Order Code RL33883
Issues Affecting Tidal, Wave, and
In-Stream Generation Projects
Updated November 26, 2008
Analyst in Environment and Resources Management
Resources, Science, and Industry Division
Issues Affecting Tidal, Wave, and
In-Stream Generation Projects
The development technology that generates electricity from ocean waves, tides,
and river currents is still in its infancy. However, Congress has provided some policy
guidance on these energy sources through the Energy Policy Act of 2005 (EPACT05;
P.L. 109-58). The act addresses this area of energy innovation by clarifying federal
jurisdiction over, and encouraging the development of, these alternative energy
sources. The act contains provisions for assessment of and reports on renewable
energy resources by the Department of Energy; production incentives for renewable
energy production; benchmarks for renewable energy purchases by federal facilities;
and grants supporting rural electrification with preference given to renewable energy
facilities. The act directs the Secretary of Energy to conduct research and
development (R&D) programs for ocean energy, including wave energy and kinetic
hydro generation projects, and amends the Outer Continental Shelf Lands Act to give
authority to the Secretary of the Interior to grant leases on the Outer Continental
Shelf (OCS) for the production of energy from sources other than oil and natural gas
(while protecting existing authorities of other state or federal agencies).
This report provides an overview of developments and considerations regarding
wave, tidal, and in-stream energy generation technology. It summarizes federal
involvement in the regulation of this new industry and highlights current issues in the
field. Because the development and application of these technologies are in the precommercial stage, the regulatory requirements governing their implementation are
not always clear. To some, there is uncertainty regarding which federal agency most
appropriately has jurisdiction over these projects and the regulatory processes that are
necessary to ensure resource protection and adequate oversight while encouraging the
development of a new energy source seen to have promise.
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Energy Sources and Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
River Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Tidal Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Waves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Ocean Thermal Energy Conversion (OTEC) . . . . . . . . . . . . . . . . . . . . . 3
Project Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Incentives for Wave, Tidal, and In-Stream Projects . . . . . . . . . . . . . . . . . . . 5
Environmental Issues and Other Considerations . . . . . . . . . . . . . . . . . . . . . . 5
Project Location . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Baseline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
State Waters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Territorial Sea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Contiguous Zone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Exclusive Economic Zone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Outer Continental Shelf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Federal Agencies’ Authorities and Federal Legislation . . . . . . . . . . . . . . . . . . . . . 8
Corps of Engineers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Clean Water Act, 33 U.S.C. §1251, et seq . . . . . . . . . . . . . . . . . . . . . . . 9
Rivers and Harbors Act, 33 U.S.C. §403 . . . . . . . . . . . . . . . . . . . . . . . . 9
Federal Energy Regulatory Commission (FERC) . . . . . . . . . . . . . . . . . . . . . 9
Preliminary Permits, Licensing, and Exemptions . . . . . . . . . . . . . . . . 10
Federal Power Act, 16 U.S.C. §817 (1) . . . . . . . . . . . . . . . . . . . . . . . . 11
Fish and Wildlife Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Endangered Species Act, 16 U.S.C. §1531 et seq . . . . . . . . . . . . . . . . 12
Fish and Wildlife Coordination Act, 16 U.S.C. §661 . . . . . . . . . . . . . 12
Marine Mammal Protection Act, 16 U.S.C. §1361-§1407 . . . . . . . . . 12
Migratory Bird Treaty Act, 50 C.F.R. §10.13 . . . . . . . . . . . . . . . . . . . 13
Minerals Management Service (MMS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Energy Policy Act of 2005, P.L. 109-58 . . . . . . . . . . . . . . . . . . . . . . . 15
Outer Continental Shelf Lands Act, 43 U.S.C. §1331-§1337 . . . . . . . 15
National Oceanographic and Atmospheric Administration . . . . . . . . . . . . . 15
Coastal Zone Management Act, 16 U.S.C. §1451-§1464 . . . . . . . . . . 16
Magnuson-Stevens Act, 16 U.S.C. §1801 et seq . . . . . . . . . . . . . . . . . 16
National Marine Sanctuaries Act, 16 U.S.C. §1431 et seq . . . . . . . . . 17
Ocean Thermal Energy Conversion Act, 42 U.S.C.§ 9101 et seq . . . . 17
U.S. Coast Guard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Hazards to Navigation, 33 C.F.R. §62, §64, §66 . . . . . . . . . . . . . . . . . 17
U.S. Environmental Protection Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Discharge Permit, CWA §1251-§1387 . . . . . . . . . . . . . . . . . . . . . . . . 17
Other Federal Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
National Environmental Policy Act, 42 U.S.C. §4332(c) . . . . . . . . . . 18
National Historic Preservation Act, 16 U.S.C. §470 . . . . . . . . . . . . . . 18
State Agencies and Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Pending Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
MMS Protest of FERC Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
List of Figures
Figure 1. Boundaries of Ocean Jurisdictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Issues Affecting Tidal, Wave, and
In-Stream Generation Projects
Renewable energy technologies will continue to gain importance in the national
energy portfolio as long as the public and Congress remain concerned about the longterm availability of affordable oil, gas, and coal supplies and the potential
environmental impacts from power generation through traditional thermal, nuclear,
and large hydropower projects.
The renewable energy technologies that produce electricity from waves, tides,
and river currents are still in the experimental stage, and utility-scale generation
projects are not yet in place. However, the energy generation potential from these
sources has been recognized in recent legislation. The Energy Policy Act of 2005
(EPACT05; P.L. 109-58) clarifies federal jurisdiction over, and encourages the
development of, these alternative energy sources. Title II of the act contains
provisions for assessment of and reports on renewable energy resources by the
Department of Energy; production incentives for renewable energy production;
benchmarks for renewable energy purchases by federal facilities; and grants
supporting rural electrification with preference given to renewable energy facilities.
