1

Federal Energy 

Regulatory Commission

2002 Annual Report
2 

MEMBERS OF THE

FEDERAL ENERGY REGULATORY COMMISSION

William L. Massey

Commissioner

Pat Wood, III

Chairman

Linda K. Breathitt

Commissioner

Nora Mead Brownell

Commissioner

TABLE OF CONTENTS

Letter from the Chairman

Regulatory Responsibilities

Strategic Plan

Oversight and Investigations

Energy Markets

Energy Projects

Hydroelectric Power Table

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5

7

11

15

19

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To the Senate and House of Representatives

I am pleased to submit to the Congress the Federal Energy 

Regulatory Commission's annual report, covering the fi scal year 

from October 1, 2001, through September 30, 2002.

This is the 82nd report issued by the Commission and its 

predecessor, the Federal Power Commission. As an independent 

agency, the Commission oversees key operating functions of the 

natural gas, electric utility, hydroelectric power, and oil pipeline 

transportation industries.

For fi scal year 2002, Congress appropriated $184,155,000 

to support Commission activities. Under the authority of the 

Omnibus Budget Reconciliation Act of 1986 and other laws, the 

Commission recovers all of its costs from regulated industries 

through fees and annual charges. Revenues generated from 

these sources completely offset congressional appropriations 

and therefore result in a net cost to the treasury of zero dollars. 

As a result, the users and benefi ciaries of the Commission's 

services–not the general taxpayers–pay its operating costs.

 Respectfully,

 Pat Wood, III

Chairman

LETTER FROM THE CHAIRMAN
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Transmission line photo courtesy of Idaho Power.
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THE COMMISSION’S REGULATORY RESPONSIBILITIES

The Commission is a five-member independent regulatory agency, which succeeded to the 

regulatory responsibilities of the Federal Power Commission in 1977. The Commission’s responsibilities 

include the licensing of non-federal hydroelectric facilities, the certification of natural gas pipelines, 

regulating the rates of natural gas pipelines and pipelines transporting crude oil and oil products, and 

regulating the rates and other aspects of electric utility activities.

Hydropower is the oldest area of Commission jurisdiction. The Commission’s predecessor 

began federal regulation of non-federal hydroelectric generation in 1920, authorizing the construction 

of projects in interstate commerce and overseeing their operation and safety. The Commission now 

regulates 2,000 dams that generate over five percent of all electric power in the United States.

Since 1935, the Commission has regulated certain electric utility activities under the Federal 

Power Act (FPA). Under FPA Sections 205 and 206, the Commission oversees the rates, terms and 

conditions of sales for resale of electric energy and transmission service in interstate commerce by 

public utilities. The Commission must ensure that those rates, terms and conditions are just and 

reasonable, and not unduly discriminatory or preferential. Under FPA Section 203, the Commission 

reviews mergers and other asset transfers involving public utilities. The utilities regulated under FPA 

sections 203, 205 and 206 are primarily investor-owned utilities; government-owned utilities (such as 

the Tennessee Valley Authority [TVA], the federal power marketing agencies, and municipal utilities) 

and most cooperatively-owned utilities are not subject to the Commission’s regulation, with certain 

exceptions. 

The Commission may not regulate retail sales or local distribution of electricity. These are 

matters left to the states by the FPA. Nor does the Commission have a role in authorizing the construction 

of new generation facilities (other than non-federal hydroelectric facilities) or transmission facilities. 

These too are state or local responsibilities.

The Commission’s role in the natural gas industry is largely defined by the Natural Gas Act of 

1938 (NGA). Under the NGA, the Commission regulates the construction of new natural gas pipelines 

and related facilities and oversees the rates, terms and conditions of sales for resale and transportation 

of natural gas in interstate commerce. Pipeline siting and construction is authorized by the Commission 

if found to be required by the public convenience and necessity. As with hydropower licensing, the 

Commission’s actions on pipeline projects typically require consideration of factors under the National 

Environmental Policy Act (NEPA), the Endangered Species Act, the Fish and Wildlife Coordination 

Act, the Coastal Zone Management Act and other such legislation. The wellhead price of natural gas, 

which the Commission previously regulated, was gradually deregulated by Congress beginning with the 

Natural Gas Policy Act of 1978 (NGPA). All wellhead price controls on natural gas ended on January 

1, 1993. Regulation of retail sales and local distribution of natural gas are matters left to the states.

Finally, the Interstate Commerce Act (ICA) gives the Commission jurisdiction over the rates, 

terms and conditions of transportation services provided by interstate oil pipelines. The Commission 

has no authority over the construction of new oil pipelines, or over other aspects of the industry such as 

production, refining or wholesale or retail sales of oil.

REGULATORY RESPONSIBILITIES
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Port Everglades, Florida, 1,240-megawatt generation facility. 

Photo courtesy of Florida Power & Light Company.
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VISION

Dependable, affordable energy through sustained competitive markets. 

MISSION

The Commission regulates and oversees energy industries in the economic and environmental interest 

of the American public.

GOALS AND OBJECTIVES

Goal 1: Promote a Secure, High-Quality, Environmentally Responsible Infrastructure 

through Consistent Policies.

Objective 1.1: Expedite Appropriate Infrastructure Development to Ensure Sufficient Energy 

Supplies.

•Identify transmission and pipeline projects with high public interest benefits and facilitate 

their speedy completion.

•Standardize interconnection of power generation plants of all sizes and technologies.

•Strengthen inter-agency coordination of hydropower licenses and gas pipeline certificates to 

expedite processing, consistent with due process.

Objective 1.2: Provide Clarity of Cost Recovery to Infrastructure Investors.

•Establish a timely process to include prudently incurred expansion costs in transmission and 

pipeline rates.

•Ensure that revenue levels and rate design for regulated company services support long-term 

competitive markets.

•Welcome balanced innovative rate of return proposals that encourage pro-competitive 

behavior and publicly beneficial projects.

Objective 1.3: Address Landowner and Environmental Concerns.

•Encourage collaboration among affected parties and address stakeholder concerns before the 

licensing/certification process.

•Incorporate reasonable environmental conditions into permits, licenses and certificates and 

ensure compliance with conditions.

Objective 1.4: Promote Measures to Improve the Security and Safety of the Energy Infrastructure.

•Work with other agencies and parties to identify and address security issues and needs.

•Support industry efforts to improve infrastructure security.

•Ensure strictest adherence to prudent dam safety practices.

•Facilitate prompt recovery of prudently incurred security and safety expenses in 

jurisdictional rates.

STRATEGIC PLAN
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Goal 2: Foster Nationwide Competitive Energy Markets as a Substitute for Traditional 

Regulation.

Objective 2.1: Advance Competitive Market Institutions Across the Entire Country.

•Complete firm establishment of regional transmission organizations with clear 

responsibilities, independence and scope.

•Develop appropriate coordination with states to efficiently oversee regional power markets.

•Encourage balanced, industry-led organizations to develop reliability and business practice 

standards.

•Firmly establish transmission planning function on a regional basis, with a variety of 

technology solutions to meet reliability, security and market needs.

•Provide regulatory certainty through clear market rules and case-specific decisions.

Objective 2.2: Establish Balanced, Self-Enforcing Market Rules.

•Link market-based rate authority to continued presence of balanced market conditions.

•Rely on international best practices to develop comprehensive market protocols/rules.

•Establish robust programs for customer demand-side participation in energy markets.

•Encourage standardized business rules and practices to maximize market efficiency, ease 

market entry and reduce transaction costs.

Goal 3: Protect Customers and Market Participants through Vigilant and Fair Oversight 

of the Transitioning Energy Markets.

Objective 3.1: Promote Understanding of Energy Market Operations and Technologies.

•Develop and maintain an expert market-operation oversight and investigation capability.

•Keep abreast of industry and market trends and technological innovations to inform and guide 

market oversight.

•Enhance the Commission’s deliberations and public discussion by developing market 

information and disseminating findings.

Objective 3.2: Assure Pro-Competitive Market Structure and Operations.

•Assess market conditions and infrastructure adequacy using objective benchmarks.

•Integrate the Commission’s market oversight and the work of market monitoring units.

•Identify and remedy problems with market structure and operations, and periodically review 

market rules for consistency with long-term market development.

•Ensure that mergers and consolidations are consistent with pro-competitive goals.

STRATEGIC PLAN
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Objective 3.3: Remedy Individual Market Participant Behavior as Needed to Ensure Just and

Reasonable Market Outcomes.

•Investigate market dysfunctions, exercises of market power and rule violations, and remedy 

problems through Commission authority.

•Use expedited dispute resolution to accelerate processes and minimize customer expense.

•Act swiftly on third-party complaints, using litigation before Administrative Law Judges as 

needed to determine factual issues.

Goal 4: Strategically Manage Agency Resources.

Objective 4.1: Manage Human Capital to Fulfill the Strategic Plan.

•Apply workforce planning to help meet the challenges of new Commission roles and 

changing workforce demographics.

•Get the job done flexibly and efficiently with the right mix of internal workforce and 

contracted services from the private sector.

Objective 4.2: Manage Information Technology to Best Serve the Public and Streamline Work 

Processes.

