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###### Department of Energy

###### Office of Energy Efficiency and Renewable Energy

# AGENCY:

Office of Energy Efficiency and Renewable Energy, U.S. Department of Energy (DOE).

# ACTION:

Record of Decision (ROD) and Floodplain Statement of Findings.

# SUMMARY:

                        DOE announces its decision to provide approximately $4.6 million appropriated under the American Recovery and Reinvestment Act, Public Law 111-5 (Recovery Act), to the City                               ( print page 73060)                            of Tacoma, Washington (Tacoma), for the design and construction of certain components of the Cushman Hydroelectric Project in Mason County, Washington. These components include a new 3.6 megawatt (MW) powerhouse on the North Fork of the Skokomish River, an integral fish collection, handling, and sorting facility, and related transmission infrastructure.                    

                        The environmental impacts from the proposed action were analyzed in the Federal Energy Regulatory Commission's (FERC's)                         *1996 Final Environmental Impact Statement for the Cushman Hydroelectric Project*                         (FERC Project No. 460) (1996 FEIS). In a July 15, 2010, Order [1]                                                  (FERC's 2010 Order), FERC lifted a stay on a 1998 license for the Cushman Hydroelectric Project and amended the license to include                         *inter alia*                         conditions for fish passage facilities and authorization to construct the powerhouse. FERC's 2010 Order includes the components of the Cushman Hydroelectric Project that DOE proposes to fund. FERC relied on the 1996 FEIS                        **                         to fulfill its National Environmental Policy Act (NEPA) obligations for the 1998 license as amended on July 15, 2010. DOE has adopted the 1996 FEIS and 2010 Order, together, as a final DOE EIS (DOE/EIS-0456).                    

# ADDRESSES:

                        DOE's final EIS, this ROD, and other project information are available on the DOE NEPA Web site at                         *http://nepa.energy.gov.*                         In addition, copies of this ROD may be requested by contacting Ms. Jane Summerson, NEPA Document Manager, Office of Energy Efficiency and Renewable Energy Department of Energy at                         *jane.summerson@ee.doe.gov.*                         Ms. Summerson can be reached at the U.S. Department of Energy, 1000 Independence Ave, SW., EE-4a, Washington, DC 20585, phone (202) 287-6188 or fax (202) 586-8177.                    

# FOR FURTHER INFORMATION CONTACT:

                        For further information about this project, contact Ms. Summerson as indicated in the                         **ADDRESSES**                         section above. For information about DOE's NEPA process, contact Ms. Carol M. Borgstrom, Director, NEPA Policy and Compliance, GC-54, U.S. Department of Energy, 1000 Independence Avenue, SW., Washington, DC 20585, telephone (202) 586-4600, or leave a message at (800) 472-2756.                    

# SUPPLEMENTARY INFORMATION:

## Background

                    DOE is providing approximately $4.6 million to Tacoma, for the design and construction of certain components of the Cushman Hydroelectric Project in Mason County, Washington. These components include a new 3.6 MW powerhouse on the North Fork of the Skokomish River, an integral fish collection and sorting facility, and related transmission infrastructure.[2] 

Tacoma applied for this funding in response to DOE Solicitation (FOA-0000120), entitled “Hydroelectric Facility Modernization,” pursuant to the Wind and Water Technologies Program. The goal of the Solicitation is to provide funding for industry members who propose to develop, deploy, and test hydropower projects that would modernize the existing hydropower infrastructure in the U.S. and increase the quantity, value, and environmental performance of hydropower generation. Because the funds are appropriated by the Recovery Act, the projects must stimulate the economy and create and retain jobs.

                    The background on the relicensing of the Cushman Project spans several decades and includes administrative and judicial litigation and multiple stays with interim operating requirements. To fully understand the history of the relicensing process, please refer to FERC's 2010 Order, the 1998 license,[3]                                          and the 1996 FEIS. What follows is a brief summary setting forth those aspects of the Cushman Project and relicensing process relevant to this ROD.                

In 1924, Tacoma obtained a license from the Federal Power Commission (predecessor to FERC) to flood 8.8 acres of national forest land by damming the North Fork of the Skokomish River at Lake Cushman on the Olympic Peninsula. This license was designated a “minor part license” because it covered only a small part of Tacoma's much larger hydroelectric project (Cushman Project). At that time, the Federal Power Commission interpreted its licensing authority narrowly, and the 1924 minor part license gave Tacoma the authority it needed to proceed with the Cushman Project.