EPACT05 §931 directs the Secretary of Energy to conduct research and development
(R&D) programs for ocean energy, including wave energy and kinetic hydro
generation projects, and §388 amends §8 of the Outer Continental Shelf Lands Act
(43 U.S.C. §1337) to grant authority to the Secretary of the Interior to grant leases on
the Outer Continental Shelf (OCS) for the production of energy from sources other
than oil and natural gas. Further, under P.L. 110-140, the Congress authorized $50
million annually from FY2008 through FY2012 for the creation of a national ocean
energy research center.
Because the development and application of these technologies are in their
infancy, the regulatory requirements governing their implementation are not always
clear. To some, there is uncertainty regarding which federal agency most
appropriately has jurisdiction over these projects and the regulatory processes that are
necessary to ensure resource protection and adequate oversight while encouraging the
development of a new energy source seen to have promise.1
The federal policy issues that may arise for entities interested in developing
wave, tidal, or river current generation projects center on agency jurisdiction and
In a presentation titled Overview: EPRI Ocean Energy Program, the Electric Power
Research Institute estimates that the total U.S. wave energy resource is approximately 2,100
tera-watt hours annually (one tera-watt hour is one trillion watts produced over one hour),
or roughly 1/6 of the country’s annual energy requirement. See [http://www.epri.com/
authority, regulatory processes (related to agency jurisdiction), and applicable
legislation.2 The location of a project — offshore, near-shore, or in an estuary or
river — determines which federal agency is responsible for its oversight. The
agency with ultimate responsibility will, in turn, determine what type of process
applies. Finally, a number of federal statutes may apply to a potential energy
installation, depending on its type, location, and the agency with jurisdiction.
Energy Sources and Technologies
For each type of energy resource, a number of specific generator designs have
been considered and, as the technology is further developed, new engineering
solutions may be devised to generate power with the energy of moving water or
waves. Rather than provide great detail on specific mechanical designs, this
discussion of technology will focus on the broad categories of renewable ocean and
river power generation currently under development.
River Flow. Hydroelectric dams — the most familiar waterpower technology
— have been a source of energy for centuries, but they have costs due to the changes
they create in river flow patterns.3 However, kinetic, or free-flow, turbines do not
rely on the differential height of water on either side of an impoundment to generate
electricity, but instead use the force of moving water to spin turbine blades.4 River
currents may be harnessed as a power source with new turbine technologies similar
to those identified below for tidal power generation.
Tidal Flow. Tidal generation uses the energy of moving water to spin a
generator and may produce power from water moving in two directions: inward on
the flood tide and outward on the ebb tide. Tidal power technology projects fall into
two broad categories: barrage projects and in-stream generators. Barrage generation
is similar to the construction of a traditional hydropower dam in that an
impoundment is built across a river estuary or other area subject to tidal flow and
electricity is generated by the difference of water height on either side of the barrier,
depending on whether the tide is flowing in or out. In-stream projects do not
impound water but instead use the energy of the tidal current to spin a turbine.5
Tidal resources are modest overall in the United States, although significant
potential exists in some areas, such as New England, northern California, and the
CRS Report RL32658, Wind Energy: Offshore Permitting, by Adam Vann, provides
additional detail on regulatory issues related to energy development in the ocean.
Edison Electric Institute, Kinetic Energy Turbines. See [http://www.eei.org/industry_
Pacific Northwest. Where feasible, tidal generators have the benefit of great
predictability, as tides can be calculated years in advance.6
Waves. Wave energy technologies generate electricity from the undulating
motion of the ocean’s waves.7 The power in the moving wave may drive a turbine
or other device directly or it may pressurize air or hydraulic fluid to power a
generator. Waves contain more energy than other renewable energy sources like
solar radiation. Wave size is predictable many hours or even days in advance. The
United States has considerable wave energy potential, and wave energy generators
may minimize aesthetic issues by being located far from shore, underwater, or
protruding only slightly above the surface of the sea.8
Ocean Thermal Energy Conversion (OTEC). OTEC systems rely on
technology that uses the ocean’s thermal gradient — the difference in temperature of
water layers — to drive a generator. These systems require that the temperature
between the warm surface water and the cold deep water differs by at least 36°F.
Under these circumstances, an OTEC system can produce electric power. The
requirement for this temperature differential limits OTEC systems largely to tropical
zones. Ocean temperature differentials in the Pacific Northwest, for example, range
from 0° to 20° F.9
OTEC technology has been demonstrated at the Natural Energy Laboratory of
Hawaii (NELHA), at Keahole Point on the Kona coast of the island of Hawaii. It has
become the world’s foremost OTEC laboratory and test facility. Unlike the other
technologies discussed, due in part to the limited number of suitable sites and the
expense of the technology, OTEC systems have not been the focus of recent ocean
energy proposals in the United States.10
Energy projects designed to harness the power of waves, tides, or river currents
are being considered in a number of U.S. states. Wave energy is being explored in
locations such as California, Oregon,11 Hawaii, New Jersey,12 Rhode Island,13 and
EPRI, Overview: EPRI Ocean Energy Program the Possibilities in California (June 2006).
EPRI, Overview: EPRI Ocean Energy Program (September 2006). See [http://www.epri.
Northwest Power and Conservation Council, Biennial Assessment of the Fifth Power Plan,
Assessment of Other Generating Technologies (November 2006), p. 6. See [http://www.
U.S. Dept. of Energy, Energy Efficiency and Renewable Energy (EERE), California and
Washington.14 Tidal power generation is being considered by California,15 Maine,16
and Washington, and a prototype project has been deployed in New York’s East
River.17 Finally, in-stream energy projects are being evaluated in the Mississippi
River and other locations such as Alaska.18
The 109th Congress considered legislation to authorize funding for guaranteed
loans to be used for clean energy generation, including ocean energy sources (H.R.
2828), and to allow revenues from OCS leases to fund ocean energy development
(H.R. 4761). Neither of these measures was enacted. As introduced, H.R. 4241
would have, in part, authorized funding for mitigation of environmental impacts from
the development of alternative energy sources, including those from the ocean. The
bill was enacted (P.L. 109-171) but without this provision in the final version.
