PG&E withdraws Potter Valley hydro relicensing, FERC opens orphan project solicitation

California electric utility Pacific Gas and Electric Company has withdrawn its expression of intent to seek a new license for the Potter Valley Hydroelectric Project, saying its relicensing would be contrary to the interests of its electric ratepayers. The withdrawal has prompted federal hydropower regulators to institute an "orphan project" process to find interest from other entities in seeking a license for the project. If no other entity seeks and obtains a new license for the project, PG&E would be responsible for surrendering the existing project license.

The Potter Valley Project is located on the Eel and East Fork Russian Rivers in northern California, about 15 miles northeast of the city of Ukiah. Originally licensed by the Federal Power Commission in 1922, and owned by PG&E since 1930, the project includes Lake Pillsbury, impounded by Scott Dam; the Van Arsdale Reservoir, impounded by the Cape Horn Diversion Dam; and a tunnel, penstock and powerhouse located in the headwaters of the Russian River Basin. PG&E estimates the average annual generation of the project to be 19,900 megawatt-hours, with an installed capacity of 9.4 megawatts. The current license issued by the Federal Energy Regulatory Commission expires on April 14, 2022, requiring PG&E to submit a new license application by April 14, 2020.

On April 6, 2017, PG&E filed a pre-application document (PAD) and notice of its intent (NOI) to file an application for a new license. But on January 25, 2019, PG&E filed notice of the withdrawal of its NOI and PAD, indicating it is no longer seeking a new license for the project and is terminating its efforts to transfer and sell the project.

In that notice, PG&E said it has "determined that it would be contrary to the interests of its electric ratepayers to continue relicensing the Potter Valley project." PG&E said it had long recognized hte project as "uneconomic for PG&E's ratepayers (i.e. the cost of production exceeding the cost of alternative sources of renewable power on the open market)." PG&E cited "continued declining energy markets, potential increased costs associated with anticipated new license conditions, and challenging financial circumstances" as leading the company to conclude it cannot justify to its ratepayers further expenditures associated with the project.

PG&E noted its anticipation that the Commission would institute its "orphan project" process under the Commission's rules to solicit license applications for Potter Valley from other entities, and expressed its understanding that PG&E would be responsible for surrendering the existing license if no other entity seeks and obtains a new license for the project. PG&E closed by saying it "recognizes the value of Potter Valley to local communities because it provides for the protection of important environmental resources, consumptive water uses, public recreation, and other economic values" which the utility said should be appropriately considered if it is required to file a surrender application.

In response, on March 1, 2019, the Commission issued a Notice Soliciting Applications for a new license for the Potter Valley project within 120 days. The Commission noted that if no other applicant files an application for a license by April 14, 2020, PG&E would be provided with written notice that no timely application for the project has been filed, and would then have 90 days within which to file a schedule for the filing of a surrender application for the project.

Boom in FERC hydro relicensing

U.S. federal hydropower regulatory staff currently has a full workload processing original license, relicense, and exemption applications, as well as its compliance and dam safety work, according to testimony presented to the House Energy & Commerce Committee, Subcommittee on Energy -- and this workload is expected to increase as many hydro projects face relicensing proceedings.

The Federal Energy Regulatory Commission regulates over 1,600 non-federal hydropower projects located at over 2,500 dams, under Part I of the Federal Power Act.  These projects collectively represent about 56 gigawatts of hydropower capacity, over half of the nation's total hydropower capacity.

The Federal Power Act generally requires non-federal hydropower projects to be licensed by the Commission if they: (1) are located on a navigable waterway; (2) occupy federal land; (3) use surplus water from a federal dam; or (4) are located on non-navigable waters over which Congress has jurisdiction under the Commerce Clause, involve post-1935 construction, and affect interstate or foreign commerce.  Licenses are generally issued for terms of between 30 and 50 years, and are renewable.

According to testimony presented to the House Energy & Commerce Committee, Subcommittee on Energy on May 3, 2017, the Commission's relicensing workload "has started to increase and will continue to remain high well into the 2030s."  Between fiscal years 2017 and 2030, the Commission projects that about 480 older projects will begin the pre-filing consultation stages of the relicensing process.  These projects facing relicensing represent about 45 percent of Commission-licensed projects, and one-third of jurisdictional licensed hydropower capacity.

