the 
public, 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. These materials 
must be available for inspection during regular business hours 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.
    (2) 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.
    (3) The materials specified in paragraph (b)(1) of this section 
must be made available to the requester at the location specified in 
paragraph (b)(1) of this section or through the mail. Except as 
provided in paragraph (b)(4) of this section, copies of the license 
application and any materials referenced therein must be made available 
at their reasonable cost of reproduction plus, if applicable, postage.
    (4) A licensee applicant must make requested copies of the 
materials specified in paragraph (b)(1) of this section available to 
the United States Fish and Wildlife Service, the National Marine 
Fisheries Service, and the state agency responsible for fish and 
wildlife resources, any affected Federal land managing agencies, and 
Indian tribes without charge for the costs of reproduction or postage.
    (c) Confidentiality of cultural information. A potential applicant 
must delete from any information made available to the public under 
paragraphs (a) and (b) of this section, specific site or property 
locations the disclosure of which would create a risk of harm, theft, 
or destruction of archeological or native American cultural resources 
or of 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.
    (d) Access. Anyone may file a petition with the Commission 
requesting access to the information specified in paragraphs (a) or (b) 
of this section if it believes that the potential applicant or 
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.


Sec.  5.3  Process selection

    (a)(1) Notwithstanding any other provision of this part or of parts 
4 and 16 of this chapter, a potential applicant for a new, subsequent, 
or original license may until July 23, 2005 elect to use the licensing 
procedures of this part or the licensing procedures of parts 4 and 16.
    (2) Any potential license applicant that files its notification of 
intent pursuant to Sec.  5.5 and pre-application document pursuant to 
Sec.  5.6 after July 23, 2005 must request authorization to use the 
licensing procedures of parts 4 and 16, as provided for in paragraphs 
(b)-(f) of this section.
    (b) A potential license applicant may file with the Commission a 
request to use the traditional licensing process or alternative 
procedures pursuant to this Section with its notification of intent 
pursuant to Sec.  5.5.
    (c)(1)(i) An application for authorization to use the traditional 
process must include justification for the request and any existing 
written comments on the potential applicant's proposal and a response 
thereto.
    (ii) A potential applicant requesting authorization to use the 
traditional process should address the following considerations:
    (A) Likelihood of timely license issuance;
    (B) Complexity of the resource issues;
    (C) Level of anticipated controversy;
    (D) Relative cost of the traditional process compared to the 
integrated process;
    (E) The amount of available information and potential for 
significant disputes over studies; and
    (F) Other factors believed by the commenter to be pertinent
    (2) A potential applicant requesting the use of Sec.  4.34(i) 
alternative procedures of this chapter must:
    (i) Demonstrate that a reasonable effort has been made to contact 
all agencies, Indian tribes, and others affected by the applicant's 
request, and that a consensus exists that the use of alternative 
procedures is appropriate under the circumstances;
    (ii) 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 potential 
applicant's proposal and proposals and recommendations of interested 
entities; and
    (iii) Provide a copy of the request to all affected resource 
agencies and Indian tribes and to all entities contacted by the 
applicant that have expressed an interest in the alternative pre-filing 
consultation process.
    (d)(1) The potential applicant must provide a copy of the request 
to use the traditional process or alternative procedures to all 
affected resource agencies, Indian tribes, and members of the public 
likely to be interested in the proceeding. The request must state that 
comments on the request to use the traditional process or alternative 
procedures, as applicable, must be filed with the Commission within 30 
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.
    (2) The potential applicant must also publish notice of the filing 
of its notification of intent, of the pre-application document, and of 
any request to use the traditional process or alternative procedures no 
later than the

[[Page 51123]]

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:
    (i) Disclose the filing date of the request to use the traditional 
process or alternative procedures, and the notification of intent and 
pre-application document;
    (ii) Briefly summarize these documents and the basis for the 
request to use the traditional process or alternative procedures;
    (iii) 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;
    (iv) 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 30 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;
    (v) State that comments on any request to use the traditional 
process should address, as appropriate to the circumstances of the 
request, the:
    (A) Likelihood of timely license issuance;
    (B) Complexity of the resource issues;
    (C) Level of anticipated controversy;
    (D) Relative cost of the traditional process compared to the 
integrated process; and
    (E) The amount of available information and potential for 
significant disputes over studies; and
    (F) Other factors believed by the commenter to be pertinent; and
    (vi) State that respondents must submit an electronic filing 
pursuant to Sec.  385.2003(c) or 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.
    (e) Requests to use the traditional process or alternative 
procedures shall be granted for good cause shown.


Sec.  5.4  Acceleration of a license expiration date.

    (a) Request for acceleration. (1) No later than five and one-half 
years prior to expiration of an existing license, 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 must 
make available the Pre-Application Document provided for in Sec.  5.6 
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.
    (2) The notice issued pursuant to paragraphs (b)(1)(A) and (B) and 
the written notice given pursuant to paragraph (b)(1)(C) 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.  5.5  Notification of intent.

    (a) Notification of intent. A potential applicant for an original, 
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) Requirement to notify. In order for a non-licensee to notify 
the Commission that it intends to file an application for an original, 
new, or subsequent license, or for an existing licensee to notify the 
Commission whether or not it intends to file an application for a new 
or subsequent license, a potential license applicant must file with the 
Commission pursuant to the requirements of subpart T of part 385 of 
this chapter 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;
    (ii) Every city, town, 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;
    (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; and
    (v) Affected Indian tribes.
    (c) Requirement to distribute. 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 of this 
chapter and, as appropriate, part 16 of this chapter (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

[[Page 51124]]

proceeding the notification of intent provided for in paragraph (a) of 
this section.
    (d) When to notify. An existing licensee or non-licensee potential 
applicant 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 the existing license expires.
    (e) Non-Federal representatives. A potential 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. A potential license 
applicant may at the same time request authorization to initiate 
consultation under section 106 of the National Historic Preservation 
Act and the implementing regulations at 36 CFR 800.2(c)(4).
    (f) Procedural matters. The provisions of subpart F of part 16 of 
this chapter apply to projects to which this part applies.
    (g) Construction of regulations. The provisions of this part and 
parts 4 and 16 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.  5.6  Pre-application document.

    (a) Pre-application document. (1) Simultaneously with the filing of 
its notification of intent to seek a license as provided for in Sec.  
5.5, and before it files any application for an original, new, or 
subsequent license, a potential applicant for a license to be filed 
pursuant to this part or part 4 of this chapter and, as appropriate, 
part 16 of this chapter, must file with the Commission and distribute 
to the appropriate Federal, state, and interstate resource agencies, 
Indian tribes, local governments, and members of the public likely to 
be interested in the proceeding, the pre-application document provided 
for in this section.
    (2) The agencies referred to in paragraph (a)(1) of this section 
include: Any state agency with responsibility for fish, wildlife, and 
botanical resources, water quality, coastal zone management plan 
consistency certification, shoreline management, and water resources; 
the U.S. Fish and Wildlife Service; the National Marine Fisheries 
Service; Environmental Protection Agency; State Historic Preservation 
Officer; Tribal Historic Preservation Officer; National Park Service; 
local, state, and regional recreation agencies and planning 
commissions; local and state zoning agencies; and any other state or 
Federal agency or Indian tribe with managerial authority over any part 
of project lands and waters.
    (b) Purpose of pre-application document. (1) The pre-application 
document provides the Commission and the entities identified in 
paragraph (a) of this section with existing information relevant to the 
project proposal that is in the potential applicant's possession or 
that the potential applicant can obtain with the exercise of due 
diligence. This existing, relevant, and reasonably available 
information is distributed to these entities to enable them to identify 
issues and related information needs, develop study requests and study 
plans, and prepare documents analyzing any license application that may 
be filed. It is also a precursor to the environmental analysis section 
of the Preliminary Licensing Proposal or draft license application 
provided for in Sec.  5.16, Exhibit E of the final license application, 
and the Commission's scoping document(s) and environmental impact 
statement or environmental assessment under the National Environmental 
Policy Act (NEPA).
    (2) A potential applicant is not required to conduct studies in 
order to generate information for inclusion in the pre-application 
document. Rather, a potential applicant must exercise due diligence in 
determining what information exists that is relevant to describing the 
existing environment and potential impacts of the project proposal 
(including cumulative impacts), obtaining that information if the 
potential applicant does not already possess it, and describing or 
summarizing it as provided for in paragraph (d) of this section. Due 
diligence includes, but is not limited to, contacting appropriate 
agencies and Indian tribes that may have relevant information and 
review of Federal and state comprehensive plans filed with the 
Commission and listed on the Commission's Web site at http://www.ferc.gov.
    (c) Form and distribution protocol.--(1) General requirements. As 
specifically provided for in the content requirements of paragraph (d) 
of this section, the pre-application document must describe the 
existing and proposed (if any) project facilities and operations, 
provide information on the existing environment, and existing data or 
studies relevant to the existing environment, and any known and 
potential impacts of the proposed project on the specified resources.
    (2) Availability of source information and studies. The sources of 
information on the existing environment and known or potential resource 
impacts included in the descriptions and summaries must be referenced 
in the relevant section of the document, and in an appendix to the 
document. The information must be provided upon request to recipients 
of the pre-application document. A potential applicant must provide the 
requested information within 20 days from receipt of the request. 
Potential applicants and requesters are strongly encouraged to use 
electronic means or compacts disks to distribute studies and other 
forms of information, but a potential applicant must, upon request, 
provide the information in hard copy form. The potential applicant is 
also strongly encouraged to include with the pre-application document 
any written protocol for distribution consistent with this paragraph to 
which it has agreed with agencies, Indian tribes, or other entities.
    (d) Content requirements.--(1) Process plan and schedule. The pre-
application document must include a plan and schedule for all pre-
application activity that incorporates the time frames for pre-filing 
consultation, information gathering, and studies set forth in this 
part. The plan and schedule must include a proposed location and date 
for the scoping meeting and site visit required by Sec.  
5.8(b)(3)(viii).
    (2) Project location, facilities, and operations. The potential 
applicant must include in the pre-application document:
    (i) The exact name and business address, and telephone number of 
each person authorized to act as agent for the applicant;
    (ii) Detailed maps showing lands and waters within the project 
boundary by township, range, and section, as well as by state, county, 
river, river mile, and closest town, and also showing the specific 
location of any Federal and tribal lands, and the location of proposed 
project facilities, including roads, transmission lines, and any other 
appurtenant facilities;
    (iii) A detailed description of all existing and proposed project 
facilities and components, including:
    (A) The physical composition, dimensions, and general configuration 
of any dams, spillways, penstocks, canals, powerhouses, tailraces, and 
other structures proposed to be included