During the development of EPACT05, an income tax credit for wave, tidal, river
current, and OTEC was approved by the Senate but later dropped in conference
committee.19 EPACT05 does address wave, tidal, and in-stream energy directly or
indirectly in a number of ways. Title II of the act contains provisions for assessment
of and reports on renewable energy resources by the Department of Energy;
production incentives for renewable energy production; benchmarks for renewable
energy purchases by federal facilities; and grants supporting rural electrification with
preference given to renewable energy facilities.
Under the Energy Independence and Security Act of 2007 (P.L. 110-140), the
110th Congress authorized $50 million annually from FY2008 through FY2012 for
the creation of at least one national ocean energy research center. The 110th Congress
also approved funding for hydrokinetic energy development in FY2008
Oregon Pursue Tidal and Wave Energy Projects (October 18, 2006). See [http://www.eere.
EERE, New Wave Energy Prototypes Deployed in Hawaii and New Jersey (November 23,
2005). See [http://www.eere.energy.gov/states/state_news_detail.cfm/news_id=9551/state
EERE, Rhode Island Launches Wave Energy Pilot Project (October 1, 2004). See [http://
EERE, California and Oregon Pursue Tidal and Wave Energy Projects (October 18,
2006). See [http://www.eere.energy.gov/states/news_detail.cfm/news_id=10339].
EERE, Maine Assesses Tidal Power Potential (June 2006). See [http://www.eere.energy.
Staff of the Joint Committee on Taxation, Description and Technical Explanation of the
Conference Agreement of H.R. 6, Title XIII, the “Energy Incentives Act of 2005.” JCX-6005 (July 2005).
appropriations legislation. Under P.L. 110-161, approximately $10 million was
provided for water power R&D, which includes hydrokinetic generation.
The Emergency Economic Stabilization Act of 2008 (P.L. 110-343) authorized
a production tax credit applicable to hydrokinetic projects having a nameplate
capacity of 150 kilowatts or greater and producing power by January 1, 2012.
Incentives for Wave, Tidal, and In-Stream Projects
Legislation pertaining to several funding and tax incentive programs that would
apply to energy projects using waves, tides, or river currents is mentioned above.
Additionally, EPACT05 Title II authorizes production incentives for renewable
energy production as well as grants supporting rural electrification with preference
given to renewable energy facilities.
There are also state efforts to encourage the development of these projects.
Florida has a renewable energy production tax credit that covers a number of energy
sources including tidal energy, wave energy, and OTEC projects. The credit is
$0.01/kilowatt-hour and the program is to continue through June 2010.20 Similarly,
Maine offers matching funds, up to $50,000, for some parties interested in
developing renewable energy resources, including tidal power generation. New
Jersey also has a program intended to recruit renewable energy industries to the state
by competitively offering grants of up to $500,000 to applicants wishing to develop
commercial renewable energy systems.21
Environmental Issues and Other Considerations
These technologies are appealing to some due to their renewable energy sources
and emission-free operation. In contrast to hydroelectric dams, free-flow turbines do
not impound water, divert flow, or prevent sediment transport. However, as the
technologies develop — especially if their application grows to a commercial scale
— there will be environmental issues to consider. These issues likely will include
Withdrawal of wave energy: converting some of a wave’s power into
electricity reduces wave height, which may alter the coastal or
Interactions with marine life: power plants may artificially provide
resting space for seals and sea lions and nesting for sea birds, and
may create artificial reefs below the surface; and devices with open
spinning turbines may pose a hazard to fish or mammals.
Air or water emissions: devices using hydraulic fluid may leak,
Aesthetic concerns: there may be issues with the visual appearance
of some devices, and some designs may produce noise that affects
humans or marine life.
More information on state incentives is at [http://www.dsireusa.org].
Construction and decommissioning of facilities: habitats, structures
on the sea bed, and sediment deposition may be affected by these
Project siting: can affect other uses like shipping, boating, and
commercial and recreational fishing.22
Offshore areas are subject to various federal and state authorities. Which federal
agency has lead responsibility for regulatory oversight of a specific ocean or instream generation project depends on the location of the project. Depending on the
specific locale, more than one state or federal agency may exercise jurisdiction. All
ocean and inland waterway jurisdictions23 are defined in reference to the following
technical demarcations, illustrated in Figure 1.24
Baseline. This is the boundary line dividing the land from the ocean, and other
waters are defined by their distance from the baseline in nautical miles (NM).25 The
baseline is defined as the mean low water line along the coast as shown on official
U.S. nautical charts. It is drawn across the mouths of rivers and the entrances to
bays, and along the outer points of complex coastlines. Bodies of water that are
inland of the baseline, such as bays, estuaries, and rivers, are considered inland
State Waters. Generally, offshore state waters cover the area from the
baseline out 3 NM, although it is to 9 NM for the offshore Gulf coasts of Texas and
Florida, as well as Puerto Rico. This area of state jurisdiction was granted by the
Submerged Lands Act of 1953 (43 U.S.C. §1301 et seq.). Although the federal
government may regulate commerce, navigation, power generation, national defense,
and international affairs within this area, states also have the authority to manage,
develop, and lease resources throughout the water column as well as on and under the
associated sea bed.26
EPRI, Offshore Wave Power in the US: Environmental Issues, E21 Global EPRI-007-US
(December 2004). See [http://www.epri.com/oceanenergy/attachments/wave/reports/007_
Wave_Envr_Issues_Rpt.pdf]. EPRI, Overview: EPRI Ocean Energy Program (September
2006). See [http://www.epri.com/oceanenergy/oceanenergy.html].
For more detail on maritime boundaries, see CRS Report RL32912, State-Federal
Maritime Boundary Issues, by Laura K. Welles, Aaron M. Flynn, and Eugene H. Buck.
U.S. Commission on Ocean Policy, Primer on Ocean Jurisdictions: Drawing Lines in the
Water (hereafter referred to as Primer). On December 19, 2004, the commission expired,
as provided under the terms of the Oceans Act of 2000 (P.L. 106-256), as amended.
However, the following website is to continue to be available as an archive of the
commission’s work: [http://www.oceancommission.gov/documents/full_color_rpt/03a_
primer.pdf]. For the Minerals Management Service definition of Outer Continental Shelf,
A nautical mile is 1.15 statute miles.