The testimony also notes that some of these projects may face different standards in a relicensing context than were considered when their current or original licenses were issued.  Many projects now entering relicensing were first licensed in the early to mid-1980s, following the enactment of PURPA but prior to enactment of modern environmental standards.

For example, the Electric Consumers Protection Act of 1986 directed the Commission, when issuing licenses, to give equal consideration to power and development, energy conservation, fish and wildlife, recreational opportunities, and other aspects of environmental quality.  This mandate may not have applied to a 40-year license issued in 1982, but would come into play during a relicensing case initiated in 2017.

The House Subcommittee on Energy is considering discussion drafts and several pieces of legislation affecting hydropower, including the Hydropower Policy Modernization Act of 2017; the Promoting Hydropower Development at Existing Non-Powered Dams Act; the Promoting Closed-Loop Pumped Storage Hydropower Act; the Promoting Small Conduit Hydropower Facilities Act of 2017; and the Supporting Home Owner Rights Enforcement Act.

Oroville Dam evacuation and relicensing

A California dam in the midst of a federal relicensing process has experienced flooding and storm-related damage, prompting the evacuation of over 180,000 people.  Evacuation orders and a reservoir drawdown represent the most rapid responses to the Oroville Dam incident -- but future discussions of engineering, dam safety, and public policy are likely to continue after the emergency has been resolved.

Oroville Dam is the tallest dam in the U.S.:  a 770-foot high earthfill embankment dam on the Feather River in northern California.  The dam was built from 1961-1968 by the California Department of Water Resources, as part of the State Water Project.  The resulting impoundment, Lake Oroville, can store over 3.5 million acre-feet of water, making it California's second largest man-made lake.

The Oroville project is subject to licensing by the Federal Energy Regulatory Commission under the Federal Power Act.  Its first license was issued on February 11, 1957, for a 50-year term which expired on January 31, 2007.  The Department of Water Resources filed an application for a new license for the project, which remains pending in Docket No. P-2100, although a settlement agreement was also filed.  In the meantime, the project continues to operate under a series of annual licenses issued by the Commission.  According to a DWR website, it "anticipates that FERC will issue a new license order in 2017 pending issuance of the aquatic biological opinion from the National Marine Fisheries Service."

According to state documents, California was hit by three major storms during January and February 2017, with major rain and runoff.  As Lake Oroville reached its full capacity, operators opened a spillway to allow excess water through the dam.  But on February 7, the spillway began to erode.  Four days later, operators opened the auxiliary emergency spillway, but eventually determined that this too was "in danger of failing."  Since a failure could cause widespread and severe flooding, officials called for evacuations downstream in the Feather River Valley.  On February 12, Governor Edmund G. Brown Jr. issued an emergency order strengthening the state's response.

Focus for now remains on safely resolving the risks that the Oroville Dam or its spillways might fail in a way that releases damaging waters.  The Commission could investigate what happened under its authority over the project through its existing license.  It could also raise issues relating to the incident in the context of the project's relicensing.  That case has been pending for roughly a decade, with a settlement agreement having been reached years ago.  But it is possible that the 2017 Oroville Dam incident could have consequences in the relicensing context, such as revised spillway designs or operating plans that could be reflected as conditions in a new license.

Hydro relicensing and intervention timing

The Federal Energy Regulatory Commission issues hydropower licenses for terms of up to 50 years.  At least 5 years before license expiration, the licensee is required to notify the Commission and the public whether it intends to apply for a new license for the project, and what licensing process it requests.  Any license application might not come for years after the filing of that notice of intent.  But as a recent Commission order shows, the opportunity for a third party to intervene in the relicensing case is triggered not by the notice of intent, but only after an application for a new license is actually filed and notice is published.

