Order Code IB10122
CRS Issue Brief for Congress
Received through the CRS Web
Hydropower License Conditions
and the Relicensing Process
Updated June 9, 2003
Kyna Powers
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

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CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Licensing Authority
Federal Power Act §4(e) and §18 License Conditions
License Conditions for Projects on Federal Reservations (FPA §4(e))
Fishway Provisions (FPA §18)
License Conditioning Agencies and the Relicensing Process
Pre-Application Phase
Post-Application Phase
Cost of Mandatory Conditions
Proposed Changes to the License-Conditioning Process
Hydroelectric Relicensing Legislation in the 108th Congress
Discussion
Length of Process
Environmental Issues
Effectiveness of Integrated Licensing Process (ILP)
Participation in the Conditioning Process
Conclusion
LEGISLATION
CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS
Hearings
FOR ADDITIONAL READING
CRS Reports
Other Documents

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Hydropower License Conditions and the Relicensing Process
SUMMARY
In the next ten years, more than 40% of
been proposed in the 108th Congress (H.R.
the nation’s non-federal hydropower projects
1013, H.R. 6, and S. 14) to alter federal agen-
will require new federal licenses to continue
cies’ license-conditioning authority.
This
operating. New licenses will establish facili-
legislation would allow stakeholders to pro-
ties’ allowed generation capacity, operating
pose alternative license conditions and would
parameters, and environmental protection
require federal agencies to consider alterna-
requirements for the next 30 to 50 years.
tives proposed by license applicants.
The
These operating parameters will affect: the
proposed legislation would also require an
total quantity and timing of electricity produc-
agency to accept the applicant’s proposed
tion, flood control, irrigation, municipal water
alternative if it found that the alternative: 1)
supplies, recreation, fish and wildlife habitat,
provides for the adequate protection and
and transportation.
utilization of the federal reservation, or will be
no less protective of the fish resource than the
Under the 1920 Federal Power Act
fishway initially prescribed, and 2) costs less
(FPA), the Federal Energy Regulatory Com-
to implement, and/or will result in improved
mission (FERC) has primary responsibility for
operation of the project for electricity produc-
balancing multiple water uses and evaluating
tion.
relicensing applications. However, the FPA
also creates a role in the licensing process for
Response to the proposed legislation has
federal agencies that are responsible for man-
been
mixed.
While
FERC
and
the
aging fisheries or federal reservations (e.g.
hydropower industry both support the pro-
national forests, etc.). Specifically, sections
posed legislation, environmental organizations
4(e) and 18 of the FPA give certain federal
oppose the legislation and officials within
agencies the authority to attach conditions to
some conditioning agencies have expressed
FERC licenses. For example, federal agencies
concerns. Opponents of the legislation argue
may require applicants to: build passageways
that resource agencies are taking adequate
through which fish can travel around the dam,
steps to improve the conditioning process, and
schedule periodic water releases for recre-
that the legislation could increase relicensing
ation, release constant minimum flows of
time, weaken environmental protections, give
water for fish migration, control water release
applicants undue standing in the conditioning
rates to reduce erosion, or limit reservoir
process, and weaken FERC’s proposed licens-
fluctuations to protect the reservoir’s shoreline
ing process. On the other hand, proponents of
habitat. Once an agency issues such condi-
the legislation argue that it would create
tions, FERC must include them in its license.
accountability on the part of conditioning
While these conditions often generate envi-
agencies, decrease the cost of license condi-
ronmental or recreational benefits, they may
tions without diminishing agencies’ condition-
also require construction expenditures and
ing authority, and enhance FERC’s proposed
may increase costs by reducing operational
licensing process.
flexibility.
The House passed H.R. 6 on April 11,
Reflecting recommendations by FERC
2003. The Senate began deliberations on S.
and the hydropower industry, legislation has
14 on May 8, 2003.
Congressional Research Service
˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
On April 30, 2003 Senator Domenici introduced S. 14, the comprehensive energy bill.
