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[Senate Report 106-430]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 852
106th Congress                                                   Report
                                 SENATE
 2d Session                                                     106-430

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                HYDROELECTRIC PROJECTS IN WEST VIRGINIA

                                _______
                                

  September 28 (legislative day, September 22), 2000.--Ordered to be 
                                printed

                                _______
                                

  Mr. Murkowski, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 2942]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 2942) to extend the deadline for 
commencement of construction of certain hydroelectric projects 
in the State of West Virginia, having considered the same, 
reports favorably thereon without amendment and recommends that 
the bill do pass.

                         purpose of the measure

    The purposes of S. 2942 is to authorize the FERC, upon the 
request of the licensee for projects Nos. 6901, 6902, and 7307 
to extend for 3 consecutive 2-year periods the time period for 
the commencement of construction. It also provides for the 
reinstatement of the license for such project if it has 
expired.

                          background and need

    Section 13 of the Federal Power Act requires a 
hydroelectric licensee to commence the construction of its 
project within two years of the date of the issuance of the 
license. That deadline can be extended by the FERC one time for 
as much as two additional years. Unless additional legislation 
is enacted, if construction has not commenced by the end of the 
time period the license is terminated by the FERC.
    New Cumberland, FERC Project No. 6901. On September 27, 
1989, the Commission issued an original license to the city of 
New Martinsville, West Virginia, to construct and operate the 
37-megawatt New Cumberland Project No. 6901, to be located at 
an existing U.S. Corps of Engineers dam on the Ohio River in 
Hancock County, West Virginia.
    The original deadline for commencement of project 
construction was September 26, 1991. The Commission rescinded 
the license for lack of a grant or waiver of State water 
quality certification for the project, and subsequently 
reissued the license once that certification was issued. This 
resulted in a new deadline of October 3, 1993, for commencing 
construction. This deadline was subsequently extended by the 
Commission to October 3, 1995, in order to give the licensee 
additional time to secure project financing. In 1996, Congress 
passed Public Law 104-173, which authorized the Commission to 
extend the deadline for the commencement of Project No. 6901 
construction to October 3, 1999, which the Commission did. On 
June 28, 2000 (91 FERC para.61,309), the Commission issued an 
order finding that construction did not timely commerce and 
terminating the license. The licensee's request for rehearing 
of the termination order is currently pending before the 
Commission.
    Willow Island Lock and Dam, FERC Project No. 6902. On 
September 27, 1989, the Commission issued an original license 
to the city of New Martinsville, West Virginia, to construct 
and operate the 35-megawatt Willow Island Lock and Dam Project 
No. 6902, to be located at an existing U.S. Corps of Engineers 
dam on the Ohio River in Pleasant County, West Virginia, and 
Washington County, Ohio.
    The Commission stayed, pending judicial review, most of the 
requirements of the license for Project No. 6902 (including the 
construction deadline) from March 28, 1991, to April 16, 1992, 
which resulted in a new construction deadline of October 15, 
1992. This deadline was subsequently extended to October 15, 
1994, in order to give the licensee additional time to secure 
project financing. In 1996, Congress passed Public Law 104-173, 
which authorizing the Commission to extend the deadline for the 
commencement of Project No. 6902 construction to October 3, 
1999, which the Commission did. On June 28, 2000 (91 FERC 
para.61,309), the Commission issued an order finding that 
construction had not timely commence and terminating the 
license. The licensee's request for rehearing of the 
termination order is currently pending before the Commission.
    Tygart Dam, FERC Project No. 7307. On September 27, 1989, 
the Commission issued an original license to the city of 
Grafton, West Virginia, to construct and operate the Tygart Dam 
Project No. 7307, to be located at an existing U.S. Corps of 
Engineers dam on the Tygart River in Taylor County, West 
Virginia.
    The original deadline for commencement of project 
construction was September 26, 1991. The Commission stayed, 
pending judicial review, most of the license (including the 
construction deadlines) from September 27, 1990, to April 16, 
1992 (nearly 19 months), which resulted in a new deadline of 
April 15, 1993, to commence construction. This deadline was 
subsequently extended April 15, 1995, because the licensee 
needed additional time to consult with the Corp regarding 
access to the site and project design and construction, and to 
obtain a power sales contract. Pursuant to Public Law 104-246, 
the Commission granted extensions until September 26, 1999.
    On February 9, 2000, the Commission Secretary dismissed as 
moot the licensee's request for a stay of the licensee's 
requirement to submit plans prior to beginning construction. 
Construction did not timely commence. An order terminating the 
license was issued on March 27, 2000. No rehearing request was 
filed, and the termination became final on April 26, 2000.
    On May 8, 2000, Universal Electric Power Corp. filed a 
preliminary permit application (docketed as Project No. 11840) 
for the site. No action has been taken on the permit 
application.