•Expedite interactions with customers through secure and efficient e-government initiatives.

•Build effective electronic workload/time-management and case-processing systems to enable 

getting the work done right and on time.

Objective 4.3: Clearly Communicate and Build Strong Partnerships with all Stakeholders.

•Proactively reach out to groups affected by agency actions for advance input.

•Build strong partnerships with all stakeholders, especially with states.

Objective 4.4: Strategically Manage Financial and Logistical Resources.

•Integrate budget, business plan, and performance measurement to improve performance 

and accountability.

•Generate accurate and timely financial information to support operating, budget, and policy 

decisions.

STRATEGIC PLAN
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INVESTIGATIONS 

AND 

ENFORCEMENT

COMMISSIONER COMMISSIONER CHAIRMAN COMMISSIONER COMMISSIONER

OFFICE OF 

EXTERNAL 

AFFAIRS

OFFICE 

OF THE 

SECRETARY

OFFICE OF 

ADMINISTRATIVE 

LITIGATION

OFFICE OF 

ADMINISTRATIVE 

LAW JUDGES

OFFICE OF THE 

CHIEF INFORMATION 

OFFICER

OFFICE OF THE 

EXECUTIVE 

DIRECTOR

FINANCIAL POLICY 

DIVISION

FINANCIAL SERVICES 

DIVISION

HUMAN RESOURCES 

MANAGEMENT 

DIVISION

DEPUTY EXECUTIVE 

DIRECTOR

BUDGET

DIVISION

CHIEF

ACCOUNTANT

LEGAL DIVISION

TECHNICAL 

DIVISION

DIVISION OF 

PRESS SERVICES

DIVISION OF 

CONGRESSIONAL, 

INTERGOVERNMENTAL

AND PUBLIC AFFAIRS

ORGANIZATIONAL 

MANAGEMENT 

DIVISION

PROCUREMENT 

DIVISION

REGULATORY 

ACCOUNTING 

POLICY DIVISION

MANAGEMENT, 

ADMINISTRATIVE AND 

PAYROLL SUPPORT 

DIVISION

REGULATORY 

AUDITS DIVISION

LOGISTICS 

MANAGEMENT 

GENERAL AND DIVISION

ADMINISTRATIVE 

LAW

SOLICITOR

MARKET 

OVERSIGHT AND ENFORCEMENT

ENERGY

PROJECTS

MARKETS, TARIFFS 

AND RATES

DISPUTE 

RESOLUTION 

SERVICE

DIVISION OF ISSUE 

IDENTIFICATION AND 

RESOLUTION 

MANAGEMENT

ASSOCIATE DIRECTOR

OFFICE OF MARKETS, 

TARIFFS AND RATES

OFFICE OF THE 

GENERAL COUNSEL

DIVISION OF 

ADMINISTRATION AND 

CASE TRACKING

CHIEF ECONOMIC 

ADVISOR

DIVISION OF POLICY 

INNOVATION AND 

COMMUNICATION

DIVISION OF 

TARIFFS AND RATES 

– EAST

DIVISION OF 

TARIFFS AND RATES

 – CENTRAL

DIVISION OF 

TARIFFS AND RATES 

– WEST

DIVISION OF MARKET 

INFORMATION

DIVISION OF MARKET 

DEVELOPMENT

OFFICE OF ENERGY 

PROJECTS

DIVISION OF 

TECHNICAL 

INVESTIGATIONS

DIVISION OF 

ENFORCEMENT

DIVISION OF 

OPERATIONAL 

INVESTIGATIONS

DIVISION OF 

INFORMATION 

DEVELOPMENT

DIVISION OF 

INTEGRATED 

MARKET ASSESSMENT

DIVISION OF

FINANCIAL MARKET 

ASSESSMENT

DIVISION OF ENERGY 

MARKET OVERSIGHT

MARKET

OVERSIGHT AND 

ASSESSMENT

OFFICE OF MARKET 

OVERSIGHT AND 

INVESTIGATIONS

MANAGEMENT 

AND OPERATIONS

DIVISION OF 

PIPELINE 

CERTIFICATES

DIVISION OF 

ENVIRONMENTAL 

AND ENGINEERING 

REVIEW

DIVISION OF 

HYDROPOWER 

ADMINISTRATION 

AND COMPLIANCE

DIVISION OF DAM 

SAFETY AND 

INSPECTIONS

FERC REGIONAL OFFICES

ATLANTA, PORTLAND, 

CHICAGO, NEW YORK 

AND SAN FRANCISCO

2002 FERC ORGANIZATIONAL CHART
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In January 2002, the Commission announced creation of a new Office of Market Oversight and 

Investigations (OMOI) to oversee the operations of electric and natural gas markets. The Chairman 

intended OMOI to bring together all of the Commission staff devoted to energy market oversight and 

enforcement, and receive the resources needed to restore and maintain the integrity of the nation’s energy markets. Beginning operations on August 12, 2002, OMOI fulfilled the Chairman’s promise that 

the new organization would be up and running in August 2002.

OMOI’s first challenge was to staff itself with highly qualified people. This was accomplished 

through a combination of internal transfers and external recruitment. A total of 186 applications were 

received from within the Commission, 62 of whom were transferred to the office. Externally, the Commission engaged in an aggressive recruitment campaign, with advertisements in major newspapers and 

the trade press. It received 952 external applications. In all, OMOI staffing exceeded 80 positions by the 

end of fiscal 2002, well on the way to its FY 2003 staffing target of 110 employees.

OMOI reports directly to the Chairman and all of the Commissioners on market oversight and 

enforcement matters. As a result, market oversight and enforcement now has equal weight with more 

traditional forms of regulation in the Commission’s deliberations.

A DESIGN FOR MARKET OVERSIGHT

The Commission revised its strategic plan to reflect more precisely how it intends to oversee 

markets. Based on the revised strategic plan, it developed a business plan that describes the activities 

OMOI will undertake, the products those activities will generate and the resources it plans to spend on 

each activity. Together the revised strategic plan and the business plan are the best blueprint the agency 

has had for how it will oversee markets.

MARKET OVERSIGHT AND ASSESSMENT

Despite having begun operations late in the fiscal year, OMOI completed several significant 

oversight-oriented tasks in FY 2002:

OMOI initiated biweekly surveillance reports, modeled on the Commodity Futures Trading 

Commission’s (CFTC) practice of briefing Commissioners directly on market developments. OMOI 

presents the reports at regularly scheduled closed meetings of the Commission to encourage candid 

discussion of overall market conditions. OMOI has produced surveillance reports regularly since June 

2002.

It completed its first seasonal assessment in July. The assessment focused on electric markets, 

highlighted important successes (such as market fundamentals and institutional development in the 

Northeast and Midwest), as well as potential problems (including transmission access in the Southeast 

and overall financial problems that may impair market liquidity).

OMOI addressed the need for financial analysis by creating the Division of Financial Market 

Assessment and by hiring key financial experts, working with other entities.

It began establishing strong, standard market metrics by holding an all-day conference along 

with individual and joint meetings with regional market monitoring units for independent system operator (ISO) and regional transmission organization (RTO) markets across the country.

OVERSIGHT AND INVESTIGATIONS
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OMOI addressed the need for greater transparency in energy markets by collaborating with entities such as the New York Mercantile Exchange and the Intercontinental Exchange to create transparent, 

creditworthy electricity trading platforms.

OMOI also continued the tradition of providing the Commission with daily reports on market 

developments and occasional incident reports on urgent developments.

INVESTIGATION AND ENFORCEMENT

One objective of the Commission’s strategic plan is to remedy individual market participant 

behavior to ensure just and reasonable market outcomes. To that end, OMOI had several accomplishments.

OMOI began an aggressive program of outreach to a wide variety of entities. It focused strongly 

on anti-competitive behavior. Key cases included New York gas price anomalies, Enron trading practices, and alleged capacity withholding by El Paso Natural Gas Company.

The New York gas price anomaly case illustrates how OMOI operates. Analytic staff detected 

the price anomalies early, so that when enforcement staff received a complaint, OMOI was ready to 

act. In the wake of OMOI’s investigative activities, the companies announced the results of their own 

internal investigation implicating several traders in false reporting and removing them from further 

trading.

OMOI cooperated closely with CFTC, the Department of Justice (DOJ), and the Securities and 

Exchange Commission (SEC) on specific investigations, including Enron trading practices and the 

New York price anomalies. Each agency brings a somewhat different focus to bear on the issues. For 

example, in the gas price case, FERC was concerned with whether prices were just and reasonable; 

CFTC was concerned with whether companies manipulated commodity prices (a potential felony under 

its statute); and DOJ brings experience in negotiating with potential witnesses and determining jurisdictional issues for fraudulent reporting to the government.

The Commission resolved key market issues, including a possible generation shortage in southwest Connecticut. In this case, OMOI intervention helped keep generating plants on line and may have 

prevented blackouts or brownouts in the region. It is investigating transmission access issues in the 

Southeast and will do so nationwide.

OMOI managed the Hotline, a dedicated phone number for the public and market participants 

to report potential energy market discrepancies or manipulations. Part of this focused on a publicity 

campaign to ensure that those who are aware of potential market problems know how to get their information to the Commission as expeditiously as possible.

