[Federal Register Volume 91, Number 36 (Tuesday, February 24, 2026)]
[Proposed Rules]
[Pages 8799-8803]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-03657]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 380
[Docket No. RM26-7-000]
Categorical Exclusion Under the National Environmental Policy Act
for Certain Terminations or Revocations of Water Power Licenses and
Exemptions
AGENCY: Federal Energy Regulatory Commission.
ACTION: Notice of proposed rulemaking; request for comments.
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SUMMARY: The Federal Energy Regulatory Commission (Commission) proposes
to amend section 380.4 of its regulations implementing the National
Environmental Policy Act (NEPA) to expand an existing Categorical
Exclusion (CE). A CE describes a category of actions that a Federal
agency has determined normally does not significantly affect the
quality of the human environment, absent extraordinary circumstances,
and so does not trigger NEPA's requirement to prepare an environmental
document. The proposed revision would add a category of actions to an
existing CE to include terminations or revocations of water power
licenses and exemptions that will result in minor or no ground
disturbing activity and minor or no changes in reservoir conditions and
downstream flows.
DATES: Comments are due March 26, 2026.
ADDRESSES: Comments, identified by docket number, may be filed in the
following ways. Electronic filing through http://www.ferc.gov, is
preferred.
Electronic Filing: Documents must be filed in acceptable
native applications and print-to-PDF, but not in scanned or picture
format.
For those unable to file electronically, comments may be
filed by USPS mail or by hand (including courier) delivery.
[cir] Mail via U.S. Postal Service Only: Addressed to: Federal
Energy Regulatory Commission, Secretary of the Commission, 888 First
Street NE, Washington, DC 20426.
[cir] Hand (Including Courier) Delivery: Deliver to: Federal Energy
Regulatory Commission, 12225 Wilkins Avenue, Rockville, MD 20852.
The Comment Procedures section of this document contains more
detailed filing procedures.
The public may access the related Draft Substantiation Record in
the Commission's eLibrary system under Docket No. RM26-7-000, https://elibrary.ferc.gov/eLibrary.
FOR FURTHER INFORMATION CONTACT:
CarLisa Linton (Technical Information), Office of Energy Projects,
Federal Energy Regulatory Commission, 888 First Street NE, Washington,
DC 20426, (202) 502-8416, [email protected].
Thomas Chandler (Legal Information), Office of the General Counsel,
Federal Energy Regulatory Commission, 888 First Street NE, Washington,
DC 20426, (202) 502-6699, [email protected].
SUPPLEMENTARY INFORMATION:
1. The Federal Energy Regulatory Commission (Commission) proposes
to amend section 380.4 of its regulations identifying categorically
excluded projects or actions under the National Environmental Policy
Act (NEPA), 42 U.S.C. 4321 et seq. in an ongoing effort to streamline
the Commission's regulations. Section 380.4 of the Commission's
regulations implementing NEPA identifies categories of actions or
projects for which generally neither an Environmental Assessment nor an
Environmental Impact Statement will be prepared.\1\ The Commission
proposes to expand an existing Categorical Exclusion (CE) to add a
category of actions for terminations or revocations of water power
licenses and exemptions that will result in minor or no ground
disturbing activity and minor or no changes in reservoir conditions and
downstream flows.
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\1\ 18 CFR 380.4.
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[[Page 8800]]
I. Background
2. NEPA requires Federal agencies to consider the environmental
effects of their proposed actions in their decision-making process and
to inform and engage the public in that process. For every proposed
major federal action with a reasonably foreseeable significant effect
on the quality of the human environment, the responsible federal agency
shall issue an environmental impact statement (EIS).\2\ For a proposed
action with an unknown or lesser effect, the agency shall issue a more
concise environmental assessment (EA) unless the agency finds that the
proposed action is covered by a CE or is exempt from NEPA review under
another law.\3\ A CE describes ``a category of actions that a Federal
agency has determined normally does not significantly affect the
quality of the human environment.'' \4\ Applying a CE allows an agency
to satisfy NEPA's requirements more efficiently by reducing the
resources spent analyzing proposals that normally do not have
significant environmental effects.