Section 511 of S. 14 amends the Federal Power Act to provide for alternative conditions and
alternative fishways in hydroelectric dam licenses. S. 14 was reported out of the Senate
Energy and Natural Resources Committee on May 1, 2003. Section 511 of S. 14 is identical
to Title III of H.R. 6, the comprehensive energy bill that passed the House on April 11, 2003.
BACKGROUND AND ANALYSIS
Hydropower is one of the multiple benefits the nation’s waters provide. It accounts for
nearly 7% of all electricity produced in the United States and 15% or more of the electricity
produced in Idaho (27%), Maine (15%), Montana (34%), Oregon (43%), South Dakota
(30%), Vermont (37%), and Washington (44%).1 Hydroelectric power is generated by
releasing water through a set of turbines; thus, it does not produce air pollutants and can be
turned on or off in a matter of minutes. By storing water behind dams and controlling water
releases, hydropower facilities can generate electricity during periods of high energy demand
(so called peaking power).
While these facilities are important sources of clean peaking power, the construction
and management of dams are contentious because dams affect other beneficial water uses
and resources. The construction of dams alters the river by blocking downstream flows and
creating reservoirs. While reservoirs can provide recreational opportunities and habitat for
certain fish species, they increase the effort migratory fish must exert to travel up or down
river and increase the exposure of young fish to predators. Once a hydropower facility is
built, its management also affects water uses. For example, the decision of when, how, and
how much water to release from a hydroelectric facility affects flood control, irrigation,
municipal water supplies, recreation, fish and wildlife habitats, and transportation (See CRS
Report RL31536, Licensing of Non-Federal Hydroelectric Projects: Background and
Current Issues).
In order to make sure that navigable waters are managed for the public interest,
Congress oversees the construction and operation of hydroelectric facilities. Congress
directly authorizes federal hydropower projects and requires that private hydropower projects
obtain federal licenses.
This issue brief summarizes federal licensing and license-
conditioning authority for non-federal projects, discusses key arguments for and against
changing the process through which federal resource agencies issue license conditions, and
reviews current legislative proposals to revise federal licensing authority. (Managers of
federal dams may implement changes similar to those contained in hydropower licenses.)
1 Department of Energy Report DOE/EIA-0214. Table 3: Energy Consumption Estimates by Source.
State Energy Data Report 1999. 528p. at: [http://www.eia.doe.gov/emeu/sedr/contents.html].
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Licensing Authority
Through the 1920 Federal Power Act (FPA) (16 U.S.C. 792), Congress created the
Federal Power Commission (FPC), later renamed the Federal Energy Regulatory
Commission (FERC), which licenses all non-federal hydropower facilities. Using this
authority, FERC granted 30 to 50 year licenses to projects located in 45 states (excluding
Delaware, Hawaii, Mississippi, North Dakota, and South Dakota which have no non-federal
dams). Many of the licenses for these projects were issued during the 1950s and 1960s, and
are now expiring. In the next 10 years, 218 projects, or about 40% of all non-federal
hydropower facilities, will need new licenses to continue operating.2
In order to help ensure that FERC licenses protect migratory fish and federally reserved
lands (e.g., lands, such as Indian reservations and national forests, that are set apart by the
federal government for a special purpose), Congress created a role in the licensing process
for certain federal agencies. The FPA requires that FERC include in its license certain
agency-established operating conditions. For example, section 18 of the FPA (16 U.S.C.
811) stipulates that the Secretary of the Interior or the Secretary of Commerce may develop
license conditions that direct the applicant to construct and maintain a passageway, called
a fishway, through which fish can travel around barriers created by the dam. Furthermore,
section 4(e), authorizes certain department secretaries to develop license conditions for
facilities located in the federal reservations they manage (16 U.S.C. 797(e)). Under section
4(e), a secretary may stipulate provisions that are necessary to maintain the reservation for
its federally designated purposes. Conditioning authority is not limited to FERC and Federal
agencies. The 1970 Federal Water Pollution Control Act, commonly known as the Clean
Water Act (CWA) (33 U.S.C. 1341) extends conditioning authority to state pollution-control
agencies. Under the CWA, a FERC-issued license must include any conditions that the state
deems necessary to maintain state-designated uses or water quality standards.