OVERSIGHT AND INVESTIGATIONS
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Distribution substation in Broward County, Florida.

Photo courtesy of Florida Power & Light Company.
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Oil pipeline construction photo courtesy of Enbridge Energy Company, Inc.
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GOALS

In the energy markets area, the Commission’s primary duty is to make wholesale natural gas 

and electric power markets work well and thereby support a strong, stable national economy. To this 

end, the Commission’s focus over the next few years will be to continue developing fully functioning, 

nationwide wholesale electricity markets. The Commission hopes to gain the benefits of competition as 

soon as practical and to minimize transition difficulties.

The best sustainable path to competitive power markets is to establish independent transmission 

providers (ITPs) such as RTOs to implement fair, standardized market rules across the nation’s regional 

bulk power markets. ITPs must operate the transmission system and competitive markets independent 

of all market participants. The most immediate task facing the Commission is to complete development 

of independent electric wholesale markets across the country.

The Commission will also work to ensure that cost-effective rules for regional electricity markets balance the interests of all market participants while being as self-enforcing as possible. Since a 

market can only be as good as the rules that govern it, the Commission will continue to establish rules 

that are fair and equitable, prevent market power abuse, and maintain the confidence of customers and 

investors in the integrity of the marketplace.

In regulating the transportation of natural gas in interstate commerce, the Commission will continue to seek ways to enhance pipeline transportation services, while safeguarding against the exercise 

of market power. Further, the Commission plans to continue its dialogue with industry members and 

the public about policy issues facing the natural gas industry and the Commission’s regulation of the 

industry for the future.

ACHIEVEMENTS

REGIONAL TRANSMISSION ORGANIZATIONS (RTOS)

Much has been accomplished in establishing RTOs, but much remains to be done; there are still 

vast areas of the country where transmission is controlled by vertically integrated utilities.

The Midwest Independent System Operator, Inc. (Midwest ISO) was approved by the Commission as an RTO in December 2001 and commenced operations in February 2002 in all or parts of 

several Midwestern states and one Canadian province. The Southwest Power Pool (SPP) proposed to 

join the Midwest ISO. The Pennsylvania-New Jersey-Maryland Interconnection (PJM), which received 

conditional RTO status in FY 2002, was working with the Midwest ISO and SPP to create a joint and 

common market.

Likewise, the California Independent System Operator (Cal ISO), New York ISO and ISO-New 

England were each making progress. Progress was also made in the Southeast, Pacific Northwest and 

Desert Southwest.

ENERGY MARKETS
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Standard Market Design (SMD)

On July 31, 2002, the Commission proposed for public comment a new rule which, if implemented in its current form, will require all areas of the country to adopt a standard design for electric 

power markets using the best practices from around the country and the world. SMD is a comprehensive 

proposal for shaping electric markets throughout the country in order to:

•Eliminate undue discrimination by creating uniform rules for transmission service across the 

interstate grid with regional flexibility as appropriate;

•Ensure transmission grid and short-term markets will be operated by a fair, independent 

organization (RTO or ITP);

•Establish procedures to monitor market operations and to mitigate market power and 

manipulation; and

•Preserve and expand the roles of states in regional planning, resource adequacy, and cost 

allocation for new resources and facilities.

The Commission expects the proposal to save customers money by achieving more efficient use 

of the current electric system and providing the platform on which to improve the reliability and security of the nation’s infrastructure.

When SMD is implemented, electric markets will have a strong long-term basis for providing 

customers with the very real and significant benefits that come from competition. For these reasons, 

the Commission is committed to properly formulating the rule in order to support reliable competitive 

markets in all regions across the country. The Commission anticipates adopting a final tariff incorporating the standard market design in 2003, but recognizes that additional time may be necessary to ensure 

that the markets are established in a way that work most effectively in each region of the country. The 

intent of the standard market design proposal is to build on existing RTO formation efforts and to allow 

for regional variation in certain aspects of market design. In the Southeast and the West, for example, 

the Commission reaffirmed the importance of recognizing regional differences.

STANDARDIZATION OF GENERATOR INTERCONNECTION AGREEMENTS AND PROCEDURES

In April 2002, the Commission issued a proposed rule to develop and adopt national standard 

electric interconnection agreements and procedures between transmission providers and generators. 

In August 2002, the Commission established a separate rulemaking proceeding to set up standardized 

interconnection agreements and procedures applicable to small generators. Final rules are anticipated 

to be issued in FY 2003. Good interconnection standards and procedures will ease entry for competitors 

while ensuring efficient siting decisions.

ENERGY MARKETS
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INVESTIGATIONS INTO POTENTIAL PRICE MANIPULATIONS

In February 2002 the Commission initiated a fact-finding investigation into whether any entity, 

including Enron, manipulated short-term prices in electric or natural gas markets in the West or unduly 

influenced wholesale prices since January 1, 2000. In response to an August 2002 interim staff report, 

the Commission initiated three separate investigations into possible violations of FERC regulations 

against Enron and several of its affiliates, El Paso Electric Company, and Avista Corporation and Avista 

Energy.

If companies are found to have violated federal law, the Commission can revoke their marketbased rate authority. If found to have violated a FERC rule, regulation, tariff or order, they may be 

ordered to disgorge any profits obtained while engaging in the prohibited activities.

ORDER NO. 637 IMPLEMENTATION COMPLIANCE PROCESS

During FY 2002 the Commission issued over 80 initial orders on pending Order No. 637 compliance filings that addressed the Commission’s requirements relating to scheduling procedures, capacity segmentation, imbalance services, pipeline penalties and operational flow orders. These orders 

improve the competitiveness and efficiency of the pipeline grid, and benefit customers by enhancing 

pipeline transportation services. The compliance process for initial Order No. 637 filings was substantially complete.

NATURAL GAS WELLHEAD DETERMINATIONS

The Commission has received 2,600 jurisdictional agency determinations under the NGPA since 

the Commission issued Order No. 616, which reinstated the procedures under NGPA section 503 that 

authorize jurisdictional agencies to make such determinations and the Commission to review them. Producers need these determinations to provide required documentary support for their non-conventional 

fuel tax credit claims under Section 29 of the Internal Revenue Code.

ENERGY MARKETS
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Natural gas pipeline welding photo courtesy of 

Enbridge Energy Company, Inc., and Vector Pipeline.
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GOALS

The Commission’s challenge is to promote a secure, high-quality, environmentally-responsible 

energy infrastructure through consistent policies. The objectives for meeting these challenges include:

•Removing roadblocks impeding market investment; and

•Proactively addressing landowner, safety, and environmental concerns.

NATURAL GAS PIPELINE INFRASTRUCTURE

The expeditious processing of certificate applications, while ensuring due process for those affected by natural gas projects, remains an ongoing goal for the Commission. Early stakeholder involvement in project development is important in accomplishing this goal. For that reason, the Commission 

encourages applicants to identify and address stakeholder concerns before the certification process 

formally begins. The Commission fosters early involvement by using such tools as the new pre-filing 

process and its gas outreach program.

In FY2002, Greenbrier Pipeline Company became the first pipeline company to use the Commission’s new formal prefiling process. Staff participated in numerous discussions with landowners, 

state and local government officials and other interested and affected parties to ensure that to the greatest extent practicable, issues would be resolved prior to filing of an application to construct and operate 

the Greenbrier project.

The gas pipeline industry continues to pursue serving new markets aggressively. In this competitive environment, pipelines are proposing to serve markets already served by other pipelines. 

Competing pipelines, and landowners who question the need for the new projects, vigorously contest 

many of these proposals. Others, with environmental concerns, also question the need. Processing these 

contested proposals requires significant resources, and the Commission remains fully committed to 

ensuring that multiple competing interests and timeliness issues are not only addressed, but that any 

decision authorizing the construction and operation of facilities reflects a balancing of these concerns. 

To that end, the Commission ensures that reasonable but effective environmental conditions are placed 

in certificate authorizations.

Increasing availability of Canadian offshore supplies, new deep-water production in the Gulf 

of Mexico, and the growing market for natural gas in the Northeast will continue to result in large construction projects. The Commission also expects that Canadian gas and oil suppliers will seek additional 

markets for their products in the U.S., and that producers will explore options to export gas to Canadian 

and Mexican markets, which may require pipeline construction. Pre-filing conferences and meetings are 

taking place to explore the utilization of Alaskan gas reserves for the lower 48 states. Increased competition in markets and customers and desires for multiple, competing sources of supply will generate 

more filings and related requests for permits for importing and exporting gas and oil. The Commission 

expects to continue to see projects related to the extensive exploration effort on the offshore outer continental shelf and construction of pipelines to reach significant new gas supplies.

The Commission also expects to continue receiving applications for storage development for 

peaking capacity and supply flexibility since customers will continue to be responsible for their own 

gas supply acquisition. Anticipated storage facilities include depleted gas fields, new leached-salt caverns, and liquefied natural gas (LNG) tanks. Commission review and approval of these projects, many 

of which will be located near market areas, is likely to generate significant public interest regarding 

ENERGY PROJECTS
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competition, need, and environmental impact. Additionally, as storage fields age, more applications are 

expected for new wells and additional acreage for buffer zones.