Primer, pp. 70-71.
Figure 1. Boundaries of Ocean Jurisdictions
Source: See [http://www.oceancommission.gov/documents/full_color_rpt/03a_primer.pdf].
Territorial Sea. Under international law,27 every coastal nation has sovereign
rights over the air space, water column, sea bed, and anything beneath it, within its
territorial sea. In 1988, President Reagan proclaimed that the United States’
territorial sea extended 12 nautical miles seaward from the baseline.28
Contiguous Zone. International law establishes a contiguous zone adjacent
to a nation’s territorial sea. The contiguous zone of the United States covers the area
between 12 and 24 nautical miles off shore. Within this area a country has more
United Nations Convention on the Law of the Sea (LOS). The United States is not a
signatory to the Convention.
Presidential Proclamation 5928 (54 Fed. Reg. 777, December 27, 1988).
limited authority that is generally related to customs, immigration, and sanitation
Exclusive Economic Zone. The exclusive economic zone (EEZ) is an area
recognized under international law within which a nation has sovereign rights for
exploiting, conserving, and managing living and nonliving resources within the
water, or on or under the sea bed. In 1983, President Reagan proclaimed that the
United States’ EEZ extends to 200 nautical miles.30
Outer Continental Shelf. The federal government administers the outer
continental shelf (OCS), which comprises the submerged lands, subsoil, and sea bed
lying between the seaward extent of the states’ jurisdiction and the seaward extent
of federal jurisdiction. Typically, this is the area between three and 200 nautical
Federal Agencies’ Authorities
and Federal Legislation
Depending on project type and location, a number of federal agencies may be
involved in reviewing or permitting of a wave, tidal, or in-stream generation project.
Federal laws may directly or indirectly affect a proposed ocean or in-stream energy
project. Laws that protect fish and wildlife or regulate pollution or public safety will
have a direct effect. Compliance with such laws will dictate what can or cannot be
done, how a project can be operated, or where it may be located. Laws with an
indirect effect could include a statute that has a broader influence on the project. For
example, §388 of EPACT05 established the Department of the Interior’s Minerals
Management Service (MMS) as the lead federal agency with oversight for renewable
energy project leasing on the OCS — thus changing the applicable regulatory
process. EPACT05 §388 also makes clear that MMS authority does not supersede
the authorities or responsibilities of other state or federal agencies. Many federal
statutes define the oversight authority of specific agencies, although some statutes
apply generally to federal actions. The authorities are listed below by agency
alphabetically with cross-cutting federal authorities and state authorities at the end.
Corps of Engineers
The U.S. Army Corps of Engineers is responsible for a number of permitting
activities in waterways and offshore areas. In this capacity, it may be involved in the
development of an ocean or in-stream energy project. Specifically, the Corps
regulates and issues permits for structures and work that affect navigable waters
under §10 of the River and Harbors Act.31 The Corps also issues permits for the
discharge of dredge and fill material into navigable waters under §404 of the Clean
In 1999, through Presidential Proclamation 7912, President Clinton extended the outer
boundary of the contiguous zone of the United States from 12 to 24 nautical miles (64 Fed.
Reg. 48701, September 8, 1999).
Presidential Proclamation 5030 (48 Fed. Reg. 10601, March 10, 1983).
33 U.S.C. §403.
Water Act (CWA).32 Additionally, the Corps may be involved in water quality
certification under §401 of the CWA, as described below.33
Clean Water Act, 33 U.S.C. §1251, et seq. The primary purpose of the
CWA is to protect and restore the quality of the nation’s surface water. Sections of
this act that may be applicable to wave, tidal, and in-stream energy projects are
§401 Water Quality Certificate. Applicants for a federal license to conduct
an activity that might result in any discharge of a pollutant, including water that
contains pollutants (a temperature change may be considered a pollutant), must
obtain a water quality certificate from the state in which the project will be located,
certifying that the project will comply with applicable state water quality standards.
Some wave, tidal, or in-stream generation projects may be construed as discharging
water, and so must comply with this regulation. Section 401 only applies to locations
within three nautical miles of the coast.
§404 Dredge and Fill. This section of the CWA regulates the discharge of
dredged or fill material into waters of the United States. The law requires a permit
for the discharge of any such material. Permits are issued by the Corps, in
consultation with and using environmental guidance issued by the Environmental
Protection Agency (EPA). However this permit, too, is only applicable within the
three nautical mile limit.
Rivers and Harbors Act, 33 U.S.C. §403. Section 10 of the Rivers and
Harbors Act requires a permit issued by the Corps for any obstruction not authorized
by Congress that would be built in the navigable waters of the United States. A
project being constructed under a FERC license is exempt from this permit.34 Projects
which are exempt from FERC licensing — either through application for a standard
exemption, or those experimental projects (such as the Verdant Power tidal energy
project) that are granted a limited exemption — may need to apply for a §10 permit
from the Corps.
Federal Energy Regulatory Commission (FERC)
FERC is the federal agency responsible for licensing non federal hydroelectric
projects. The agency derives its authority to license hydropower projects under 16
U.S.C. §817 (1) of the Federal Power Act (FPA). This section of the act states that
for the purpose of generating power, it is illegal to construct, operate, or maintain any
dam, reservoir, powerhouse, or other works across, along, or in any of the navigable
waters of the United States without a FERC-issued license.
33 U.S.C. §1344.
33 U.S.C. §1341.
Corps regulations state that issuance of a FERC license precludes the need for a §10
permit (33 C.F.R. §221.f.).
Preliminary Permits, Licensing, and Exemptions. FERC has three
general administrative categories that may apply to a potential wave, tidal, or instream generation project. First, a proposed project may be issued a preliminary
permit. This permit is not required prior to license application. A permit is valid for
up to three years and gives the holder priority status if the holder chooses to apply for
a license. That is, the permit reserves a project location for the applicant while the
holder conducts feasibility studies and prepares a license application. It does not
allow a demonstration project or any other construction, and the permit holder must
file periodic reports on the progress of the feasibility studies.