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\2\ 42 U.S.C. 4336(b)(1).
\3\ Id. 4336(a)(2), (b)(2).
\4\ Id. 4336e(1).
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3. In deciding whether a specific proposed action is excluded from
case-specific NEPA review under a CE, the Commission and its staff
independently evaluate environmental information supplied by an
applicant or project sponsor, by Commission staff inspections or
research, by other federal agencies, and by commenting stakeholders to
determine whether circumstances indicate that a proposed action may be
a major Federal action significantly affecting the quality of the human
environment.\5\ A list of such circumstances, often referred to as
``extraordinary circumstances,'' is set out in the Commission's
regulations at 18 CFR 380.4(b)(2).
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\5\ 18 CFR 380.4(b)(1).
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4. Agencies may establish a new CE if they have reliable data and
resources, such as previous NEPA evaluations, to determine that the
category of actions does not normally result in significant effects.\6\
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\6\ Congress amended NEPA through the Fiscal Responsibility Act
of 2023 to authorize agencies to ``adopt'' categorical exclusions
listed in another agency's NEPA procedures to be applied to the
adopting agency's actions. Fiscal Responsibility Act of 2023, Public
Law 118-5, 137 Stat. 10 (2023); NEPA Section 109, 42 U.S.C. 4336c.
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5. Part I of the Federal Power Act (FPA) \7\ establishes Commission
jurisdiction over non-federal hydropower projects throughout the United
States. The FPA makes it unlawful for any person, State, or
municipality to build and operate a hydropower project subject to the
Commission's jurisdiction unless they obtain a license \8\ from the
Commission.
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\7\ 16 U.S.C. 791a-823g. Parts II and III of the FPA address
electric transmission and wholesale sales rates and services.
\8\ Given that there are no distinctions between licenses and
exemptions relevant to this proceeding, we will refer herein to
``licenses'' as including exemptions and ``licensees'' as including
exemptees.
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6. A license may end by: voluntary surrender,\9\ termination for
failure to commence construction,\10\ termination by implied
surrender,\11\ or revocation.\12\ The Commission's existing regulations
only specifically address the level of NEPA review for voluntary
surrenders initiated by the licensee.\13\ Section 380.5 of the
Commission's regulations implementing NEPA states that an EA will
normally be prepared first for ``[s]urrender of water power licenses
and exemptions where project works exist or ground disturbing activity
has occurred . . . .'' \14\ The existing CE at section 380.4(a)(13)
applies to the ``surrender of water power licenses and exemptions where
no project works exist or ground disturbing activity has occurred.''
\15\ The Commission's order either approving or denying the surrender
indicates how the Commission complied with NEPA. The surrender becomes
effective after the licensee fulfills any conditions for disposing of
project works and restoring project lands that may be required by the
Commission.
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\9\ 18 CFR 6.1, 6.2 (licenses), 4.95, 4.102 (exemptions).
\10\ Id. 6.3 (licenses), 4.94(c), 4.106(c) (exemptions).
\11\ Id. 6.4 (licenses), 4.94(a), 4.106(a) (exemptions).
\12\ 16 U.S.C. 823b(b) (licenses and exemptions).
\13\ A licensee may request surrender for a variety of reasons,
for example if the licensee determines that the project is no longer
economical or if natural disasters have damaged or destroyed project
facilities. See 16 U.S.C. 799 (section 6 of the FPA provides the
Commission authority to issue licenses and that licenses may be
surrendered only upon mutual agreement between the licensee and the
Commission).
\14\ 18 CFR 380.5(b)(13).
\15\ Id. 380.4(a)(13).
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7. The Commission's existing regulations do not specifically
address the levels of NEPA review for the following types of
terminations or revocations:
Termination: Commission-initiated termination after notice
if there is failure to commence actual construction of the project
works within the time prescribed by the Commission.\16\
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\16\ 16 U.S.C. 806; 18 CFR 4.94(c), 4.106(c), 6.3; see also id.