[[Page 51125]]

as part of the project or connected directly to it;
    (B) The normal maximum water surface area and normal maximum water 
surface elevation (mean sea level), gross storage capacity of any 
impoundments;
    (C) The number, type, and minimum and maximum hydraulic capacity 
and installed (rated) capacity of any proposed turbines or generators 
to be included as part of the project;
    (D) The number, length, voltage, and interconnections of any 
primary transmission lines proposed to be included as part of the 
project, including a single-line diagram showing the transfer of 
electricity from the project to the transmission grid or point of use; 
and
    (E) An estimate of the dependable capacity, average annual, and 
average monthly energy production in kilowatt hours (or mechanical 
equivalent);
    (iv) A description of the current (if applicable) and proposed 
operation of the project, including any daily or seasonal ramping 
rates, flushing flows, reservoir operations, and flood control 
operations.
    (v) In the case of an existing licensed project;
    (A) A complete description of the current license requirements; 
i.e., the requirements of the original license as amended during the 
license term;
    (B) A summary of project generation and outflow records for the 
five years preceding filing of the pre-application document;
    (C) Current net investment; and
    (D) A summary of the compliance history of the project, if 
applicable, including a description of any recurring situations of non-
compliance.
    (vi) A description of any new facilities or components to be 
constructed, plans for future development or rehabilitation of the 
project, and changes in project operation.
    (3) Description of existing environment and resource impacts.--(i) 
General requirements. A potential applicant must, based on the 
existing, relevant, and reasonably available information, include a 
discussion with respect to each resource that includes:
    (A) A description of the existing environment as required by 
paragraphs (d)(3)(ii)-(xiii) of this section;
    (B) Summaries (with references to sources of information or 
studies) of existing data or studies regarding the resource;
    (C) A description of any known or potential adverse impacts and 
issues associated with the construction, operation or maintenance of 
the proposed project, including continuing and cumulative impacts; and
    (D) A description of any existing or proposed project facilities or 
operations, and management activities undertaken for the purpose of 
protecting, mitigating impacts to, or enhancing resources affected by 
the project, including a statement of whether such measures are 
required by the project license, or were undertaken for other reasons. 
The type and amount of the information included in the discussion must 
be commensurate with the scope and level of resource impacts caused or 
potentially caused by the proposed project. Potential license 
applicants are encouraged to provide photographs or other visual aids, 
as appropriate, to supplement text, charts, and graphs included in the 
discussion.
    (ii) Geology and soils. Descriptions and maps showing the existing 
geology, topography, and soils of the proposed project and surrounding 
area. Components of the description must include:
    (A) A description of geological features, including bedrock 
lithology, stratigraphy, structural features, glacial features, 
unconsolidated deposits, and mineral resources at the project site;
    (B) A description of the soils, including the types, occurrence, 
physical and chemical characteristics, erodability and potential for 
mass soil movement;
    (C) A description of reservoir shorelines and streambanks, 
including:
    (1) Steepness, composition (bedrock and unconsolidated deposits), 
and vegetative cover; and
    (2) Existing erosion, mass soil movement, slumping, or other forms 
of instability, including identification of project facilities or 
operations that are known to or may cause these conditions.
    (iii) Water resources. A description of the water resources of the 
proposed project and surrounding area. This must address the quantity 
and quality (chemical/physical parameters) of all waters affected by 
the project, including but not limited to the project reservoir(s) and 
tributaries thereto, bypassed reach, and tailrace. Components of the 
description must include:
    (A) Drainage area;
    (B) 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, specifying any adjustments made for 
evaporation, leakage, minimum flow releases, or other reductions in 
available flow;
    (C) A monthly 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;
    (D) 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;
    (E) Existing instream flow uses of streams in the project area that 
would be affected by project construction and operation; information on 
existing water rights and water rights applications potentially 
affecting or affected by the project;
    (F) Any federally-approved water quality standards applicable to 
project waters;
    (G) Seasonal variation of existing water quality data for any 
stream, lake, or reservoir that would be affected by the proposed 
project, including information on:
    (1) Water temperature and dissolved oxygen, including seasonal 
vertical profiles in the reservoir;
    (2) Other physical and chemical parameters to include, as 
appropriate for the project; total dissolved gas, pH, total hardness, 
specific conductance, cholorphyll a, suspended sediment concentrations, 
total nitrogen (mg/L as N), total phosphorus (mg/L as P), and fecal 
coliform (E. Coli) concentrations;
    (H) The following data with respect to any existing or proposed 
lake or reservoir associated with the proposed project; surface area, 
volume, maximum depth, mean depth, flushing rate, shoreline length, 
substrate composition; and
    (I) Gradient for downstream reaches directly affected by the 
proposed project.
    (iv) Fish and aquatic resources. A description of the fish and 
other aquatic resources, including invasive species, in the project 
vicinity. This section must discuss the existing fish and 
macroinvertebrate communities, including the presence or absence of 
anadromous, catadromous, or migratory fish, and any known or potential 
upstream or downstream impacts of the project on the aquatic community. 
Components of the description must include:
    (A) Identification of existing fish and aquatic communities;
    (B) Identification of any essential fish habitat as defined under 
the Magnuson-Stevens Fishery Conservation and Management Act and 
established by the National Marine Fisheries Service; and

[[Page 51126]]

    (C) Temporal and spacial distribution of fish and aquatic 
communities and any associated trends with respect to:
    (1) Species and life stage composition;
    (2) Standing crop;
    (3) Age and growth data;
    (4) Spawning run timing; and
    (5) The extent and location of spawning, rearing, feeding, and 
wintering habitat.
    (v) Wildlife and botanical resources. A description of the wildlife 
and botanical resources, including invasive species, in the project 
vicinity. Components of this description must include:
    (A) Upland habitat(s) in the project vicinity, including the 
project's transmission line corridor or right-of-way and a listing of 
plant and animal species that use the habitat(s); and
    (B) Temporal or spacial distribution of species considered 
important because of their commercial, recreational, or cultural value.
    (vi) Wetlands, riparian, and littoral habitat. A description of the 
floodplain, wetlands, riparian habitats, and littoral in the project 
vicinity. Components of this description must include:
    (A) A list of plant and animal species, including invasive species, 
that use the wetland, littoral, and riparian habitat;
    (B) A map delineating the wetlands, riparian, and littoral habitat; 
and
    (C) Estimates of acreage for each type of wetland, riparian, or 
littoral habitat, including variability in such availability as a 
function of storage at a project that is not operated in run-of-river 
mode.
    (vii) Rare, threatened and endangered species. A description of any 
listed rare, threatened and endangered, candidate, or special status 
species that may be present in the project vicinity. Components of this 
description must include:
    (A) A list of Federal- and state-listed, or proposed to be listed, 
threatened and endangered species known to be present in the project 
vicinity;
    (B) Identification of habitat requirements;
    (C) References to any known biological opinion, status reports, or 
recovery plan pertaining to a listed species;
    (D) Extent and location of any federally-designated critical 
habitat, or other habitat for listed species in the project area; and
    (E) Temporal and spatial distribution of the listed species within 
the project vicinity.
    (viii) Recreation and land use. A description of the existing 
recreational and land uses and opportunities within the project 
boundary. The components of this description include:
    (A) Text description illustrated by maps of existing recreational 
facilities, type of activity supported, location, capacity, ownership 
and management;
    (B) Current recreational use of project lands and waters compared 
to facility or resource capacity;
    (C) Existing shoreline buffer zones within the project boundary;
    (D) Current and future recreation needs identified in current State 
Comprehensive Outdoor Recreation Plans, other applicable plans on file 
with the Commission, or other relevant local, state, or regional 
conservation and recreation plans;
    (E) If the potential applicant is an existing licensee, its current 
shoreline management plan or policy, if any, with regard to permitting 
development of piers, boat docks and landings, bulkheads, and other 
shoreline facilities on project lands and waters;
    (F) A discussion of whether the project is located within or 
adjacent to a:
    (1) River segment that is designated as part of, or under study for 
inclusion in, the National Wild and Scenic River System; or
    (2) State-protected river segment;
    (G) Whether any project lands are under study for inclusion in the 
National Trails System or designated as, or under study for inclusion 
as, a Wilderness Area.
    (H) Any regionally or nationally important recreation areas in the 
project vicinity;
    (I) Non-recreational land use and management within the project 
boundary; and
    (J) Recreational and non-recreational land use and management 
adjacent to the project boundary.
    (ix) Aesthetic resources. A description of the visual 
characteristics of the lands and waters affected by the project. 
Components of this description include a description of the dam, 
natural water features, and other scenic attractions of the project and 
surrounding vicinity. Potential applicants are encouraged to supplement 
the text description with visual aids.
    (x) Cultural resources. A description of the known cultural or 
historical resources of the proposed project and surrounding area. 
Components of this description include:
    (A) Identification of any historic or archaeological site in the 
proposed project vicinity, 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;
    (B) 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 within or adjacent 
to the project boundary; and
    (C) Identification of Indian tribes that may attach religious and 
cultural significance to historic properties within the project 
boundary or in the project vicinity; as well as available information 
on Indian traditional cultural and religious properties, whether on or 
off of any federally-recognized Indian reservation (A potential 
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 general description of socio-
economic conditions in the vicinity of the project. Components of this 
description include general land use patterns (e.g., urban, 
agricultural, forested), population patterns, and sources of employment 
in the project vicinity.
    (xii) Tribal resources. A description of Indian tribes, tribal 
lands, and interests that may be affected by the project Components of 
this description include:
    (A) Identification of information on resources specified in 
paragraphs (d)(2)(ii)-(xi) of this section to the extent that existing 
project construction and operation affecting those resources may impact 
tribal cultural or economic interests, e.g., impacts of project-induced 
soil erosion on tribal cultural sites; and
    (B) Identification of impacts on Indian tribes of existing project 
construction and operation that may affect tribal interests not 
necessarily associated with resources specified in paragraphs 
(d)(3)(ii)-(xi) of this Section, e.g., tribal fishing practices or 
agreements between the Indian tribe and other entities other than the 
potential applicant that have a connection to project construction and 
operation.
    (xiii) River basin description. A general description of the river 
basin or sub-basin, as appropriate, in which the proposed project is 
located, including information on:

