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[Senate Report 115-105]
[From the U.S. Government Publishing Office]

                                                     Calendar No. 141

115th Congress}                                            { Report
                                 SENATE
 1st Session  }                                            { 115-105

======================================================================
 
    TO AUTHORIZE THE EXPANSION OF AN EXISTING HYDROELECTRIC PROJECT

                                _______
                                

                 June 13, 2017.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 214]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 214) to authorize the expansion of an 
existing hydroelectric project, having considered the same, 
reports favorably thereon without amendment and recommends that 
the bill do pass.

                                PURPOSE

    The purpose of S. 214 is to authorize the expansion of the 
existing Terror Lake hydroelectric project in Alaska.

                          BACKGROUND AND NEED

    Approval to construct the Terror Lake Hydroelectric Project 
in Alaska was granted by the Federal Energy Regulatory 
Commission in 1981. The 36-megawatt project has been in 
operation since the 1980s and the Kodiak Electric Association 
(KEA), which serves the city of Kodiak, including the nation's 
largest U.S. Coast Guard Base and one of the country's largest 
commercial fishing ports, now obtains 99.7 percent of its 
electric power from the hydroelectric project and another 
nearby wind farm.
    In order to avoid burning approximately two million gallons 
of diesel fuel to produce additional power, KEA seeks to 
increase the amount of hydropower generated at the facility by 
expanding operations through the Upper Hidden Basin Diversion 
Expansion. The proposed expansion involves diverting five small 
streams located on Alaska State lands in the adjacent Upper 
Hidden Basin and allowing that water to flow into Terror Lake 
through an underground tunnel. The project would not involve 
adding turbines or equipment to the existing Terror Lake 
powerhouse. The expansion would increase the total production 
of electricity from the existing project by an additional 30 
gigawatt-hours annually, representing a 25 percent increase in 
power production. This will allow KEA to enhance its wind-
hydropower integration system and its micro-grid energy storage 
technology.
    The existing Terror Lake Project is located within the 
Kodiak National Wildlife Refuge pursuant to a Special Use 
Permit granted by the U.S. Fish and Wildlife Service in 1981. 
S. 214 authorizes the construction, operation, and maintenance 
of the underground tunnel within the Kodiak National Wildlife 
Refuge. Insofar as the Upper Hidden Basin Diversion Expansion 
is an expansion of the Terror Lake Hydroelectric Project, the 
Committee expects the terms and special conditions of the 
Special Use Permit KD-81-0040 issued on July 21, 1981, as 
amended, to remain in effect and to apply to the expansion.

                          LEGISLATIVE HISTORY

    Senators Murkowski and Sullivan introduced S. 214 on 
January 24, 2017.
    Representative Don Young introduced companion legislation, 
H.R. 220, in the House of Representatives on January 3, 2017.
    In the 114th Congress, similar legislation, S. 1583, was 
introduced by Senator Murkowski on June 16, 2015. The Committee 
on Energy and Natural Resources held a hearing on October 8, 
2015, to consider the bill and ordered S. 1583 favorably 
reported, as amended, at its business meeting on November 19, 
2015 (S. Rept. 114-185). Representative Don Young introduced 
companion legislation, H.R. 4193, in the House of 
Representatives on December 8, 2015.
    The measure was included in Amendment No. 3234, which the 
Senate agreed to on April 19, 2016, as an amendment to S. 2012, 
the Energy Policy Modernization Act of 2016, which the Senate 
passed, as amended, on April 20, 2016.
    The Committee on Energy and Natural Resources met in open 
business session on March 30, 2017, and ordered S. 214 
favorably reported.

                        COMMITTEE RECOMMENDATION

    The Senate Committee on Energy and Natural Resources, in 
open business session on March 30, 2017, by a majority voice 
vote of a quorum present, recommends that the Senate pass S. 
214.

                      SECTION-BY-SECTION ANALYSIS

Section 1. Terror Lake Hydroelectric Project Upper Hidden Basin 
        Diversion authorization

    Section 1(a) defines key terms.
    Subsection (b) authorizes the licensee to occupy up to 20 
acres of Federal land to construct, operate, and maintain the 
Upper Hidden Basin Diversion Expansion without further 
authorization of the Secretary. It also clarifies that 
authorization of the expansion is not subject to the Alaska 
National Interest Lands Conservation Act.
    Subsection (c) clarifies that the expansion of the Terror 
Lake Hydroelectric Project remains subject to the Federal 
Energy Regulatory Commission's hydropower licensing proceedings 
pursuant to the Federal Power Act, including section 4(e) of 
that Act, as well as the National Environmental Policy Act of 
1969.