Federal Power Act §4(e) and §18 License Conditions
As noted above, sections 4(e) and 18 of the FPA grant federal agencies the authority to
issue license conditions designed to preserve or enhance federally reserved lands, and to help
fish travel around barriers created by hydropower facilities. The type of conditions issued
pursuant to FPA sections 4(e) and 18 are described below.
License Conditions for Projects on Federal Reservations (FPA §4(e)).
Section 4(e) of the FPA applies to hydropower facilities located on federally reserved lands
(e.g., Indian reservations and national forests, etc.). Under this section, the Secretary of the
department with jurisdiction over the reserved land has the authority to issue any license
conditions necessary to maintain the reservation.
Depending on the purpose of the
reservation, the agency’s conditions may address a range of goals including the preservation
or enhancement of recreation, federal lands, and aquatic habitat. Specifically, the Secretary
could require the applicant to: schedule periodic water releases for recreation (white-water
releases), release minimum quantities of water for fish migration (minimum flows), control
2 Federal Energy Regulatory Commission. Hydroelectric Projects Under Commission License.
Updated March 11, 2003 at: [http://www.ferc.gov/hydro/docs/projlic.pdf].
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the rate of water release to reduce habitat disruption (ramping requirements), and limit
reservoir fluctuations to reduce erosion and maintain habitat (reservoir fluctuation limits).
The Department of the Interior reports that the Bureau of Indian Affairs, Bureau of
Reclamation, National Park Service, and Bureau of Land Management issued section 4(e)
conditions for 6% of the projects relicensed between 1995 and 2000.
Fishway Provisions (FPA §18). Under section 18 of the FPA, the Secretary of the
Interior and the Secretary of Commerce may require applicants to construct and operate a
passageway, called a fishway, that allows fish to swim around barriers created by the facility.
Fishways provide young migratory fish with somewhat safer passage around the dam on their
way downstream.
Without a fishway, migratory fish must attempt more dangerous
passageways over the dam or through the project’s turbines. Adult fish also use fishways,
such as fish ladders, to swim past the dam on their way upstream to spawn. Without
fishways, a hydropower project may block upstream migration. In order to preserve and
enhance fish resources, the Fish and Wildlife Service (USFWS) issued section 18 conditions
for 20% of the projects relicensed between 1995 and 2000. The Department of Commerce,
through the National Marine Fisheries Service (NMFS) issued section 18 conditions for 7.6%
of the projects licensed between 1995 and 2000. In some cases, the NMFS and the USFWS
issued conditions for the same projects.3
License Conditioning Agencies and the Relicensing Process
Federal resource agencies establish FPA section 4(e) and 18 license conditions by
working through and alongside FERC’s licensing processes. FERC’s regulations allow two
licensing processes: a structured process known as the Traditional Licensing Process (TLP),
and a collaborative process known as the Alternative Licensing Process (ALP). Through a
rule, proposed in February, 2003 and expected to be promulgated in July 2003, FERC is
likely to establish a third licensing process, called the Integrated Licensing Process (ILP), that
would be both structured and collaborative. Each of these processes has two phases: a pre-
application phase led by the applicant and a post-application analysis phase led by FERC.4
As described below, conditioning agencies participate in both licensing phases.
Pre-Application Phase. In order for agencies to evaluate a project and develop
license conditions, they need information on how the project affects the resources they
manage. The conditioning agency generally obtains this information from the applicant who
conducts studies before a license application is submitted. Specifically, FERC’s licensing
process requires an applicant to consult with stakeholders, including conditioning agencies,
before the applicant decides which studies to undertake.
