Federal Energy 

Regulatory Commission

2003 Annual Report
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FEDERAL ENERGY

REGULATORY COMMISSION

2003 Annual Report
2 

MEMBERS OF THE

FEDERAL ENERGY REGULATORY COMMISSION

William L. Massey

Commissioner

Pat Wood, III

Chairman

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 fiscal year from October 1, 

2002, through September 30, 2003.

This is the 83rd 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 fiscal year 2003, Congress appropriated $192,000,000 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 beneficiaries 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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Cheoah Dam and powerhouse on the Little Tennessee River in North 

Carolina. Tapoco Division of Alcoa Power Generating, Inc. holds the 

license for the project. Photo by Lee Emery.
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REGULATORY RESPONSIBILITIES

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 over 1,600 hydropower projects that utilize approximately 2,600 dams. These projects 

generate in excess of 22 gigawatts (GW) of electricity that represents more than 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.
6 

Transmission lines. Photo courtesy 

of Department of Energy.
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STRATEGIC PLAN

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, consistent with the Commission’s statutory mandates and due 

process. 

•Implement power plant interconnection rules; complete small plant interconnection rules. 

•Firmly establish regional electric system expansion planning, with a variety of technology 

solutions to meet reliability, security and market needs. 

•Implement hydroelectric rule and gas pipeline interagency agreement facilitating hydropower 

licensing, pipeline certification and liquefied natural gas (LNG) plant authorization. 

Objective 1.2: Provide for Timely Cost Recovery to Infrastructure Investors. 

•Establish clear cost recovery process for transmission investment in each region, consistent 

with regional transmission plan. 

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

competitive markets. 

•Encourage balanced innovative rate of return proposals that provide incentives for procompetitive behavior and publicly beneficial projects. 

Objective 1.3: Address Landowner and Environmental Concerns Fairly. 

•Encourage potential applicants for licenses or certificates to utilize the Commission’s 

collaborative pre-filing process. 

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

ensure compliance with conditions. 
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Objective 1.4: Promote Measures to Improve the Security and Safety of the Energy Infrastructure. 

Ensure strictest adherence to prudent dam safety practices, pipeline construction measures and LNG 

plant safety requirements. 

•Work with other agencies and industry to address and improve infrastructure security. 

•Allow prompt recovery or prudently-incurred security and safety expenses. 

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 the adoption of wholesale regional power markets in ISO (Independent System 

Operator)-New England, New York ISO, Pennsylvania-New Jersey-Maryland (PJM) 

Interconnection, Midwest ISO, Southwest Power Pool and California, phasing changes as 

appropriate. 

•Encourage further development of regional transmission organizations (RTOs) in southeast 

and western (outside California) regions of the country. 

•Support creation of regional state committees to develop and/or help oversee regional power 

markets. 

•Develop means of ensuring transparency of market and transmission information. 

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

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

•Complete revisions to market-based ratemaking policy to be implemented through periodic 

rate review. 

•Work with states to support 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 transactions costs, relying on North American Electric Standards 

Board (NAESB), North American Electric Reliability Council (NERC) and the RTOs/ISOs 

where appropriate. 

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

of the Transitioning Energy Markets. 

Objective 3.1: Assure Pro-Competitive Market Structure and Operations. 

•Promote understanding of energy market operations and technologies through maintaining 

expert skills, keeping abreast of trends and innovations, and reporting findings as appropriate. 

•Assess and report on market and infrastructure conditions using objective benchmarks. 

•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 3.2: Remedy Individual Market Participant Behavior as Needed to Ensure Just and 

Reasonable Market Outcomes. 

•Investigate statutory and rule violations, and provide appropriate remedies. 

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

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

needed to determine factual issues. 

MANAGEMENT INITIATIVES SUPPORTING ALL GOALS AND OBJECTIVES.

HUMAN CAPITAL

•Implement the Human Capital Plan to meet challenges of new Commission roles and 

changing workforce demographics. 

•Use the right mix of internal workforce and contracted services from the private sector to 

meet the agency’s statutory mandates efficiently and effectively. 