That recent order involved New York State Electric & Gas Corporation (NYSEG), the licensee for the Upper Mechanicville Hydroelectric Project, FERC No. 2934.  The Upper Mechanicville project is located on the Hudson River in upstate New York, and has an authorized capacity of 18.5 megawatts.  Its original license, issued in 1981 for a 40-year term, expires on March 31, 2021.

On March 30, 2016, NYSEG filed a Notice of Intent to relicense the project, under the Commission's Integrated Licensing Process or ILP, along with a Pre-Application Document.

On April 13, 2016, the New York State Council of Trout Unlimited filed a motion to intervene in the docket, citing Rule 214 of the Commission's Rules of Practice and Procedure.  But on May 24, the Commission issued a notice dismissing that motion.

The notice first points to Rule 214(a)(3) of its procedural order, any person may seek to intervene and become a party in a proceeding by filing a motion to intervene that complies with the content requirements of Rule 214(b).  But the notice states that because NYSEG has not yet filed an application for a new license, there is no proceeding in which to intervene.  It therefore dismissed the motion to intervene as premature.

The notice does offer the Trout Unlimited group two other approaches to involvement.  First, it suggests that interested persons can register and eSubscribe to the docket.  Second, it notes that should NYSEG file an application for a new license for its project, notice of the application will be published, and interested entities "will have an opportunity to intervene and present views concerning the project as proposed in the license application."

FERC relicensing and annual licenses

What happens when the holder of a hydropower license applies to the Federal Energy Regulatory Commission for a new license, but the original license expires before the relicensing case is resolved?  Depending on which federal laws and regulations apply, possible outcomes can include the Commission issuing an annual license, or continued operation under the license terms, until a new license is issued or other disposition is ordered.

A recent FERC case illustrates this dynamic, involving the Don Pedro Hydroelectric Project, Project No. 2299, located on the Tuolumne River in California.  Turlock Irrigation District and Modesto Irrigation District are the licensees for Project No. 2299, under a license issued for a period ending April 30, 2016.

Just over 2 years before the Don Pedro project's license expired, on April 28, 2014 the licensees filed an Application for a New License pursuant to the Federal Power Act (FPA) and the Commission's regulations thereunder.  That relicensing application remains pending.

Section 15(a)(1) of the FPA, 16 U.S.C. 808(a)(1), requires the Commission, at the expiration of a license term, to issue from year-to-year an annual license to the then licensee under the terms and conditions of the prior license until a new license is issued, or the project is otherwise disposed of as provided in section 15 or any other applicable section of the FPA.  But some projects operate pursuant to licenses which include waivers of the applicability of Section 15 of the FPA.

In the Don Pedro project's case, on May 5, 2016, the Commission issued a Notice of Authorization for Continued Project Operation, including language covering both the scenario under which Section 15 applies, as well as the scenario under which the prior license waived Section 15's applicability.

If the project is subject to section 15 of the FPA, the Commission gave notice that an annual license for Project No. 2299 is issued to the licensee for a period effective May 1, 2016 through April 30, 2017 or until the issuance of a new license for the project or other disposition under the FPA, whichever comes first.  If issuance of a new license (or other disposition) has not occurred by April 30, 2017, the Commission gave notice that, pursuant to 18 CFR 16.18(c), an annual license under section 15(a)(1) of the FPA is renewed automatically without further order or notice by the Commission, unless the Commission orders otherwise.

If Section 15 does not apply, the Commission gave notice that based on section 9(b) of the Administrative Procedure Act, 5 U.S.C. 558(c), and as set forth at 18 CFR 16.21(a), if the licensee of such project has filed an application for a subsequent license, the licensee may continue to operate the project in accordance with the terms and conditions of the license after the minor or minor part license expires, until the Commission acts on its application. If the licensee of such a project has not filed an application for a subsequent license, then it may be required, pursuant to 18 CFR 16.21(b), to continue project operations until the Commission issues someone else a license for the project or otherwise orders disposition of the project.

The irrigation districts' relicensing case remains pending.

West Branch storage project relicensed

Earlier this month U.S. hydropower regulators issued a new license for the West Branch Project, which includes water storage facilities on the West Branch of the St. Croix River in Maine.