[[Page 51127]]

    (A) The area of the river basin or sub-basin and length of stream 
reaches therein;
    (B) Major land and water uses in the project area;
    (C) All dams and diversion structures in the basin or sub-basin, 
regardless of function; and
    (D) Tributary rivers and streams, the resources of which are or may 
be affected by project operations;
    (4) Preliminary issues and studies list. Based on the resource 
description and impacts discussion required by paragraphs (d)(1) and 
(d)(2) of this section; the pre-application document must include with 
respect to each resource area identified above, a list of:
    (i) Issues pertaining to the identified resources;
    (ii) Potential studies or information gathering requirements 
associated with the identified issues;
    (iii) Relevant qualifying Federal and state or tribal comprehensive 
waterway plans; and
    (iv) Relevant resource management plans.
    (5) Summary of contacts. An appendix summarizing contacts with 
Federal, state, and interstate resource agencies, Indian tribes, non-
governmental organizations, or other members of the public made in 
connection with preparing the pre-application document sufficient to 
enable the Commission to determine if due diligence has been exercised 
in obtaining relevant information.
    (e) 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.


Sec.  5.7  Tribal consultation.

    A meeting shall be held no later than 30 days following issuance of 
the notification of intent required by Sec.  5.5 between each Indian 
tribe likely to be affected by the potential license application and 
the Commission staff if the affected Indian tribe agrees to such 
meeting.


Sec.  5.8  Notice of commencement of proceeding and scoping document, 
or of approval to use traditional licensing process or alternative 
procedures.

    (a) Notice. Within 60 days of the notification of intent required 
under Sec.  5.5, filing of the pre-application document pursuant to 
Sec.  5.6, and filing of any request to use the traditional licensing 
process or alternative procedures, the Commission will issue a notice 
of commencement of proceeding and scoping document or of approval of a 
request to use the traditional licensing process or alternative 
procedures.
    (b) Notice contents. The notice shall include:
    (1) The decision of the Director of the Office of Energy Projects 
on any request to use the traditional licensing process or alternative 
procedures.
    (2) If appropriate, a request by the Commission to initiate 
informal 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 implementing regulations at 50 CFR 600.920, or section 106 of the 
National Historic Preservation Act and implementing regulations at 36 
CFR 800.2, and, if applicable, designation of the potential applicant 
as the Commission's non-federal representative.
    (3) If the potential license application is to be developed and 
filed pursuant to this part, notice of:
    (i) The applicant's intent to file a license application;
    (ii) The filing of the pre-application document;
    (iii) Commencement of the proceeding;
    (iv) A request for comments on the pre-application document 
(including the proposed process plan and schedule);
    (v) A statement that all communications to or from the Commission 
staff related to the merits of the potential application must be filed 
with the Commission;
    (vi) The request for other Federal or state agencies or Indian 
tribes to be cooperating agencies for purposes of developing an 
environmental document;
    (vii) The Commission's intent with respect to preparation of an 
environmental impact statement; and
    (viii) A public scoping meeting and site visit to be held within 30 
days of the notice.
    (c) Scoping Document 1. At the same time the Commission issues the 
notice provided for in paragraph (a) of this Section, the Commission 
staff will issue Scoping Document 1. Scoping Document 1 will include:
    (1) An introductory section describing the purpose of the scoping 
document, the date and time of the scoping meeting, procedures for 
submitting written comments, and a request for information or study 
requests 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 list of qualifying tribal comprehensive waterway plans;
    (6) A process plan and schedule and a draft outline of the 
environmental document; and
    (7) A list of recipients.
    (d) Scoping meeting and site visit. The purpose of the public 
meeting and site visit is to:
    (1) Initiate 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 and study needs;
    (4) Review, discuss, and finalize the process plan and schedule for 
pre-filing activity that incorporates the time periods provided for in 
this part and, to the extent reasonably possible, maximizes 
coordination of Federal, state, and tribal permitting and certification 
processes, including consultation under section 7 of the Endangered 
Species Act and water quality certification or waiver thereof under 
section 401 of the Clean Water Act; and
    (5) 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.

[[Page 51128]]

    (e) Method of notice. The public notice provided for in this 
section will be given by:
    (1) Publishing notice in the Federal Register;
    (2) Publishing notice 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, state water quality and coastal zone management plan 
consistency certification agencies, Indian tribes, and non-governmental 
organizations by mail.


Sec.  5.9  Comments and information or study requests.

    (a) Comments and study requests. Comments on the pre-application 
document and the Commission staff's Scoping Document 1 must be filed 
with the Commission within 60 days following the Commission's notice of 
consultation procedures issued pursuant to Sec.  5.8. Comments, 
including those by Commission staff, must be accompanied by any 
information gathering and study requests, and should include 
information and studies needed for consultation under section 7 of the 
Endangered Species Act and water quality certification under Section 
401 of the Clean Water Act.
    (b) Content of study request. Any information or study request 
must:
    (1) Describe the goals and objectives of each study proposal and 
the information to be obtained;
    (2) If applicable, explain the relevant resource management goals 
of the agencies or Indian tribes with jurisdiction over the resource to 
be studied;
    (3) If the requester is a not 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, 
and how the study results would inform the development of license 
requirements;
    (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; and
    (7) Describe considerations of level of effort and cost, as 
applicable, and why any proposed alternative studies would not be 
sufficient to meet the stated information needs.
    (c) Applicant seeking PURPA benefits; estimate of fees. If a 
potential 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 potential 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 a 
potential 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 potential applicant with a new 
estimate and submit a copy to the Commission.


Sec.  5.10  Scoping Document 2.

    Within 45 days following the deadline for filing of comments on 
Scoping Document 1, the Commission staff shall, if necessary, issue 
Scoping Document 2.


Sec.  5.11  Potential Applicant's proposed study plan and study plan 
meetings.

    (a) Within 45 days following the deadline for filing of comments on 
the pre-application document, including information and study requests, 
the potential applicant must file with the Commission a proposed study 
plan.
    (b) The potential applicant's proposed study plan must include with 
respect to each proposed study:
    (1) A detailed description of the study and the methodology to be 
used;
    (2) A schedule for conducting the study;
    (3) Provisions for periodic progress reports, including the manner 
and extent to which information will be shared; and sufficient time for 
technical review of the analysis and results; and
    (4) If the potential applicant does not adopt a requested study, an 
explanation of why the request was not adopted, with reference to the 
criteria set forth in Sec.  5.9(b).
    (c) The potential applicant's proposed study plan must also include 
provisions for the initial and updated study reports and meetings 
provided for in Sec.  5.15.
    (d) The applicant's proposed study plan must:
    (1) Describe the goals and objectives of each study proposal and 
the information to be obtained;
    (2) Address any known resource management goals of the agencies or 
Indian tribes 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 level of effort and cost, as 
applicable.
    (e) The potential applicant's proposed study plan must be 
accompanied by a proposal for conducting a study plan meeting or 
meetings during the 90-day period provided for in Sec.  5.12 for the 
purpose of clarifying the potential applicant's proposed study plan and 
any initial information gathering or study requests, and to resolve any 
outstanding issues with respect to the proposed study plan. The initial 
study plan meeting must be held no later than 30 days after the 
deadline date for filing of the potential applicant's proposed study 
plan.


Sec.  5.12  Comments on proposed study plan.

    Comments on the potential applicant's proposed study plan, 
including any revised information or study requests, must be filed 
within 90 days after the proposed study plan is filed. This filing must 
also include an explanation of any study plan concerns and any 
accommodations reached with the potential applicant regarding those 
concerns. Any proposed modifications to the potential applicant's 
proposed study plan must address the criteria in Sec.  5.9(b).


Sec.  5.13  Revised study plan and study plan determination.