                          legislative history

    S. 2942 was introduced on July 27, 2000. A hearing was held 
by the Subcommittee on Water and Power on September 19, 2000.

            committee recommendation and tabulation of votes

    The Senate Committee on Energy and Natural Resources, in 
open business session on September 20, 2000, by a voice vote 
with a quorum present,recommends that the Senate pass the bill 
without amendment.

                     cost and budget considerations

    The Congressional Budget Office estimate of the costs of 
this measure has been requested but was not received at the 
time the report was filed. When the report is available, the 
Chairman will request it to be printed in the Congressional 
Record for the advice of the Senate.

                      regulatory Impact Evaluation

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out this measure.
    The bill is not a regulatory measure in he sense of 
imposing Government-established standards or significant 
economic responsibilities on private individuals and 
businesses.
    No personal information would be collected in administering 
the provisions of the bill. Therefore, there would be no impact 
on personal privacy.
    Little, if any, additional paperwork would result from the 
enactment of this measure.

                        executive communications

    The pertinent communications received by the Committee from 
the Federal Energy Regulatory Commission setting forth 
Executive agency views relating to this measure are set forth 
below:

  Statement of James J. Hoecker, Chairman, Federal Energy Regulatory 
                               Commission

    Mr. Chairman and Members of the Subcommittee, thank you for 
the opportunity to comment on S. 2942, a bill to extend the 
construction deadlines applicable to three hydroelectric 
projects licensed by the Federal Energy Regulatory Commission.
    Section 13 of the Federal Power Act requires that 
construction of a licensed project be commenced within two 
years of issuance of the license. Section 13 authorizes the 
Commission to extend this deadline once, for a maximum of two 
additional years. If project construction has not commenced by 
this deadline, Section 13 requires the Commission to terminate 
the license.
    S. 2942 would authorize the Commission, at the request of 
the licensee and in accordance with the good faith, due 
diligence, and public interest requirements of Section 13 of 
the FPA, to extend, by up to 3 additional 2-year periods, the 
period during which the licensee is required to commence 
construction of the three licensed projects described below.
    New Cumberland, FERC Project No. 6901. On September 27, 
1989, the Commission issued an original license to the City of 
New Martinsville, West Virginia, to construct and operate the 
37-megawatt New Cumberland Project No. 6901, to be located at 
an existing U.S. Corps of Engineers dam on the Ohio River In 
Hancock County, West Virginia. Construction entails the 
addition of a 600-foot-long intake channel, a powerhouse, a 
649-foot-long tailrace, a primary transmission line, and 
related facilities.
    The original deadline for commencement of project 
construction was September 26, 1991. The Commission rescinded 
the license for lack of a grant or waiver of state water 
quality certification for the project, and subsequently 
reissued the license once that certification was issued. This 
resulted in a new deadline of October 3, 1993, for commencing 
construction. This deadline was subsequently extended by the 
Commission to October 3, 1995, in order to give the licensee 
additional time to secure project financing. In 1996, Congress 
passed Pub. L. No. 104-173, which authorized the Commission to 
extend the deadline for the commencement of Project No. 6901 
construction to October 3, 1999, which the Commission did. On 
June 28, 2000 (91 FERC para. 61,309), the Commission issued an 
order finding that construction did not timely commence and 
terminating the license. The licensee's request for rehearing 
of the termination order is currently pending before the 
Commission.
    S. 2942 would authorize the Commission to reinstate the 
Project No. 6901 license and extend the deadline for commencing 
construction, in two-year increments, to October 3, 2005. This 
deadline would be 16 years after the date the license was 
issued. Even a single 2-year extension under the legislation 
would extend the construction deadline to 12 years after the 
license was issued.
    Willow Island Lock and Dam, FERC Project No. 6902. On 
September 27, 1989, the Commission issued an original license 
to the City of New Martinsville, West Virginia, to construct 
and operate the 35-megawatt Willow Island Lock and Dam Project 
No. 6902, to be located at an exiting U.S. Corps of Engineers 
dam on the Ohio River in Pleasant County, West Virginia, and 
Washington County, Ohio. Construction entails the addition of a 
980-foot-long approach channel, a powerhouse, an 865-foot-long 
exit channel, a 1.5-mile-long transmission line, and related 
facilities.
    The Commission stayed, pending judicial review, most of the 
requirements of the license for Project No. 6902 (including the 
construction deadline) from March 28, 1991, to April 16, 1992, 