The Federal Energy Regulatory Commission first issued an original license for the West Branch Project on September 4, 1980.  The project includes two developments, Sysladobsis and West Grand, that operate as water storage facilities to provide flood storage and flow releases for downstream hydroelectric generation.  The Sysladobsis Development uses Sysladobsis Lake as its impoundment.  The license describes the West Grand Development as composed of several natural lakes including Scraggly Lake, Keg Lake, Bottle Lake, Junior Lake, Junior Bay, Norway Lake, Pug Lake, Pocumcus Lake, Horseshoe Lake, and West Grand Lake. 

Dikes and dams are used to control and release water, first from Sysladobsis Lake into the downstream West Grand impoundment, then into either Grand Lake Stream or Grand Lake Brook.  Many of the dams and dikes at these sites are old -- the Sysladobsis dam, West Grand dam, and Farm Cove dike were constructed in 1861, 1836, and 1879, respectively, although all three have since been rebuilt.

Each of these developments operates in a seasonal store-and-release mode whereby water is stored to reduce downstream flooding during periods of high flow and released during periods of low flow to augment generation at the downstream hydroelectric projects.

The West Branch Project also operates as part of the larger St. Croix River headwater storage system.  This network of dams includes Woodland Pulp LLC’s Forest City Project No. 2660 and the recently relicensed Vanceboro Project No. 2492. Generation associated with these projects occurs at the Grand Falls and Woodland hydroelectric projects downstream on the St. Croix River.

The West Branch Project's original 1980 license was amended in 1987 to include the existing Farm Cove dike, but the original license expired on September 30, 2000.  Since then, the licensee has operated the project under an annual license pending the disposition of a new license application.

On March 19, 2009, the licensee filed, pursuant to sections 4(e) and 15 of the Federal Power Act (FPA), an application for a new license to continue operating and maintaining the West Branch Project. The licensee proposed to continue store-and-release operation with some changes, continue operating fishways and take other measures to promote fish populations, enhance a land use plan, and develop a historic properties management plan.

Fishery issues have been contentious in the St. Croix River system.  After opportunity for public comment, agency consultation, and preparation of an Environmental Assessment, the Maine Department of Inland Fisheries and Wildlife asked the Commission to delay its licensing decision until fishery management talks concluded.  After being notified by the Department that those talks had concluded, on March 15, 2016 the Commission issued Woodland Pulp a new license to continue operating and maintaining the West Branch Project. 

The new license requires a number of measures to protect and enhance water quality, aquatic habitat, fisheries resources, terrestrial resources, and recreation opportunities at the project. These include a requirement to operate the developments in store-and-release mode between defined pond elevations, to provide certain minimum flows of water, to develop an Operation Compliance Monitoring Plan, and to provide and enhance fish passage.

A list maintained by the Federal Energy Regulatory Commission shows over 1,000 active hydropower licenses.  Many of these licenses will expire in the near future, so relicensing activity for FERC-licensed hydroelectric projects is expected to increase. 

Vanceboro Dam Storage Project relicensed

The Federal Energy Regulatory Commission has issued a new license to Woodland Pulp LLC to continue operating and maintaining the Vanceboro Dam Storage Project.  Located on the East Branch of the St. Croix River along the Canadian border in Washington County, Maine, the FERC-licensed project operates as a water storage facility that provides flood storage and flow releases for downstream hydroelectric generation.

The 469-foot-long, 16-foot-high Vanceboro Dam and 178,000 acre-foot project impoundment span the U.S.-Canada border.  The project is subject to the Boundary Waters Treaty of 1909 which established the International Joint Commission (IJC), a bi-national agency with the mission of preventing and resolving disputes between the United States and Canada over boundary waters.

The Vanceboro project is part of the larger St. Croix River headwater storage system.  This system also includes the Forest City Project, located about 24 miles upstream on the East Branch of the St. Croix, as well as the West Branch Project.  Water flows into the Vanceboro project’s impoundment from the Forest City Project. The project operates in a store-and-release mode whereby water is stored during periods of high flow to reduce downstream flooding, and then released during periods of lower flow to increase generation at the downstream hydroelectric projects.   Generation associated with these projects occurs at the unlicensed Grand Falls and Woodland hydroelectric projects located downstream on the St. Croix River.  Collectively, these storage projects provide flood storage and helps to regulate and augment flows, resulting in increased generation at Woodland Pulp’s downstream hydroelectric projects.