    (a) Within 30 days following the deadline for filing comments on 
the potential applicant's proposed study plan, as provided for in Sec.  
5.12, the potential applicant must 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 potential applicant 
does not adopt a requested study, it must explain why the request was 
not adopted, with

[[Page 51129]]

reference to the criteria set forth in Sec.  5.9(b).
    (b) Within 15 days following filing of the potential applicant's 
revised study plan, participants may file comments thereon.
    (c) Within 30 days following the date the potential applicant files 
its revised study plan, the Director of Energy Projects will issue a 
Study Plan Determination with regard to the potential applicant's study 
plan, including any modifications determined to be necessary in light 
of the record.
    (d) If no notice of study dispute is filed pursuant to Sec.  5.14 
within 20 days of the Study Plan Determination, the study plan as 
approved in the Study Plan Determination shall be deemed to be approved 
and the potential applicant shall proceed with the approved studies. If 
a potential applicant fails to obtain or conduct a study as required by 
Study Plan Determination, its license application may be considered 
deficient.


Sec.  5.14  Formal study dispute resolution process.

    (a) Within 20 days of the Study Plan 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 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 respect to studies 
pertaining directly to the exercise of their authorities under sections 
4(e) and 18 of the Federal Power Act or section 401 of the Clean Water 
Act.
    (b) The notice of study dispute must explain how the disputing 
agency's or Indian tribe's study request satisfies the criteria set 
forth in Sec.  5.9(b), and shall identify and provide contact 
information for the panel member designated by the disputing agency or 
Indian tribe, as discussed in paragraph (d) of this section.
    (c) Studies and portions of study plans approved in the Study Plan 
Determination that are not the subject of a notice of dispute shall be 
deemed to be approved, and the potential 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 who is not otherwise 
involved in the proceeding, and who shall serve as the panel chair;
    (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. The 
two panelists shall make every reasonable effort to select the third 
panel member. If however no third panel member has been selected by the 
other two panelists within 15 days, an appropriate third panel member 
will be selected at random from the list of technical experts 
maintained by the Commission.
    (e) If more than one agency or Indian 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 Indian tribes must 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 Web site. 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, 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 Indian tribe which filed the notice of dispute 
will be borne by the Commission or the agency or Indian 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 potential applicant may file with the Commission and serve upon the 
panel members comments and information regarding the dispute.
    (j) Prior to engaging in deliberative meetings, the panel shall 
hold a technical conference for the purpose of clarifying the matters 
in dispute with reference to the study criteria. The technical 
conference shall be chaired by the Commission staff member of the 
panel. It shall be open to all participants, and the panel shall 
receive information from the participants as it deems appropriate.
    (k) No later than 50 days following the notice of study dispute, 
the panel shall make and deliver to the Director of the Office of 
Energy Projects a finding, with respect to each information or study 
request in dispute, concerning the extent to which each criteria set 
forth in Sec.  5.9(b) is met or not met, and why, and make 
recommendations regarding the disputed study request based on its 
findings. The panel's findings and recommendations must be based on the 
record in the proceeding. The panel shall file with its findings and 
recommendations all of the materials received by the panel. Any 
recommendation for the potential applicant to provide information or a 
study must include the technical specifications, including data 
acquisition techniques and methodologies.
    (l) No later than 70 days from the date of filing of the notice of 
study dispute, the Director of the Office of Energy Projects will 
review and consider the recommendations of the panel, and will issue a 
written determination. The Director's determination will be made with 
reference to the study criteria set forth in Sec.  5.9(b) and any 
applicable law or Commission policies and practices, will take into 
account the technical expertise of the panel, and will explain why any 
panel recommendation was rejected, if applicable. The Director's 
determination shall constitute an amendment to the approved study plan.


Sec.  5.15  Conduct of studies.

    (a) Implementation. The potential applicant must gather information 
and conduct studies as provided for in the approved study plan and 
schedule.
    (b) Progress reports. The potential applicant must prepare and 
provide to the participants the progress reports provided for in Sec.  
5.11(b)(3). Upon request of any participant, the potential applicant 
will provide documentation of study results.
    (c) Initial study report. (1) Pursuant to the Commission-approved 
study plan and schedule provided for in Sec.  5.13 or no later than one 
year after Commission approval of the study plan, whichever comes 
first, the potential applicant must prepare and file with the 
Commission an initial study report describing its overall progress in 
implementing the

[[Page 51130]]

study plan and schedule and the data collected, including an 
explanation of any variance from the study plan and schedule. The 
report must also include any modifications to ongoing studies or new 
studies proposed by the potential applicant.
    (2) Within 15 days following the filing of the initial study 
report, the potential applicant shall hold a meeting with the 
participants and Commission staff to discuss the study results and the 
potential applicant's and or other participant's proposals, if any, to 
modify the study plan in light of the progress of the study plan and 
data collected.
    (3) Within 15 days following the meeting provided for in paragraph 
(c)(2) of this section, the potential applicant shall file a meeting 
summary, including any modifications to ongoing studies or new studies 
proposed by the potential applicant.
    (4) Any participant or the Commission staff may file a disagreement 
concerning the applicant's meeting summary within 30 days, setting 
forth the basis for the disagreement. This filing must also include any 
modifications to ongoing studies or new studies proposed by the 
Commission staff or other participant.
    (5) Responses to any filings made pursuant to paragraph (c)(4) of 
this section must be filed within 30 days.
    (6) No later than 30 days following the due date for responses 
provided for in paragraph (c)(5) of this section, the Director will 
resolve the disagreement and amend the approved study plan as 
appropriate.
    (7) If no participant or the Commission staff files a disagreement 
concerning the potential applicant's meeting summary and request to 
amend the approved study plan within 15 days, any proposed amendment 
shall be deemed to be approved.
    (d) Criteria for modification of approved study. Any proposal to 
modify an ongoing study pursuant to paragraphs (c)(1)-(4) of this 
section must be accompanied by a showing of good cause why the proposal 
should be approved, and must include, as appropriate to the facts of 
the case, a demonstration that:
    (1) Approved studies were not conducted as provided for in the 
approved study plan; or
    (2) The study was conducted under anomalous environmental 
conditions or that environmental conditions have changed in a material 
way.
    (e) Criteria for new study. Any proposal for new information 
gathering or studies pursuant to paragraphs (c)(1)-(4) of this section 
must be accompanied by a showing of good cause why the proposal should 
be approved, and must include, as appropriate to the facts of the case, 
a statement explaining:
    (1) Any material changes in the law or regulations applicable to 
the information request;
    (2) Why the goals and objectives of any approved study could not be 
met with the approved study methodology;
    (3) Why the request was not made earlier;
    (4) Significant changes in the project proposal or that significant 
new information material to the study objectives has become available; 
and
    (5) Why the new study request satisfies the study criteria in Sec.  
5.9(b).
    (f) Updated study report. Pursuant to the Commission-approved study 
plan and schedule provided for in Sec.  5.13, or no later than two 
years after Commission approval of the study plan and schedule, 
whichever comes first, the potential applicant shall prepare and file 
with the Commission an updated study report describing its overall 
progress in implementing the study plan and schedule and the data 
collected, including an explanation of any variance from the study plan 
and schedule. The report must also include any modifications to ongoing 
studies or new studies proposed by the potential applicant. The review, 
comment, and disagreement resolution provisions of paragraphs (c)(4)-
(7) of this section shall apply to the updated study report. Any 
proposal to modify an ongoing study must be accompanied by a showing of 
good cause why the proposal should be approved as set forth in 
paragraph (d) of this section. Any proposal for new information 
gathering or studies is subject to paragraph (e) of this section except 
that the proponent must demonstrate extraordinary circumstances 
warranting approval. The applicant must promptly proceed to complete 
any remaining undisputed information-gathering or studies under its 
proposed amendments to the study plan, if any, and must proceed to 
complete any information-gathering or studies that are the subject of a 
disagreement upon the Director's resolution of the disagreement.


Sec.  5.16  Preliminary licensing proposal.

    (a) No later than 150 days prior to the deadline for filing a new 
or subsequent license application, if applicable, the potential 
applicant must file for comment a preliminary licensing proposal.
    (b) The preliminary licensing proposal must:
    (1) Clearly describe, as applicable, the existing and proposed 
project facilities, including project lands and waters;
    (2) Clearly describe, as applicable, the existing and proposed 
project operation and maintenance plan, to include measures for 
protection, mitigation, and enhancement measures with respect to each 
resource affected by the project proposal; and
    (3) Include the potential applicant's draft environmental analysis 
by resource area of the continuing and incremental impacts, if any, of 
its preliminary licensing proposal, including the results of its 
studies conducted under the approved study plan.
    (c) A potential applicant may elect to file a draft license 
application which includes the contents of a license application 
required by Sec.  5.18 instead of the Preliminary Licensing Proposal. A 
potential applicant that elects to file a draft license application 
must include notice of its intent to do so in the updated study report 
required by Sec.  5.15(f).
    (d) A potential applicant that has been designated as the 
Commission's non-Federal representative may include a draft Biological 
Assessment, draft Essential Fish Habitat Assessment, and draft Historic 
Properties Management Plan with its Preliminary Licensing Proposal or 
draft license application.
    (e) Within 90 days of the date the potential applicant files the 
Preliminary Licensing Proposal or draft license application, 
participants and the Commission staff may file comments on the 
Preliminary Licensing Proposal or 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 participant 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.  5.15(f).
    (f) A waiver of the requirement to file the Preliminary Licensing 
Proposal or draft license application may be requested, based on a 
consensus of the participants in favor of such waiver.


Sec.  5.17  Filing of application.

    (a) Deadline--new or subsequent license application. An application 
for a new or subsequent license must 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

[[Page 51131]]

apply to licensing proceedings involving a subsequent license.
    (c) Rejection or dismissal of application. If the Commission 
rejects or dismisses an application for a new or subsequent license 
filed under this part pursuant to the provisions of Sec.  5.20, the 
application may not be refiled after the new or subsequent license 
application filing deadline specified in paragraph (a) of this section.
    (d)(1) Filing and service. Each applicant for a license under this 
part must submit the application to the Commission's Secretary for 
filing pursuant to the requirements of subpart T of part 385 of this 
chapter. The applicant must serve one copy of the application 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) 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 Sec.  5.2(b) 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).
    (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 of this chapter 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) 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.