The replacement and upgrading of pipeline facilities remains an area in which the Commission 

expects an increase. 

OPTIMIZING HYDROELECTRIC PROJECTS

Over the next eight years, more than 180 project licenses will expire. Many of these projects 

significantly affect regionally important environmental resources, and as such, have a high potential 

for conflicts. The Commission mitigates this potential by promoting the use of more collaborative 

alternative licensing processes (ALPs). The ALP lays the groundwork for: (1) having every interested 

stakeholder in the licensing/relicensing process (local citizen groups, power users, Native Americans, 

environmental organizations, fish and wildlife agencies, and the hydropower companies) at the table 

early in the process; and (2) promoting better communication among stakeholders. By encouraging participation in early collaborative processes, the Commission’s authorizations more thoroughly address 

the needs of the stakeholders.

ACHIEVEMENTS

NATURAL GAS PIPELINES

CERTIFICATION

The Commission continued to review its pipeline certification program for ways to improve 

on an already expeditious process. New approaches, such as enhanced pre-filing cooperation with applicants, such as with the Greenbrier Pipeline Company, have allowed the Commission to respond to 

urgent energy needs in a timely manner. Adequacy of sufficient pipeline infrastructure remains key 

to ensuring working markets, and the Commission remains committed to making timely decisions on 

certificate applications so that necessary pipeline facilities can be constructed and put into operation 

as expeditiously as possible. One of the major projects certificated involves the significant expansion 

of the Kern River Gas Transmission System, a natural gas pipeline which extends from southwestern 

Wyoming to key markets in Nevada and southern California. The $1.2 billion project, which effectively 

will double the capacity of the system, includes 716 miles of new pipeline, construction of three new 

compressor stations and modifications to six other existing stations and will add 885,600 Mcf per day 

of capacity to Kern River. The expansion will be used to serve growing markets in Nevada and California, particularly new gas fired electric generation plants which will aid in increasing needed supplies 

of electricity in this region. The case was notable since it represented the first major gas project to be 

processed using the Commission’s new NEPA pre-filing process. The Commission’s final order approving the project was issued less than one year from the initial filing date of the application.

In addition to the Kern River project, the Commission certificated a significant amount of 

natural gas infrastructure. Data from FY2002 demonstrates the Commission’s commitment to ensuring 

ENERGY PROJECTS
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infrastructure adequacy; the Commission certificated 28 major pipeline projects, resulting in 7.8 Bcf 

per day of additional capacity and 2,144 miles of new pipeline. With regard to storage facilities, the 

Commission authorized:

•29.5 Bcf of capacity and 300 MMcf per day of deliverability from traditional 

storage fields; and

•2.8 Bcf of storage capacity and 1 Bcf per day of deliverability from LNG storage facilities.

SECURITY AND SAFETY OF NATURAL GAS INFRASTRUCTURE

As a result of the events of September 11, 2001, the Commission has emphasized the importance of the safety and security of the nation’s infrastructure. In response to increased public concern 

over LNG plant security, Commission staff had principle roles in an interagency technical conference 

on the reactivation of the Cove Point LNG import terminal in Maryland; and in providing technical 

support for the resumption of LNG deliveries to an import terminal in Everett, MA. Staff coordinated 

participation by representatives with all agencies having a role in safety/security matters including the 

U.S. Coast Guard, the Department of Transportation (DOT), the Federal Bureau of Investigation (FBI), 

the Nuclear Regulatory Commission (NRC), and state and local law enforcement. In addition, as part of 

its continuing inspection program, Commission staff conducted eleven biennial inspections of jurisdictional LNG peak-shaving and import facilities, placing increased emphasis on plant security measures 

and improvements.

In addition, in FY2002, representatives from the Commission actively participated in, and provided direction for, the following security/safety-related conferences:

•security of river crossing facilities;

•emergency reconstruction of interstate natural gas facilities; and

•emergency reallocation of natural gas.

INFRASTRUCTURE POLICY GROUP

In FY2002, the Commission brought together a cadre of senior technical experts from different 

organizational units to form an infrastructure policy group for the express purpose of identifying present infrastructure conditions, needs, investment and other barriers to expansion, and environmental and 

landowner concerns. Three conferences were held in different parts of the country.

COMMUNICATION AND PARTNERS

One important goal of the Commission’s partnership efforts is ensuring that energy matters 

spanning the North America continent are addressed in concert. In FY2002, the Commission again 

demonstrated its commitment to this effort by:

•championing, organizing and participating in the semi-annual partnering effort with the 

Canadian National Energy Board (NEB) to discuss regulatory issues of mutual concern;

•initiating efforts to implement a partnership with the Mexican Comision Reguladora de 

Energia, using the NEB effort as a model.

The Commission also participated in:

•National Energy Plan (NEP) group for energy projects streamlining;

•NEP taskforce to provide efficient federal response to a pipeline from Alaska;

•Department of Energy (DOE)/Canada Energy Consultative Mechanism to discuss 

ENERGY PROJECTS
22 

cross-border gas and electric issues;

•NEP North American Energy Working Group to foster communication and cooperation 

among the governments and energy sectors of America, Canada and Mexico;

•Connecticut State Task Force reviewing siting and need for natural gas and electric projects; 

and,

•Interstate Oil and Gas Compact Commission.

The Commission and nine other federal agencies have committed to coordinate their efforts to 

bring about a more efficient use of time and resources in an interagency agreement issued by the Council on Environmental Quality. The agreement states that FERC will be the lead agency for NEPA review 

of interstate natural gas pipeline projects and will work closely with the other agencies to identify and 

resolve issues early in the review process and attempt to build consensus among all stakeholders.

In a memorandum of understanding (MOU), the agencies also endorsed FERC’s prefiling procedures established for natural gas pipeline proposals before formal applications are filed. The agreement 

and the prefiling procedures emphasize the importance of early communication with all stakeholders, 

including applicants, landowners, and other state, federal and local agencies.

IMPROVED INFORMATION AVAILABILITY AND OUTREACH

The Commission has hosted a series of public outreach meetings around the country for the 

purpose of exploring and enhancing strategies for constructive public participation in early pre-filing 

stages of natural gas facility planning. One outcome of the first phase of the outreach effort was the report entitled “Ideas for Better Stakeholder Involvement in the Interstate Natural Gas Pipeline Planning 

Pre-filing Process.” The report provides information to the industry, agencies, and citizens on the value 

of public involvement and suggests methods to enhance participation.

The report suggested that by beginning the NEPA review for pipeline projects before the filing 

of the application at the Commission, environmental issues could be identified and resolved efficiently 

as the project develops. This NEPA pre-filing environmental review process offers a number of potentially significant benefits to companies choosing to implement it. Among other things, these activities, 

when started early, enhance the NEPA process by facilitating issue identification, study needs, and issue 

resolution. For companies that provide a detailed route and the related resource reports substantially 

before the filing of the application, a draft environmental impact statement may be released within two 

to three months after a complete application is filed, with a final environmental impact statement issued 

possibly six months earlier than average for a major project. Therefore, a final certificate could be issued seven to nine months earlier than possible for the traditional certificate application process.

The NEPA pre-filing environmental review process has been used for two major cases and has 

shown that there are benefits. 

Another area in which the Commission has actively promoted outreach is industry training. 

Commission staff conducted five sessions of its Environmental Report Preparation (ERP) Seminars and 

Post-Certificate Environmental Compliance Seminars. The training seminars were delivered by FERC 

staff and consultants with significant industry experience.

ENERGY PROJECTS
23

HYDROPOWER LICENSING, ADMINISTRATION, COMPLIANCE AND SAFETY

LICENSING

INCREASED COLLABORATIVE EFFORTS

The Commission continues to promote collaborative efforts by encouraging participation in the 

ALP. The process is fl exible and tailored to the facts and circumstances of the particular project. Other 

efforts to promote collaboration include interagency hydropower workshops, stakeholder consultation 

meetings, and outreach meetings.

One of the main aspects of an ALP is the preparation (by the applicant, its contractor, or consultant) of a preliminary draft environmental assessment (EA). The Commission produced an EA guidance 

document for those preparing to submit an environmental document as part of their application. Use 

of the guidelines, which are available on the Commission’s website, is helping to expedite the post-fi ling environmental review process by minimizing staff revisions to applicant- and contractor-prepared 

environmental assessments.

As an example, the Commission issued a new license for the Rock Creek-Cresta Project No. 

1962. The project is located on the North Fork Feather River in California. Many streamfl ow-related 

relicensing issues were resolved by using a collaborative approach, facilitated by a Commission staff 

member, that resulted in a settlement agreement signed by 12 of the 13 collaborating entities. The new 

ENERGY PROJECTS

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

5500

6000

6500

7000

2002 2003 2004 2005 2006 2007 2008 2009 2010

FISCAL YEAR

MEGAWATTS

TOTAL MEGAWATTS AT HYDRO PROJECTS UP FOR RELICENSING
24 

license approves the settlement agreement, and authorizes increasing the project’s installed capacity 

from 185 MW to 196 MW.