The Federal Energy Regulatory Commission issued an original license for the United States portion of the Vanceboro project on April 4, 1966.  The project is docketed as No. 2492.  That original license expired February 29, 2016, so two years earlier the licensee filed an application to the Commission for a new license to continue operating and maintaining the project.  In the interim, Woodland Pulp operated the project under an annual license pending resolution of its FERC relicensing process. 

On March 22, 2016, the FERC released an order issuing a new license for the Vanceboro Project. The new license authorizes no new capacity, and requires what the Commission characterized as "a moderate amount of new environmental mitigation measures."  These include a mandatory prescription issued under section 18 of the Federal Power Act, relating to new upstream fish passage facilities for American eel, river herring, and landlocked Atlantic salmon.

Given the fact that the Vanceboro Project is operated in coordination with the recently-relicensed West Branch Project No. 2618 and Forest City Project No. 2660 which each received 30-year license terms within the past 5 months, the Commission similarly relicensed the Vanceboro project for a 30-year license term to allow coordination of all three projects during any future relicensing.

Based on the large number of FERC-licensed hydropower projects whose licenses will expire in the near future, regulators expect to see an uptick in relicensing activity for hydroelectric projects and dams.

Waterbury hydro need and economics

A recent order issuing a new hydropower license to Green Mountain Power Corporation's Waterbury Hydroelectric Project sheds insight into the project's operations and economics.

The Waterbury project is located at a dam built in 1938, and licensed for hydropower development since 1954.  After a 16-year relicensing process, the Federal Energy Regulatory Commission issued a new license for the project in February 2016, authorizing 5.52 megawatts of generating capacity.  That relicensing process illustrates how the Commission considers the need for power from the project, as well as project economics, when considering whether to relicense a hydropower project.

By regulation, the Commission's process for reviewing a license application includes an evaluation of the "need of the applicant over the short and long term for the electricity generated by the project or projects to serve its customers."  In the Waterbury project's relicensing case, this consideration of the applicant's "need for power" involved observations about the project's expected output as well as the regional power market.  The order notes historic average generation from the Waterbury Project of 17,562 MWh annually, but observes that under the new license average annual generation will be reduced to 14,767 MWh.

The order then states, "Electricity generated from the Waterbury Project will help supply the power needs in northern Vermont."  It also cites a 10-year forecast by electric reliability organization North American Electric Reliability Corporation (NERC) showing summer peak demand in the region is expected to increase at an average rate of 0.84 percent per year between 2014 and 2023.  Based on this, the order concludes that "the project's power will help meet the regional need for power."

The Commission's process for determining whether to issue a new license for an existing hydroelectric project also includes consideration of public interest factors, such as the economic benefits of project power.  A 1995 decision established the Commission’s approach to evaluating the economics of hydropower projects.  Under that approach, the Commission uses current costs to compare the costs of the project and likely alternative power with no forecasts concerning potential future inflation, escalation, or deflation beyond the license issuance date.  The Commission has described the basic purpose of this economic analysis as to provide a general estimate of the potential power benefits and the costs of a project, and of reasonable alternatives to project power, "to support an informed decision concerning what is in the public interest with respect to a proposed license."

For the Waterbury project, as ultimately licensed with mandatory conditions and staff measures, the Commission concluded that:

• the levelized annual cost of operating the project is $711,735, or $48.20/MWh
• the proposed project would generate an average of 14,767 MWh of energy annually.
• average generation is multiplied by the alternative power cost of $44.12/MWh, for a total value of the project’s power is $651,520, in 2015 dollars.

Therefore, the Commission concluded that in the first year of operation, the project would cost $60,215, or $4.08/MWh, more than the likely alternative cost of power.  As the order notes, "Although staff’s analysis shows that the project as licensed herein would cost more to operate than the estimated cost of alternative power, it is the applicant who must decide whether to accept this license and any financial risk that entails."