The second category, licensing, refers to the traditional operating license
associated with nonfederal hydropower projects. This is the regulatory document
referenced in 16 U.S.C. §817 (1). Hydropower licenses typically are issued for up
to 50 year periods and may require several years of pre-application analysis and
review before submission of an application and issuance of a license.35
FERC has introduced two license modifications to hydrokinetic projects that aid
project developers. The first is a pilot license process. The goal of the hydrokinetic
pilot license is to eliminate barriers to development by reducing processing time to
as little as six months, allowing installation of test equipment, and allowing power
generation to the grid. The license requires that projects have a size of five megawatts
or less, be easily removed or deactivated, and be installed for no longer than a fiveyear term. There are additional provisions for site decommissioning and project
changes or equipment removal if unexpected environmental impacts arise.36 The
second license modification is a conditioned license. Unlike the pilot license
program, this is a full project operating license which allows applicants to begin nonconstruction activities while some permitting processes — such as water quality
certification — are still pending.37 On March 20, 2008, FERC finalized the first
license under this program for a wave energy project in Washington.38
Finally, for some projects, FERC may issue an exemption to the licensing
required under the FPA. An exemption is valid in perpetuity and the process of
applying for an exemption may be simpler than applying for a license. However,
there are some stipulations and technical specifications for an exemption. To be
exempt, a project must be rated at less than 5 megawatts (MW)39 and use a natural
water feature40 for head (or be built at an existing dam).41 An exempted project is
For more information on FERC licensing, see [http://www.ferc.gov/industries/
122 FERC ¶61,248.
Projects that are constructed in existing conduits may be up to 40 MW if the developer
is a municipality.
To be eligible for this type of exemption, in addition to meeting other requirements, the
still subject to mandatory prescriptions set by state and federal fish and wildlife
agencies and FERC.42
Additionally, in a 2005 declaratory order, FERC ruled that Verdant Power LLC
may deploy an in-stream tidal generator in New York’s East River without need for
a FERC license.43 This ruling differs from a standard exemption in that it is not
granted in perpetuity. The company is developing new generation technology that
would employ moving water currents to generate electricity without a dam or
conduit. FERC made this ruling with several specifications: (1) the technology must
be experimental; (2) the proposed facilities must be used for a short time to gather
data in support of a license application; and (3) power generated from the test project
will not be transmitted into, or displace power from, the national electric grid thereby
affecting interstate commerce.44
Federal Power Act, 16 U.S.C. §817 (1). The FPA authorizes FERC to
regulate hydroelectric facilities on navigable waters of the United States. FERC
maintains that its authority extends to the oceans under the FPA, referencing 16
U.S.C. §796 (8) “... streams or other bodies of water....” (emphasis in original) and
cites Presidential Proclamation 5928 as having extended the territorial sea, and thus
its federal jurisdiction, to 12 nautical miles.45 FERC contends that wave and tidal
energy projects are under its jurisdiction based on FERC’s interpretation of the FPA
— adding its own emphasis — “... any dam, water conduit, reservoir, power house,
or other works incidental thereto....”46
The agency has asserted that project features such as undersea anchors, or a
conduit leading to a station on the shore, would occupy land under federal
jurisdiction, so the project would require a FERC license. Additionally, FERC finds
that any generator connecting to, or displacing power from, the electric transmission
grid affects interstate commerce, thereby triggering a need for a FERC license.
developer of a wave or tidal energy project in the ocean would need to successfully argue
to FERC that the facility would use a “natural water feature,” e.g. the ocean.
Declaratory Order re Verdant Power LLC’s Roosevelt Island Tidal Energy Hydropower
Project, under P-12178. 111 FERC ¶61,024 (April 14, 2005).
Verdant Power indicated that, due to the nature of its proposed technology, it must be
connected to the grid to generate power. However, it proposed to provide the power
generated to the end users at no charge, and to compensate Consolidated Edison of New
York, Inc. and New York Power Authority for any power displaced by the test. FERC
accepted this proposal. 112 FERC ¶61,143.
54 Fed. Reg. 777, December 27, 1988.
16 U.S.C. §817(1).
Finally, FERC has stated that it considers wave or tidal energy structures to be
powerhouses under the FPA licensing provision,47 and has indicated that it considers
wave and tidal projects that connect to the electric grid to be powerhouses affecting
interstate commerce, thus requiring a FERC license.48
Fish and Wildlife Service
The Fish and Wildlife Service (FWS) may have jurisdiction under the
Endangered Species Act (ESA)49 and the Marine Mammal Protection Act,50
depending on the location of a proposed project, and consultation with FWS may be
required. If a proposed wave, tidal, or in-stream energy project might interfere with
birds identified under the Migratory Bird Treaty Act (MBTA),51 FWS consultation
would be required.
Endangered Species Act, 16 U.S.C. §1531 et seq. The ESA protects
plants and animals that have been designated by FWS or the National Marine
Fisheries Service (NMFS) as threatened or endangered. Once a species is listed, any
action undertaken or funded by a federal agency must be publicly determined by
FWS or NMFS not to be jeopardizing the species or adversely affecting its
designated critical habitat.52
Fish and Wildlife Coordination Act, 16 U.S.C. §661. The Fish and
Wildlife Coordination Act provides the authority for FWS and NMFS involvement
in evaluating fish and wildlife impacts from proposed water resource development
projects. The act requires that fish and wildlife resources be given equal
consideration to other aspects of a proposed project, and it mandates that federal
agencies that construct, permit, or license water resource projects must consult with
the relevant federal and state fish and wildlife agencies regarding possible effects and
necessary mitigation to the resources under their authority.
Marine Mammal Protection Act, 16 U.S.C. §1361-§1407. The act
prohibits harassment, hunting, or capture of any marine mammal. It may apply if a
proposed project is deemed by a regulatory agency to harass marine mammals. This
decision may be based on project location or some aspect of its construction or
16 U.S.C. §817 (1).
102 FERC ¶61,242.
P.L. 93-205; 16 U.S.C. §1531 et seq.