The pre-application process can be delayed when the applicant disagrees with the
conditioning agencies regarding the need for, or content of, particular studies. Agencies,
3 Letter by William D. Bettenberg (Interior) to David P. Boergers (FERC).
Hydroelectric Licensing Policies, Procedures, and Regulations: Comprehensive Review. Entered
into FERC Docket No. PL01-1-000 on April 16, 2001.
4
The
Notice
of
Proposed
Rulemaking
is
available
under
RM02-16-000
at
[http://www.ferc.gov/hydro/docs/hydro-reluemaking-nopr.pdf]. (Hereafter referred to as FERC’s
NOPR.)
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unlike FERC, do not have the authority to require applicants to conduct studies. However,
agencies’ authority to issue license conditions does provide applicants with an incentive to
resolve study disagreements. Applicants and conditioning agencies may utilize voluntary
mechanisms for resolving these study disputes. Under the ALP, for example, conditioning
agencies and applicants may use FERC’s Dispute Resolution Service (DRS). The DRS is
a FERC service that mediates license disputes. The DRS does not provide recommendations,
but it may bring in FERC experts to help clarify issues. When agencies and the applicant do
not resolve their disagreements using the DRS, the agency’s study request may wait until
FERC becomes involved during the post-application phase.
Under the proposed ILP, applicants and stakeholders would first try to resolve disputes
through voluntary discussions. If this voluntary process fails, then the conditioning agencies,
under the ILP, would have the opportunity to initiate an additional mandatory study dispute
resolution process. Under the ILP, FERC would become involved during the pre-application
phase and would have the final say regarding the applicant’s study development plan. (For
more information on this process see CRS Report RL31903. Relicensing of Non-Federal
Hydroelectric Projects: Summary and Discussion of Procedural Reform Proposals)
Post-Application Phase. Once the applicant completes its studies and submits its
license application, conditioning agencies evaluate the study results and develop their
conditions. At present, agencies develop license conditions that may or may not incorporate
suggestions from other stakeholders. After the agency submits its conditions, FERC must
include them in its license unless FERC finds that the conditions are unrelated to the
agencies’ FPA jurisdiction. If the conditions are outside the agencies’ jurisdiction, FERC
may refuse to include them in its license. A key issue prompting legislative proposals is that
under the current processes, applicants and other stakeholders have little opportunity to
contest agencies’ conditions. However, the Departments of Agriculture and the Interior are
currently developing administrative appeals processes for license conditions.5
Another issue is that delay in the license-conditioning process may occur when the
agency has insufficient information to evaluate the project. Specifically, some officials
within conditioning agencies have voiced concern that some applicants do not provide
sufficient information in their license applications for agencies to develop conditions.
Insufficient information is often the result of unresolved study disputes. If a study is not
conducted during the pre-application phase, a conditioning agency may ask FERC to require
that the applicant conduct the study. The agency may also conduct the study itself, or may
issue license conditions in the absence of full information. However, conducting studies
often requires significant financial resources and the imposition of conditions without the
underlying studies may lead to litigation. Therefore, a major goal of the proposed ILP is to
resolve study disputes early in the pre-application phase.
5 Statement of Lynn Scarlett, Assistant Secretary of Policy, Management and Budget, U.S.
Department of the Interior to the Federal Energy Regulatory Commission. November 7, 2002. See
also, FERC’s NOPR.
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Cost of Mandatory Conditions
Through the relicensing process, FERC and federal agencies establish license conditions
designed to preserve and enhance the resources affected by hydropower projects. While
these conditions often generate environmental, recreational, or other benefits, they also
generate costs. FERC calculated the median cost of a license’s protection, mitigation, and
enhancement measures, including state agency conditions, as $246 per kilowatt (kW) of
capacity under the TLP and as $58 per kW under the ALP. However, these figures have been
criticized by the General Accounting Office because they are based on a sample of projects
that submitted their costs to FERC and not on a representative sample.6
License conditions may generate two types of costs: fixed capital costs such as
construction of installations, and variable costs that arise from changes in management
techniques. For example, license conditions may require applicants to purchase or construct
installations including fishways, boat ramps, and fish screens. Changing facility operations
may also decrease total hydropower production. For example, minimum flow requirements,
white water releases, or fishway releases reduce the facility’s total generation when the water
is not released through turbines. According to FERC, conditions placed in the license for
environmental protection reduce average annual hydropower generation by 1.59%. While
these conditions may decrease total electricity generation, they may also reduce the facility
operator’s leeway to store water behind the dam for release during periods of peak demand.