375.308(e), (f) (delegating limited authority to the Director of the
Office of Energy Projects to terminate licenses or revoke exemptions
for failure to construct).
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Implied Surrender Termination: Commission-initiated
termination after notice when a licensee or exemptee, by action or
inaction, has indicated its intent to abandon the project but has not
filed a surrender application (e.g., the licensee has physically
abandoned the project property, sold the project property without
Commission authorization, dissolved its corporate or other legal
identity, or has failed for several years to operate or maintain the
project with no indication of doing so in the reasonably foreseeable
future).\17\
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\17\ 18 CFR 6.4, see, e.g., Standard License Article 30, Form L-
1 (1975) (describing the triggers, process, and liabilities for
implied surrender), https://www.ferc.gov/industries-data/hydropower/administration-and-compliance/standard-l-e-p-form-articles; 18 CFR
6.4 (same).
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Revocation: Commission-initiated revocation under FPA
Sec. 31 when the licensee has knowingly violated a compliance order
from the Commission despite a reasonable time to comply.\18\
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\18\ 16 U.S.C. 823b(b).
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8. Termination for failure to commence construction results in no
environmental effects. Typically, implied surrender termination or
revocation leaves project facilities in place without further action
that would alter the conditions of the project or affect the
surrounding environment. When evaluating a project for implied
surrender termination or revocation, Commission staff reviews the
project compliance history, including previous dam safety inspection
reports and compliance with the recommendations in them, to determine
the current conditions at the site and coordinates with the appropriate
state or local authority responsible for dam safety. Following
termination or revocation, the project is removed from the Commission's
FPA jurisdiction but remains subject to applicable federal, state, and
local laws, including state regulatory programs for dam safety.\19\ The
Commission cannot conduct post-termination monitoring because it lacks
jurisdiction following termination or revocation.\20\
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\19\ E.g., Leonard Lundgren, 10 FERC ] 61,270, at 61,524 (1980)
(explaining that after termination of the license for a project on
National Forest land, the project owner's continued use of the
project dam and facilities for irrigation, without generating
electricity, would be subject to the supervision of the U.S. Forest
Service under a permit for continued occupancy of national forest
lands by part of the project); Pub. Util. Dist. No. 1 of Okanogan
Cnty., 169 FERC ] 61,215, at P 19 (2019) (explaining that Commission
staff had coordinated with the Washington State Department of
Ecology, Dam Safety Division, before terminating a license for
failing to construct new facilities at the existing Enloe Dam).
\20\ The Commission may, however, provide that a voluntary
surrender will not be effective until specified conditions are met.
See PacifiCorp, 181 FERC ] 61,122, at P 64 (2022).
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[[Page 8801]]
9. With this rulemaking, the Commission seeks to clarify its
compliance with NEPA for terminations or revocations that would result
in, at the most, limited changes to the environment. The changes to
section 380.4(a)(13) will make, for certain proposed terminations and
revocations, a categorical exclusion available as a form of review that
may be used to comply with NEPA, providing more efficient oversight of
hydropower projects and more efficient use of Commission resources.
II. Substantiation
10. The Commission may use various methods to gather and evaluate
information to substantiate a proposed CE.\21\ The amount of required
information will vary based on a variety of factors (e.g., the type and
number of actions previously authorized, the scale of possible effects,
or the frequency of such actions). As detailed below, Commission
experience has shown that few or no environmental effects result from
implied surrender terminations or revocations of water power licenses
and exemptions with minor or no ground disturbing activity and minor or
no changes in reservoir conditions and downstream flows. Accordingly,
Commission staff prepared a separate draft substantiation record based
on environmental assessments of previously implemented actions. The
draft substantiation record is summarized below and is available with
this NOPR for public review and comment.