16 U.S.C. §1361-§1407.
50 C.F.R. §10.13.
For background on the ESA see CRS Report RL31654, The Endangered Species Act: A
Primer, by M. Lynne Corn, Eugene H. Buck, and Kristina Alexander.
Migratory Bird Treaty Act, 50 C.F.R. §10.13. The MBTA prohibits the
harming of more than 800 species of migratory birds.53 If an energy project might
harm any of the species, consultation, and possibly permitting, would be required
Minerals Management Service (MMS)
MMS in the Department of the Interior, manages the nation’s OCS oil, natural
gas, and other mineral resources. The agency collects, accounts for, and disburses
more than $8 billion annually in revenues from offshore federal mineral leases and
from onshore mineral leases on federal and Indian lands. With the passage of
EPACT05, MMS has additional authority to act as the lead federal agency for leasing
OCS lands to be used for renewable energy projects.
Under the program described as Alternate Energy-Related Use (AERU), MMS
has some jurisdiction over energy projects on the OCS including, but not limited to:
offshore wind energy, wave energy, ocean current energy, offshore solar energy, and
offshore hydrogen generation. MMS will also have jurisdiction over other projects
that make alternate use54 of existing oil and natural gas platforms in federal waters
of the OCS.55 MMS will grant easements, leases, and rights-of-way for renewable
energy uses of the federal OCS, and is to issue regulations related to the
implementation of its additional authority. EPACT05 stipulates that the agency must
also establish a formula for revenue-sharing with coastal states that are within 15
miles of a renewable energy project.
EPACT05, §388, stipulates that MMS authority does not supercede the existing
authority of any other agency for renewable energy project permitting. Thus, a wave
or tidal energy project on the OCS may still require a FERC license to operate
although leasing and environmental review would be fulfilled by MMS.56 The act did
not authorize any additional activities related to oil or natural gas reserves, and MMS
was not granted jurisdiction over areas within the boundaries of the National Park
System, national wildlife refuges, national monuments, or the National Marine
MMS indicates that alternate uses of existing oil and gas platforms may include
nonenergy activities such as offshore aquaculture, research, telecommunications, and
recreation. MMS is not seeking authority over those activities, but rather would grant
permission for a platform’s use, with ultimate authority over the specific activity being the
purview of the appropriate federal agency. See [http://ocsenergy.anl.gov/guide/platform/in
Personal communication with Ms. Julie Fleming, Legislative Specialist, Minerals
Management Service, Washington, DC, January 22, 2007.
Finavera’s Makah Bay Project is located within the Olympic Coastal National Marine
Sanctuary, thus MMS authority does not apply to that project.
The National Environmental Policy Act of 1969 (NEPA, 42 U.S.C. §4332(c))
stipulates that federal agencies must prepare an environmental impact statement
(EIS) on major federal actions with potential for significant changes to the quality of
the human environment. MMS has determined that establishing the AERU program
and rulemaking constitute a major federal action and has completed a programmatic
environmental impact statement (PEIS) on its proposed AERU program.58 The PEIS
analysis is focused on the environmental, cultural, and socioeconomic effects
associated with different approaches to implementing the AERU program and its
related rulemaking. Specifically, the programmatic PEIS process is intended to:59
Provide for public input concerning the scope of national issues
associated with offshore alternate energy-related use activities;
Identify, define, and assess generic environmental, socio-cultural,
and economic impacts associated with offshore alternate energyrelated use activities;
Evaluate and establish effective mitigation measures and best
management practices to avoid, minimize, or compensate for
potential impacts; and
Facilitate future preparation of site-specific NEPA documents.
Subsequent NEPA documents prepared for site-specific AERU
projects will be based on the Programmatic EIS and MMS’ final
Record of Decision.
With the issuance of a final PEIS analyzing the environmental impact of a
program to develop wave, tidal, and current energy projects on the OCS, MMS now
anticipates the completion of a final rule on the process of lease application and
energy project development in the fall of 2008.60 MMS will not issue decisions on
hydrokinetic energy projects until a final rule is established, but in advance of a final
rule it has established an interim process that includes limited-term leases to allow
data collection and technology testing.61 This specifically excludes commercial-scale
project development.62 Additionally, MMS has released its proposed rules for
alternative energy projects on the OCS with a 60-day comment period.63 The
proposed rules indicate that two types of leases may be available for project sponsors:
commercial and limited. Commercial leases would have a term up to 25 years and
allow full commercial energy production. Limited leases would have a shorter fiveyear term and are intended for site assessment, technology testing, and other pre-
72 Fed. Reg. 214, November 6, 2007.
73 72 Fed. Reg. 132, July 9, 2008.
commercial activities.64 MMS indicates that it intends to finalize its rulemaking
process by December 2008.65
Energy Policy Act of 2005, P.L. 109-58. EPACT05 clarifies federal
jurisdiction over, and encourages the development of, alternative energy sources.
Section 388 amends §8 of the Outer Continental Shelf Lands Act (43 U.S.C. §1337)
to grant authority to the Secretary of the Interior — through MMS — to grant leases
on the OCS for producing energy from sources other than oil and gas.
MMS views its primary authorities under §388 to be (1) granting leases,
easements, and rights-of ways for renewable energy-related uses on federal OCS
lands; (2) acting as the lead agency for coordinating of the permitting process with
other federal agencies; and, (3) monitoring and regulating facilities used for
renewable energy production and energy support services.66
Outer Continental Shelf Lands Act, 43 U.S.C. §1331-§1337. This law
stipulates that energy developers operating on the OCS are required to have a federal
lease for the project. Originally limited to oil and gas resources, §8 of the Outer
Continental Shelf Lands Act was amended by EPACT05 to include energy from
sources other than oil and gas, naming MMS the lead agency. Wave and tidal energy
developers on the OCS will require a lease even if a FERC license is required for the
National Oceanographic and Atmospheric Administration
Pursuant to the OTEC Act,67 the National Oceanographic and Atmospheric
Administration (NOAA) is to be the lead agency for licensing any proposed OTEC
project. NOAA retains jurisdiction of OTEC projects on the OCS with passage of
EPACT05 §388. However, as noted above, OTEC projects are of limited
commercial appeal in most U.S. waters, because OTEC requires site conditions found
only in tropical waters. Thus it is primarily of interest in Hawaii, Puerto Rico, and
some U.S. territories.