which resulted in a new construction deadline of October 15, 
1992. This deadline was subsequently extended to October 15, 
1994, in order to give the licensee additional time to secure 
project financing. In 1996, Congress passed Pub. L. No. 104-
173, which authorized the Commission to extend the deadline for 
the commencement of Project No. 6902 construction to October 3, 
1999, which the Commission did. On June 28, 2000 (91 FERC para. 
61,309), the Commission issued an order finding that 
construction had not timely commenced and terminating the 
license. The licensee's request for rehearing of the 
termination order is currently pending before the Commission.
    S. 2942 would authorize the Commission to reinstate the 
Project No. 6902 license and extend the deadline for commencing 
construction, in two-year increments, to October 3, 2005. This 
deadline would be nearly 15 non-stayed years from the date the 
license was issued. Even a single 2-year extension under the 
legislation would extend the construction deadline to nearly 11 
non-stayed years after the license was issued.
    Tygart Dam, FERC Project No. 7307. On September 27, 1989, 
the Commission issued an original license to the City of 
Grafton, West Virginia, to construct and operate the Tygart Dam 
Project No. 7307, to be located at an existing U.S. Army Corps 
of Engineers dam on the Tygart River in Taylor County, West 
Virginia. Construction of the project entails the addition of 
an intake structure, a 350-foot-long penstock, a powerhouse, a 
1-mile-long transmission line, and related project facilities.
    The original deadline for the commencement of project 
construction was September 26, 1991. The Commission stayed, 
pending judicial review, most of the license (including the 
construction deadlines) from September 27, 1990, to April 16, 
1992 (nearly 19 months), which resulted in a new deadline of 
April 15, 1993, to commence construction. This deadline was 
subsequently extended to April 15, 1995, because the licensee 
needed additional time to consult with the Corps regarding 
access to the site and project design and construction, and to 
obtain a power sales contract. Pursuant to Public Law No. 104-
246, the Commission granted extensions until September 26, 
1999.
    On February 9, 2000, the Commission Secretary dismissed as 
moot the licensee's request for a stay of the licensee's 
requirement to submit plans prior to beginning construction. 
Construction did not timely commence. An order terminating the 
license was issued on March 27, 2000. No rehearing request was 
filed, and the termination became final on April 26, 2000.
    On May 8, 2000, Universal Electric Power Corp. filed a 
preliminary permit application (docketed as Project No. 11840) 
for the site. No action has been taken on the permit 
application.
    S. 2942 would authorize the Commission to reinstate the 
Project No. 7303 license and extend the deadline for commencing 
construction, in two-year increments, to September 26, 2005. 
This deadline would be nearly 14\1/2\ non-stayed years from the 
date the license was issued. Even a single 2-year extension 
under the legislation would extend the construction deadline to 
nearly 10\1/2\ non-stayed years after the license was issued.
    Comments. As a general matter, enactment of bills 
authorizing or requiring commencement-of-construction 
extensions for individual projects delays utilization in the 
public interest of an important energy resource and therefore 
is inappropriate. In cases where project-specific extensions 
are authorized by the Congress, however, they should be of 
relatively short duration and respond only to the practical but 
unforeseeable needs of the licensee. Absent a showing of 
extraordinary circumstances, granting a licensee more than ten 
years from the issuance date of the license to commence 
construction does not meet these criteria. (Where the 
Commission has stayed the construction deadlines, or the entire 
license, for example pending judicial appeal of the license, 
the period of the stay should not be counted in applying this 
10-year policy.) I believe ten years is a more than reasonable 
period for a licensee to determine whether a project is 
economically viable, to sign a power purchase agreement, and to 
begin construction. If a licensee cannot meet such a deadline, 
then I believe as a general matter the license should be 
terminated pursuant to the requirements of Section 13, so that 
the site is once again available for whatever uses current 
circumstances may warrant, based on up-to-date information on 
economic and environmental considerations.
    H.R. 2942 would provide for the extension of the deadline 
for the commencement of construction of Project No. 6901 to 16 
years after license issuance; Project No. 6902 to 15 non-stayed 
years after license issuance; and Project No. 7307 to nearly 
14\1/2\ non-stayed years after license issuance. Because the 
bill would extend the commencement of construction deadlines to 
more than 10 years after license issuance, I do not support its 
enactment.

                        changes in existing law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee notes that no 
changes in existing law are made by S. 2942 as ordered 
reported.

                                  
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