If hydropower is removed from the supply of peaking power, additional generation by other
higher cost producers would be required. At the same time, FERC estimates that efficiency
improvements made during relicensing increase capacity by an average of 4.06%.
While hydropower license conditions often generate costs, other stakeholders would
face costs if such conditions were not applied. For example, fishway requirements and
minimum flow requirements reduce the dam’s harm to migratory fish populations. Without
such requirements, Native Americans, the commercial fishing industry, and individuals who
fish for recreation would continue to pay the costs of decreased fish populations. Likewise,
constraints on reservoir height fluctuations and water release rates reduce stream-bank and
reservoir-bank erosion. Without such conditions, taxpayers, as owners of national forests,
and other owners of shoreline or river-front property may continue to pay the costs of such
erosion. Depending on the project’s characteristics, license conditions may benefit a wide
array of stakeholders that use the water for irrigation, transportation, fishing, boating.
Proposed Changes to the License-Conditioning Process
A number of issues emerged as the first wave of hydropower projects were relicensed
throughout the 1990s. These issues have prompted Congress to hold hearings and take other
actions to examine the licensing process. The 106th Congress directed FERC to conduct a
comprehensive review of the policies, procedures, and regulations guiding the licensing
process and report to Congress (section 603 of the Energy Act of 2000, P.L.106-469). FERC
responded in May 2001, with recommendations on how to reduce the length and expense of
6 General Accounting Office Report, GAO-01-499. Licensing Hydropower Projects: Better Time and
Cost Data Needed to Reach Informed Decisions about Process Reforms. May 2, 2001.
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obtaining a new license.7 In addition to administrative proposals, which are the subject of
CRS Report RL31903, the Section 603 Report proposed legislative changes to the relicensing
process. One class of proposals focuses on agencies’ mandatory conditioning authority. For
example, FERC suggested that Congress grant it the authority to reject or modify resource
agencies’ conditions and that Congress require agencies to better support their license
conditions. While the hydropower industry tends to support these FERC recommendations,
environmental organizations, and officials within federal and state agencies oppose these
suggestions and any other proposed reduction in current license-conditioning authority.
Opponents of FERC’s legislative proposal argue that administrative reforms, such as FERC’s
proposed rule establishing the ILP and the development of agencies’ administrative review
processes, are adequate to improve the relicensing process.
Legislative proposals incorporating some of these suggestions have been introduced in
Congress in recent years, but none has been enacted. For example, hydroelectric titles passed
both chambers during the 107th Congress. (H.R. 4, the Securing America’s Future Energy
Act, passed the House August 2, 2001 and the Energy Policy Act, also H.R. 4, passed the
Senate April 25, 2002.) Title III of each of these bills would have allowed license applicants
to propose alternatives to agencies’ mandatory conditions under the Federal Power Act.
While a compromise was not achieved at the end of the 107th Congress, this legislation is the
basis of all relicensing legislation proposed in the 108th Congress.
Hydroelectric Relicensing Legislation in the 108th
Congress
A modified version of Title III from H.R. 4 (107th Congress) was introduced in the 108th
Congress as H.R. 1013, and in the comprehensive energy bills H.R. 6 (Title III), and S. 14
(§511). Each of these bills focuses on federal agencies’ license conditioning authority under
section 4(e) or 18 of the FPA. Each bill would change the license-conditioning process by
allowing stakeholders, including applicants, to propose alternative conditions. When the
license applicant proposes an alternative, the conditioning agency would be required to
consider it, and to adopt the alternative if it meets certain environmental and cost criteria.
