A bill to amend the Federal Power Act to improve the hydroelectric licensing process by granting the Federal Energy Regulatory Commission statutory authority to better coordinate participation by other agencies and entities, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Hydroelectric Licensing Process 
Improvement Act of 2001''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) hydroelectric power is an irreplaceable source of 
        clean, economic, renewable energy with the unique capability of 
        supporting reliable electric service while maintaining 
        environmental quality;
            (2) hydroelectric power is the leading renewable energy 
        resource of the United States;
            (3) hydroelectric power projects provide multiple benefits 
        to the United States, including recreation, irrigation, flood 
        control, water supply, and fish and wildlife benefits;
            (4) in the next 15 years, the bulk of all non-Federal 
        hydroelectric power capacity in the United States is due to be 
        relicensed by the Federal Energy Regulatory Commission;
            (5) the process of licensing hydroelectric projects by the 
        Commission--
                    (A) does not produce optimal decisions, because the 
                agencies that participate in the process are not 
                required to consider the full effects of their 
                mandatory and recommended conditions on a license;
                    (B) is inefficient, in part because agencies do not 
                always submit their mandatory and recommended 
                conditions by a time certain;
                    (C) is burdened by uncoordinated environmental 
                reviews and duplicative permitting authority; and
                    (D) is burdensome for all participants and too 
                often results in litigation; and
            (6) while the alternative licensing procedures available to 
        applicants for hydroelectric project licenses provide important 
        opportunities for the collaborative resolution of many of the 
        issues in hydroelectric project licensing, those procedures are 
        not appropriate in every case and cannot substitute for 
        statutory reforms of the hydroelectric licensing process.

SEC. 3. PURPOSE.

    The purpose of this Act is to achieve the objective of relicensing 
hydroelectric power projects to maintain high environmental standards 
while preserving low cost power by--
            (1) requiring agencies to consider the full effects of 
        their mandatory and recommended conditions on a hydroelectric 
        power license and to document the consideration of a broad 
        range of factors;
            (2) requiring the Federal Energy Regulatory Commission to 
        impose deadlines by which Federal agencies must submit proposed 
        mandatory and recommended conditions to a license; and
            (3) making other improvements in the licensing process.

SEC. 4. PROCESS FOR CONSIDERATION BY FEDERAL AGENCIES OF CONDITIONS TO 
              LICENSES.

    (a) In General.--Part I of the Federal Power Act (16 U.S.C. 791a et 
seq.) is amended by adding at the end the following:

``SEC. 32. PROCESS FOR CONSIDERATION BY FEDERAL AGENCIES OF CONDITIONS 
              TO LICENSES.