The Commission did note that its consideration of public interest factors also considers that "hydroelectric projects offer unique operational benefits to the electric utility system", including ancillary services like stability and rapid response.  The order also notes that while staff did not explicitly account for the effects inflation may have on the future cost of electricity, hydropower generation is relatively insensitive to inflation compared to fossil fueled generators -- illustrating why "project economics is only one of the many public interest factors the Commission considers in determining whether or not, and under what conditions, to issue a license."

FERC relicenses Waterbury hydro project

More than 16 years after Green Mountain Power Corporation applied to the Federal Energy Regulatory Commission for a new license to continue operation and maintenance of its Waterbury Hydroelectric Project on the Little River in Vermont, the Commission has issued a new license for the project.

Waterbury dam and reservoir were built by the United States in 1938 to reduce flooding in the Winooski Valley, but are owned by the State of Vermont and operated by Green Mountain Power.  The Commission issued the original license for the project in 1954, effective September 1, 1951, for a period of 50 years.

That original license expired on August 31, 2001.  Two years before that date, Green Mountain Power applied for a new license to continue operation and maintenance of the project.  But relicensing a FERC-licensed hydropower project can be an involved process.  Environmental, conservation, and recreation-oriented groups intervened in the application case.  As the relicensing case progressed, the original license expired, after which Green Mountain Power operated the project under annual licenses pending the disposition of its license application.

Over time, the applicant revised its proposal, in part to propose a change to run-of-river operation as contemplated by the project's Vermont Department of Environmental Conservation water quality certification. Ultimately, on February 19, 2016, the Commission issued an order issuing a new license for the Waterbury Project for a period of 40 years.

In setting the 40-year license term for the Waterbury project's new license, the Commission noted its discretion under Section 15(e) of the Federal Power Act to issue new licenses for a term that the Commission determines to be in the public interest, but not less than 30 years or more than 50 years.  The order also notes the Commission's general policy "to establish 30-year terms for projects with little or no redevelopment, new construction, new capacity, or environmental mitigation and enhancement measures; 40-year terms for projects with a moderate amount of such activities; and 50-year terms for projects with extensive measures."

The Waterbury project relicensing case illustrates one potential path for what happens when a license expires for an existing FERC-licensed hydropower project.  According to the Commission, as of February 11, 2016, over 50 projects were pending relicensing, with an increase expected in applications for new licenses over the coming years.

Merced River hydro relicensing Environmental Impact Statement released

Staff of the Federal Energy Regulatory Commission have released a final Environmental Impact Statement (EIS) evaluating proposals to relicense two hydroelectric power projects located on the Merced River in California.

The two projects are Merced Irrigation District’s existing 101.25 megawatt Merced River Project No. 2179-043, and Pacific Gas and Electric Company’s (PG&E) existing 3.4-MW Merced Falls Project No. 2467-020.  Prepared as part of the relicensing process for those projects, the Merced River EIS contains FERC staff evaluations of the applicants’ proposals and the alternatives for relicensing the Merced River and Merced Falls Hydroelectric Projects.  The staff’s recommendation is to relicense the project as proposed, with certain modifications, and additional measures recommended by the agencies.

The Federal Energy Regulatory Commission is authorized by the Federal Power Act to issue licenses for up to 50 years for the construction and operation of nonfederal hydroelectric development subject to its jurisdiction, on condition:

That the project adopted…shall be such as in the judgment of the Commission will be best adapted to a comprehensive plan for improving or developing a waterway or waterways for the use or benefit of interstate or foreign commerce, for the improvement and utilization of water-power development, for the adequate protection, mitigation, and enhancement of fish and wildlife (including related spawning grounds and habitat), and for other beneficial public uses, including irrigation, flood control, water supply, and recreational and other purposes referred to in section 4(e)…

The Commission may also require such other conditions not inconsistent with the FPA as may be found necessary to provide for the various public interests to be served by the project.  To assist in this evaluation, and as required by the National Environmental Policy Act, FERC staff prepares the EIS.  It is designed to record the view of governmental agencies, non-governmental organizations, affected Indian tribes, the public, the license applicants, and FERC staff.