The 131 MW Cushman Project is located on the North Fork of the Skokomish River (North Fork) in Mason County, Washington, and occupies U.S. lands within the Olympic National Forest and the Skokomish Indian Reservation. Tacoma built two dams across the Skokomish River. Dam No. 1, which was completed in 1926, impounds Lake Cushman and supplies water for electricity generation at a powerhouse with a capacity of 50 MW, located downstream of that dam. Dam No. 2, which was completed in 1930, impounds Lake Kokanee, a much smaller reservoir than Lake Cushman. Water leaving Dam No. 2 passes through a tunnel to a second powerhouse with 81 MW capacity and does not return to the North Fork. Historically, the Cushman Project diverted nearly all of the flow of the North Fork out of the river basin, leading to controversy regarding the total amount of flow diverted from the river, its environmental effects, and the appropriate level of minimum flows that should be required to return water to the North Fork. The Cushman Project is currently operated to provide load-following power and to meet peak-demand period needs.

In 1963, the Federal Power Commission determined that its hydroelectric licensing jurisdiction extends to whole projects, not just to the parts of those projects that occupy or use Federal land. As required by Title I of the Federal Power Act, Tacoma filed for a “major project license” for the Cushman Project on November 5, 1974. Tacoma continued to operate the Cushman Project under the terms of its 1924 minor part license, and FERC issued annual renewals of Tacoma's existing license during the application review period.

## FERC's 1996 FEIS

Subsequent to Tacoma's application for a major part license, FERC decided to prepare an environmental impact statement to analyze the impacts from the Cushman Project and alternatives to it. FERC issued a Notice of Intent to prepare a Draft EIS for the Cushman Project on November 12, 1992 (57 FR 53727). FERC held two rounds of scoping, in December 1992 and April 1993, and issued a final Scoping Document in February 1994. FERC issued the Draft EIS in November 1995 and held three public meetings in January and February 1996 to receive public comments on the Draft EIS (61 FR 1375). The comment period closed on February 13, 1996. FERC issued the 1996 FEIS on November 15, 1996 (61 FR 59435).

                    After a lengthy relicensing proceeding, FERC issued a new license for the Cushman Project on July 30,                           ( print page 73061)                        1998,[4]                                          and issued an order on rehearing on March 30, 1999.[5]                                          The license then became the subject of judicial and administrative review, in which the principal plaintiff was the Skokomish Tribe (Tribe), and concerns about endangered and threatened species and minimum flow were at the center of the dispute. The relicensing was stayed in part for most of the following decade, and FERC, at various times, amended the license with conditions for interim operation of the Cushman Project.                

As required by Section 7 of the Endangered Species Act, the Fish and Wildlife Service (FWS) filed a biological opinion for protection of listed fish in 2004. On January 21, 2009, the City of Tacoma and other parties to the litigation, including the Tribe, filed a comprehensive offer of settlement that includes conditions for protection of the Skokomish Indian Reservation, fish passage facilities, and measures for fish and wildlife protection. The National Marine Fisheries Service (NMFS) and FWS filed revised biological opinions in 2010.

## FERC's 2010 Order

                    In its July 15, 2010, Order, FERC lifted a stay on a 1998 license for the Cushman Project and amended the license to include conditions for fish passage facilities and authorization to construct the 3.6 MW powerhouse. FERC relied on the 1996 FEIS                    **                     to fulfill its NEPA obligations for the 1998 license, as amended in FERC's 2010 Order. The amended license includes license articles consistent with the settlement, extends the license expiration date to June 20, 2048, and authorizes construction of a new 3.6 MW powerhouse that will increase the Cushman Project's authorized capacity to 134.6 MW.                

As stated above, FERC's license authorizes all activities that DOE is funding through this decision. In FERC's 2010 Order, FERC found that the activities it authorized, including the proposed powerhouse, were within the range of alternatives examined in the 1996 FEIS and that a supplemental EIS would not be needed for the activities.

## Alternatives Analyzed in FERC's 1996 EIS

In the 1996 FEIS, FERC analyzed Tacoma's proposal, which included replacing turbine runners at the second powerhouse; installing a 1.3 MW powerhouse at the base of Dam No. 2; implementing major environmental enhancements such as increasing instream flows into the North Fork; removing resident fish passage barriers in project reservoir tributaries; and executing a land exchange to remove lands within Olympic National Forest. FERC also analyzed four other alternatives:

(1) No Action Alternative;

(2) Alternative adapted from resource agencies' and Tribe's recommended alternatives to Tacoma's proposal. Under this alternative, Tacoma would build a new powerhouse with a generating capacity of 16 MW at the base of Dam No. 2, and the project would operate with full river flows. Tacoma would remove certain dikes, enhance more than 15,000 acres of land for wildlife, and stop diverting water from the North Fork;

(3) Alternative intended to achieve, to the extent practicable, important elements of each objective: under this alternative, Tacoma would manage flow levels through an instream flow schedule to balance the competing demands on North Fork water; build a new 3 MW powerhouse near the base of Dam No. 2; and implement a staff-formulated wildlife habitat enhancement plan covering 5,981 acres of land for wildlife; and

(4) Decommissioning Alternative.