NOAA’s National Marine Fisheries Service (NMFS) may also be involved in
Endangered Species Act68 consultations triggered by wave, tidal, and in-stream
energy projects, as well as those related to marine mammals under the Marine
Mammal Protection Act.69 NMFS would also be the lead agency ensuring that a
proposed energy project did not conflict with fishery management under the
42 U.S.C. §9111.
ESA; P.L. 93-205; 16 U.S.C. §1531 et seq.
16 U.S.C. §1361-§1407.
Magnuson-Stevens Fishery Conservation and Management Act.70 NOAA’s National
Ocean Service (NOS) has authority over national marine sanctuaries and any federal
action that may affect these areas would require consultation with NOS.71
NOAA has other legal authorities and responsibilities that may affect wave,
tidal, and in-stream energy projects. In particular, NMFS (also known as NOAA
Fisheries) shares jurisdiction under ESA, MMPA, and the Fish and Wildlife
Coordination Act with FWS; these provisions are addressed above. In addition,
NMFS and FWS may also prescribe fishways as part of a FERC hydropower license
under the Federal Power Act.72
Coastal Zone Management Act, 16 U.S.C. §1451-§1464. The Coastal
Zone Management Act (CZMA) is the primary federal statute for protecting of
America’s coastal areas from development, including pollution associated with
residential, recreational, commercial, and industrial uses. The CZMA assists states
in the development of Coastal Zone Management Programs aimed at balancing the
competing uses of coastal resources. The programs define permissible land and
water uses within state coastal areas. Federal actions must be consistent with
established state programs.
The CZMA requires federal consistency; that is, federal activities that affect the
coastal zone must be consistent to the maximum extent practicable with the
enforceable policies of a coastal state’s federally approved coastal management
program. (Federal agency activities are activities and development projects
performed by a federal agency, or a contractor for the benefit of a federal agency.)
NOAA interprets the CZMA, oversees the application of federal consistency, and
mediates CZMA-related disputes.73 Thus, wave, tide, and in-stream energy projects
must be consistent with state coastal zone plans as well as with NOAA
implementation of CZMA.
Magnuson-Stevens Act, 16 U.S.C. §1801 et seq. The Magnuson-Stevens
Fishery Conservation and Management Act governs the conservation and
management of ocean fishing and established the United States’ exclusive
management authority over all fishing within the EEZ, all anadromous fish
throughout their migratory range, except when in another nation’s waters, and all fish
in the waters of the OCS.74 The act also established eight Regional Fishery
Management Councils that are responsible for preparing fishery management plans
designed to provide for the optimum yield from the fisheries in their regions. A wave
or tidal energy project must not be constructed in conflict with these management
16 U.S.C. §1801 et seq.
16 U.S.C. §1434(d).
16 U.S.C. § 811.
Anadromous fish are those that are born in fresh water, mature in the ocean, and return
to fresh water to breed.
National Marine Sanctuaries Act, 16 U.S.C. §1431 et seq. The NMSA
authorizes the Secretary of Commerce to designate and manage areas of the marine
environment that have special significance as national marine sanctuaries. The
management of national marine sanctuaries is conducted by the National Marine
Sanctuary Program (NMSP). Through the NMSP, the Secretary of Commerce may
issue regulations that specify the types of activities that can and cannot occur within
the sanctuaries. Permits may be issued for activities which are normally prohibited
by the regulations. Any federal actions that may affect a sanctuary require
consultation with NMSP.
Ocean Thermal Energy Conversion Act, 42 U.S.C.§ 9101 et seq. The
OTEC Act applies to parties interested in applying for a permit for an OTEC project.
NOAA, the agency with primary authority over OTEC projects, established
regulations for license applicants75 but withdrew them in 1996 because no
applications had been received since the OTEC Act was passed in 1980.76 However,
the OTEC Act is still in force.
U.S. Coast Guard
The Coast Guard regulates waterborne navigation and safety. An energy project
requiring the addition of any aids to navigation in U.S. waters must meet Coast
Guard approval and conform to established standards.
Hazards to Navigation, 33 C.F.R. §62, §64, §66. Coast Guard regulations
establish conventions for marking marine hazards and placing aids to navigation. A
proposed project must not be a hazard to navigation and must be marked in
compliance with the regulations.
U.S. Environmental Protection Agency
The U.S. EPA may be involved in a tidal, wave, or in-stream generation project
if it determines that the project may be considered a “point source discharger.” The
Clean Water Act authorizes EPA to regulate discharge of waterborne pollutants
through a program of National Pollutant Discharge Elimination System (NPDES)
permits. The NPDES permit program regulates point sources that discharge
pollutants into waterways of the United States.77
Discharge Permit, CWA §1251-§1387. The CWA regulates the discharge
of pollutants, including sand, rocks, and chemical waste — but not unpolluted water.
EPA may issue technology-based effluent limitations for different categories of point
source discharge. These are nationally applicable rules that would be incorporated
into the CWA discharge permits issued to individual sources under the NPDES
program. In the absence of national rules for a particular category of discharger
(wave generation projects for example), the permit writer (EPA or state water quality
15 C.F.R. §981.
61 Fed. Reg. 2969, January 30, 1996.
40 C.F.R. §122.
regulators) would develop discharge limits for a specific source using best
professional judgement. In many cases, EPA delegates responsibility for the NPDES
permit program to qualified states.78
Other Federal Legislation
Some federal statutes apply broadly to federal activities and require some action
on the part of the lead agency in a process, or from the agency that is intending to
conduct an activity such as licensing or permitting.
National Environmental Policy Act, 42 U.S.C. §4332(c). NEPA requires
the preparation of an EIS for federal actions that may significantly affect the quality
of the human environment. Thus, any federal permitting or other action related to a
proposed energy project would require first an environmental assessment (EA) to
determine if an environmental impact statement is required. The EA and EIS must
consider alternatives such as alternate locations, a “no action” option, and socioeconomic, environmental, and cultural impacts.