INFORMATION TECHNOLOGY

•Complete the implementation of e-government initiatives to expedite interactions with 

customers. 

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

expedite work. 

AGENCY 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.

COMMUNICATION

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

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

STRATEGIC PLAN
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2003 FERC ORGANIZATIONAL CHART

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 

EXECUTIVE 

DIRECTOR

FINANCIAL POLICY 

DIVISION

FINANCIAL SERVICES 

DIVISION

HUMAN RESOURCES 

SERVICES

DIVISION

DEPUTY CHIEF 

INFORMATION 

OFFICER

BUDGET

DIVISION

CHIEF

ACCOUNTANT

LEGAL DIVISION

TECHNICAL 

DIVISION

DIVISION OF 

PRESS SERVICES

DIVISION OF 

CONGRESSIONAL, 

INTERGOVERNMENTAL

AND PUBLIC AFFAIRS

PROCUREMENT 

DIVISION

REGULATORY 

ACCOUNTING 

POLICY DIVISION

MANAGEMENT, 

ADMINISTRATIVE AND 

PAYROLL SUPPORT 

DIVISION

REGULATORY 

AUDITS DIVISION

LOGISTICS 

MANAGEMENT 

DIVISION

GENERAL AND 

ADMINISTRATIVE 

LAW

SOLICITOR

ENERGY

PROJECTS

MARKETS, TARIFFS 

AND RATES

DISPUTE 

RESOLUTION 

SERVICES

OFFICE OF MARKETS, 

TARIFFS AND RATES

OFFICE OF THE 

GENERAL COUNSEL

DIVISION OF 

ADMINISTRATION 

AND DATA SUPPORT

DIVISION OF TARIFFS 

& MARKET 

DEVELOPMENT–

EAST

DIVISION OF TARIFFS 

& MARKET 

DEVELOPMENT–

SOUTH

DIVISION OF TARIFFS 

& MARKET 

DEVELOPMENT–

CENTRAL

DIVISION OF TARIFFS 

& MARKET 

DEVELOPMENT–

WEST

DIVISION OF POLICY 

ANALYSIS & 

RULEMAKING

OFFICE OF ENERGY 

PROJECTS

DIVISION OF 

OPERATIONAL 

INVESTIGATIONS

DIVISION OF 

MANAGEMENT AND 

COMMUNICATIONS

DIVISION OF 

ENFORCEMENT

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

DIVISION OF 

PIPELINE 

CERTIFICATES

DIVISION OF GAS 

ENVIRONMENT AND 

ENGINEERING

DIVISION OF 

HYDROPOWER 

ENVIRONMENT AND 

ENGINEERING

DIVISION OF 

HYDROPOWER 

ADMINISTRATION 

AND COMPLIANCE

DIVISION OF DAM 

SAFETY AND 

INSPECTIONS

FERC REGIONAL OFFICES

ATLANTA, PORTLAND, 

CHICAGO, NEW YORK 

AND SAN FRANCISCO

DIVISION OF 

TECHNICAL 

INVESTIGATIONS
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OVERSIGHT AND INVESTIGATIONS

GOALS

Competition in electricity and natural gas markets promises to improve efficiency and spur 

innovation, thereby benefiting both energy customers and the nation’s overall economy. At the 

same time, energy markets are unusually dynamic and can lead to unexpected results unless wellmonitored. As a result, one of the Commission’s three core goals is to protect customers and market 

participants through vigilant and fair oversight of transitioning energy markets. 

Oversight, investigations and enforcement are important. The Commission’s Market Oversight 

Program examines how electric power and natural gas markets work as a whole. It assesses the 

performance of energy markets, identifies key problems in the way those markets are operating, and 

recommends effective remedies in a timely way. Given the dynamic quality of energy markets, this 

process provides an essential feedback loop to make sure that market problems are largely selfcorrecting. 

During FY 2003, the Commission developed the essential infrastructure for market oversight. 

