69–010 

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 allowVerDate Sep 11 2014 05:13 Jun 14, 2017 Jkt 069006 PO 00000 Frm 00001 Fmt 6659 Sfmt 6602 E:\HR\OC\SR105.XXX SR105
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ing 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 

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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, payas-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. 

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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 

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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. 

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