## Environmentally Preferred Alternative

FERC identified Alternative (2) as the environmentally preferred alternative in the 1996 FEIS because, among other things, it maximizes river flows and enhances the greatest area of land for wildlife in comparison to the other alternatives.

## Alternatives Available to DOE

DOE's two alternatives are to (1) provide funding for certain components of the Cushman Project as defined and conditioned in FERC's 2010 Order and which were analyzed in substantive part in Alternative 2 of the 1996 EIS, or (2) not provide funding (No Action Alternative). Under either alternative, Tacoma would construct and operate the Cushman Project consistent with FERC's 2010 Order and related settlement agreements.

## Consultation

FERC is the lead Federal agency for complying with Section 106 of the National Historic Preservation Act (NHPA) and Tribal Consultation for all components of the Cushman Project. The Tribe and others originally opposed Tacoma's Cultural Resource Summary Report, and cultural resource protection became a contested issue. On May 13, 2010, however, FERC entered into a Memorandum of Agreement (MOA) with the Washington State Historic Preservation Officer (SHPO) and the Tribe, and other interested parties concurred in the MOA. The MOA includes a Treatment Plan that Tacoma must follow to protect cultural resources during the construction of the new powerhouse. On June 8, 2010, the Advisory Council on Historic Preservation (ACHP) acknowledged receipt of the MOA and stated that FERC had completed its requirements under Section 106 of the NHPA.

DOE hereby concurs with the May 13, 2010, MOA and, in so doing, completes its own consultation requirements under Section 106 of the NHPA. DOE's proposed action is to fund elements of the Cushman Project that were already the subject of extensive Section 106 consultations.

FERC is also the lead Federal agency for complying with Section 7 of the Endangered Species Act (16 U.S.C. 1536) (ESA). FERC consulted extensively with both NMFS and FWS regarding impacts from the Cushman Project on listed species and critical habitat. These agencies concluded consultation when NMFS and FWS issued Biological Opinions finding that the Cushman Project is not likely to result in jeopardy to listed species or destruction or adverse modification of critical habitat. FERC and Tacoma agreed to implement certain mitigation measures (2010 Order at 148).

DOE finds that, either with or without DOE funding, Tacoma will manage the Cushman Project in compliance with the terms of FERC's relicense and the settlement agreement, which include terms that mitigate impacts to listed species. Thus, DOE's proposed action will have no effect on listed species or critical habitat and DOE has fulfilled its obligations under Section 7 of the ESA.

## EIS Adoption

DOE has independently reviewed the 1996 FEIS and FERC's 2010 Order and has concluded that, together, the 1996 FEIS and FERC's 2010 Order meet the standards for an adequate environmental impact statement under the Council on Environmental Quality's and DOE's NEPA regulations, which can be found at 40 CFR Parts 1500-1508 and 10 CFR Part 1021, respectively. In addition, DOE has determined that the Cushman Project is within the range of alternatives analyzed in the 1996 FEIS.

                    The only difference between the project that DOE is funding and the actions analyzed under the 1996 FEIS is the placement of a transmission line. In the 1996 FEIS, FERC analyzed an                           ( print page 73062)                        aboveground transmission line. Tacoma is now planning to bury the line underground to mitigate environmental impacts. This mitigation measure is not a substantial change in the proposed action relevant to environmental concerns, within the meaning of 40 CFR 1502.9(c), warranting a supplement to the FEIS. Accordingly, DOE adopted FERC's 1996 FEIS and 2010 Order as a final DOE EIS (DOE/EIS-0456).                

                    Because DOE did not participate as a cooperating agency in preparation of FERC's 1996 FEIS, DOE recirculated the adopted document as a DOE final EIS and filed it with the Environmental Protection Agency (EPA). EPA published a notice of availability in the                     **Federal Register**                     on October 8, 2010 (75 FR 62386). DOE did not receive any comments on the final EIS.                

## Floodplain Statement of Findings

                    In accordance with DOE regulations at 10 CFR Part 1022 (                    *Compliance with Floodplain and Wetland Environmental Review Requirements*), DOE considered the potential impacts of the Cushman Project on floodplains. These findings are based on the assessment of environmental impacts in the final EIS. The location of the Cushman Project and the alternatives considered are discussed in detail in the final EIS. The differences among the alternatives, including the original proposal from Tacoma, are summarized above.                