Also, Avista Utilities’ request to use the Commission’s alternative licensing process for its 137-

MW Spokane River Project in Spokane, Washington, was approved.

SETTLEMENTS

The Commission encourages stakeholders, particularly when using the ALP, to resolve issues in 

the form of settlement agreements. The following are examples of licenses issued pursuant to settlement 

agreements in FY 2002.

In November 2001 the Commission issued the final environmental impact statement (FEIS) for 

the 462-megawatt Cowlitz River Hydroelectric Project No. 2016 located in Washington State on the 

Cowlitz River. A comprehensive settlement agreement was developed by the applicant, Tacoma Power, 

through the use of the Commission’s alternative licensing process. The license was issued less than 2.5 

years from the filing date of the application. 

The Commission issued an order approving a settlement offer and issued new licenses to Erie 

Boulevard Hydropower, L.P. for the 161.46-megawatt Lower, Middle, and Upper Raquette Projects 

Nos. 2330, 2320, and 2084, respectively, and the Carry Falls Project No. 2060 located on the Raquette 

River in New York. Erie reached a settlement with seventeen participants in a collaborative proceeding. The settlement agreement includes conditions for various interests and river uses, including power 

production and natural resources.

The Commission issued a subsequent license to Duke Power, a division of Duke Energy Corporation, Nantahala Area, for the 1,440-kilowatt Queens Creek Project, No. 2694. The license incorporates the terms of a settlement between Duke Power, North Carolina Department of Environment and 

Natural Resources, and North Carolina Wildlife Resources Commission. The settlement agreement 

includes conditions for limits on reservoir levels, minimum flows in the bypassed reach, a low inflow 

operating protocol, and public recreational facility improvements.

The Commission issued a new license to Pacific Gas & Electric Company for the 206-megawatt Mokelumne Project located in California. The license order also approved a settlement agreement 

among most of the parties to the proceeding resolving numerous issues pertaining to minimum flow 

releases and project operations. Included in the settlement conditions are provisions to establish an 

adaptive management program to monitor and, if needed, modify, within a specified range, certain protection, mitigation and enhancement measures.

The Commission issued a new license for the Rock Creek-Cresta Project No. 1962. The project 

is located on the North Fork Feather River in California. Many streamflow-related relicensing issues 

were resolved by using a collaborative approach, facilitated by a Commission staff member, that resulted in a settlement agreement signed by 12 of the 13 collaborating entities. The new license approves 

the settlement agreement, and authorizes increasing the project’s installed capacity from 185 MW to 

196 MW.

The Commission issued an original license to Erie Boulevard, L.P., for the 6.8-MW West Branch 

St. Regis River Project No. 10461. The license combines the existing unlicensed 2.4-MW Parishville 

Hydroelectric Project and the 4.4 MW Allens Falls Project, located on the West Branch St. Regis River 

in St. Lawrence County in northern New York. Issuance of the license resulted from the filing of a 

settlement among the applicant and various federal and state agencies and non-governmental organizaENERGY PROJECTS
25

tions. The significant issues included minimum flows, limits on reservoir fluctuations, and recreational 

and fishery enhancements.

PacifiCorp has reached a settlement agreement with stakeholders for the relicensing of the Bear 

River Projects (Soda P-20, Grace-Cove P-2401, and Oneida P-472). The three projects are located on 

the Bear River in Caribou and Franklin counties, Idaho, and have a combined installed capacity of 84.5 

MW. The settlement agreement provides for various interests and river uses, including power production, irrigation, and natural resources. Measures benefitting natural resources include improvements 

to aquatic and riparian habitats, increased minimum flows, whitewater boating flows, improved recreational fishing, and other recreation improvements.

Madison Paper Industries, Inc., filed a settlement agreement reached with 16 other entities, 

including federal and state agencies, local governments and non-governmental organizations (NGOs). 

This filing marked the successful completion of a three-year collaborative effort for the relicensing of 

the Anson and Abenaki Hydroelectric Projects (Nos. 2365 and 2364, respectively) located on the Kennebec River in Maine. Signatories included the Maine Department of Environmental Protection and 

U.S. Fish and Wildlife Service, agencies with mandatory conditioning or prescription authority. Commission staff participated in the collaborative discussions. Together, the projects generate 25 MW.

Erie Boulevard Hydro, L.L.P., reached a settlement agreement with stakeholders for the relicensing of the Hoosic River Project No. 2616. The project is located on the Hoosic River in Rensselaer 

and Washington Counties, New York, and has an installed capacity of 18.5 MW. The settlement agreement signed by 12 federal, state, and non-governmental organizations includes conditions for various 

interests and river uses, including power production and natural resources. These conditions, when 

implemented, will enhance fish and wildlife resources by providing minimum flows and fish protection 

measures, improving recreational fishing, and increasing whitewater boating opportunities.

The City of Sturgis, Michigan, reached a settlement for the Sturgis Hydroelectric Project (P2964). The 2.6-megawatt project is located on the St. Joseph River in St. Joseph County, Michigan. 

The settling parties agreed on previously contested measures including impoundment water levels, 

compliance monitoring, downstream fish protection and passage, and fish entrainment. The stakeholders agreed to set up an escrow account that would provide funds to be used for the installation of fish 

protection devices at such time that an effective device is available, or, at the discretion of the Michigan 

Department of Natural Resources and the U.S. Fish and Wildlife Service, the funds may be used for 

fishery enhancement projects within the watershed. 

CAPACITY DEVELOPMENT AT RELICENSING

When applicants apply for a new or subsequent license, the Commission staff examines the 

viability of installing additional capacity at the project site. The examinations include such factors as 

streamflow records, turbine hydraulic capacity, potential to improve generating efficiency, regional 

need for power, and ways to avoid adverse impacts on environmental resources and economics.

For example, the Commission issued a new license to Finch, Pruyn and Company, Inc. (FPC) for 

the 12.1- megawatt Glen Falls Project No. 2385 located on the Hudson River in New York. The license 

authorizes FPC to increase project capacity an additional 600 kilowatts. The license includes conditions 

for various river uses, including enhancements to fisheries, cultural, and recreational resources in the 

project area.

ENERGY PROJECTS
26 

Also, the Commission issued five licenses for the E.J. West Project No. 2318, Great Sacandaga 

Lake Project No. 12252, Hudson River Project No. 2482, Stewarts Bridge Project No. 2047, and Feeder 

Dam Project No. 2554 located on the Sacandaga and Hudson Rivers, New York. The licenses represented a culmination of many years of work involving a comprehensive settlement agreement between 

the two licensees (Erie Boulevard Hydropower, L.P. and the Hudson River-Black River Regulating District) and 27 other parties. The projects will provide 135.6 megawatts (MW) of power which includes 

an additional 6.42 MW gained as a result of modifications made during relicensing.

INTERAGENCY COOPERATION

The Commission continues to participate in the Interagency Hydropower Committee (IHC). In 

addition to Commission representatives, the IHC is made up of representatives of the Department of 

the Interior, the Department of Commerce, and the Forest Service. Most notably, the IHC completed a 

proposal for a new licensing process that coordinates NEPA scoping, study development and execution, 

and agency comment and recommendations, so multiple agency steps in the hydro licensing process 

occur simultaneously rather than sequentially.

ADVISORY INTERACTION WITH NON-AGENCY HYDROPOWER PARTICIPANTS

NATIONAL REVIEW GROUP

Commission staff continued its advisory role in the National Review Group (NRG), which is 

made up of representatives from the hydropower industry, NGOs and Native Americans. The purpose 

of the group is to share experiences in the hydropower licensing process in order to recommend improvements to the existing licensing process. The NRG decided to develop and recommend regulatory 

changes for a coordinated application and environmental review process. This dynamic process, which 

promoted the sharing of ideas, information and constituency perspectives, resulted in NRG filing its 

coordinated environmental review and application development process. The work of the NRG will 

now be carried out by industry and NGO participants, but not within the context of the formal NRG 

organization.

NEW LICENSING PROCESS

The Commission issued a public notice to provide interested entities an opportunity to enter 

into discussions and make comments concerning adoption of a new licensing process to cut the time 

and cost without jeopardizing the environment. Attached to the notice for public comment were two 

proposals for a new licensing process; one by the IHC, and one by the NRG. The notice also included 

a schedule for a series of six public forums throughout the country, co-sponsored with the Departments 

of Commerce and the Interior and the Forest Service to discuss issues and proposals for a new licensing 

process. A draft notice of proposed rulemaking will be prepared for consideration by the Commission.

OUTREACH

The Commission staff conducted six regional hydroelectric workshops on integrating states processes. The purposes of the workshops were to: (1) familiarize Commission staff with the participating 

states’ Water Quality Certification (WQC) and Coastal Zone Management Act (CZMA) processes and 

programs; (2) familiarize states with the Commission’s hydroelectric licensing process; and (3) increase 

ENERGY PROJECTS
27

efficiency of the processes by (a) identifying common attributes and (b) developing potential ways to 

integrate the processes. State officials representing the bulk of hydropower licensing activity attended 

the workshops in their region. Based on these meetings staff developed several recommendations for 

improving the hydroelectric licensing process through better integration of state WQC processes and 

CZM consistency determinations. These recommendations will be taken into account in the development of any new hydroelectric process or regulations that the Commission may promulgate.