In the Merced River cases, the licensees used FERC's Integrated Licensing Process (ILP) and filed relicensing applications in February 2012.  FERC elected to process the applications for the two projects together "because they: (1) are located contiguously on the Merced River; (2) the Merced Falls Project’s operation depends entirely on flows released by the upstream Merced River Project; and (3) downstream of the Merced River Project, the environmental effects of both projects are interrelated."

Each applicant proposed some modified environmental measures in its license application, but no new capacity and no new construction at the project.  In the Merced projects' 840-page final EIS, Commission staff noted that the "primary issues associated with relicensing the projects are flow regimes in project-affected reaches for aquatic resources, project effects on physical habitat for aquatic resources, protection of wildlife resources, recreation enhancements, and protection of cultural resources." After consideration, Commission staff recommended the staff alternative, which consists of measures included in Merced ID’s and PG&E’s proposals, as well as some of the mandatory conditions and recommendations made by other state and federal agencies and non-governmental organizations, plus additional measures developed by FERC staff:

We chose the staff alternative as the preferred alternative because: (1) the projects would provide a dependable source of electrical energy for the region; (2) the generation comes from a renewable resource that does not contribute to atmospheric pollution, including greenhouse gases; and (3) the recommended environmental measures proposed by Merced ID and PG&E, as modified by staff, would adequately protect and enhance environmental resources affected by the projects. The overall benefits of the staff alternatives would be worth the cost of the environmental measures.

Ultimately, the Merced River hydropower relicensing project EIS concludes that "issuing new licenses for the Merced River and Merced Falls Projects, with the environmental measures we recommend, would not be major federal actions significantly affecting the quality of the human environment."

More hydropower relicensure expected

Many U.S. hydropower projects face relicensure by the Federal Energy Regulatory Commission within the next 3 years, making hydro project relicensing a hot topic.

The FERC is the nation's primary federal regulator of hydropower facilities.  Under Part I of the Federal Power Act, the Commission's responsibilities over hydropower include issuing licenses for the construction of new projects, relicensing for the continuance of existing projects, and oversight of all ongoing project operations, including dam safety inspections and environmental monitoring.

According to the Commission, about 1,023 issued licenses were active as of April 1, 2015.  Licenses are typically effective for up to 50 years, largely because dams and hydroelectric power facilities are typically long-lived assets and because the regulatory process for licensure is extensive (and expensive for project developers or owners).  Nevertheless, as time marches on, even a 50-year license will ultimately expire, so owners of FERC-licensed hydropower projects must eventually evaluate relicensure. 

Federal law and regulations, including Section 15(b)(1) of the Federal Power Act and 18 C.F.R. §5.5 of the Commission’s regulations, govern the relicensure process.  Between 5 and 5.5 years before an existing license expires, the licensee must notify the Commission whether or not it intends to file an application for a new license.  This filing is known as a Notice of Intent or NOI.  At the same time, the licensee seeking relicensure must also file a Pre-Application Document (PAD).  The PAD must include: (1) a process plan and schedule; (2) a description of the project’s location, facilities, and operation; (3) a description of the existing environment at the project and its resource impacts; (4) a preliminary list of issues and proposed studies; and (5) a list of contacts.  A licensee must also distribute the PAD to appropriate federal, state, and interstate resource agencies, Indian tribes, local governments, and members of the public likely to be interested in the project’s relicensing.

The Commission has noted an anticipated uptick in the rate of relicensure applications.  From October 1, 2010 through September 30, 2014, the Commission has received an annual average of about 12 Notices of Intent to relicense hydroelectric projects.  According to the FERC, 47 licensed projects were in the relicensure process as of April 1.  But even more projects face relicensure in the next 3 years.  According to an April 1 notice issued by the Commission, about 100 FERC-licensed hydropower projects will begin the relicensing process between October 1, 2016, and September 30, 2018.  The Commission thus anticipates the annual average number of Notices of Intent to increase to about 34.