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\21\ See Council on Environmental Quality, Memorandum
Establishing, Applying, and Revising Categorical Exclusions under
NEPA 6-10 (2010), https://ceq.doe.gov/docs/ceq-regulations-and-guidance/NEPA_CE_Guidance_Nov232010.pdf; Office of Energy Projects,
FERC, Staff Guidance Manual on Implementation of The National
Environmental Policy Act 4-5 (June 2025), https://www.ferc.gov/media/staff-guidance-manual-implementation-national-environmental-policy-act-june-2025s.
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11. Commission staff considered all previous implied surrender
terminations and revocations since 1978, the year that the Commission
first promulgated regulations implementing NEPA. The Commission has
never found a potentially significant effect from a termination or
revocation such that an Environmental Impact Statement was required.
12. Commission staff prepared an EA in thirteen previous implied
surrender termination or revocation proceedings. For implied surrender
terminations, the licensee is almost always unresponsive, so Commission
staff typically based the analysis in the EAs on site inspections
completed by Commission staff and on any prior NEPA document or prior
submitted documents, such as the environmental report that must
accompany an application for a license, exemption, or amendment. For
revocations, the licensee may either be unresponsive or be responsive
but persistently in violation of the requirements of its license.
Commission staff typically based the analysis in those EAs on the same
sources used for implied surrender terminations. The EAs evaluated
effects on geology and soils, water quality and quantity, aquatic
resources, terrestrial resources, recreation, cultural resources, air
quality, and threatened and endangered species, as relevant.
13. Six of the EAs recommended termination or revocation without
further requirements on the licensee.\22\ The EAs determined that the
proposed actions would result in no changes to existing project
facilities, no ground-disturbing activity, and no addition or change to
the existing passive effect of the project works on the reservoir,
flows, and environmental resources at the projects. These EAs found no
potential effects on any environmental resource area.
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\22\ See the discussion in the Substantiation Record of the
Whittelsey Dam Hydroelectric Project No. 10522-024; Gilman Stream
Hydroelectric Project No. 7473-013; Hammeken's Powerhouse Canal
Project No. 9647-003; Blackstone Mill Hydroelectric Project No.
11426-003; Appleton Trust Project No. 9300-018; and Lowell Atlantic
Hydroelectric Project No. 5946-007.
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14. The other seven EAs evaluated terminations and revocations with
requirements for further actions to be conducted by the licensee
required by the Commission's dam safety oversight program or by another
federal agency to stabilize, repair, or remove project works.\23\
Although the EAs identified more potential effects than in the cases
requiring no further action by the licensee, the EAs uniformly
concluded that the terminations and revocations would not significantly
affect the quality of the human environment.\24\
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\23\ See the discussion in the Substantiation Record of the
Upper Watertown Dam Project No. 9974-040, -048; Star Milling and
Electric Minor Water Power Project No. 11291-023; Bannister Mill
Project No. 8656-007; 29-Mile Creek Project No. 7931-021;
Slaughterhouse Gulch Project No. 6375-006; Tyrone Project No. 6624-
009; and Mechanicville Hydroelectric Project No. 6032-041.
\24\ Commission staff identified the implied surrender
termination for the Mechanicville Hydroelectric Project No. 6032-041
as an outlier. Niagara Mohawk Power Corp., 98 FERC ] 61,227 (2002)
(including Environmental Assessment). The EA evaluated termination
with a requirement for the licensee to repair and stabilize the dam
and powerhouse. The EA concluded that the activities could
reintroduce polychlorinated biphenyl (PCB) pollution from the
riverbed into the water column. Id. EA at G.2. This potential for
more than a minor change to reservoir conditions and downstream
flows would have placed the termination outside the scope of the
proposed CE.
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15. These examples have informed the proposed CE. Consistent with
the previous EAs, discussed in detail in the Substantiation Record, the
Commission finds that ``terminations or revocations of water power
licenses that will result in minor or no ground disturbing activity and
minor or no changes in reservoir conditions and downstream flows''
normally do not significantly affect the quality of the human
environment, absent extraordinary circumstances.