The Commission now understands how rapidly evolving energy markets work, has developed 

key performance measures for electric power and natural gas markets, is able to identify possible 

weaknesses that need to be addressed (as well as strengths that can help other energy markets operate 

better), and has shown an ability to help markets improve their performance. The Commission has 

begun to develop strong partnerships with other institutions that can help monitor markets, especially 

the market monitoring units (MMUs) in regional electric markets. The Commission also began to 

develop partnerships with other federal agencies and state public utility commissions.

The Commission’s Investigations Program remedies violations of statutes and rules by 

individual market participants. To do this, the Commission investigates and audits market participants 

as appropriate, identifies violations and provides remedies. In some cases, investigations feed into 

market oversight by uncovering patterns of behavior that require changes in rules or tariffs.

The Commission has committed itself to developing a first-rate market oversight and 

enforcement capability, now embodied in the new Office of Market Oversight and Investigations 

(OMOI). During FY 2003, OMOI became a fully staffed, fully functional organization.

ACHIEVEMENTS

MARKET OVERSIGHT

OMOI has developed a series of regular reports that report energy market developments to the 

Commission and, in some cases, the public. These reports include:

•A biweekly Market Surveillance Report. This is a comprehensive report on new and 

ongoing developments in the natural gas and electric power markets, delivered at each closed 

Commission meeting in FY 2003.

•An annual State of the Markets Report. This is an overall evaluation of how well energy 

markets are working in each region of the country. The Commission developed the State of 

the Markets Report in FY 2003 and will issue the first full report early in FY 2004.
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•Semi-annual assessments of natural gas and electric power markets. These reports highlight 

key issues in each industry. The Commission issued the first two assessments in public 

meetings during FY 2003.

•A daily energy report on market events over the previous 24 hours.

These reports give the Commission an unprecedented overview of market events and an 

early warning of new market developments. The Commission now understands the energy markets 

it regulates far more quickly and completely than before. Similarly, the State of the Markets Report 

will evaluate market results more completely than ever before. Over time, the market evaluations in 

the State of the Markets Report will become the best guide to the effectiveness of the competitive 

approach to energy markets. 

QUICK, COGENT RESPONSE TO EMERGING MARKET ISSUES

During FY 2003, the Commission showed its ability to analyze key market issues in detail. 

Most important was the study of natural gas price spikes. In February 2003, natural gas prices rose 

to historic highs across North America, especially in the Northeast. The Commission’s intensive 

investigation of the price spike showed that the high prices were consistent with market fundamentals 

(late-season cold weather, low storage pressure, limited gas supplies). A detailed examination of 

thousands of transactions available from electronic exchanges showed no symptoms of market 

manipulation. 

IMPROVING MARKET PERFORMANCE

The Commission identified two major problems in market operation: the validity of published 

price indices and the efficiency of current credit clearing systems. Having identified the problems, the 

Commission held technical conferences with representatives from all key industry segments. These 

conferences clarified the issues involved and laid the ground work for industry and the Commission to 

work together to find solutions that will work over the long run. 

MARKET INVESTIGATIONS

The Commission conducted many more investigations in FY 2003 than in FY 2002. These 

resulted in key successes that led to significant financial restitution for market abuses and the 

institution of new compliance programs. These include:

•Reliant Energy. The Commission expects Reliant to return $50 million as a result of the 

Commission’s investigation into market abuses by Reliant in Western markets. 

•Transcontinental Gas Pipe Line Company. The Commission imposed a $20 million civil 

penalty as a result of an investigation into Transco’s illegally discriminating in favor of its 

affiliates.

•Cleco Corporation. The Commission imposed a $750,000 civil penalty (the first 

ever imposed under Part II of the FPA) and required Cleco to give $2.1 million in refunds 

to retail customers from improperly gained profits after investigating Cleco for anticompetitive

practices favoring its affiliate.

OVERSIGHT AND INVESTIGATIONS
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•Idaho Power. The Commission imposed $5.8 million in refunds to retail customers after 

finding that Idaho Power gave undue preference to its wholesale marketing affiliate. 

•Nicor Gas. The Commission found that Nicor violated the Commission’s regulations and 

reporting requirements in entering negotiated rate contracts and ordered refunds to customers 

totaling $1.8 million.