HYDRO LICENSING STATUS WORKSHOP

The Commission held a two-day, public workshop at the Commission’s offices in Washington, 

D.C to discuss 51 pending hydropower license applications that had been on file with the Commission 

longer than five years. Representatives from state and federal agencies as well as licensees and NGOs 

attended. The workshop concentrated on identifying the unresolved issues associated with each project 

and determining the best course of action to resolve or remove obstacles to final action on each pending 

license application. 

ADMINISTRATION AND COMPLIANCE

AUTHORIZING FEASIBILITY STUDIES FOR NEW HYDROPOWER PROJECTS

For FY 2002, approximately 230 preliminary permit applications were filed. The purpose of 

a preliminary permit is to maintain priority of application for a license during the three-year term of 

the permit, while the permittee conducts investigations and secures data necessary to determine the 

feasibility of the proposed project and prepares a developmental application. During FY2002, the Commission authorized the feasibility studies of 52 hydropower projects, with a combined capacity of over 

three GW.

LICENSEE ASSISTANCE PROGRAM

The Commission visited several projects in Vermont to address erosion and pollution issues. 

Staff also traveled to New Hampshire to meet with the licensee of the Lower Great Falls Project, the 

adjacent land owner and other parties to successfully fashion an agreement to allow the repair of the 

project penstock while at the same time providing for safe tenant access to apartments, and improving 

landowner/licensee communication. Also, staff traveled to New Jersey to meet with the exemptee of the 

Dundee Project to outline the steps needed to prepare a surrender application while ensuring the safety 

of the project dam.

The Commission held shoreline management workshops in South Carolina and Georgia, each 

attended by over 50 licensee representatives, to allow staff and licensees to meet face to face and discuss shoreline management issues. As a result of the success of these workshops, shoreline managers 

have asked that the Commission hold a similar workshop in the Northwest during FY 2003.

Drought conditions were experienced in several areas of the country. The Commission collaborated with licensees and state and federal agencies concerning the effect of projects’ operations on 

reservoir and river conditions. As a result, staff participated in technical meetings in North Carolina and 

Montana to discuss ways in which hydropower projects could be best operated during these prolonged 

drought periods.

ENERGY PROJECTS
28 

Staff traveled several times to West Virginia to meet with the licensee of Dam No. 4 Project 

regarding the surrounding neighbors’ concerns about unauthorized activities in the project’s recreation 

area. The Commission was able to bring the concerned parties together and negotiate an agreement that 

includes cooperation of not only the licensee, but that of the neighbors, the local police, the resource 

agencies, and the public.

COMPLIANCE WORKLOAD PROJECTION

The Commission is in the third year of an 11-year cycle during which 218 applications for hydropower relicenses are due to be fi led. The issuance of 218 new licenses will add about 2,200 more 

license articles, requiring numerous compliance fi lings and amendment applications. The annual workload receipts in this area have become increasing complex as agencies and the public participate more 

fully in setting license requirements. As a result, average annual workload receipts are expected to 

increase by about 15 percent.

COMPLIANCE PLANS AND REPORTS

Licenses include conditions that will protect and enhance environmental resources. These conditions require licensees to prepare and fi le plans or reports with the Commission. These plans and reports may deal with project operation, development of recreational resources, improvements to fi shery 

habitat, water quality protection, wildlife benefi ts, wetlands and vegetation improvements, and cultural 

resources protection. Prepared after the license is issued, the licensees typically develop the plans and 

reports in consultation with identifi ed agencies and groups, and fi le them as post-license compliance 

applications with the Commission. In FY 2002, the Commission reviewed and approved over 850 of 

these applications.

ENERGY PROJECTS

WATER QUALITY 

MITIGATION 6% – Monitoring 

completed; Mitigation 

in progress

9% – Monitoring in 

progress; Mitigation 

requirements pending 85% – Monitoring 

complete; Mitigation 

successful and/or no 

additional monitoring 

needed
29

ENVIRONMENTAL COMPLIANCE REVIEWS

To ensure that licensees comply with the terms and conditions of their licenses, the Commission will continue to aggressively pursue reported incidences of environmental non-compliance. If an 

incident is reported, the Commission directs the licensee to explain the circumstances surrounding the 

incident and, if necessary, provide additional explanatory information. In FY 2002, the Commission 

completed over 225 reviews of reports of non-compliance incidents related to environmental requirements and conducted over 200 environmental inspections.

EFFECTIVENESS OF ENVIRONMENTAL MEASURES

In FY 2002 the Commission continued to review the results of monitoring efforts to evaluate whether the environmental measures were providing appropriate levels of protection, mitigation, 

and enhancement for environmental resources. The Commission conducted a workshop to discuss the 

results of a draft report entitled “Mitigation Effectiveness Studies at the Federal Energy Regulatory 

Commission: Water Quality.” The report analyzed 81 hydropower projects and found that the water 

quality monitoring and mitigation plans of the projects reviewed were well designed for their intended 

purpose to assess compliance with state standards and to identify water quality problems. The evaluations resulting from the review and analysis of these monitoring results will allow for improvements to 

the environmental measures included in future licenses and, consequently, to the hydropower program 

objective of improving the environmental performance of hydropower projects.

FEDERAL LANDS

When federal lands are reserved for waterpower purposes, the Commission must review any 

applications for other uses of those lands. Other uses may include mining claims, oil and gas leases, 

mineral leases, rights-of-way, and revocations under the FPA. The review allows the Commission and 

the Bureau of Land Management (BLM) to protect existing licensed projects from adverse impacts by 

outside parties. It also allows for federal lands not affected by a project to be opened for other beneficial 

public uses. The Commission completed 46 reviews for federal lands applications from BLM. It also 

met with BLM to discuss improvements to the quality of exhibit drawings filed for proposed hydropower projects to provide clear directions to preliminary permit applicants to improve and expedite 

application reviews.

JURISDICTIONAL REVIEW

The Commission’s jurisdictional review program entails evaluating the jurisdictional status of 

all licensed projects with license expiration dates within five years. This review is conducted to determine if the project continues to meet the jurisdictional criteria defined in the FPA. The Commission’s 

review consists of historical research of a river system to determine if interstate commerce took place. 

To determine jurisdiction, staff conducts a detailed navigation study of the river. The Commission completed nine historical reviews and three detailed navigation studies. In addition, it evaluates the jurisdictional status of proposed projects, as well as licensed and unlicensed operating hydropower projects. It 

completed declarations of intention reviews for four proposed projects, and one licensed project.

ENERGY PROJECTS
30 

SAFETY

The Commission’s dam safety program, through its many components, helps ensure dam safety, 

public safety, environmental resource protection, and reliability in the electric industry.

PROJECT INSPECTIONS

 Inspections verify the structural integrity of dams and compliance with engineering, environmental, and public safety conditions and regulations. They also identify necessary maintenance and 

remedial modifications. The Commission is responsible for inspecting about 2,600 dams and related 

water retention structures. It conducts periodic inspections starting from the receipt of an application for 

a proposed jurisdictional project, throughout the term of a license. Types of inspections are prelicense, 

construction, operation, instrumentation, exemption, safety, and special. The Commission’s Division of 

Dam Safety and Inspections with its five regional offices conducts the inspections.

PERFORMANCE MONITORING

Applying instrumentation to dams and related water-retaining structures, to monitor otherwise-undetectable changes in these structures, is a critical component of the Commission’s dam safety 

program. By applying the correct technology and instrumentation to each unique situation for early detection and evaluation of deficiencies, serious problems are identified, evaluated, and corrected before 

they fully develop. In FY 2002, the Commission completed the development of an important aspect 

of its performance monitoring program–potential failure modes analysis. A team of Commission staff, 

licensees, and consultants worked together through the year to develop the program. A pilot program 

tested the new procedures on actual projects. Using information from the pilot, the program is being 

further refined.

ACTIONS TAKEN TO IMPROVE STATES’ DAM SAFETY PROGRAMS

Congress established the National Dam Safety Program Review Board (NDSPRB) to advise the 

Director of the Federal Emergency Management Agency (FEMA) on implementation of the National 

Dam Safety Program. The Commission’s dam safety expertise was influential in the board’s accomplishments in FY 2002. Accomplishments included grant distribution to all 50 states, and dam safety 

program improvements being made in every state. Also during FY 2002, the National Dam Safety 

Program Training Subcommittee, which includes a Commission staff member, facilitated several training opportunities for state programs. Commission staff held a training course in New York State on the 

testing of emergency action plans for state-regulated dam owners and Commission-regulated licensees. 

Commission staff also provided assistance in security issues at dams.

EMERGENCY ACTION PLANNING

During FY 2002, the “International Workshop for Emergency Preparedness at Dams” was held 

in Niagara Falls, New York. The workshop provided detailed emergency action planning information, including dam security issues, for the international audience. Commission staff emphasizes the 

importance of emergency management personnel working closely with the dam owner to complete 

the emergency action plan test. The presence of emergency management personnel provides valuable 

information and insight to dam owners on how the emergency response and recovery system operates. 