    ``(a) Definitions.--In this section:
            ``(1) Condition.--The term `condition' means--
                    ``(A) a condition to a license for a project on a 
                Federal reservation determined by a consulting agency 
                for the purpose of the first proviso of section 4(e); 
                and
                    ``(B) a prescription relating to the construction, 
                maintenance, or operation of a fishway determined by a 
                consulting agency for the purpose of the first sentence 
                of section 18.
            ``(2) Consulting agency.--The term `consulting agency' 
        means--
                    ``(A) in relation to a condition described in 
                paragraph (1)(A), the Federal agency with 
                responsibility for supervising the reservation; and
                    ``(B) in relation to a condition described in 
                paragraph (1)(B), the Secretary of the Interior or the 
                Secretary of Commerce, as appropriate.
    ``(b) Factors To Be Considered.--
            ``(1) In general.--In determining a condition, a consulting 
        agency shall take into consideration--
                    ``(A) the impacts of the condition on--
                            ``(i) economic and power values;
                            ``(ii) electric generation capacity and 
                        system reliability;
                            ``(iii) air quality (including 
                        consideration of the impacts on greenhouse gas 
                        emissions); and
                            ``(iv) drinking, flood control, irrigation, 
                        navigation, or recreation water supply;
                    ``(B) compatibility with other conditions to be 
                included in the license, including mandatory conditions 
                of other agencies, when available; and
                    ``(C) means to ensure that the condition addresses 
                only direct project environmental impacts, and does so 
                at the lowest project cost.
            ``(2) Documentation.--
                    ``(A) In general.--In the course of the 
                consideration of factors under paragraph (1) and before 
                any review under subsection (e), a consulting agency 
                shall create written documentation detailing, among 
                other pertinent matters, all proposals made, comments 
                received, facts considered, and analyses made regarding 
                each of those factors sufficient to demonstrate that 
                each of the factors was given full consideration in 
                determining the condition to be submitted to the 
                Commission.
                    ``(B) Submission to the commission.--A consulting 
                agency shall include the documentation under 
                subparagraph (A) in its submission of a condition to 
                the Commission.
    ``(c) Scientific Review.--
            ``(1) In general.--Each condition determined by a 
        consulting agency shall be subjected to appropriately 
        substantiated scientific review.
            ``(2) Data.--For the purpose of paragraph (1), a condition 
        shall be considered to have been subjected to appropriately 
        substantiated scientific review if the review--
                    ``(A) was based on current empirical data or field-
                tested data; and
                    ``(B) was subjected to peer review.
    ``(d) Relationship to Impacts on Federal Reservation.--In the case 
of a condition for the purpose of the first proviso of section 4(e), 
each condition determined by a consulting agency shall be directly and 
reasonably related to the impacts of the project within the Federal 
reservation.
    ``(e) Administrative Review.--
            ``(1) Opportunity for review.--Before submitting to the 
        Commission a proposed condition, and at least 90 days before a 
        license applicant is required to file a license application 
        with the Commission, a consulting agency shall provide the 
        proposed condition to the license applicant and offer the 
        license applicant an opportunity to obtain expedited review 
        before an administrative law judge or other independent 
        reviewing body of--
                    ``(A) the reasonableness of the proposed condition 
                in light of the effect that implementation of the 
                condition will have on the energy and economic values 
                of a project; and
                    ``(B) compliance by the consulting agency with the 
                requirements of this section, including the requirement 
                to consider the factors described in subsection (b)(1).
            ``(2) Completion of review.--
                    ``(A) In general.--A review under paragraph (1) 
                shall be completed not more than 180 days after the 
                license applicant notifies the consulting agency of the 
                request for review.
                    ``(B) Failure to make timely completion of 
                review.--If review of a proposed condition is not 
                completed within the time specified by subparagraph 
                (A), the Commission may treat a condition submitted by 
                the consulting agency as a recommendation is treated 
                under section 10(j).
            ``(3) Remand.--If the administrative law judge or reviewing 
        body finds that a proposed condition is unreasonable or that 
        the consulting agency failed to comply with any of the 
        requirements of this section, the administrative law judge or 
        reviewing body shall--
                    ``(A) render a decision that--
                            ``(i) explains the reasons for a finding 
                        that the condition is unreasonable and may make 
                        recommendations that the administrative law 
                        judge or reviewing body may have for the 
                        formulation of a condition that would not be 
                        found unreasonable; or
                            ``(ii) explains the reasons for a finding 
                        that a requirement was not met and may describe 
                        any action that the consulting agency should 
                        take to meet the requirement; and
                    ``(B) remand the matter to the consulting agency 
                for further action.
            ``(4) Submission to the commission.--Following 
        administrative review under this subsection, a consulting 
        agency shall--
                    ``(A) take such action as is necessary to--
                            ``(i) withdraw the condition;
                            ``(ii) formulate a condition that follows 
                        the recommendation of the administrative law 
                        judge or reviewing body; or
                            ``(iii) otherwise comply with this section; 
                        and
                    ``(B) include with its submission to the Commission 
                of a proposed condition--
                            ``(i) the record on administrative review; 
                        and
                            ``(ii) documentation of any action taken 
                        following administrative review.
    ``(f) Submission of Final Condition.--
            ``(1) In general.--After an applicant files with the 
        Commission an application for a license, the Commission shall 
        set a date by which a consulting agency shall submit to the 
        Commission a final condition.
            ``(2) Limitation.--Except as provided in paragraph (3), the 
        date for submission of a final condition shall be not later 
        than 1 year after the date on which the Commission gives the 
        consulting agency notice that a license application is ready 
        for environmental review.
            ``(3) Default.--If a consulting agency does not submit a 
        final condition to a license by the date set under paragraph 
        (1)--
                    ``(A) the consulting agency shall not thereafter 
                have authority to recommend or establish a condition to 
                the license; and
                    ``(B) the Commission may, but shall not be required 
                to, recommend or establish an appropriate condition to 
                the license that--
                            ``(i) furthers the interest sought to be 
                        protected by the provision of law that 
                        authorizes the consulting agency to propose or 
                        establish a condition to the license; and
                            ``(ii) conforms to the requirements of this 
                        Act.
            ``(4) Extension.--The Commission may make 1 extension, of 
        not more than 30 days, of a deadline set under paragraph (1).
    ``(g) Analysis by the Commission.--
            ``(1) Economic analysis.--The Commission shall conduct an 
        economic analysis of each condition submitted by a consulting 
        agency to determine whether the condition would render the 
        project uneconomic.
            ``(2) Consistency with this section.--In exercising 
        authority under section 10(j)(2), the Commission shall consider 
        whether any recommendation submitted under section 10(j)(1) is 
        consistent with the purposes and requirements of subsections 
        (b) and (c) of this section.
    ``(h) Commission Determination on Effect of Conditions.--When 
requested by a license applicant in a request for rehearing, the 
Commission shall make a written determination on whether a condition 
submitted by a consulting agency--
            ``(1) is in the public interest, as measured by the impact 
        of the condition on the factors described in subsection (b)(1);
            ``(2) was subjected to scientific review in accordance with 
        subsection (c);
            ``(3) relates to direct project impacts within the 
        reservation, in the case of a condition for the first proviso 
        of section 4(e);
            ``(4) is reasonable;
            ``(5) is supported by substantial evidence; and
            ``(6) is consistent with this Act and other terms and 
        conditions to be included in the license.''.
    (b) Conforming and Technical Amendments.--
            (1) Section 4.--Section 4(e) of the Federal Power Act (16 
        U.S.C. 797(e)) is amended--
                    (A) in the first proviso of the first sentence by 
                inserting after ``conditions'' the following: ``, 
                determined in accordance with section 32,''; and
                    (B) in the last sentence, by striking the period 
                and inserting ``(including consideration of the impacts 
                on greenhouse gas emissions)''.
            (2) Section 18.--Section 18 of the Federal Power Act (16 
        U.S.C. 811) is amended in the first sentence by striking 
        ``prescribed by the Secretary of Commerce'' and inserting 
        ``prescribed, in accordance with section 32, by the Secretary 
        of the Interior or the Secretary of Commerce, as appropriate''.