These cases (among others) show the Commission’s increasing ability to investigate market 

abuses and its continuing commitment to policing bad behavior effectively wherever it is 

found. Most important, the compliance programs the Commission is instituting as a result of 

its investigations provide tangible guarantees against a recurrence of bad behavior.

DEVELOPING MARKET INFORMATION

During FY 2003, the Commission significantly continued to obtain key market information 

from a wide variety of sources, and developed standard ways to display information that would 

highlight key aspects of market performance. It also significantly upgraded its flagship market data 

collection, the Electronic Quarterly Report (EQR). This report collects all electricity transactions 

from jurisdictional companies that happen within a quarter. Companies report the transactions within 

30 days of the end of the quarter, and the Commission makes the results public. During FY 2003, 

the Commission focused on ensuring that affected companies comply with the requirement to file 

the report and improved the degree of consistency among company submissions. The result is an 

increasingly useful report. It will become the bedrock for many analyses of what has happened in 

markets.

PARTNERSHIP WITH MARKET MONITORING UNITS

To oversee and investigate markets well, the Commission must work closely with many other 

agencies. During FY 2003, the Commission focused on developing a strong partnership with MMUs 

associated with RTO markets. The MMUs have far more detailed information about specific markets 

than the Commission can collect or monitor. On the other hand, RTO markets are profoundly 

influenced by neighboring regions and related markets (for example, natural gas markets), and the 

Commission has far more information about these markets than the MMUs do. As a result, close 

collaboration with MMUs is a strategic necessity for the health of interstate power markets. The 

Commission and the MMUs have begun to forge a strong partnership by agreeing on:

•A common mission statement, describing shared purposes.

•The outline of a standard market monitoring plan.

•A clear, formal structure of contacts and standard meetings between the Commission and the 

MMUs.

•A set of “triggers” for when the MMUs will contact the Commission.

•An initial set of standard market performance measures (metrics) that will provide 

comparable information on market performance in all the markets MMUs cover around the 

country.
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FERC’s Market Monitoring Center allows Commission personnel 

to monitor energy markets. FERC photo.
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ENERGY MARKETS

GOALS

The Commission’s primary goal in the energy markets area continues to focus on making 

wholesale natural gas and electric power markets work well in order to support a strong, stable 

national economy. To this end, the Commission is committed to encouraging competitive market 

institutions across the lower 48 states, and to implementing clear, self-enforcing market rules across 

the nation’s regional bulk power markets that balance the interests of all market participants. 

An important initiative within this goal is ensuring electricity reliability; an issue pushed 

to the forefront in the wake of the August blackout experienced in large areas of the Midwest, the 

Northeast, and Canada. The Commission will continue to promote a more reliable electricity system 

by: (1) fostering regional coordination and planning of the interstate grid through regional ISOs and 

RTOs; (2) adopting transmission pricing policies that provide price signals for the most reliable and 

efficient operation and expansion of the grid; and (3) providing pricing incentives at the wholesale 

level for investment in grid improvements and assuring opportunities for cost recovery in wholesale 

transmission rates.

In regulating the transportation of oil and 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. 

ACHIEVEMENTS

COMPETITIVE WHOLESALE POWER MARKETS

In April 2003, the Commission issued a White Paper on its Wholesale Power Market Platform 

which proposes a common set of principles for the design of electric transmission markets, while 

underscoring an increasingly flexible approach to allow for regional differences. The eight elements of 

the wholesale market platform are: 

•regional independent grid operation; 

•regional transmission planning process; 

•fair cost allocation for existing and new transmission; 

•market monitoring and market power mitigation; 

•spot markets to meet customers’ real-time energy needs; 

•transparency and efficiency in congestion management; 

•firm transmission rights; and 

•resource adequacy approaches. 

This proposal is intended to enhance wholesale competition and remove economic inefficiencies, 

while respecting regional differences. Regional technical conferences are being used to discuss with 

states and market participants in each region reasonable timetables for addressing wholesale market 

design issues and ways in which to tailor market design rules to benefit customers within each region. 