Specifically, the agency would have to accept an applicant’s proposed alternative if it found
that the alternative: 1) “provides for the adequate protection and utilization of the
reservation” (H.R. 6 §33 (a)(2)(A)), and/or “will be no less protective of the fish resources
than the fishway initially prescribed” (H.R. 6 §33 (b)(2)(A)); and 2) costs less to implement,
and/or will result in improved operation of the project for electricity production (H.R. 6 §33
(a)(2)(B) and §33 (b)(2)(B)).
The bills would also require that the conditioning agency justify its decision to accept
or reject the alternative after giving equal consideration to the effect of its condition and the
alternative condition on a broad range of factors. These factors include: energy supply,
distribution, cost, and use; flood control; navigation; water supply; and air quality (in
7 Federal Energy Regulatory Commission. Report to Congress on Hydroelectric Licensing Policies,
Procedures, and Regulations- Comprehensive Review and Recommendations Pursuant to Section
603 of the Energy Act of 2000, Section 603 Report (Washington, DC: May 2001). Available at:
[http://www.ferc.gov/hydro/docs/section603.htm].
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addition to the preservation of other aspects of environmental quality) (H.R. 6 §33 (a)(3)).
This section of the proposed legislation differs from H.R. 4 (107th Congress) which would
have required the agency to include the factors in its justification, but not to consider them
equally.
The proposed legislation also differs from H.R. 4 (107th Congress) by establishing a
system for reviewing the agency’s condition when it rejects the applicant’s alternative.
Specifically, current relicensing legislation states that FERC could refer the agency’s
decision to its Dispute Resolution Service (DRS). Unlike the DRS’ mediation role under the
alternative licensing process (ALP), the proposed legislation would require the DRS to
review the facts and issue a non-binding advisory. The Secretary of the conditioning agency
would then reconsider his or her decision and may or may not accept the advisory.
Discussion
Response to the relicensing legislation in the 108th Congress is mixed. FERC and the
hydroelectric industry support the proposed hydropower relicensing legislation, but some
environmental organizations and some relevant officials within government agencies have
expressed concerns. According to FERC, this legislation (H.R. 6, H.R. 1013, or S. 14) would
provide accountability by making agencies justify their conditions in light of the proposed
alternatives and the conditions’ effects on multiple resources. The hydropower industry
argues that this legislation would decrease the cost of license conditions. On the other hand,
environmental organizations and officials within conditioning agencies have expressed
concerns that the legislation would further increase the length of the relicensing process,
diminish environmental protection, reduce the effectiveness of FERC’s proposed ILP, and
give license applicants more authority in the license conditioning process than other
stakeholders. These issues are discussed below.
Length of Process. If enacted, the relicensing bills (H.R. 6, H.R. 1013, or S. 14)
would add additional steps to the licensing process. Specifically, the bills would require that
federal agencies determine whether or not a proposed alternative meets the environmental
and cost criteria described above, and determine how the alternative and agencies’ conditions
affect energy supply, distribution, cost, and use; flood control; navigation; water supply; and
air quality (in addition to the preservation of other aspects of environmental quality). The
bills would also allow license applicants to initiate a trial-type hearing before an
administrative law judge on issues of material fact. Both of these provisions could add an
undetermined amount of time to the licensing process. The legislation proposed in the 108th
Congress, but not in H.R. 4 (107th Congress), would also establish a 90-day process for the
DRS and FERC to review the agency’s conditions.
From the perspective of industry and FERC, this legislation would improve the license
conditions, thus justifying additional process time. From the perspective of environmental
organizations and some officials within resource agencies, the legislation is not necessary to
improve the licensing process.
Some opponents of the legislation argue that new
administrative appeals processes, and FERC’s upcoming rule establishing the ILP will
sufficiently improve the relicensing process.
