```

[House Report 106-119]
[From the U.S. Government Publishing Office]

106th Congress                                                   Report
 1st Session            HOUSE OF REPRESENTATIVES                 106-119

=======================================================================

 
TO  EXTEND  THE  DEADLINE  UNDER  THE  FEDERAL  POWER 
  ACT FOR FERC PROJECT NO. 9401, THE MT. HOPE WATER-
  POWER PROJECT

                                _______
                                

 April 28, 1999.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                 _______

  Mr. Bliley, from the Committee on Commerce, submitted the following

                              R E P O R T

                        [To accompany H.R. 459]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Commerce, to whom was referred the bill 
(H.R. 459) to extend the deadline under the Federal Power Act 
for FERC Project No. 9401, the Mt. Hope Waterpower Project, 
having considered the same, report favorably thereon without 
amendment and recommend that the bill do pass.

                                CONTENTS

                                 -------                              
                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................     2
Committee Consideration..........................................     2
Roll Call Votes..................................................     3
Committee Oversight Findings.....................................     3
Committee on Government Reform Oversight Findings................     3
New Budget Authority, Entitlement Authority, and Tax Expenditures     3
Committee Cost Estimate..........................................     3
Congressional Budget Office Estimate.............................     3
Federal Mandates Statement.......................................     4
Advisory Committee Statement.....................................     4
Constitutional Authority Statement...............................     4
Applicability to Legislative Branch..............................     4
Section-by-Section Analysis of the Legislation...................     5
Agency Views.....................................................     5
Changes in Existing Law Made by the Bill, as Reported............     6

                          PURPOSE AND SUMMARY

    The purpose of H.R. 459 is to extend the deadline for the 
commencement of construction of a hydroelectric project in the 
State of New Jersey.

                  BACKGROUND AND NEED FOR LEGISLATION

    Section 13 of the Federal Power Act (16 U.S.C. Sec. 806) 
establishes time limits for commencement of construction of a 
hydroelectric project once the Federal Energy Regulatory 
Commission (FERC) has issued a license. The licensee must begin 
construction not more than two years from the date the license 
is issued unless FERC extends the initial deadline. However, 
section 13 permits FERC to grant only one extension of that 
deadline for ``not longer than two additional years . . . when 
not incompatible with the public interests.'' Accordingly, FERC 
lacks authority to extend the deadline beyond a maximum of two 
years from the original deadline for commencement of 
construction. Therefore, a license is subject to termination if 
a licensee fails to begin construction within four years of the 
date the license is issued.
    Lack of a power sales contract can delay the commencement 
of construction of licensed hydroelectric projects. It is very 
difficult for a hydroelectric project sponsor to secure 
financing until it has a power sales contract, and generally a 
licensee cannot secure a contract until it has been granted a 
license. However, the construction deadline begins to toll once 
the license is granted. There are other obstacles to 
commencement of construction, such as protracted proceedings on 
a licensee's application for a dredge and fill permit from the 
Army Corps of Engineers under section 404 of the Clean Water 
Act. FERC has testified that in such cases ithas issued orders 
staying the license until matters are resolved, suggesting extension 
legislation is not needed in order to address delays beyond the control 
of the licensee.
    H.R. 459 authorizes FERC to extend the deadline for the 
commencement of construction for a 2,000 megawatt hydroelectric 
project (Project No. 9401) in Morris County, New Jersey, until 
August 3, 2002. This extends the deadline to ten years after 
the date the license was issued. According to the project 
sponsor, construction has not commenced because it lacks a 
power purchase agreement. The deadline for the commencement of 
construction of this project expires on August 3, 1999. H.R. 
459 does not ease the requirements of a hydroelectric license, 
but merely extends the period for commencement of project 
construction. The legislation provides that the licensee must 
meet the section 13 requirement that it prosecute construction 
``in good faith and with due diligence.''

                                HEARINGS

    The Committee on Commerce has not held hearings on H.R. 
459.

                        COMMITTEE CONSIDERATION

    On April 14, 1999, the Subcommittee on Energy and Power met 
in open markup session and approved H.R. 459 for Full Committee 
consideration, without amendment, by a voice vote. The Full 
Committee met in open markup session on April 21, 1999, and 
ordered H.R. 459 reported to the House, without amendment, by a 
voice vote, a quorum being present.

                             ROLLCALL VOTES

    Clause 3(b) of rule XIII of the Rules of the House requires 
the Committee to list the recorded votes on the motion to 
report legislation and amendments thereto. There were no 
recorded votes taken in connection with ordering H.R. 459 
reported. A motion by Mr. Bliley to order H.R. 459 reported to 
the House, without amendment, was agreed to by a voice vote, a 
quorum being present.

                      COMMITTEE OVERSIGHT FINDINGS

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee has not held oversight 
or legislative hearings on this legislation.

           COMMITTEE ON GOVERNMENT REFORM OVERSIGHT FINDINGS

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, no oversight findings have been 
submitted to the Committee by the Committee on Government 
Reform.

   NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
459, a bill to extend the deadline under the Federal Power Act 
for FERC Project No. 9401, the Mt. Hope Waterpower Project, 
would result in no new or increased budget authority, 
entitlement authority, or tax expenditures or revenues.

                        COMMITTEE COST ESTIMATE

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  CONGRESSIONAL BUDGET OFFICE ESTIMATE

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, April 26, 1999.
Hon. Tom Bliley,
Chairman, Committee on Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 459, a bill to 
extend the deadline under the Federal Power Act applicable to 
the construction of FERC Project Number 9401, the Mt. Hope 
Waterpower Project.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Kim Cawley.
            Sincerely,
                                           Bary B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 459.--A bill to extend the deadline under the Federal Power Act 
        for FERC Project Number 9401, the Mt. Hope Waterpower Project

    CBO estimates that enacting this bill would have no net 
effect on the federal budget. The bill does not contain any 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act, and would not impose any costs on 
state, local, or tribal governments.
    The bill would extend the deadline for construction of a 
hydroelectric project currently subject to licensing by the 
Federal Energy Regulatory Commission (FERC) until August 3, 
2002. The proposed extension is for FERC project number 9401. 
This provision may have a minor impact on FERC's workload. 
Because FERC recovers 100 percent of its costs through user 
fees, any change in its administrative costs would be offset by 
an equal change in the fees that the commission charges. Hence, 
the bill's provisions would have no net budgetary impact.
    Because FERC's administrative costs are limited in annual 
appropriations, enacting this bill would not affect direct 
spending or receipts. Therefore, pay-as-you-go procedures would 
not apply to the bill.
    The CBO staff contact for this estimate is Kim Cawley. This 
estimate was approved by Paul N. Van de Water, Assistant 
Director for Budget Analysis.

                       FEDERAL MANDATES STATEMENT

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      ADVISORY COMMITTEE STATEMENT

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                   CONSTITUTIONAL AUTHORITY STATEMENT

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional authority for this legislation is provided in 
Article I, section 8, clause 3, which grants Congress the power 
to regulate commerce with foreign nations, among the several 
States, and with the Indian tribes.

                  APPLICABILITY TO LEGISLATIVE BRANCH

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Extension of Time for FERC Project

    The section authorizes FERC, upon the request of the 
licensee for Project No. 9401, and in accordance with the good 
faith, due diligence, and public interest requirements of 
section 13 of the Federal Power Act and FERC's procedures under 
such section, to extend the time required for commencement of 
construction for such project until August 3, 2002.

                              AGENCY VIEWS

    On December 1, 1998, the Committee on Commerce, in response 
to a request for comments, received the following letter from 
the Chairman of the Federal Energy Regulatory Commission 
stating the Commission's views on H.R. 4633, an identical bill 
that was introduced in the 105th Congress to extend the 
deadline under the Federal Power Act for FERC Project No. 9401, 
the Mt. Hope Waterpower project.

                      Federal Energy Regulatory Commission,
                                  Washington, DC, December 1, 1998.
Hon. Dan Schaefer,
Chairman, Subcommittee on Energy and Power, Committee on Commerce, 
        House of Representatives, Washington, DC.
    Dear Mr. Chairman: Thank you for your letter of October 16, 
1998, requesting comments on H.R. 4633, an act to extend the 
construction deadlines applicable to a hydroelectric project 
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 
additional two years. If project construction has not commenced 
by this deadline, the Commission is required to terminate the 
license.
    On August 4, 1992, the Commission issued a license to the 
Halecrest Company to construct and operate the 2,000-megawatt 
Mt. Hope Pumped Storage Project No. 9401, to be located in 
Rockaway Township, Morris County, New Jersey. The deadline for 
the commencement of project construction, originally August 3, 
1994, was extended to August 3, 1996, because the licensee had 
not obtained a power sales contract. The deadline was further 
extended until August 3, 1999, under the terms of P.L. 104-247. 
The Commission staff knows of no other interest in the site.
    Construction of the project entails excavation of a 57-acre 
upper reservoir and an underground lower reservoir, both with a 
5,500-acre-foot capacity; installation of a 2,800-foot-long 
shaft between the reservoirs bifurcating into five penstocks; 
and construction of an underground powerhouse, two parallel 
10.6-mile-long transmission lines, and related project 
facilities.
    H.R. 4633 would authorize the Commission, upon the request 
of the licensee and in accordance with the good faith, due 
diligence, and public interest requirements of Section 13, to 
extend the deadline for commencement of construction until 
August 3, 2002.
    The Commission has not objected to bills granting a 
licensee up to ten years from the issuance date of the license 
to commence project construction. Since the deadline in H.R. 
4633 does not exceed ten years, I do not object to the bill's 
enactment.
            Sincerely,
                                        James J. Hoecker, Chairman.

         CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    H.R. 459 does not amend any existing Federal statute.

                                

```