ESTABLISHMENT OF REGIONAL TRANSMISSION ORGANIZATIONS

Additional progress was made in FY 2003 in establishing RTOs, although a significant 

amount of work still lies ahead. Proposals for RTOs were at various stages of completion in 
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most regions of the United States at the end of the fiscal year. 

•The Midwest ISO operates in all or parts of several Midwestern states and one Canadian 

province.

•The Southwest Power Pool (SPP) has filed to establish itself as an RTO.

•The PJM Interconnection, which was granted RTO status in late 2002, was working with the 

Midwest ISO to create a joint and common market. 

•The New York and New England ISOs had working groups striving to make the two ISOs act 

as if they were a single operator, and dispatch across seams in a manner that would be more 

consistent with dispatch over internal constraints.

•The California ISO is in the process of implementing a redesign of its wholesale electricity 

markets.

To further encourage development of regional transmission networks, the Commission 

proposed an incentive pricing policy on January 15, 2003. This would allow additional percentage 

points on a utility’s return on equity when it participates in an RTO, divests its RTO-operated 

transmission assets, or pursues additional measures that promote efficient operation and expansion 

of the transmission grid. The Commission’s proposed incentives would help encourage needed 

investment in transmission infrastructure and improve grid performance. 

GENERATOR INTERCONNECTION PROCEDURES AND AGREEMENTS

In July 2003 the Commission issued standard procedures and a standard agreement between 

transmission providers and generators for the interconnection of generators larger than 20 megawatts, 

actions designed to facilitate development of needed infrastructure for the nation’s electric system. 

The rule will reduce interconnection time and cost, help protect reliability, increase energy supply, 

and lower wholesale prices for the nation’s customers by increasing the number and variety of 

independent generators that can compete in the wholesale electricity markets.

In a companion order also issued in July 2003, the Commission proposed a rule that would 

apply to the interconnection of small generators no larger than 20 megawatts. The proposed rule 

should expedite the interconnection of small generators, many of which use alternative fuels such 

as wind and solar, and innovative technologies. The rule should protect reliability, increase energy 

supply, and increase the number and variety of new generation sources, including the use of nonpolluting alternative energy sources. 

WESTERN MARKETS INVESTIGATION

On March 26, 2003, the Commission publicly released its Staff Final Report on Price Manipulation 

in Western Markets, culminating an exhaustive 13 month investigation into behavior that may have caused 

dramatic price spikes in Western energy markets in 2000 and 2001. This was one of the most prominent 

and challenging investigations of competitive markets the Commission has ever initiated. 

Among its major conclusions, the Final Report determined that an underlying supply-demand 

imbalance and flawed market design created a fertile environment for manipulative conduct by market 

participants. It further concluded that there was clear evidence of market manipulation in western 

ENERGY MARKETS
17

markets and that the effect of such manipulation was exacerbated by the underlying supply shortage 

and flawed market rules. 

The Final Report concludes that dysfunctions in the natural gas market partly stemmed from 

deliberate misreporting of natural gas prices to trade publications; that Enron OnLine, which gave 

Enron knowledge of market conditions not available to other market participants, was a key factor in 

wash trading; and that Enron manipulated thinly traded physical markets to profit in financial markets. 

The Final Report recommended that the Commission issue show cause orders to market 

participants that may have engaged in gaming or anomalous market behavior or other conduct, as well 

as generic actions to address problems identified by the investigation. 

PROPOSED MARKET BEHAVIOR RULES

Based on recommendations made in the Final Report, the Commission is reevaluating the 

reporting and accounting rules which govern FERC-regulated companies. On June 25, 2003, the 

Commission proposed that all electric market-based rate tariffs and authorizations (and all natural 

gas blanket marketing certificates) expressly prohibit a number of transactions and market behaviors. 

FERC proposed six specific rules relating to: (1) unit operation; (2) market manipulation; (3) 

communications; (4) reporting; (5) record retention; and (6) related tariffs. 