Sec.  5.18  Application content.

    (a) General content requirements. 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 located 
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 the 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)(B) 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 must 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 of--------, 2----.
-----------------------------------------------------------------------
(Applicant(s))
By:--------------------------------------------------------------------

    Subscribed and sworn to before me, a [Notary Public, or title of 
other official 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 (General instructions, initial 
statement, and Exhibits A, B, C, D, F, and G);
    (ii) License for a major unconstructed project and a major modified 
project: Sec.  4.41 of this chapter (General instructions, initial 
statement, Exhibits A, B, C, D, F, and G);
    (iii) License for a major project--existing dam: Sec.  4.51 of this 
chapter (General instructions, initial statement, Exhibits A, F, and 
G); or
    (iv) License for a project located at a new dam or diversion where 
the applicant seeks PURPA benefits: Sec.  292.208 of this chapter.
    (b) Exhibit E--Environmental Exhibit. The specifications for 
Exhibit E in

[[Page 51132]]

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 must address the resources 
listed in the Pre-Application Document provided for in Sec.  5.6; 
follow the Commission's ``Preparing Environmental Assessments: 
Guidelines for Applicants, Contractors, and Staff,'' as they may be 
updated from time-to-time; and meet the following format and content 
requirements:
    (1) 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.
    (2) 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.
    (3) Applicable laws. Include a discussion of the status of 
compliance with or consultation under the following laws, if 
applicable:
    (i) Section 401 of the Clean Water Act. The applicant must file a 
request for a water quality certification (WQC), as required by Section 
401 of the Clean Water Act no later than the deadline specified in 
Sec.  5.23(b). Potential applicants are encouraged to consult with the 
certifying agency or tribe concerning information requirements as early 
as possible.
    (ii) Endangered Species Act (ESA). Briefly describe the 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 must be included.
    (iii) 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 a draft ``EFH Assessment'' of the impacts of the project. The 
draft EFH Assessment should contain the information outlined in 50 CFR 
600.920(e).
    (iv) 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.
    (v) 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 may include a Historic Properties Management 
Plan (HPMP) to avoid or mitigate the effects. The applicant must 
include documentation of consultation with the Advisory Council, the 
State Historic Preservation Officer, Tribal Historic Preservation 
Officer, National Park Service, members of the public, and affected 
Indian tribes, where applicable.
    (vi) 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 must 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.
    (vii) 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 wilderness study area under the 
Wilderness Act.
    (4) Project facilities and operation. Provide a description of the 
project to include:
    (i) Maps showing existing and proposed project facilities, lands, 
and waters within the project boundary;
    (ii) The configuration of any dams, spillways, penstocks, canals, 
powerhouses, tailraces, and other structures;
    (iii) The normal maximum water surface area and normal maximum 
water surface elevation (mean sea level), gross storage capacity of any 
impoundments;
    (iv) The number, type, and minimum and maximum hydraulic capacity 
and installed (rated) capacity of existing and proposed turbines or 
generators to be included as part of the project;
    (v) An estimate of the dependable capacity, and average annual 
energy production in kilowatt hours (or mechanical equivalent);
    (vi) A description of the current (if applicable) and proposed 
operation of the project, including any daily or seasonal ramping 
rates, flushing flows, reservoir operations, and flood control 
operations.

[[Page 51133]]

    (5) Proposed action and action alternatives. (i) The environmental 
document must explain the effects of the applicant's proposal on 
resources. For each resource area addressed include:
    (A) A discussion of the affected environment;
    (B) A detailed analysis of the effects of the applicant's licensing 
proposal and, if reasonably possible, any preliminary terms and 
conditions filed with the Commission; and
    (C) Any unavoidable adverse impacts.
    (ii) The environmental document must contain, with respect to the 
resources listed in the Pre-Application Document provided for in Sec.  
5.6, and any other resources identified in the Commission's scoping 
document prepared pursuant to the National Environmental Policy Act and 
Sec.  5.8, the following information, commensurate with the scope of 
the project:
    (A) 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 description must 
include the information on the affected environment filed in the Pre-
Application Document provided for in Sec.  5.6, developed under the 
applicant's approved study plan, and otherwise developed or obtained by 
the applicant. This section must include a general description of 
socio-economic conditions in the vicinity of the project including 
general land use patterns (e.g., urban, agricultural, forested), 
population patterns, and sources of employment in the project vicinity.
    (B) 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 
must 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. This analysis must be based on the 
information filed in the Pre-Application Document provided for in Sec.  
5.6, developed under the applicant's approved study plan, and other 
appropriate information, and otherwise developed or obtained by the 
Applicant.
    (C) 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. The applicant must describe how each proposed measure 
would protect or enhance the existing environment, including, where 
possible, a non-monetary quantification of the anticipated 
environmental benefits of the measure. This section must 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, 
Indian tribes, or the public. If an applicant does not adopt a 
preliminary environmental measure proposed by a resource agency, Indian 
tribe, or member of the public, it must include its reasons, based on 
project-specific information.
    (D) 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.
    (E) Economic analysis. The economic analysis must include 
annualized, current cost-based information. For a new or subsequent 
license, the applicant must include the cost of operating and 
maintaining the project under the existing license. For an original 
license, the applicant must estimate the cost of constructing, 
operating, and maintaining the proposed project. For either type of 
license, the applicant should estimate the cost of each proposed 
resource protection, mitigation, or enhancement measure and any 
specific measure filed with the Commission by agencies, Indian tribes, 
or members of the public when the application is filed. For an existing 
license, the applicant's economic analysis must estimate the value of 
developmental resources associated with the project under the current 
license and the applicant's proposal. For an original license, the 
applicant must estimate the value of the developmental resources for 
the proposed project. As applicable, these developmental resources may 
include power generation, water supply, irrigation, navigation, and 
flood control. Where possible, the value of developmental resources 
must be based on market prices. If a protection, mitigation, or 
enhancement measure reduces the amount or value of the project's 
developmental resources, the applicant must estimate the reduction.
    (F) 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.
    (G) 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.
    (H) 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:
    (A) 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);
    (B) A description of operation and maintenance procedures for any 
existing or proposed measures or facilities;
    (C) 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;
    (D) An estimate of the costs of construction, operation, and 
maintenance, of any proposed facilities, and of implementation of any 
proposed environmental measures.
    (E) 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) Exhibit H. The information required to be provided by this 
paragraph (c) must be included in the application as a separate exhibit 
labeled ``Exhibit H.''
    (1) Information to be provided by an applicant for new license: 
Filing requirements.--(i) Information to be supplied by all applicants. 
All Applicants for a new license under this part must file the 
following information with the Commission:
    (A) A discussion of the plans and ability of the applicant to 
operate and

[[Page 51134]]

maintain the project in a manner most likely to provide efficient and 
reliable electric service, including efforts and plans to:
    (1) Increase capacity or generation at the project;
    (2) Coordinate the operation of the project with any upstream or 
downstream water resource projects; and
    (3) Coordinate the operation of the project with the applicant's or 
other electrical systems to minimize the cost of production.
    (B) A discussion of the need of the applicant over the short and 
long term for the electricity generated by the project, including:
    (1) 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;
    (2) 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 power necessary to replace the output of the 
licensed project, if the applicant is not granted a license for the 
project;
    (3) The effect of each alternative source of power on:
    (i) The applicant's customers, including wholesale customers;
    (ii) The applicant's operating and load characteristics; and
    (iii) The communities served or to be served, including any 
reallocation of costs associated with the transfer of a license from 
the existing licensee.
    (C) The following data showing need and the reasonable cost and 
availability of alternative sources of power:
    (1) The average annual cost of the power produced by the project, 
including the basis for that calculation;
    (2) The projected resources required by the applicant to meet the 
applicant's capacity and energy requirements over the short and long 
term including:
    (i) 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;
    (ii) A resource analysis, including a statement of system reserve 
margins to be maintained for energy and capacity; and
    (iii) If load management measures are not viewed as resources, the 
effects of such measures on the projected capacity and energy 
requirements indicated separately;
    (iv) 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: The total annual cost of each alternative source of power 
to replace project power; the basis for the determination of projected 
annual cost; and 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 the effect on the direct 
providers (and their immediate customers) of alternate sources of 
power.
    (D) 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.
    (E) 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 Indian tribe for electricity generated by the project to foster 
the purposes of the reservation.
    (F) 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:
    (1) 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;
    (2) An analysis of the advantages that the applicant's transmission 
system would provide in the distribution of the project's power; and
    (3) 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.
    (G) 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.
    (H) 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.
    (I) 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.
    (J) 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.
    (K) The applicant's electricity consumption efficiency improvement 
program, as defined under Section 10(a)(2)(C) of the Federal Power Act, 
including:
    (1) 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
    (2) A statement describing the compliance of the applicant's energy 
conservation programs with any applicable regulatory requirements.
    (L) 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.
    (ii) Information to be provided by an applicant licensee. An 
existing licensee that applies for a new license must provide:
    (A) The information specified in paragraph (c)(1) of this section.
    (B) A statement of measures taken or planned by the licensee to 
ensure safe management, operation, and maintenance of the project, 
including:

[[Page 51135]]