National Historic Preservation Act, 16 U.S.C. §470. The act protects
historic, archeological, and cultural resources. Compliance involves consultation
with state historic preservation officers (SHPO), Tribes, and other interested parties
to determine the effect of a proposed activity on historic properties, and, if necessary,
the development of plans to avoid or mitigate damage to important sites.
State Agencies and Statutes
States may have restrictions or impose their own conditions on the use of
cultural, fish and wildlife, and water resources and may have laws more stringent
than federal law. In some cases, federal law defers to state regulatory agencies for
implementing programs related to resource management. There are also likely to be
relevant state energy agencies involved in the approval process for a wave, tidal, or
in-stream energy project proposal.
Some aspects of the regulatory procedures applicable to wave, tidal, and instream generation projects are yet to be decided. Multiple federal agencies are
involved in establishing these projects and the lead agency depends in part on a
project’s location. Some project developers have contended that there is no
consistent template for state or federal oversight of wave, tidal, and in-stream energy
project development. They feel that a clearly defined, formal process specific to this
type of resource development would be an important step in the growth of this
technology.79 Other parties may have concerns about environmental or other conflicts
Personal communication with Mr. Craig Collar, Senior Manager, Energy Resource
that may arise from the development of wave, tidal, and in-stream generation
projects. They may feel that greater federal involvement and regulatory oversight
from several agencies will ensure that these energy resources are developed more
slowly, which may provide more opportunities to address conflicts that develop.
MMS Protest of FERC Jurisdiction
Wave, tidal, and in-stream kinetic energy generation technologies are just
starting to emerge. The fact that their regulatory status is still evolving is shown by
amendments to the law aimed at clarifying the federal role in ocean wave and
renewable energy.80 At least two federal agencies currently have what appears to be
a lead role in offshore renewable energy projects.81 MMS indicates that its authority
as the lead agency for projects proposed on the OCS is made clear by EPACT05
§388, and it is not accepting applications for these projects until its rulemaking
process is complete in late 2008.82 EPACT05 §388 includes a clause stating that
§388 does not modify or supersede the authority of any other federal or state agency,
and FERC is proceeding with permitting actions for projects on the OCS in advance
of MMS final rulemaking. Because MMS jurisdiction does not commence until
beyond 3 NM, FERC is the primary federal regulatory agency in rivers and ocean
waters up to this boundary.
In response to FERC’s acceptance of an application83 for a preliminary permit
for a wave energy project that was at least partially located on the OCS off the coast
of Oregon, MMS filed a protest of FERC’s authority under the FPA to issue permits
or licenses for projects on the OCS.84 MMS cites three points of protest:
FERC’s FPA jurisdiction does not extend beyond 3 NM into the
ocean. MMS specifically refutes a FERC claim that Presidential
Proclamation 5928 extending the territorial sea to 12 NM also
extends FERC authority. MMS cites the Proclamation language
indicating that its intent is not to extend or alter existing federal law
Development, Snohomish Public Utility District, Everett, WA. On January 26, 2007.
Snohomish PUD is investigating the development of several tidal current energy sites in
Washington’s Puget Sound.
For more information on questions regarding FERC and MMS jurisdiction over offshore
renewable energy projects, see CRS Report RS22721, Wave, Tidal, and In-Stream Energy
Projects: Which Federal Agency Has the Lead? by Nic Lane.
FERC, Notice of Application Accepted for Filing and Soliciting Motions to Intervene,
Protest, and Comments RE AquaEnergy Group Ltd’s Coos County Offshore Wave Energy
Project Under P-12752 (December 1, 2006).
MMS, Protest of the United States Minerals Management Service, FERC Docket P12752-000. (January 30, 2007).
MMS cites §388 of EPACT05 granting authority for renewable
energy projects on the OCS to MMS.
MMS asserts that FERC’s existing hydropower licensing process is
inappropriate for wave energy projects on the OCS for a number of
reasons, such as preliminary permits tie up large areas of potential
development based on the first applicant rather than the best
applicant; and a 30-50 year FERC license is too long for prototype
Citing the reasons above, MMS requested that FERC reject the preliminary
permit application, and also that it stop processing all permit applications for energy
projects on the OCS. Although CRS found no public FERC response to the MMS
protests, it appears that for a period following the protests no preliminary permits
were issued for projects that reach onto the OCS. However, in March 2008, FERC
issued preliminary permits for projects that include portions of the OCS off of
California. The Department of the Interior has filed a request for rehearing of the
FERC order issuing those permits.85 FERC has since reaffirmed its authority over
hydrokinetic projects on the OCS and denied the Department of the Interior’s request
for rehearing. 86
FERC has posted a Notice of Inquiry outlining its interim policy regarding its
preliminary permitting procedure. Pending final resolution, FERC will continue to
issue preliminary permits for wave, tidal, and in-stream generation projects; however,
it will administer these permits under a “stricter scrutiny” policy.87 FERC has stated
that preliminary permits are to be issued with more limited project boundaries to
prevent site-banking and promote competition, and the required project progress
reports will be given closer review to ensure active exploration of the energy
There is a concern among ocean energy proponents that having different
agencies with regulatory authority on either side of a 3 NM line may lead to hardship
for project developers. Some projects may be sited outside of the limit specifically
to avoid FERC licensing, while others that choose to use similar technology inside
the 3 NM limit would require a FERC license.89
There are some who may oppose wave or tidal power development or have
concerns about project impacts. This may especially be true among groups such as
fishing organizations, other recreational users, and some environmental interests.
These stakeholders may prefer to see a slower-paced licensing process, which they
may feel ensures more extensive public involvement and regulatory review.
FERC, Request for Rehearing of U.S. Department of the Interior under P-12779-000 and
P-12781.Docket Numbers P-12779-000 and P-12781-000 (April 14, 2008).
125 FERC ¶61,045.
FERC, Notice of Inquiry, Docket Number RM07-08-000 (February 15, 2007).
Request for Rehearing, p 22.