[Federal Register Volume 72, Number 234 (Thursday, December 6, 2007)]
[Notices]
[Pages 68877-68879]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-23615]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. PL08-1-000; 121 FERC ] 61,221]


Policy Statement on Conditioned Licenses for Hydrokinetic 
Projects

 November 30, 2007.
AGENCY: Federal Energy Regulatory Commission, Department of Energy.

ACTION: Policy Statement.

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SUMMARY: The Federal Energy Regulatory Commission is giving notice of a 
new policy with respect to the issuance of licenses for hydrokinetic 
projects. In the Policy Statement, the Commission concludes that, in 
appropriate cases, where the Commission has completed its processing of 
license applications for hydrokinetic projects, but where other 
authorizations required under federal law have not yet been received, 
it will issue conditioned licenses for hydrokinetic projects, 
predicated on the licensee being precluded from commencing construction 
until the necessary authorizations are received.

DATES: Effective Dates: This Policy Statement is effective November 30, 
2007.

FOR FURTHER INFORMATION CONTACT:

Ann Miles, Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, (202) 502-6769;
John Katz, Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, (202) 502-8082.

SUPPLEMENTARY INFORMATION:

Before Commissioners: Joseph T. Kelliher, Chairman; Suedeen G. Kelly, 
Marc Spitzer, Philip D. Moeller, and Jon Wellinghoff.

    1. The Commission is issuing this Policy Statement as part of its 
ongoing effort to establish a regulatory climate that supports the 
development of

[[Page 68878]]

innovative hydropower projects that use the forces of currents, waves, 
and tides (generally referred to herein as ``hydrokinetic projects') to 
generate clean, renewable electric energy. In the Policy Statement, the 
Commission sets forth a new policy, applicable only to hydrokinetic 
projects, pursuant to which the Commission will, in appropriate cases, 
issue licenses pending actions by other entities under federal law. The 
goal of this action is to shorten the regulatory process and speed the 
development of meritorious hydrokinetic projects.

I. Background

    2. In recent years, the Commission has become aware of efforts by 
the hydrokinetic industry to test and develop projects that harness the 
nation's water resources to produce new supplies of much-needed 
electric power. Estimates suggest that new hydrokinetic technologies, 
if fully developed, could double the amount of hydropower production in 
the United States, bringing it from just under 10 percent to close to 
20 percent of the national electric energy supply. Given the potential 
benefits of this new, clean power source, the Commission has taken 
steps to lower regulatory barriers to its development.
    3. On December 6, 2006, the Commission held a technical conference 
on Hydroelectric Generation from Ocean Waves, Tides, and Currents and 
from Free-Flowing Rivers.\1\ At the conference, the Commission heard 
from state and federal regulators, developers, and other stakeholders 
interested in hydrokinetic projects. Following the conference, the 
Commission received public comments. A number of the comments focused 
on issues relating to the issuance of preliminary permits for 
hydrokinetic projects,\2\ while other comments discussed the licensing 
process for such projects.
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    \1\ Docket AD06-13-000.
    \2\ Preliminary permits, issued for a term of up to three years 
pursuant to section 4(f) of the Federal Power Act, 18 U.S.C. 797(f) 
(2000), allow a potential applicant to develop sufficient 
information to prepare a license application and give the permit 
holder a priority with respect to filing a license application, but 
confer no property rights in the project site and no authority to 
conduct construction or other land-disturbing activity.
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    4. On February 15, 2007, the Commission issued a notice of inquiry 
and interim statement of policy with respect to preliminary permits for 
hydrokinetic projects.\3\ The Commission explained that there had been 
a surge in applications for preliminary permits to study potential 
hydrokinetic projects, and noted the potential for new energy 
production from those projects. In consequence, the Commission proposed 
to implement a ``strict scrutiny'' approach to reviewing preliminary 
permit applications, in order to respond to issues that had been raised 
at the technical conference, and to encourage thoughtful permit 
applications and promote competition.\4\ The Commission also sought 
comment on this proposal, and the great majority of the commenters 
supported the Commission's approach.
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    \3\ The notice of inquiry and interim statement of policy is 
published at FERC Stats. & Regs. ] 35,555.
    \4\ Id. at ] 14, 16.
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    5. On October 2, 2007, the Commission held a Commissioner-led 
technical conference, in Portland, Oregon, to discuss a Commission 
staff proposal for a pilot licensing process regarding hydrokinetic 
projects. The staff proposal called for an expedited licensing process, 
to be completed in as few as six months. Staff suggested that pilot 
project licenses would be available only for proposed projects that are 
small (five megawatts or less), are removable or able to be shut down 
quickly, are not located in sensitive areas, and are for the purpose of 
testing new technologies or locating appropriate sites.\5\ Staff 
proposed that pilot project licenses (1) have a short term (five 
years), (2) include a standard condition requiring project alteration 
or shutdown in the event that there was an unacceptable level of 
environmental effect, (3) provide the option of applying for a standard 
30-50 year license, and (4) require decommissioning and site 
restoration at license expiration, if a standard license is not sought. 
The comments filed regarding the pilot project license proposal were 
largely supportive of a more expedited, less burdensome process, and 
included a number of specific suggestions as to how the process could 
be implemented.
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    \5\ See Notice of Technical Conference and Soliciting Comments, 
Docket No. AD07-14-000 (issued July 19 2007).
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II. Discussion