Under the proposed market behavior rules, if it is found that a seller engaged in prohibited 

behavior, the seller would be subject to disgorgement of unjust profits and non-monetary remedies 

such as revocation of the seller’s market-based rate authority or blanket certificate authority. 

ENRON’S MARKET-BASED RATE AUTHORITY REVOKED; BLANKET GAS CERTIFICATES

TERMINATED

On June 25, 2003, the Commission revoked the electric market-based rate authority of Enron 

Power Marketing, Inc. and Enron Energy Services, Inc. (Enron Power Marketers). In addition, six 

Enron-affiliated companies’ natural gas marketing certificates were terminated. 

These actions stem from the Commission’s Final Staff Report in which staff alleged that Enron 

companies gamed western energy markets, severely disrupting the industry in 2000 and 2001. Acting 

on findings in the investigation, the Commission launched an enforcement proceeding, issuing a show 

cause order and directing the Enron companies to explain why they should be allowed to retain their 

broad authorization to trade in the electric and gas markets at market-based rates. 

SUMMER 2003 POWER FAILURE IN THE U.S. AND CANADA

The Commission assisted the United States-Canada Joint Task Force in investigating the 

August blackout and identifying the steps needed to prevent similar events in the future. 

In the longer term, the reliability of the grid will depend upon regional planning and operation 

of the transmission system; greater investment in infrastructure; and better methods of monitoring and 

managing transmission flow in order to relieve congestion. The Commission had under way several 

initiatives to address these issues, including: (1) promoting the formation of independent regional 

organizations with clear regional market rules to promote an efficient, reliable wholesale marketplace; 

(2) authorizing incentive rates for new infrastructure, including innovative technologies; and (3) 

identifying problems in the transmission infrastructure (e.g., determining the areas needing additional 

investment in transmission facilities). 

ENERGY MARKETS
18 

Near Mathias, West Virginia, Commission personnel and Columbia Gas employees conduct an environmental compliance inspection along a natural gas right-of-way. FERC photo.
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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:

•Expediting appropriate infrastructure development to ensure sufficient energy supplies;

•Addressing landowner and environmental concerns fairly; and

•Promoting measures to improve the security and safety of the energy infrastructure.

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 NEPA Pre-Filing Process and its gas outreach program.

In FY 2003, Greenbrier Pipeline Company became the first pipeline company to be certificated 

using the Commission’s NEPA Pre-Filing Process. 

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 and any associated 

impacts. 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 

conditions and environmental mitigative measures are placed in certificate authorizations.

The 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 designed to bring these supplies to historic market areas. 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. 

HYDROELECTRIC INFRASTRUCTURE

Beginning in 2003 and extending to 2010, applications to relicense over 120 projects are due 

to be filed. A large percentage of these cases include large scale projects (with capacities that exceed 

100 megawatts) that significantly affect regionally important environmental resources, and as such, 

have a high potential for conflicts between developmental and non-developmental interests.

The Commission basically has two goals in the licensing process. One is to ensure that the end 

product of the licensing process balances the multitude of competing interests and represents the most 

comprehensive development of the waterway. The second goal is to facilitate the timely completion 

of the licensing process. Both goals have been met through promoting the use of more collaborative 

ENERGY PROJECTS
20 

alternatives to the traditional licensing processes. These alternatives include what is known as the 

alternative licensing process (ALP), a flexible process tailored to the facts of the particular case and 

development of settlement agreements. ALPs and settlements provide the opportunity for: (1) early 

and continuing stakeholder involvement in the licensing process; and (2) better communication 

among stakeholders. By encouraging participation in these collaborative processes, the Commission’s 

licenses more thoroughly address the needs of the stakeholders and, in addition, reduce the processing 

time after the application is filed with the Commission to less than half of that required for the 

traditional licensing process. 

Building on the successes of this collaborative approach and in response to continuing requests 

for further license process streamlining, the Commission issued a new rulemaking that established the 

Integrated Licensing Process (ILP). This new process was, in large part, the result of a collaborative 

effort that involved representatives from virtually every interest group.