Commission staff continues to hold training courses and informational meetings with state emergency 

ENERGY PROJECTS
31

managers to search for ways to further: (1) improve the relationship between dam owners and emergency management personnel to improve any potential response to an emergency; and (2) encourage an 

exchange of emergency action plan information among dam owners for the benefit of all.

SECURITY AT DAMS

The Commission developed and implemented the FERC Hydropower Security Program, including coordination with the FBI and the Office of Homeland Security, participation in interagency 

security workgroups, categorization of FERC dams by risk, establishment of a rapid communication 

method, and implementation of additional security measures at projects to protect water retaining structures from sabotage. Staff worked closely with dam owners to develop the security program requirements, including vulnerability and security assessments of dams.

ENERGY PROJECTS
32 
33

(PROJECTS FOR WHICH LICENSES WILL EXPIRE BETWEEN JANUARY 1, 2002 AND DECEMBER 31, 2008)

LICENSE FERC PERIOD FACILITIES 

EXPIRATION PROJECT INSTALLATION OF UNDER SUBJ.

DATE LICENSEE NO. STATE COUNTY RIVER {KW} YEARS LICENSE FED.

20020131 PEND OREILLE COUNTY PUBLIC UTILITY 2042 ID PEND OREILLE PEND OREILLE R 60000 50 DM PH N

20020223 EL DORADO IRRIGATION DISTRICT 184 CA EL DORADO S FK AMERICAN R 20000 22 DM PH Y

20020331 FORT JAMES OPERATING COMPANY 2312 ME PENOBSCOT PENOBSCOT R 7655 39 DM PH N

20020831 PACIFICORP 2652 MT FLATHEAD SWAN R 4150 26 DM PH N

20020903 CITY OF SPRINGVILLE UTAH 2031 UT UTAH BARTHOLOMEW CR 2000 50 DM PH N

20020930 CITY OF HART MICHIGAN 3516 MI OCEANA S BR PENTWATER R 352 20 DM PH N

20021012 RELIANT ENERGY MID-ATLANTIC POWER 309 PA CLARION CLARION R 28800 23 DM PH Y

20021031 HYDRO DEVELOPMENT GROUP INC. 6059 NY ST LAWRENCE OSWEGATCHIE R 900 20 DM PH N

20021101 NEW YORK STATE ELECTRIC & GAS 2835 NY ESSEX BLACK BR 2640 20 DM PH N

20021101 TRINITY CONSERVANCY INC. 719 WA CHELAN PHELPS CR 240 23 DM PH Y

20021231 HYDRO DEVELOPMENT GROUP INC. 6058 NY ST LAWRENCE OSWEGATCHIE R 1490 19 DM PH N

20030131 WOODS LAKE ASSOCIATION 3410 CO EAGLE LIME CR 45 20 DM PH N

20030228 NEW YORK STATE ELECTRIC & GAS 2852 NY STEUBEN KEUKA LK 2000 20 DM PH N

20030228 ENTERGY SERVICES INC. 271 AR HOT SPRING OUACHITA R 65300 23 DM PH Y

20030331 AVONDALE MILLS INC. 5044 GA RICHMOND AUGUSTA 2475 20 DM PH N

20030426 SOUTHERN CALIF EDISON CO 344 CA RIVERSIDE SAN GORGONIO CR 2626 20 DM PH Y

20030430 PAROWAN CITY CORPORATION 2782 UT IRON RED CR 500 25 DM PH Y

20030606 FORD MOTOR COMPANY 362 MN HENNEPIN MISSISSIPPI R 17920 23 DM PH Y

20030630 TENNECO PACKAGING INC. 2180 WI LINCOLN WISCONSIN R 3000 26 DM PH Y

20030731 JUDITH A. BURFORD 6418 CO EAGLE E BRUSH CR 11 20 PH N

20030824 MINNESOTA POWER INC. 346 MN MORRISON MISSISSIPPI R 18000 23 DM PH Y

20030831 SOUTHERN CALIFORNIA EDISON COMPANY 2086 CA FRESNO MONO CR 0 50 DM PH N

20030918 INDIANA MICHIGAN POWER COMPANY 401 MI ST JOSEPH ST JOSEPH R 1750 25 DM PH Y

20030930 CHARTER TOWNSHIP OF YPSILANTI 5334 MI WASHTENAW HURON R 3413 20 DM PH N

20030930 PACIFIC GAS AND ELECTRIC COMPANY 2107 CA PLUMAS N FK FEATHER R 142830 50 DM PH Y

20031031 NEW YORK POWER AUTHORITY 2000 NY ST LAWRENCE ST LAWRENCE R 912000 50 DM PH N

20031031 PACIFIC GAS AND ELECTRIC COMPANY 233 CA SHASTA PIT R 317000 22 DM PH Y

20031031 MINNESOTA POWER 469 MN LAKE KAWISHIWI R 4000 22 DM PH Y

20031231 POTOMAC EDISON COMPANY 2516 WV BERKELEY POTOMAC R 1900 27 PH Y

20031231 POTOMAC EDISON COMPANY 2517 WV BERKELEY POTOMAC R 1200 27 PH Y

20040131 ORION POWER NEW YORK GP INC. 7000 NY ST LAWRENCE E BR OSWEGATCHIE R 2220 20 DM PH N

20040331 S. D. WARREN COMPANY 2984 ME CUMBERLAND PRESUMPSCOT R 1800 20 DM PH N

20040331 PUBLIC UTILITY DISTRICT NO. 1 OF CHELAN 637 WA CHELAN CHELAN R 48000 23 DM PH N

20040410 HYDRO-OP ONE ASSOC. 287 IL LA SALLE FOX R 3680 25 DM PH Y

20040430 UNITED WTR CONS DIST 2153 CA VENTURA PIRU CR 1420 50 DM PH N

20040430 MADISON PAPER INDUSTRIES 2364 ME SOMERSET KENNEBEC R 16977 40 DM PH N

20040430 MERIMIL LIMITED PARTNERSHIP 2574 ME KENNEBEC KENNEBEC R 6915 35 DM PH N

20040430 MADISON PAPER INDUSTRIES 2365 ME SOMERSET KENNEBEC R 9000 40 DM PH N

20040630 WISCONSIN PUBLIC SERVICE CORP 1979 WI LINCOLN WISCONSIN R 4200 19 DM PH Y

20040731 IDAHO POWER CO 2726 ID GOODING MALAD R 21770 25 DM PH N

20040731 NORWAY CITY OF 2720 MI MARINETTE MENOMINEE R 5636 20 DM PH N

20040930 PPL HOLTWOOD LLC 487 PA PIKE WALLENPAUPACK CR 40000 24 DM PH Y

20040930 BARTON VILLAGE INC 7725 VT ORLEANS CLYDE R 1300 20 DM PH N

20041031 FALL RIVER RURAL ELECTRIC COOP INC. 1413 ID FREMONT BUFFALO R 250 24 DM PH N

20041031 PACIFIC GAS & ELECTRIC CO 2105 CA PLUMAS N FK FEATHER R 342628 49 DM PH N

20041112 PETERSBURG CITY OF 201 AK WRANGELL CRYSTAL CR 2000 24 DM PH N

20041116 PORTLAND GENERAL ELEC CO 477 OR CLACKAMAS BULL RUN R 21000 24 DM PH Y

20041130 INTERNATIONAL PAPER CO 4914 WI BROWN FOX R 1078 20 DM PH N

20041230 CITY OF PAROWAN 1273 UT IRON PAROWAN CR 600 27 DM PH Y

20041231 OAKDALE & S SAN JOAQUIN I D 2067 CA CALAVERAS STANISLAUS R 17100 53 DM PH N

20041231 MOSINEE PAPER MILLS CO 2207 WI MARATHON WISCONSIN R 3050 22 DM PH Y

20041231 PACIFIC GAS & ELECTRIC CO 2130 CA TUOLUMNE M FK STANISLAUS R 87900 49 DM PH N

20041231 GEORGIA POWER CO 2177 GA HARRIS CHATTAHOOCHEE R 115600 45 DM PH N

20041231 OAKDALE & S SAN JOAQUIN I D 2005 CA TUOLUMNE M FK STANISLAUS R 63990 49 DM PH N

20041231 PORTLAND GENERAL ELECTRIC BLUE HERON 2233 OR CLACKAMAS WILLAMETTE R 16800 44 DM PH N

20050228 SOUTHERN CALIF EDISON CO 382 CA KERN KERN R 12000 26 DM PH Y

20050228 TAPOCO INC 2169 NC BLOUNT LITTLE TENNESSEE 326500 50 DM PH Y

HYDROELECTRIC POWER TABLE
34 

HYDROELECTRIC POWER TABLE

20050331 WISCONSIN ELECTRIC POWER COMPANY 2697 WI DUNN RED CEDAR R 6000 24 DM PH N