SEC. 5. COORDINATED ENVIRONMENTAL REVIEW PROCESS.

    Part I of the Federal Power Act (16 U.S.C. 791a et seq.) (as 
amended by section 4) is amended by adding at the end the following:

``SEC. 33. COORDINATED ENVIRONMENTAL REVIEW 
              PROCESS.

    ``(a) Lead Agency Responsibility.--The Commission, as the lead 
agency for environmental reviews under the National Environmental 
Policy Act of 1969 (42 U.S.C. 4321 et seq.) for projects licensed under 
this part, shall conduct a single consolidated environmental review--
            ``(1) for each such project; or
            ``(2) if appropriate, for multiple projects located in the 
        same area.
    ``(b) Consulting Agencies.--In connection with the formulation of a 
condition in accordance with section 32, a consulting agency shall not 
perform any environmental review in addition to any environmental 
review performed by the Commission in connection with the action to 
which the condition relates.
    ``(c) Deadlines.--
            ``(1) In general.--The Commission shall set a deadline for 
        the submission of comments by Federal, State, and local 
        government agencies in connection with the preparation of any 
        environmental impact statement or environmental assessment 
        required for a project.
            ``(2) Considerations.--In setting a deadline under 
        paragraph (1), the Commission shall take into consideration--
                    ``(A) the need of the license applicant for a 
                prompt and reasonable decision;
                    ``(B) the resources of interested Federal, State, 
                and local government agencies; and
                    ``(C) applicable statutory requirements.''.

SEC. 6. STUDY OF SMALL HYDROELECTRIC PROJECTS.

    (a) In General.--Not later than 18 months after the date of 
enactment of this Act, the Federal Energy Regulatory Commission shall 
submit to the Committee on Energy and Natural Resources of the Senate 
and the Committee on Commerce of the House of Representatives a study 
of the feasibility of establishing a separate licensing procedure for 
small hydroelectric projects.
    (b) Definition of Small Hydroelectric Project.--The Commission may 
by regulation define the term ``small hydroelectric project'' for the 
purpose of subsection (a), except that the term shall include at a 
minimum a hydroelectric project that has a generating capacity of 5 
megawatts or less.

Summary: Hydroelectric Licensing Process Improvement Act of 2001- Amends the Federal Power Act to prescribe mandatory factors for consideration and documentation by Federal agency participants in the Federal Energy Regulatory Commission (FERC) hydroelectric license renewal process when setting forth renewal prerequisites, including the economic impact, and the means to ensure that such prerequisites address only direct project environmental impacts at the lowest project cost. Mandates that each condition be subjected to scientific peer review. Requires a consulting agency to provide a license applicant an opportunity to obtain expedited administrative review of its proposed conditions before filing a FERC application. Empowers the reviewing body to remand the matter to such agency upon finding that the agency's conditions are inconsistent with this Act. Sets a one-year deadline by which a consulting agency must file its proposed licensing conditions with FERC. Directs FERC to: (1) conduct an economic analysis of each condition submitted by a consulting agency to determine whether it would render the project uneconomic. (2) conduct a single consolidated environmental review for each licensed project. And (3) consider the need of license applicants for a prompt decision when setting a deadline for the submission of comments by governmental agencies regarding environmental impact statements or assessments. Directs FERC to study and report to certain congressional committees on the feasibility of establishing a separate licensing procedure for small hydroelectric projects with a generating capacity of five megawatts or less.