    (1) A description of existing and planned operation of the project 
during flood conditions;
    (2) A discussion of any warning devices used to ensure downstream 
public safety;
    (3) 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;
    (4) 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
    (5) A discussion of the project's employee safety and public safety 
record, including the number of lost-time accidents involving employees 
and the record of injury or death to the public within the project 
boundary.
    (C) A description of the current operation of the project, 
including any constraints that might affect the manner in which the 
project is operated.
    (D) A discussion of the history of the project and record of 
programs to upgrade the operation and maintenance of the project.
    (E) 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.
    (F) 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.
    (G) A discussion of any actions taken by the existing licensee 
related to the project which affect the public.
    (H) A summary of the ownership and operating expenses that would be 
reduced if the project license were transferred from the existing 
licensee.
    (I) 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.
    (iii) Information to be provided by an applicant who is not an 
existing licensee. An applicant that is not an existing licensee must 
provide:
    (A) The information specified in paragraph (c)(1) of this section.
    (B) A statement of the applicant's plans to manage, operate, and 
maintain the project safely, including:
    (1) 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;
    (2) 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;
    (3) A description of the applicant's plans to continue safety 
monitoring of existing project instrumentation and any proposed 
changes; and
    (4) 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.
    (d) Consistency with comprehensive plans. An application for 
license under this part must 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 must respond to any requests for additional 
information-gathering or studies filed with comments on its preliminary 
licensing proposal or draft license application. If the license 
applicant agrees to do the information-gathering or study, it must 
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 
must explain the basis for declining to do so.
    (f) Maps and drawings. All required maps and drawings must conform 
to the specifications of Sec.  4.39 of this chapter.


Sec.  5.19  Tendering notice and schedule.

    (a) Notice. Within 14 days of the filing 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.  5.22.
    (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) Modifications to process plan and schedule. The tendering 
notice shall also include any known modifications to the schedules 
developed pursuant to Sec.  5.8 for completion of consultation under 
section 7 of the Endangered Species Act and water quality certification 
under section 401 of the Clean Water Act.
    (c) Method of notice. The public notice provided for in paragraphs 
(a) and (b) of this Section will be given by:
    (1) Publishing notice in the Federal Register; and
    (2) Notifying appropriate Federal, state, and interstate resource 
agencies, state water quality and coastal zone management plan 
consistency certification agencies, Indian tribes, and non-governmental 
organizations by mail.
    (d) Applicant notice. The applicant must publishing notice once 
every week for two 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.
    (e) Resolution of pending information requests. Within 30 days of 
the filing 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 additional information-gathering or 
studies made in comments on the preliminary licensing proposal or draft 
license application.


Sec.  5.20  Deficient applications.

    (a) Deficient applications. (1) If an applicant believes that its 
application conforms adequately to the pre-filing consultation and 
filing requirements of this part without containing certain required 
materials or information, it

[[Page 51136]]

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 filing 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 judgment, the 
application does not conform to the prefiling consultation and filing 
requirements of this part, and is 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 a filing pursuant to the requirements of subpart T of 
part 385 of this chapter 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.
    (iii) Any application for an original license 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.  5.21  Additional information.

    An applicant may be required to submit any additional information 
or documents that the Commission 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 
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, Indian tribe or other entity that 
the Commission specifies. If an applicant fails to provide timely 
additional information, documents, or copies of submitted materials as 
required, the Commission may dismiss the application, hold it in 
abeyance, or take other appropriate action under this chapter or the 
Federal Power Act.


Sec.  5.22  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.  5.18 
and 5.19, the approved studies have 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 5.21, as applicable, within the time frame 
prescribed in Sec.  5.20 or Sec.  5.21;
    (2) Finding that the application is ready for environmental 
analysis;
    (3) Requesting comments, protests, and interventions;
    (4) Requesting recommendations, preliminary terms and conditions, 
and preliminary fishway prescriptions, including all supporting 
documentation; and
    (5) Establishing the date for final amendments to applications for 
new or subsequent licenses; and
    (6) Updating the schedule issued with the tendering notice for 
processing the application.
    (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 must 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.  5.23  Response to notice.

    (a) Comments and reply comments. Comments, protests, interventions, 
recommendations, and preliminary terms and conditions or preliminary 
fishway prescriptions must be filed no later than 60 days after the 
notice of acceptance and ready for environmental analysis. All reply 
comments must be filed within 105 days of that notice.
    (b) 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 
applicant must file no later than 60 days following the date of 
issuance of the notice of acceptance and ready for environmental 
analysis provide for in Sec.  5.22:
    (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 (b)(5)(2) 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 18 CFR part 4, subpart 
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.

[[Page 51137]]

Sec.  5. 24  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.
    (b) Each environmental assessment issued pursuant to this paragraph 
must 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.  5.26, and any preliminary mandatory terms and 
conditions and fishway prescriptions.
    (c) 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 or 
45 days after issuance of the environmental assessment, as specified in 
the notice accompanying issuance of the environmental assessment, and 
should any revisions to supporting documentation.
    (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, as specified in 
the notice accompanying issuance of the environmental analysis.


Sec.  5.25  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 environmental assessment for comment 
no later than 180 days from the date responses are due to the notice of 
acceptance and ready for environmental analysis provided for in Sec.  
5.22.
    (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 
section 10(j) of the Federal Power Act with the purposes and 
requirements of the Federal Power Act and other applicable law, as 
provided for in Sec.  5.26, and any preliminary mandatory terms and 
conditions and fishways prescriptions.
    (c) Comments on a draft 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 or 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.


Sec.  5.26  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 
recommendations and the relevant resource goals and objectives 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 assessment. The preliminary determination, 
for any recommendations believed to be inconsistent, shall include 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 an explanation of 
how the measures recommended in the environmental document would 
adequately and equitably protect, mitigate damages to, and enhance, 
fish and wildlife (including related spawning grounds and habitat) 
affected by the development, operation, and management of the project.
    (c) Any party, affected resource agency, or Indian tribe may file 
comments in response to the preliminary determination of inconsistency, 
including any modified recommendations, within the time frame allotted 
for comments on the draft environmental document or, if none, the time 
frame for comments on the environmental assessment. 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 paragraph to discuss section 10(j) issues, including any proposed 
resolutions and supporting analysis, and a copy of the summary will be 
sent to all parties,

[[Page 51138]]

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. 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.


Sec.  5.27  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.  5.20-5.26. 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) Date of acceptance. 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 and subsequent licenses. 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.  4.32(d)(2) of 
this chapter if a material amendment, as that term is used in Sec.  
4.35(f) of this chapter, is filed.
    (d) Deadline. 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.  5.23.


Sec.  5.28  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 to the pre-filing consultation 
provisions in parts 4 and 16 of this chapter shall be construed in a 
manner 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.  5.23 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.  5.29  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, must conform to the requirements of 
18 CFR part 385, subpart T of this chapter.
    (b) Waiver of compliance with consultation requirements. (1) If an 
agency, Indian tribe, or member of the public waives in writing 
compliance with any consultation requirement of this part, an applicant 
does not have to comply with the requirement as to that agency, Indian 
tribe, or member of the public.
    (2) If an 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 agency, Indian 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 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 must also serve a copy of the submission on 
that resource agency.
    (2) The Director of Energy Projects may waive or modify any of the 
provisions of this part for good cause. 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 Sec.  
385.2008 of this chapter.
    (3) Late-filed recommendations by fish and wildlife agencies 
pursuant to the Fish and Wildlife Coordination Act and section 10(j) of 
the Federal Power Act 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 filed pursuant to sections 4(e) and 18 
of the Federal Power Act, respectively, 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) Settlement negotiations. (1) The Commission will consider, on a 
case-by-case basis, requests for a short suspension of the procedural 
schedule for the purpose of participants conducting settlement 
negotiations, where it determines that the suspension will not 
adversely affect timely action on a license application. In acting on 
such requests, the Commission will consider, among other things:
    (i) Whether requests for suspension of the procedural schedule have 
previously been made or granted;
    (ii) Whether the request is supported by a consensus of 
participants in the proceeding and an explanation of objections to the 
request expressed by any participant;

[[Page 51139]]

    (iii) The likelihood that a settlement agreement will be filed 
within the requested suspension period; and
    (iv) Whether the requested suspension is likely to cause any new or 
subsequent license to be issued after the expiration of the existing 
license.
    (2) The Commission reserves the right to terminate any suspension 
of the procedural schedule if it concludes that insufficient progress 
is being made toward the filing of a settlement agreement.
    (h) License conditions and required findings. (1) 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.
    (2) 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.
    (3) 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.
    (4) 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 filed pursuant to section 4(e) of the 
Federal Power Act.
    (5) 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.
    (i) 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.
    (j) Fees under section 30(e) of the Federal Power Act. The 
requirements of 18 CFR part 4, subpart M, of this chapter, fees under 
section 30(e) of the Federal Power Act, apply to license applications 
developed under this part.


Sec.  5.30  Critical energy infrastructure information.

    If any action required by this part requires a potential Applicant 
or Applicant to reveal Critical Energy Infrastructure Information, as 
defined by Sec.  388.113(c) of this chapter, to the public, the 
Applicant must follow the procedures set out in Sec.  4.32(k) of this 
chapter.


Sec.  5.31  Transition provision.

    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, as required by Sec.  5.5 of this part, is 
July 23, 2005 or later.

PART 9--TRANSFER OF LICENSE OR LEASE OF PROJECT PROPERTY

0
27. The authority citation for part 9 continues to read as follows:

    Authority: Sec. 8, 41 Stat. 1068, sec. 309, 49 Stat. 858; 16 
U.S.C. 801, 825h; Pub. L. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et 
seq.)


Sec.  9.1  [Amended]

0
28. In Sec.  9.1, remove ``4.31'' and add ``4.32'' in its place.