Environmental Issues. Under the FPA, Congress granted FERC the authority to
issue hydropower licenses, but gave federal land and water management agencies the
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responsibility for protecting federal reservations and maintaining fish resources. When
issuing license conditions to fulfill their responsibilities under sections 4(e) and 18 of the
FPA,
conditioning
agencies
are
not
currently required
to
solicit
stakeholder
recommendations. Under the proposed legislation the agency “must consider” the alternative
conditions offered by the license applicant. After considering the alternative, the agency
would not be required to accept the alternative if it found that the proposal does not meet
specified environmental and cost criteria (e.g., the proposed alternative does not adequately
protect the resource).
Although federal conditioning agencies could reject an alternative condition that did not
meet the bills’ environmental and cost criteria, environmental organizations are concerned
that the legislation would distract agencies from their focus on protecting fish and federal
reservations. These opponents of the proposed legislation argue that the bills would require
conditioning agencies to expand their focus to give equal consideration to the conditions’
effects on energy supply, distribution, cost, and use; flood control; navigation; water supply;
and air quality (in addition to the preservation of other aspects of environmental quality).
While the equal consideration clause may expand the agencies’ focus, the effect of this
language on the conditions designed to protect fish and federally reserved lands would
depend on how the agencies interpret the phrase “no less protective of fish resources,” and
the phrase “adequate protection and utilization of the reservation.”
Environmental organizations are also concerned that the phrase “no less protective of
the fish resource than the fishway initially prescribed,” could open the door for applicants
to propose non-fishway alternatives to fishway conditions. For example, the applicant could
propose maintaining fish populations by stocking the river with hatchery fish or by barging
juvenile fish downstream.
Environmental organizations generally find these other
mechanisms to be less successful than fishways in maintaining fish populations. However,
industry representatives argue that such concerns regarding the effectiveness of alternative
conditions are unwarranted.
Specifically, proponents of the legislation point out that it
preserves agencies’ authority to reject alternatives which are “less protective of the fish
resources than the agencies’ alternative.” Therefore, the applicant’s ability to substitute
barging or other mechanism for fishways, would depend on the agency’s determination of
the protectiveness of the alternative.
Effectiveness of Integrated Licensing Process (ILP).
Environmental
organizations and some officials within conditioning agencies also assert that proposed
legislation could weaken the pending Integrated Licensing Process regulation by reducing
the incentives for applicants to engage actively in early consultations with resource agencies.
Specifically, opponents of the legislation argue that license applicants would be less willing
to consult and negotiate with resource agencies if the agencies do not have the authority to
issue final license conditions. Conversely, FERC and the hydropower industry argue that this
legislation would not reduce agencies’ conditioning authority, and thus would not alter an
applicant’s incentive to negotiate with agencies. (For more information on the ILP, see CRS
Report RL31536, Licensing of Non-Federal Hydroelectric Projects: Background and
Current Issues.)
Participation in the Conditioning Process.
Under current law, the
recommendations of industry and non-industry stakeholders are given similar weight in
agencies’ conditioning process. A key concern of environmentalists and other nonutility
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stakeholder groups is that the proposed relicensing legislation would increase the applicant’s
input relative to other stakeholders.
Specifically, these opponents of the relicensing
legislation point to the bills’ requirement that agencies consider the applicant’s alternative
conditions but not the conditions offered by “other interested parties.”8 The proposed
legislation also states that the agency shall accept the applicant’s alternative if it meets the
bills’ environmental and cost requirements. Therefore, opponents are concerned that the
legislation would require the conditioning agency to accept a proposed alternative condition
with little regard for its effect on other water resource uses (e.g., recreation, flood control,
irrigation, etc.). FERC and the hydropower industry point out that FERC already has the
responsibility to balance multiple water uses, and that the bill could decrease the cost of
meeting agencies’ section 4(e) and 18 objectives.9
Conclusion
Enactment of the proposed hydropower relicensing legislation would affect the
conditioning process in a number of ways. The legislation would allow stakeholders to offer
alternative license conditions and would create a mechanism for reviewing the decision of
conditioning agencies. These changes could lengthen the conditioning process. The bills
could also increase the influence of applicants relative to other stakeholders. The effect of
this legislation on fish resources and on federal reservations is unclear and would depend on
how conditioning agencies interpret the terms “adequate protection and utilization of the
reservation” and “no less protective of the fish resources.” Likewise, the legislation’s effect
on other resources could depend on how the agencies balance their obligation to accept the
applicant’s alternative (i.e., if it meets the two criteria) relative to their responsibility to
justify the conditions they select based on equal consideration of multiple effects. It appears
that these issues could lead to further review.