    6. Based on the Commission's experience, it has often been the case 
that Commission staff has completed its processing of a hydropower 
license application, including preparation of an environmental 
document, but that authorizations required from other entities under 
federal laws including the Clean Water Act, the Coastal Zone Management 
Act, and the Endangered Species Act, have not yet been received. 
Typically, the Commission has not acted in such instances, sometimes 
resulting in substantial delays in developers' abilities to undertake 
non-construction activities. This has a concomitant adverse impact on 
developers' abilities to move quickly with project construction once 
the pending authorizations are filed with the Commission.
    7. The Commission has taken a different approach with respect to 
authorizations issued under the Natural Gas Act. In those cases, the 
Commission has issued pipeline certificates and authorizations to 
construct liquefied natural gas facilities while action by other 
entities is still pending, and included in the Commission order 
provisos that construction may not commence until the necessary 
authorizations have been received.\6\
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    \6\ See, e.g., Crown Landing LLC, 117 FERC ] 61,209 at P 21 and 
n. 19 and n. 36 (2006); Georgia Strait Crossing Pipeline LP, 108 
FERC ] 61,053 at P 13-16 (2004); Millennium Pipeline Company, L.P., 
100 FERC ] 61,277 at P 225-231 (2002).
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    8. In light of the nation's interest in the development of its 
water power resources to meet the growing need for clean, renewable 
energy, the Commission has decided to adopt the natural gas procedural 
model with respect to new, hydrokinetic projects. Thus, for new 
hydrokinetic projects only, we will, in appropriate cases, issue 
project licenses where the Commission has completed processing an 
application but other authorizations remain outstanding. In such cases, 
the license will include conditions precluding the licensee from 
commencing construction until it has obtained all necessary 
authorizations.
    9. There are a number of policy reasons to consider adopting the 
gas pipeline practice rather than the conventional hydropower practice 
with respect to conditioned licensing of hydrokinetic technologies. 
First, issuing licenses as described will have no environmental 
impacts. By the terms of the licenses, licensees will not be permitted 
to commence construction until they have obtained all authorizations 
required by federal law. When the authorizations are obtained, 
licensees will be required to file them with the Commission, and the 
Commission then will review them and incorporate their terms in the 
licenses, as appropriate.
    10. Second, issuing an appropriately conditioned license would in 
no way diminish the authority of the states or other federal agencies. 
Construction of a hydrokinetic project could not start without any 
necessary state and federal authorizations under a conditioned license. 
For that reason, states and federal agencies will fully retain their 
authority to take action under relevant federal law.

[[Page 68879]]

    11. Third, the new procedure is suitable for demonstration 
projects. The Commission can issue licenses quickly, leaving state and 
federal agencies that have not yet completed their actions the 
opportunity to do so, ideally quickly, on their own timetable. While it 
is not clear whether state and federal resource agencies will complete 
their actions on hydrokinetic projects in a shortened timeframe, as 
suggested in the pilot project license proposal drafted by Commission 
staff, issuance of conditioned licenses would likely give the 
Commission a greater ability to respond quickly to innovative project 
proposals. Also, early issuance of a Commission license will improve 
the ability of project developers to secure financing of demonstration 
projects.
    12. Issuance of a conditioned license will be a final Commission 
action, as is the case with other licenses that contain reservations of 
authority. Thus, these licenses will be subject to rehearing, and, once 
accepted, their terms will be binding on licensees. Licensees will be 
able, and required, to comply with all license terms that do not 
involve construction, such as those which may require the development 
of plans and consultation with stakeholders.

III. Comments

    13. Interested persons may submit comments on this Policy 
Statement. Comments are due on or before December 14, 2007. Comments 
must refer to Docket No. PL08-1-000, and must include the commenter's 
name, the organization they represent, if applicable, and their 
address.
    14. Commenters are requested to use appropriate headings and to 
double space their comments.
    15. Comments may be filed on paper or electronically via the 
eFiling link on the Commission's Web site at http://www.ferc.gov. The 
Commission accepts most standard word processing formats and commenters 
may attach additional files with supporting information in certain 
other file formats. Commenters filing electronically do not need to 
make a paper filing. Commenters that are not able to file comments 
electronically must send an original and 14 copies of their comments 
to: Federal Energy Regulatory Commission, Office of the Secretary, 888 
First Street, NE., Washington, DC 20426.
    16. All comments will be placed in the Commission's public files 
and may be viewed, printed, or downloaded remotely as described in the 
Document Availability section below. Commenters are not required to 
serve copies of their comments on other commenters.

IV. Document Availability

    17. In addition to publishing the full text of this document in the 
Federal Register, the Commission 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 normal business hours 
(8:30 a.m. to 5 p.m. Eastern time) at 888 First Street, NE., Room 2A, 
Washington DC 20426.
    18. From the Commission's Home Page on the Internet, this 
information is available in the Commission's document management 
system, eLibrary. The full text of this document is available on 
eLibrary in PDF and Microsoft Word format for viewing, printing, and/or 
downloading. To access this document in eLibrary, type the docket 
number (excluding the last three digits of the docket number), in the 
docket number field. User assistance is available for eLibrary and the 
Commission's Web site during normal business hours. For assistance, 
please contact FERC Online Support at (202) 502-6652 (toll-free at 1-
866-208-3676) or e-mail at [email protected], or the Public 
Reference Room at (202) 502-8371, TTY (202) 502-8659. E-mail the Public 
Reference Room at [email protected].

    By the Commission.
Kimberly D. Bose,
Secretary.
[FR Doc. E7-23615 Filed 12-5-07; 8:45 am]
BILLING CODE 6717-01-P