Owners of FERC-licensed hydropower projects nearing the end of their license terms must plan ahead to prepare for relicensure.  Given the expected increase in hydroelectric project relicensure, Commission staff reasonably expects an increase in their workload.  While most existing projects have historically been able to win new licenses, in some cases hydropower project relicensing can become controversial.  Expect the next several years to bring increased relicensing activity.

Pilgrim nuclear plant down temporarily

The Pilgrim Nuclear Power Station in Plymouth, Massachusetts, was shut down temporarily yesterday due to an apparent malfunction. Media reports suggest a problem with a condenser, a piece of equipment that converts the steam produced by the plant back into water.

Nuclear power plants typically produce electricity by using fissile nuclear material to produce heat. This thermal energy vaporizes water into steam. In turn, this steam spins one or more turbines, each of which is connected to an electric generator. In this regard, nuclear power plants' reliance on steam resembles other thermal power plants such as those fired by combustion fuels like coal or biomass.

As with many other steam-based power plants, nuclear power plants often include steam condensers. A steam condenser takes the steam that is passed through the turbines and converts it back into liquid water. This enables the turbines to extract more energy from the flow of steam, and improves plant efficiency. It appears that a condenser at the Pilgrim station stopped working, leading to a shutdown of the plant.

Any time major equipment at a nuclear power plant sales or malfunctions, operators typically take it very seriously.  Plant owner Entergy has reportedly said that it will not restart the plant until it figures out what went wrong.

Pilgrim Station is a relatively large generating facility, capable of producing up to 688 megawatts of power. The plant was reportedly operating at 30% of its capacity prior to yesterday's shutdown. As result, the short-term impacts on electricity markets in New England may be relatively minimal. However, if the plant continues to be down for an extended period of time, particularly as temperatures heat up and air-conditioning loads increase, the region may experience marginally higher power pricing as result of the shutdown.

The Pilgrim plant is also undergoing a relicensing process through the federal Nuclear Regulatory Commission.

Plymouth nuclear plant relicensing

Two fish - the Atlantic sturgeon and the river herring - have been invoked to threaten the relicensing of a nuclear power plant in Plymouth, Massachusetts.

The Pilgrim Nuclear Power Station, the only operating commercial nuclear power plant in Massachusetts, is a 688 MW boiling water nuclear reactor owned by Entergy.  Originally commissioned in 1972 by utility Boston Edison, its original license had the maximum 40-year term allowed under the Atomic Energy Act.  That license is due to expire on June 8, 2012.

Entergy applied to the Nuclear Regulatory Commission for a license renewal, seeking the 20 year term allowed for relicensing.  That case remains pending.  Stakeholders have raised a number of concerns about the plant's relicensing.  For example, Pilgrim Station is built around a General Electric Mark I reactor, the same type and design as used in the ill-fated Fukushima I Nuclear Power Plant; like Fukushima, the Plymouth plant is located on the coast.  While the Pilgrim plant was designed to handle anticipated natural disasters, some believe the U.S. nuclear industry should be reevaluated in light of the Fukushima incident.

Now, U.S. Congressman Ed Markey of Massachusetts has sent a letter to NRC Chairman Gregory Jaczko requesting that the NRC not re-license Pilgrim Station "until all legal requirements stipulated by the Endangered Species Act (ESA) have been met."  Specifically, Congressman Markey notes that two threatened fish species - the Atlantic sturgeon and the river herring - inhabit the waters near the plant but were not considered in a key assessment of threatened or endangered species likely to be affected by relicensure.  His letter also notes that the National Marine Fisheries Service has not yet issued a written biological opinion proposing a plan to protect threatened or endangered species, nor has the NMFS issued a written concurrence with the NRC's biological opinion.

These species were known to live in the area in 2007 when the NRC wrote its biological assessment, but were not designated as threatened at that time.  NMFS designated the Gulf of Maine distinct population segment of Atlantic Sturgeon as threatened in February 2012, and two species of river herring are currently candidates for listing.

Based on these newly designated statuses, Congressman Markey asked NRC not to re-license the Pilgrim project until after the development of a new biological assessment to include the sturgeon and herring, along with any conditions needed to protect those species.