LEGISLATION
H.R. 6 (Tauzin)
Title III is identical to H.R. 1013. Introduced April 7, 2003; referred to the House
Energy and Commerce Committee. Passed the House on April 11, 2003 and was placed on
the Senate Legislative Calendar.
H.R. 1013 (Radanovich)
Establishes new requirements for federal agencies that set conditions or fishway
prescriptions for hydroelectric licenses under sections 4(e) and 18 of the Federal Power Act.
Requires federal agencies to consider alternative conditions proposed by the license applicant
and accept the proposed alternative if it: 1) provides for the adequate protection and
8 U.S. Congress. House. Energy and Commerce Committee. Subcommittee on Energy and
Commerce. Testimony of Leon Szeptycki, General Council of Trout Unlimited, on the Role of the
Federal Government in Licensing Hydropower Dams. Hearing, March 12, 2003.
9 U.S. Congress. House. Energy and Commerce Committee. Subcommittee on Energy and
Commerce. Testimony of J. Mark Robinson, Director, Office of Energy Products, Federal Energy
Regulatory Commission. Hearing, March 12, 2003.
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utilization of the reservation, or will be “no less protective of the fish resources than the
fishway initially prescribed” and 2) will either cost less, and/or will improve the project’s
operational efficiency. Requires the agency to justify its decision to accept or to reject the
alternative after giving equal consideration to both conditions’ effects on a broad range of
factors.
Establishes a system for reviewing an agency’s decision when it rejects the
applicant’s alternative. Introduced February 27, 2003; referred to House Committee on
Energy and Commerce, Subcommittee on Energy and Air Quality.
S. 14 (Domenici)
Section 511 is identical to H.R. 1013 and Title III of H.R. 6. Introduced April 30, 2003;
placed on the Senate’s Legislative Calendar on May 1, 2003.
CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS
Hearings
U.S. Congress. House. Committee on Energy and Commerce. Subcommittee on Energy
and Air Quality.
Hearing, March 12, 2003 on comprehensive energy policy at:
[http://energycommerce.house.gov/108/Hearings/03122003hearing819/hearing.htm]
U.S. Congress. House. Committee on Energy and Commerce. Subcommittee on Energy and
Air Quality. Hydroelectric Relicensing and Nuclear Energy. Hearing, June 27, 2001.
107th Congress, 1st session. 185p. (107-55)
U.S. Congress. Senate. Committee on Energy and Natural Resources. National Energy
Issues. Hearing, July 19, 2001. 107th Congress, 1st session. 202 p.(107-144)
FOR ADDITIONAL READING
CRS Reports
CRS Report RL31536. Licensing of Non-Federal Hydroelectric Projects: Background and
Current Issues.
CRS Report RL31903. Relicensing of Non-Federal Hydroelectric Projects: Summary and
Discussion of Procedural Reform Proposals.
Other Documents
Federal Energy Regulatory Commission. Hydroelectric License Regulations under the
Federal Power Act: Notice Requesting Comments and Establishing Public Forums and
Procedures and Schedule, FERC Docket No. RM02-16-000 (Washington, DC:
September 12, 2002)
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Federal Energy Regulatory Commission. Notice Requesting Comments and Establishing
Public Forums and Procedures and Schedule pursuant to (18 CFR Parts 4 and 16),
Docket No. RM02-16-000 (Washington, DC: February 20, 2003).
[http://www.ferc.gov/hydro/docs/hydro-rulemaking-nopr.pdf].
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