Sec.  9.2  [Amended]

0
29. In Sec.  9.10, remove ``4.31'' and add ``4.32(b)(1)'' in its place.

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

0
30. 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.


0
31. Remove the phrase ``Office of Hydropower Licensing'' throughout the 
part and add in its place ``Office of Energy Projects''.

0
32. Amend Sec.  16.1 by adding paragraph (c) to read as follows:


Sec.  16.1  Applicability.

* * * * *
    (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 on or after July 23, 2005 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.

0
33. Amend Sec.  16.6 as follows:
0
a. In paragraph (b)(9), remove ``16.16'' and add ``16.7'' in its place.
0
b. In paragraph (b)(10)(ii), remove ``Indian tribe''.
0
c. In paragraph (b)(10)(iii)(B), remove ``and''.
0
d. In paragraph (b)(10)(iv), remove the period after ``notification'' 
and add a semi-colon in its place.
0
e. In paragraph (b)(10), add a new paragraph (b)(10)(v).
0
f. Paragraph (d) is revised.

0
The revised text reads as follows:


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

* * * * *
    (b) * * *
    (10) * * *
    (v) Affected Indian tribes.
* * * * *
    (d) Commission notice. Upon receipt of the notification required 
under paragraph (c) of this Section, the Commission will provide notice 
of the licensee's intent to file or not to file an application for a 
new license by:
    (1) If the notification is filed prior to July 23, 2005;
    (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 the appropriate Federal and state resource 
agencies, state water quality and coastal zone management consistency 
certifying agencies, and Indian tribes by mail.
    (2) If the notification is filed on or after July 23, 2005, 
pursuant to the provisions of Sec.  5.8 of this chapter.

0
34. Amend Sec.  16.7 as follows:
0
a. Paragraph (d) is revised.
0
b. In paragraph (e)(1), following ``section'' add ``, or the pre-
application document, as applicable,''.
0
c. In paragraph (e)(3), after ``National Marine Fisheries Service,'' 
add ``Indian tribes,''.
0
d. In paragraph (g), remove ``16.16(d)(1)(iv)'' and add 
``16.7(d)(1)(iv)'' in its place.

0
The revised text reads as follows:

[[Page 51140]]

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 licensee for which the 
deadline for filing a notification of intent to seek a new or 
subsequent license is on or after July 23, 2005 must, at the time it 
files a notification of intent to seek a license pursuant to Sec.  5.5 
of this chapter, provide a copy of the pre-application document 
required by Sec.  5.6 of this chapter to the entities specified in that 
paragraph.
    (2) A licensee for which the deadline for filing a notification of 
intent to seek a new or subsequent license is prior to July 23, 2005, 
and which elects to seek a license pursuant to this part must make the 
following information regarding its existing project reasonably 
available to the public as provided in paragraph (b) of this section:
    (i) The following construction and operation information:
    (A) The original license application and the order issuing the 
license and any subsequent license application and subsequent order 
issuing a license for the existing project, including
    (1) Approved Exhibit drawings, including as-built exhibits,
    (2) Any order issuing amendments or approving exhibits,
    (3) Any order issuing annual licenses for the existing project;
    (B) 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;
    (C) 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;
    (D) Any public correspondence related to the existing project;
    (E) Any report on the total actual annual generation and annnual 
operation and maintenance costs for the period beginning five years 
before the filing of a notice of intent;
    (F) Any reports on original project costs, current net investment, 
and available funds in the amortization reserve account;
    (G) 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; and
    (H) Any bill issued to the existing licensee for annual charges 
under Section 10(e) of the Federal Power Act.
    (ii) The following safety and structural adequacy information:
    (A) The most recent emergency action plan for the project or a 
letter exempting the project from the emergency action plan 
requirement;
    (B) Any independent consultant's reports required by part 12 of 
this chapter and filed on or after January 1, 1981;
    (C) 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;
    (D) Any construction report for the existing project; and
    (E) Any public correspondence relating to the safety and structural 
adequacy of the existing project.
    (iii) The following fish and wildlife resources information:
    (A) Any report on the impact of the project's construction and 
operation on fish and wildlife resources;
    (B) Any existing report on any threatened or endangered species or 
critical habitat located in the project area, or affected by the 
existing project outside the project area;
    (C) Any fish and wildlife management plan related to the project 
area prepared by the existing licensee or any resource agency; and
    (D) Any public correspondence relating to the fish and wildlife 
resources within the project area.
    (iv) The following recreation and land use resources information:
    (A) Any report on past and current recreational uses of the project 
area;
    (B) Any map showing recreational facilities and areas reserved for 
future development in the project area, designated or proposed 
wilderness areas in the project area; Land and Water Conservation Fund 
lands in the project area, and designated or proposed Federal or state 
wild and scenic river corridors in the project area.
    (C) Any documentation listing the entity responsible for operating 
and maintaining any existing recreational facilities in the project 
area; and
    (D) Any public correspondence relating to recreation and land use 
resources within the project area.
    (v) The following cultural resources information:
    (A) Except as provided in paragraph (d)(2)(v)(B) of this section, a 
licensee must make available:
    (1) Any report concerning documented archeological resources 
identified in the project area;
    (2) Any report on past or present use of the project area and 
surrounding areas by Native Americans; and
    (3) Any public correspondence relating to cultural resources within 
the project area.
    (B) A licensee must delete from any information made available 
under paragraph (d)(2)(v)(A) of this section, specific site or property 
locations the disclosure of which would create a risk of harm, theft, 
or destruction of archeological or Native American cultural resources 
or to the site at which the resources are located, or would violate any 
Federal law, including 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.
    (vi) 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:
    (A) Any plan of the licensee;
    (B) Any public correspondence; and
    (C) Any other pertinent information relating to a conservation 
plan.
* * * * *

0
35. Amend Sec.  16.8 as follows:
0
a. Redesignate existing paragraphs (a)(2) and (a)(3) as paragraphs 
(a)(4) and (a)(5) and revise newly redesignated paragraph (a)(4).
0
b. Add new paragraphs (a)(2) and (a)(3).
0
c. Paragraph (b) is revised.
0
d. In paragraph (c)(1), remove ``(b)(5)'' and add ``(b)(6)'' in its 
place.
0
e. In paragraph (c)(1)(ii), following ``(b)(1)'' remove ``of this 
section'' and add ``or (b)(2) of this section, as applicable,'' in its 
place.
0
f. In paragraph (c)(2), remove ``(b)(6)'' and add ``(b)(7)'' in its 
place.
0
g. In paragraph (c)(2), remove ``resource agency or Indian tribe'' and 
add ``resource agency, Indian tribe, or member of the public'' in its 
place.
0
h. In paragraph (c)(4)(ii), remove ``(b)(1)((vi)'' and add 
``(b)(2)(vi)'' in its place.
0
i. In paragraph (d)(1), remove ``mailed'' and add ``distributed'' in 
its place.
0
j. In paragraph (e), add a new paragraph (e)(4).
0
k. Remove paragraph (f)(7) and redesignate existing paragraph (f)(8) as 
(f)(7).
0
l. In paragraph (h), remove ``(b)(2)(i)'' and add ``(b)(3)(i)'' in its 
place.
0
m. In paragraph (i)(1), remove ``(b)(2)'' wherever it appears and add 
``(b)(3)'' in its place.
0
n. In paragraph (i)(2)(i), remove ``the date of the joint meeting 
required by

[[Page 51141]]

paragraph (b)(2) of this section.'' and add ``a final order is issued 
on the license application.'' in its place.
0
o. In paragraph (i)(2)(iii), remove ``(b)(2)'' and add ``(b)(3)'' in 
its place and remove ``(b)(1)'' and add ``(b)(2)'' in its place.
0
p. Paragraph (j) is removed.

0
The revised and added text reads as follows:


Sec.  16.8  Consultation requirements.

    (a) * * *
    (2) Each requirement in this section to contact or consult with 
resource agencies or Indian tribes shall require as well that the 
potential Applicant contact or consult with members of the public.
    (3) If the potential applicant for a new or subsequent license 
commences first stages pre-filing consultation under this part on or 
after July 23, 2005, it must file a notification of intent to file a 
license application pursuant to Sec.  5.5 of this chapter and a pre-
application document pursuant to the provisions of Sec.  5.6 of this 
chapter.
    (4) 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.  5.5 of this chapter, 
provide a copy of the pre-application document required by Sec.  5.6 of 
this chapter to the entities specified in Sec.  5.6(a) of this chapter.
    (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 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)(i) A potential applicant for an exemption, a new or subsequent 
license for which the deadline for filing a notification of intent to 
seek a license is prior to July 23, 2005 and which elects to commence 
pre-filing consultation under this part, or a new or subsequent license 
for which the deadline for filing a notification of intent to seek a 
license is on or after July 23, 2005 and which receives Commission 
approval to use the license application procedures of this part must:
    (A) 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
    (B) 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.
    (ii) The joint meeting must be held no earlier than 30 days, and no 
later than 60 days from, as applicable:
    (A) The date of the potential applicant's letter transmitting the 
information required by paragraph (b)(2) of this section, in the case 
of a potential exemption applicant or a potential license applicant 
that commences pre-filing consultation under this part prior to July 
23, 2005; or
    (B) The date of the Commission's approval of the potential license 
applicant's request to use the license application procedures of this 
part pursuant to the provisions of part 5, in the case of a potential 
license applicant for which the deadline for filing a notification of 
intent to seek a license is on or after July 23, 2005.
    (4) Members of the public are invited to attend the joint meeting 
held pursuant to paragraph (b)(3) of this section. Members of the 
public attending the meeting are entitled to participate fully in the 
meeting and to express their views regarding resource issues that 
should be addressed in any application for a new license that may be 
filed by the potential applicant. Attendance of the public at any site 
visit held pursuant to paragraph (b)(3) of this section shall be at the 
discretion of the potential applicant. 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 and 
Indian tribe.
    (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

[[Page 51142]]

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.
* * * * *
    (e) * * *
    (4) Following July 23, 2003 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 
potential 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.
* * * * *


Sec.  16.9  [Amended]

0
36. Amend Sec.  16.9 by removing ``agencies and Indian tribes by mail'' 
from paragraph (d)(1)(iii) and adding ``agencies, Indian tribes, and 
non-governmental organizations'' in its place.