                   COST AND BUDGETARY CONSIDERATIONS

    The following estimate of costs of this measure has been 
provided by the Congressional Budget Office:
    S. 214 would specify that the licensee of the Terror Lake 
hydroelectric project (number 2743), located within the Kodiak 
National Wildlife Refuge in Alaska, can expand that project to 
occupy not more than 20 acres of additional federal land. Under 
the bill, the proposed expansion would require no further 
approval by the Secretary of the Interior.
    CBO estimates that enacting S. 214 would not significantly 
affect the federal budget. The proposed expansion could have a 
minor effect on spending by the Federal Energy Regulatory 
Commission (FERC), which regulates the Terror Lake 
hydroelectric project. Because FERC recovers 100 percent of its 
costs through user fees, however, any change in that agency's 
costs (which are controlled through annual appropriation acts) 
would be offset by an equal change in fees that the commission 
charges, resulting in no net change in federal spending.
    According to the Department of the Interior, the federal 
lands that would be affected by the proposed expansion 
currently generate no significant receipts from programs to 
develop natural resources and are not expected to do so in the 
future. As a result, CBO expects that the proposed expansion 
would not affect offsetting receipts (which are treated as 
reductions in direct spending). Because S. 214 would not affect 
direct spending or revenues, pay-as-you-go procedures do not 
apply.
    CBO estimates that enacting S. 214 would not increase net 
direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2028.
    S. 214 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact for this estimate is Megan Carroll. 
The estimate was approved by H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis.

                      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 S. 214. The bill is not a regulatory measure in 
the sense of imposing Government-established standards or 
significant economic responsibilities on private individuals 
and businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of S. 214, as ordered reported.

                   CONGRESSIONALLY DIRECTED SPENDING

    S. 214, as ordered reported, does not contain any 
congressionally directed spending items, limited tax benefits, 
or limited tariff benefits as defined in rule XLIV of the 
Standing Rules of the Senate.

                        EXECUTIVE COMMUNICATIONS

    Because S. 214 is similar to legislation considered by the 
Committee in the 114th Congress, the Committee did not request 
Executive Agency views. The relevant portion of the written 
testimony provided by the Chairman of the Federal Energy 
Regulatory Commission for the hearing before the Energy and 
Natural Resources Committee on October 8, 2015, follows:

                                     Federal Energy
                                     Regulatory Commission,
                                                    Washington, DC.
Re S. 1583, S. 2083, and S. 2046.
Hon. Lisa Murkowski,
Chairman, Committee on Energy and Natural Resources,
Washington, DC.
    Dear Chairman Murkowski: This letter is in response to a 
request by the Senate Committee on Energy and Natural Resources 
for my views on S. 1583, a bill to authorize the expansion of 
the existing Terror Lake Hydroelectric Project, located at 
Terror Lake, on Kodiak Island, Alaska; S. 2083, a bill to 
extend the deadline for the commencement of construction of the 
W. Kerr Scott Hydroelectric Project in North Carolina; and S. 
2046, a bill to authorize the Federal Energy Regulatory 
Commission (Commission) to issue an order continuing a stay of 
a hydroelectric license for the Mahoney Lake Project in the 
State of Alaska, and for other purposes.

S. 1583

    On October 5, 1981, the Commission issued an original 
license authorizing Kodiak Electric Association, Inc. to 
construct and operate the Terror Lake Project No. 2743, to be 
located on the Terror and Kizhuyak Rivers, 25 miles southwest 
of the City of Kodiak, Alaska. The project was originally 
authorized to have a capacity of 20 megawatts (MW), but has 
since expanded to 36 MW.
    S. 1583 would expand the special-use permit issued for the 
project by the Secretary of the Interior, in order to allow the 
construction, operation, and maintenance of a tunnel and 
associated facilities and activities for the project-related 
Upper Hidden Basin Diversion. The diversion would provide 
additional flows to the project, thus allowing increased 
generation.
    The Commission has no jurisdiction over the special-use 
permit, so I have no comment on S. 1583. However, I am aware 
that Kodiak Electric Association is in the process of preparing 
an amendment application, scheduled to be filed with the 
Commission in 2017, seeking authorization to construct the 
facilities needed for the Upper Hidden Basin Diversion. It is 
my understanding that the licensee has prepared a draft 
amendment application and held joint agency and public meetings 
to discuss it, and has begun consultation under the Endangered 
Species Act, Magnuson-Stevens Fishery Conservation and 
Management Act, and the National Historic Preservation Act. I 
also understand that, to the extent that the amendment will 
result in the project occupying additional lands within a 
reservation of the United States, S. 1583 will preserve the 
right of the Secretary of the department under whose 
supervision those lands fall to impose conditions, pursuant to 
section 4(e) of the Federal Power Act, that the Secretary deems 
necessary for the adequate protection and utilization of the 
reservation. Should the amendment application be filed with the 
Commission, staff will review it as expeditiously as possible.
    If I can be of further assistance to you on this or any 
other Commission matter, please let me know.
            Sincerely,
                                             Norman C. Bay,
                                                          Chairman.

                        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 the bill as ordered 
reported.

                                  [all]
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