20050331 WISCONSIN ELECTRIC POWER COMPANY 2181 WI DUNN RED CEDAR R 5400 49 DM PH N

20050331 SOUTHERN CALIF EDISON CO 2174 CA FRESNO RANCHERIA CR 10800 50 DM PH Y

20050430 PACIFIC GAS & ELECTRIC CO 178 CA KERN KERN R 11500 26 DM PH Y

20050430 ALABAMA ELECTRIC COOP INC 2586 AL COVINGTON CONECUH R 8250 25 DM PH N

20050531 GRAND RIVER DAM AUTH 2183 OK MAYES NEOSHO R 100000 50 DM PH N

20050531 CITY OF MARSHALL MICHIGAN 6514 MI CALHOUN KALAMAZOO R 319 20 DM PH N

20050630 N. E. W. HYDRO INC ET AL 7264 WI OUTAGAMIE FOX R 1390 20 DM PH N

20050630 FPL ENERGY MAINE HYDRO LLC 2194 ME YORK SACO R 4000 49 DM PH N

20050701 PACIFICORP 2630 OR JACKSON N FK ROGUE R 36760 25 DM PH N

20050731 DUKE ENERGY CORPORATION 2603 NC MACON LITTLE TENNESSEE 1040 25 DM PH N

20050731 IDAHO POWER CO 1971 ID ADAMS SNAKE R 1166900 50 DM PH Y

20050731 DUKE ENERGY CORPORATION 2601 NC SWAIN OCONALUFTEE R 980 25 DM PH N

20050731 DUKE ENERGY CORPORATION 2602 NC JACKSON TUCKASEGEE R 225 25 DM PH N

20050801 DUKE ENERGY CORPORATION 2619 NC CHEROKEE HIWASSEE R 1800 25 DM PH N

20051004 NORQUEST SEAFOODS INC. 620 AK ALEUTIAN ISLANDS INDIAN CR 60 26 DM PH N

20051031 ERIE BOULEVARD HYDROPOWER LP 7387 NY ST LAWRENCE RAQUETTE R 2700 20 DM PH N

20051031 GRANT CO PUD 2 2114 WA GRANT COLUMBIA R 1755000 50 DM PH N

20051110 LOUISVILLE GAS AND EL CO 289 KY JEFFERSON OHIO R 80320 24 DM PH Y

20051231 PUBLIC SERVICE CO OF NH 1893 NH MERRIMACK MERRIMACK R 29700 25 DM PH Y

20060131 DUKE ENERGY CORPORATION 2686 NC JACKSON W FK TUCKASEGEE R 24600 25 DM PH N

20060131 DUKE POWER 2698 NC JACKSON E FK TUCKASEGEE 26175 25 DM PH N

20060214 MONROE CITY CORPORATION 632 UT SEVIER MONROE CR 250 28 DM PH Y

20060228 PACIFICORP 2082 OR KLAMATH KLAMATH R 151000 52 DM PH N

20060228 DUKE ENERGY CORPORATION 2692 NC MACON NANTAHALA R 43200 25 DM PH N

20060228 UNION ELECTRIC CO 459 MO MILLER OSAGE R 176200 25 DM PH Y

20060331 SOUTH CAROLINA PUBLIC SERVICE AUTH 199 SC BERKELEY SANTEE R 134520 27 DM PH N

20060412 N Y ST ELEC & GAS CORP 2738 NY CLINTON SARANAC R 38950 26 DM PH N

20060430 PACIFICORP 935 WA CLARK LEWIS R 136000 23 DM PH N

20060430 COWLITZ CO PUD NO 1 2213 WA SKAMANIA LEWIS R 70000 50 DM PH N

20060430 PUGET SOUND PWR AND LT CO 2150 WA WHATCOM BAKER R 162400 50 DM PH Y

20060430 PACIFICORP 2111 WA SKAMANIA LEWIS R 240000 50 DM PH N

20060630 CHELAN CO PUD 1 2145 WA DOUGLAS COLUMBIA R 1237400 49 DM PH N

20060831 PORTLAND GENERAL ELEC CO 135 OR CLACKAMAS CLACKAMAS R 40825 26 DM PH Y

20060831 PORTLAND GENERAL ELEC CO 2195 OR CLACKAMAS CLACKAMAS R 91900 49 DM PH N

20061130 ERIE BOULEVARD HYDROPOWER LP 7321 NY FRANKLIN SALMON R 1000 20 DM PH N

20061231 CITY & COUNTY OF DENVER 2204 CO GRAND WILLIAMS FK R 3000 43 DM PH N

20070131 CA DEPT OF WATER RESOURCES 2100 CA BUTTE FEATHER R 762850 50 DM PH N

20070228 HOLYOKE CITY OF 7758 MA HAMPDEN HOLYOKE CNL(CONN 760 20 PH N

20070327 PACIFIC GAS & ELECTRIC CO 606 CA SHASTA S COW CR 4440 27 DM PH N

20070331 FLAMBEAU HYDRO LLC 9185 WI BURNETT CLAM R 1200 20 DM PH N

20070430 GARKANE POWER ASSOCIATION INC. 2219 UT GARFIELD W FK BOULDER CR 4300 50 DM PH N

20070430 CHUGACH ELEC ASSN INC 2170 AK SEWARD DIVISION COOPER CR 15000 50 DM PH N

20070609 FLAMBEAU HYDRO LLC 9184 WI BURNETT YELLOW R 1076 20 DM PH N

20070731 ALABAMA POWER CO 2146 AL ELMORE COOSA R 690900 50 DM PH N

20070731 PACIFIC GAS & ELECTRIC CO 2155 CA EL DORADO S FK AMERICAN R 7000 45 DM PH N

20070731 ALABAMA POWER CO 82 AL CHILTON COOSA R 170000 32 DM PH Y

20070731 ALABAMA POWER CO 618 AL ELMORE COOSA R 100000 27 DM PH Y

20070731 SACRAMENTO M U D 2101 CA PLACER GERLE CR 640950 50 DM PH N

20070801 RESOURCES WEST ENERGY CORP. 2545 ID SPOKAN SPOKANE R 1366000 35 DM PH N

20070829 ALASKA POWER & TEL CO 1051 AK SKAGWAY-YAKUTAT DEWEY CR 943 27 DM PH N

20070831 SOUTH CAROLINA ELEC & GAS CO 516 SC NEWBERRY SALUDA R 207300 23 DM PH Y

20070831 ALABAMA POWER CO 2165 AL TUSCALOOSA BLACK WARRIOR R 203250 50 DM PH N

20070831 NEW YORK POWER AUTHORITY 2216 NY NIAGARA NIAGARA R 2755500 49 DM PH N

20071130 SOUTHERN CALIF EDISON CO 2085 CA FRESNO SAN JOAQUIN R 180937 50 DM PH N

20071130 WOLVERINE HYDROELECTRIC CORP 2785 MI MIDLAND TITTABAWASSEE R 3300 20 DM PH N

20071231 MONTANA POWER LLC 2543 MT MISSOULA CLARK FK R 3200 39 DM PH N

LICENSE FERC PERIOD FACILITIES 

EXPIRATION PROJECT INSTALLATION OF UNDER SUBJ.

DATE LICENSEE NO. STATE COUNTY RIVER {KW} YEARS LICENSE FED.
35

20080331 SITKA CITY OF & BOROUGH OF 2230 AK SITKA DIVISION MEDVETCHA R 7540 50 DM PH N

20080430 OTTUMWA CITY OF 925 IA WAPELLO DES MOINES R 3250 26 DM PH N

20080430 HYRUM CITY CORP 946 UT CACHE BLACKSMITH FK 400 27 DM PH N

20080430 CAROLINA POWER AND LT CO 2206 NC STANLY PEE DEE R 108600 50 DM PH N

20080430 YADKIN INC 2197 NC DAVIDSON YADKIN R 209520 50 DM PH N

20080615 VIRGINIA ELEC & PWR CO 906 VA AMHERST JAMES R 7500 28 DM PH N

20080809 CRISP COUNTY POWER COMM 659 GA WORTH FLINT R 15200 28 DM PH N

20080831 DUKE POWER CO 2232 NC ALEXANDER CATAWBA R 804940 50 DM PH Y

20080930 PEND OREILLE CO PUD 1 2225 WA PEND OREILLE SULLIVAN CR 0 50 DM PH N

20081130 EUGENE CITY OF OR 2242 OR LINN MCKENZIE R 124500 49 DM PH N

*INCLUDES TYPES OF FACILITIES AT EACH PROJECT, BUT NOT TOTAL NUMBER OF EACH TYPE (E.G. A PROJECT MAY CONSIST OF MULTIPLE 

POWERHOUSES OF DAMS). DM DAM, RS RESERVOIR, CL CANAL, TU TUNNEL, FM FLUME, PL PIPELINE, PK PENSTOCK, PH POWERHOUSE, TR 

TURBINE, GN GENERATOR(S), TC TAILRACE, TL TRANSMISSION LINE OR CONNECTION THERETO.

LICENSE FERC PERIOD FACILITIES 

EXPIRATION PROJECT INSTALLATION OF UNDER SUBJ.

DATE LICENSEE NO. STATE COUNTY RIVER {KW} YEARS LICENSE FED.

HYDROELECTRIC POWER TABLE
36

For Additional Information, Contact:

Federal Energy Regulatory Commission

Office of External Affairs

888 First Street, NE

Washington, DC 20426

202/502-8004