IV. Proposed Revisions to NEPA Procedures
16. The Commission proposes to expand the existing CE at 18 CFR
380.4(a)(13) to separate its clauses into subparts that will include
the proposed CE for terminations and revocations of water power
licenses and exemptions. The existing regulation states:
(a) General rule. Except as stated in paragraph (b) of this
section, neither an environmental assessment nor an environmental
impact statement will be prepared for the following projects or
actions:
* * * * *
(13) Surrender and amendment of preliminary permits, and surrender
of water power licenses and exemptions where no project works exist or
ground disturbing activity has occurred and amendments to water power
licenses and exemptions that do not require ground disturbing activity
or changes to project works or operation;
* * * * *
The proposed revised 18 CFR 380.4(a)(13) would state:
(13) Certain amendments, surrenders, terminations, and revocations
of preliminary permits and water power licenses and exemptions:
(i) Amendments or surrenders of preliminary permits;
(ii) Amendments to water power licenses and exemptions that do not
require ground disturbing activity or changes to project works or
operation; (iii) Surrenders of water power licenses and exemptions
where no project works exist or ground disturbing activity has
occurred; or
(iv) Terminations or revocations of water power licenses and
exemptions that will result in minor or no ground disturbing activity
and minor or no changes in reservoir conditions and downstream flows;
17. The changes to section 380.4(a)(13) will make, for certain
proposed terminations and revocations, a categorical exclusion
available as a
[[Page 8802]]
form of review that may be used to comply with NEPA, providing more
efficient oversight of hydropower projects.
V. Request for Comments
18. The Commission requests and encourages public comments on this
notice of proposed rulemaking and the accompanying draft substantiation
record. Comments may include any related matters or alternative
proposals that commenters may wish to discuss. The Commission will
consider comments it receives and provide responses in a final rule,
with changes, if warranted.
19. Comments are due March 26, 2026. Comments must refer to Docket
No. RM26-7-000 and must include the commenter's name, the organization
they represent, if applicable, and their address in their comments. 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 on this proposal are not
required to serve copies of their comments on other commenters.
20. The Commission encourages comments to be filed electronically
via the eFiling link on the Commission's website at http://www.ferc.gov. The Commission accepts most standard word processing
formats. Documents created electronically using word processing
software must be filed in native applications or print-to-PDF format
and not in a scanned format. Commenters filing electronically do not
need to make a paper filing.
21. Commenters that are not able to file comments electronically
may file an original of their comment by USPS mail or by courier-or
other delivery services. For submission sent via USPS only, filings
should be mailed to: Federal Energy Regulatory Commission, Office of
the Secretary, 888 First Street NE, Washington, DC 20426. Submission of
filings other than by USPS should be delivered to: Federal Energy
Regulatory Commission, 12225 Wilkins Avenue, Rockville, MD 20852.
VI. Regulatory Requirements
A. Information Collection Statement
22. The Paperwork Reduction Act \25\ requires each federal agency
to seek and obtain the Office of Management and Budget's (OMB) approval
before undertaking a collection of information (i.e., reporting,
recordkeeping, or public disclosure requirements) directed to ten or
more persons or contained in a rule of general applicability. OMB
regulations require approval of certain information collection
requirements contained in final rules published in the Federal
Register. This proposed rule does not impose new information collection
requirements on any person or entity. The Commission is therefore not
required to submit this rule to OMB for review.
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\25\ 44 U.S.C. 3501-3521.
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B. Environmental Analysis
23. This proposed rule is procedural in its entirety and therefore
does not require preparation of a NEPA analysis. NEPA does not require
environmental analysis or documentation when establishing procedural
guidance. The determination that establishing a CE does not require
NEPA analysis and documentation has been upheld in Heartwood, Inc. v.
U.S. Forest Service, 230 F.3d 947, 954-55 (7th Cir. 2000).