DOE finds that no practicable alternative to locating the Cushman Project in a floodplain is available. The nature of the existing Cushman Dam site and the process of generating electricity from water pressure require that the proposed powerhouse be constructed downstream of the dam; therefore the proposed construction will necessarily be within a floodplain.

                    FERC's 2010 Order establishes numerous requirements that Tacoma must follow in constructing and operating the proposed new facilities to minimize potential harm to or within the floodplain, including measures to reduce flooding hazards while protecting water quality and fish habitat. For example, Article 403 of FERC's 2010 Order requires Tacoma to implement measures to enhance the channel conveyance capacity of the mainstem Skokomish River for the reduction of risks to human health and welfare from flooding, including, among other things, providing funds to the U.S. Army Corps of Engineers for a                     *Skokomish River Basin Ecosystem Restoration and Flood Damage Reduction General Investigation;*                     the preparation, under certain conditions, of a                     *Mainstem Channel Restoration Plan*                     in consultation with NMFS, FWS, the Bureau of Indian Affairs (BIA) and including the comments of the Federal Emergency Management Agency, EPA, and Mason County; and, under certain conditions, providing funds for a                     *Channel Restoration Account.*

                    In addition, under Articles 406 and 407 of FERC's 2010 Order, Tacoma must prepare and implement an                     *Operational and Flow Monitoring Plan*                     to improve fish habitat, address lake water use changes, improve sediment transport and stream flow, and improve flood control and forecasting. This plan must be submitted to and approved by NMFS, FWS, and BIA. Under certain conditions, Tacoma would be required to develop a                     *Flood Damage and Mitigation Plan*                     and provide funding to implement the plan.                

## Mitigation

In addition to adopting the measures addressing floodplain impacts, described above, DOE adopts and incorporates by reference all other mitigation measures documented in FERC's 2010 Order. These other measures include but are not limited to:
    - Monitoring water use, which provides a feedback mechanism to help ensure that adequate flows will be available to meet the needs of anadromous fish at different times of the year, support aquatic habitats, maintain improvements to the channel capacity of the river, and provide some assurances that the flows released will benefit these resources.
    - A variety of fish habitat protection, mitigation and enhancement measures such as habitat enhancement and restoration work that benefits anadromous fish by improving channel habitat and removing instream barriers.
    - The use of a floating surface collector for downstream fish passage. Tacoma will use a trap and haul system for upstream fish passage.
    - Implementation of a resident fishery, which will include anadromous fish hatcheries.

## Decision

DOE has decided to provide funding, appropriated by the Recovery Act, to Tacoma for the design and construction of certain components of the Cushman Project in Mason County, Washington. These components include a new 3.6 MW powerhouse on the North Fork of the Skokomish River, an integral fish collection and sorting facility, and related transmission infrastructure.

DOE incorporates by reference all mitigation measures and other conditions identified in FERC's 2010 Order. DOE expects that Tacoma will execute the Cushman Project in compliance with FERC's 2010 Order. Thus, all practicable means to avoid or minimize environmental harm have been adopted.

## Basis for Decision

DOE's decision enables it to meet the objectives set forth in the Solicitation, namely, to provide financial assistance for industry members and industry-led partnerships who propose to develop, deploy, and test hydropower projects to modernize the existing hydropower infrastructure in the U.S. and increase the quantity, value, and environmental performance of hydropower generation.

DOE did not select the No Action alternative because it would not meet DOE's objectives, as set forth in the Solicitation.

DOE decided not to fund alternatives, or alternative components, that were analyzed in the 1996 FEIS but were not authorized under FERC's 2010 Order. Without a FERC license, Tacoma would not be able to implement such alternatives.

Issued in Washington, DC, on this 18th day of November 2010.

Cathy Zoi,

Assistant Secretary, Energy Efficiency and Renewable Energy.

# Footnotes

1.                                                             *City of Tacoma, Washington*                             132 FERC ¶ 61,037, (                            *Order on Remand and an Offer of Settlement, Amending License, Authorizing New Powerhouse, and Lifting Stay*).                        
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2.                             The “Cushman Project” refers to the entire project that FERC licensed in its 2010 Order. The scope of the Cushman Project is broader than the project that DOE is funding, and is defined in this section of this ROD.                    
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3.                                                     *City of Tacoma, Washington*                         84 FERC ¶ 61107 (1998).                    
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4.                                                     *City of Tacoma, Washington*                         84 FERC ¶ 61107 (1998).                    
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5.                                                     *City of Tacoma, Washington*                         86 FERC ¶ 61311 (1999).                    
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[FR Doc. 2010-29936 Filed 11-26-10; 8:45 am]

BILLING CODE 6450-01-P