US FERC Seeks Speedy Hydropower Licenses

Currently, a proposed hydropower plant must spend millions of dollars and several years to complete extensive paperwork for several federal agencies, meet with local residents, and analyze a project's impact on fish, recreational boaters and other waterway users.

FERC has been gathering suggestions from utilities, Indian tribes, state governments and conservation groups on how to speed up environmental studies and other steps needed to build or renew licenses for hydropower projects.

The Interior Department, in documents filed last week with FERC, said FERC was trying to go too fast in reforming the complicated hydropower licensing process.

"The department is concerned that the commission's schedule, which calls for a notice of proposed rulemaking in February 2003 and a final rule to be issued in the fall of 2003, may be too ambitious," the Interior Department said.

The Departments of the Interior, Agriculture and Commerce play a role in licensing hydro projects along with FERC. More than 200 hydro projects across the nation will be up for relicensing during the next 15 years.

CLEAR DEADLINES NEEDED

The Interior Department said FERC's proposed reforms should set "clear deadlines" for relicensing steps such as submitting National Environmental Policy Act documents, settlement notices and licensing orders. The environmental policy law requires energy, mining and timber firms to examine potential impacts on water, air, land and wildlife before launching a project.

Interior also noted that the Bush administration's energy policy aimed to "assure consistency and coordination" among various federal agencies.

The White House's Council on Environmental Quality has been examining ways to streamline the permitting process for oil, natural gas and other energy projects. Its work has been criticized by some environmental groups, who say the administration is too eager to help energy companies at the expense of the nation's land, air and water.

"There is clear merit in a streamlined, interagency, issue-resolution process to assure that any inconsistencies that might develop among resources agencies in making recommendations or in establishing conditions are effectively resolved," the Interior Department told FERC.

Xcel Energy Inc., a utility, told FERC that Congress must get involved to reform the cumbersome process.

"Legislative reform is the only true solution to the most troublesome aspects of the relicensing process, which in our view include mandatory conditions and prescriptions... and the progressive erosion of FERC decision-making authority in hydro licensing matters," Xcel said in a separate filing.

The utility also said that FERC should make it clear that hydropower projects bring benefits to communities -- including cleaner air than other electricity sources, increases to the tax base, flood control and recreation.

"Although hydro licensees have been required in the past to mitigate, and in some cases monetarily compensate, for every conceivable project-related environmental impact, they have been short-changed when it comes to recognition for the beneficial aspects of their projects," Xcel said.

ENVIRO STUDIES CRUCIAL

The Hydropower Reform Coalition, which represents 112 conservation and recreation groups, said it backed reforms that will manage public waterways with input from local residents.

Environmental studies must remain the "heart of the licensing process," the coalition said.

"Studies are necessary for the commission in its balancing of energy and other beneficial uses in accordance with the Federal Power Act," it told FERC. "Complete and accurate studies are vital to the public understanding of impacts to our common resources."

For example, a draft license application to FERC should be expanded to include a preliminary environmental document analyzing water flow, quality and fish spawning, as well as a draft study of any endangered species and a draft study of water quality impacts, the coalition said.

A first time project in a watershed should be subject to more extensive studies than for relicensing, it said.

The hydropower case is before FERC in docket RM02-16.