Sec.  16.10  [Amended]

0
37. Amend Sec.  16.10 as follows:
0
a. Paragraph (d) is removed.
0
b. Paragraph (e) is redesignated as paragraph (d) and newly 
redesignated paragraph (d) is revised.
0
c. Paragraph (f) is removed.
0
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]

0
38. Amend Sec.  16.11 by removing paragraph (a)(2).


Sec.  16.19  [Amended]

0
39. Amend Sec.  16.19 by removing paragraphs (b)(3) and (b)(4) and by 
redesignating paragraph (b)(5) as paragraph (b)(3).


Sec.  16.20  [Amended]

0
40. In Sec.  16.20, paragraph (c) is revised.
    The revised text reads as follows:


Sec.  16.20  Applications for subsequent license for a project with an 
expiring license subject to Section 14 and 15 of the Federal Power Act.

* * * * *
    (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 375--THE COMMISSION

0
41. The authority citation for part 375 continues to read as follows:

    Authority: 5 U.S.C. 551-557; 15 U.S.C. 717-717w, 3301-3432; 16 
U.S.C. 791-825r, 2601-2645; 42 U.S.C. 7101-7352.


0
42. Amend Sec.  375.308 as follows:
0
a. In paragraph (c)(11), remove ``4.303(d)'' and add ``4.303(e)'' in 
its place.
0
b. In paragraph (k)(1), remove ``4.32(d)(2)(i)'' and add 
``4.32(e)(2)(i)'' in its place.
0
c. In paragraph (k)(2)(ii), remove ``4.32(d)(1)'' and add 
``4.32(e)(1)(iii)'' in its place.
0
d. In paragraph (k)(3), remove ``4.32(f)'' and add ``4.32(g)'' in its 
place.
0
e. Add a new section (aa):

0
The added text reads as follows.


Sec.  375.308  Delegations to the Director of the Office of Energy 
Projects.

* * * * *
    (aa) Take the following actions to implement part 5 of this chapter 
on or after October 23, 2003:
    (1) Act on requests for approval to use the application procedures 
of parts 4 or 16, pursuant to Sec.  5.3 of this chapter;
    (2) Approve a potential license applicant's proposed study plan 
with appropriate modifications pursuant to Sec.  5.13 of this chapter;
    (3) Resolve formal study disputes pursuant to Sec.  5.14 of this 
chapter; and
    (4) Resolve disagreements brought pursuant to Sec.  5.15 of this 
chapter.

PART 385--RULES OF PRACTICE AND PROCEDURE

0
43. 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).

0
44. In Sec.  385.214, revise paragraphs (a)(2) and (a)(3).

0
The revised text reads as follows.


Sec.  385.214  Intervention (Rule 214).

    (a) * * *
    (2) Any State Commission, the Advisory Council on Historic 
Preservation, the U.S. Departments of Agriculture, Commerce, and the 
Interior, any state fish and wildlife, water quality certification, or 
water rights agency; or Indian tribe with authority to issue a water 
quality certification 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

[[Page 51143]]

Rule 210(b). If the period for filing notice has expired, each entity 
identified in this paragraph 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 seeking to intervene to become a party, other than 
the entities specified in paragraphs (a)(1) and (a)(2) of this section, 
must file a motion to intervene.
* * * * *


Sec.  385.2001  [Amended]

0
45. In Sec.  385.2001, remove ``http://www.ferc.fed.us'' from paragraph 
(a)(iii) and add ``http://www.ferc.gov'' in its place.


Sec.  385.2003  [Amended]

0
46. In Sec.  385.2003, remove ``http://www.ferc.fed.us'' from paragraph 
(c)(ii) and add ``http://www.ferc.gov'' in its place.

    Note: The following Appendix will appear in the Code of Federal 
Regulations:

Appendix A

List of Commenters

Licensees

Alabama Power Co. (Alabama Power)
American Electric Power Company (AEP)
CHI Energy (CHI)
Consumers Energy Company (Consumers)
Duke Power Company (Duke)
Edison Electric Institute and Alliance of Energy Suppliers (EEI)
Georgia Power Company (Georgia Power)
Idaho Power Company (Idaho Power)
National Hydropower Association (NHA)
Northeast Utilities Systems (NEU)
Oroville-Wyandotte Irrigation District (Oroville)
PG&E Corporation (PG&E)
Progress Energy (Progress)
Puget Sound Energy (PSE)
Reliant Energy (Reliant)
Southern California Edison Company (SCE)
Tri-Dam Project (Tri-Dam)
WPS Resources (WPSR)
Wisconsin Public Service Corporation (WPSC)
Xcel Energy (Xcel)

Non-Governmental Organizations

Adirondack Mountain Club (ADK)
American Rivers (AmRivers)
American Whitewater Affiliation (AW)
Appalachian Mountain Club (AMC)
California Hydropower Reform Coalition (CHRC)
Catawba-Wateree Relicensing Coalition (C-WRC)
Hydropower Reform Coalition (HRC)
Idaho Rivers United (IRU)
Maine Rivers
New England FLOW (NE FLOW)
Pacific Fishery Management Council (PFMC)
River Alliance of Wisconsin (RAW)
South Carolina Coastal Conservation League (SC League)
Trout Unlimited (TU)

Federal Agencies

Advisory Council on Historic Preservation (Advisory Council)
Environmental Protection Agency (EPA)
National Marine Fisheries Service (NOAA)
Dept. of the Interior (Interior)
Dept. of the Interior, Bureau of Indian Affairs (BIA)
Dept. of the Interior, Bureau of Land Management (BLM)
Dept. of the Interior, Fish and Wildlife Service (FWS)
Dept. of the Interior, National Park Service (NPS)

States/State Agencies

Alaska Department of Natural Resources (Alaska DNR)
California Department of Fish and Game (CDFG)
California Attorney-General (Cal A-G)
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)
California Regional Council of Rural Counties (CA RCRC)
Commonwealth of Virginia (Virginia DEQ)
Georgia Department of Natural Resources (Georgia DNR)
Idaho Department of Fish and Game (IDFG)
Idaho Department of Environmental Quality (IDEQ)
Idaho Department of Parks and Recreation (IDPR)
Indiana Department of Natural Resources
Maine Department of Environmental Protection (MDEP)
Maryland Department of Natural Resources (Maryland DNR)
Massachusetts Division of Energy Resources (Massachusetts DER)
Minnesota Department of Natural Resources (Minnesota DNR)
Minneapolis Parks and Recreation Board (MPRB)
New Jersey Department of Environmental Protection (NJDEP)
New York State Department of Environmental Conservation (NYSDEC)
North Carolina Wildlife Resources Commission (NCWRC)
Pennsylvania Fish and Boat Commission (PFBC)
Placer County Water Agency (PCWA)
State of Oregon (Oregon)
Oregon Water Resources Commission (OWRC)
Oregon Department of Fish and Wildlife (ODFW)
Oregon Dept. of Enviromental Quality (ODEQ)
Snohomish County PUD and City of Everett (Snohomish)
State of Washington
State of Vermont, Agency of Natural Resources (VANR)
Washington Department of Ecology (WDOE)
Washington Department of Natural Resources (Washington DNR)
Western Governors' Association (WGA)
Wisconsin Department of Natural Resources (Wisconsin DNR)
Wyoming Game and Fish Department

Indian Tribes

Affiliated Tribes of Northwest Indians--Economic Development 
Corporation (NW Indians)
Catawba Indian Nation (Catawba)
Confederated Tribes of the Umatilla Indian Reservation (Umatilla)
Columbia River Inter-Tribal Fish Commission (CRITFC)
Fort Peck Assiniboine Sioux Tribes, Northeast Montana (Fort Peck)
Shoshone-Paiute Tribes of Nevada and Idaho, Duck Valley Reservation 
(S-P)
Shoshone-Bannock (S-B)
Great Lakes Indian Fish and Wildlife Commission (GLIFWC)
Maidu-Enterprise Tribe (Maidu)
Menominee Tribe of Wisconsin (Menominee)
Mississippi Band of Choctaw Indians (Choctaw)
Nez Perce
North Fork Rancheria of Mono Indians of California (NF Rancheria)
Skagit System Cooperative
Skokomish Indian Tribe (Skokomish)

Individuals

Frank Groznik
Acres International
Cyrus Noe
Thomas Sullivan, Sullivan & Gomez Engineers (Sullivan)
Grammer, Kissel, Robbins, Skancke, & Edwards (GKRSE)
Fred Springer
John Suloway

Other

Association of California Water Agencies (ACWA)
Balch & Bingham (B&B)
California State Water Contractors (CSWC)
Commonwealth of Puerto Rico (PR)
Geosyntec
Long View Associates (Long View)
Mead & Hunt (M&H)
MWH
Normandeau Associates (Normandeau)
Pacific Legacy
Spiegel and McDiarmid (Spiegel)
Troutman Sanders (Troutman)
Western Urban Water Coalition (WUWC)

[FR Doc. 03-20999 Filed 8-22-03; 8:45 am]
BILLING CODE 6717-01-P