24. Moreover, this rulemaking falls within the Commission's
category of actions for the promulgation of rules that are clarifying,
corrective, or procedural, or that do not substantially change the
effect of legislation or the regulations being amended.\26\ This notice
proposes to add a CE for certain terminations of hydropower
authorizations. Because the proposed rule is procedural in nature and
falls within this categorical exclusion, preparation of an
Environmental Assessment or an Environmental Impact Statement is not
required. Further, we note that this proposed rule only changes the
default treatment under NEPA of certain terminations of hydropower
authorizations, and such a change would not alter the environmental
effects of the Commission's termination orders.
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\26\ 18 CFR 380.4(a)(2)(ii).
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C. Regulatory Flexibility Act
25. The Regulatory Flexibility Act of 1980 (RFA) \27\ generally
requires a description and analysis of proposed rules that will have
significant economic impact on a substantial number of small entities.
The RFA mandates consideration of regulatory alternatives that
accomplish the stated objectives of a proposed rule and minimize any
significant economic impact on a substantial number of small
entities.\28\ In lieu of preparing a regulatory flexibility analysis,
an agency may certify that a proposed rule will not have a significant
economic impact on a substantial number of small entities.\29\ The
Small Business Administration's (SBA) Office of Size Standards develops
the numerical definition of a small business.\30\ The SBA size standard
for hydroelectric power generation is based on the number of employees,
including affiliates.\31\ Under SBA's size standards, a hydroelectric
power generator is small if, including its affiliates, it employs 750
or fewer people.\32\
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\27\ 5 U.S.C. 601-612.
\28\ Id. 603(c).
\29\ Id. 605(b).
\30\ 13 CFR 121.101.
\31\ Id.
\32\ Id. 121.201, subsector 221.
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26. If enacted, this proposed rule would apply to a number of
entities, some of which may be small businesses, who hold a license or
exemption from the Commission for a hydropower project. However, this
proposed rule would have no effect on these entities, regardless of
their status as a small entity or not, as the proposed rule imposes no
action or requirement on those entities. Instead, this proposed rule
would establish a new CE, altering the responsibilities and obligations
only of the Commission and its staff under NEPA.
27. Accordingly, pursuant to section 605(b) of the RFA, the
Commission certifies that this proposed rule will not have a
significant economic impact on a substantial number of small entities.
D. Document Availability
28. 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).
29. From the Commission's Home Page on the internet, this
information is available on 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 this document in
the docket number field.
30. User assistance is available for eLibrary and the Commission's
website during normal business hours from FERC Online Support at (202)
502-6652 (toll free at 1-866-208-3676) or email at
[email protected], or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at
[email protected].
List of Subjects in 18 CFR Part 380
Environmental impact statements, Reporting and recordkeeping
requirements.
[[Page 8803]]
By direction of the Commission.
Issued: February 19, 2026.
Debbie-Anne A. Reese,
Secretary.
In consideration of the foregoing, the Commission proposes to amend
part 380, chapter I, title 18, Code of Federal Regulations, as follows:
PART 380--REGULATIONS IMPLEMENTING THE NATIONAL ENVIRONMENTAL
POLICY ACT
0
1. Revise Sec. 380.4(a)(13) to read as follows:
Sec. 380.4 Projects or actions categorically excluded.
(a) * * *
* * * * *
(13) Certain amendments, surrenders, terminations, and revocations
of preliminary permits and water power licenses and exemptions:
(i) Amendments or surrenders of preliminary permits;
(ii) Amendments to water power licenses and exemptions that do not
require ground disturbing activity or changes to project works or
operation;
(iii) Surrenders of water power licenses and exemptions where no
project works exist or ground disturbing activity has occurred; or
(iv) Terminations or revocations of water power licenses and
exemptions that will result in minor or no ground disturbing activity
and minor or no changes in reservoir conditions and downstream flows;
[FR Doc. 2026-03657 Filed 2-23-26; 8:45 am]
BILLING CODE 6717-01-P