ACHIEVEMENTS

NATURAL GAS PIPELINES

CERTIFICATION

In FY 2003 the Commission certificated 17 major pipeline projects, resulting in 4.8 Bcf per 

day of additional capacity and 1,211 miles of new pipeline. With regard to storage facilities, the 

Commission authorized:

• 3.5 Bcf of peak-day deliverability of new and

• 16.5 Bcf of storage capacity and 3,730 MMcf per day of deliverability from LNG storage 

facilities.

With respect to LNG import terminals, the Commission has signaled a new regulatory 

approach that will remove federal financial and economic regulatory oversight that has proven to be 

a barrier to the development of new onshore sites. This new approach will not affect the jurisdiction 

of the facilities and staff will continue to address safety, security, and environmental concerns during 

the application process. If approved, the project will be regularly inspected throughout its operational 

life to ensure compliance with safety, security, and environmental requirements. In the Hackberry 

LNG Project proceeding, the Commission stated that the proposed import terminal is similar to gas 

production facilities and gathering pipelines and is therefore exempt from open access requirements. 

As a result, the Commission has provided financial certainty for companies looking to invest the 

billions of dollars often required to develop LNG facilities. Since that policy decision there has been 

an unprecedented movement to develop LNG facilities and it is significant to note that several LNG 

projects have, or plan to make use of the NEPA Pre-Filing Process. 

ENERGY PROJECTS
21

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 closely coordinate with representatives of all 

agencies having a role in safety and security matters, including the U.S. Coast Guard, the Department 

of Transportation (DOT), the Federal Bureau of Investigation (FBI), and state and local law 

enforcement. In addition, as part of its continuing inspection program, Commission staff conducted 

six biennial inspections of jurisdictional LNG peak-shaving and import facilities, placing increased 

emphasis on plant security measures and improvements.

Finally, FY 2003 marked the staff’s first involvement with the National Association of State 

Fire Marshals, who are among the “first responders” to any natural gas pipeline emergency.

INFRASTRUCTURE POLICY GROUP

In fall 2002, the Commission assembled a specialized group of senior technical experts to 

form an infrastructure policy group to apprise the Commission of the status of the nation’s energy 

infrastructure. This information is conveyed to the Commission through guidance on projects and 

issues before the Commission, the convening of regional conferences, the preparation of periodic 

regional reports, and the execution of special infrastructure studies. During FY 2003, conferences 

were held in Chicago and Denver.

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 FY 2003, the Commission again 

demonstrated its commitment to this effort by:

•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 (CRE) using the NEB effort as a model; and

•championing, organizing and participating in the first trilateral meetings between the 

Commission, the NEB, and the CRE to discuss regulatory issues of mutual concern.

The Commission also participated in:

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

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

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

cross-border gas and electric issues;

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

among the governments and energy sectors of the United States, Canada and Mexico;

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

and

•Interstate Oil and Gas Compact Commission.

ENERGY PROJECTS
22 

IMPROVED INFORMATION AVAILABILITY AND OUTREACH

In FY 2003, the Commission continued its outreach program to collect and disseminate 

information on ways for applicants, citizens, and state and other federal agencies to identify and 

resolve disputes before natural gas companies file their applications. These efforts are now focused 

on refining the NEPA Pre-Filing Process. In FY 2003 the Greenbrier Pipeline Project, which used the 

Pre-filing Process, received a certificate about 40 percent sooner than under the traditional processing 

time for a major project. 

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

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

and Post-Certificate Environmental Compliance Seminars. Commission staff, and consultants with 

significant industry experience, delivered the training seminars.

HYDROPOWER LICENSING, ADMINISTRATION, 

COMPLIANCE AND SAFETY

LICENSING

COLLABORATIVE EFFORTS

Throughout FY 2003, the Commission continued to encourage the use of the ALP and the 

development of settlements. Of the 38 licenses issued during the year, 13 were based upon the use of 

the ALP or settlement agreements. 

In September, the Commission issued the final environmental impact statement for the 

912-MW St. Lawrence-FDR Hydroelectric Project No. 2000 spanning the St. Lawrence River 

from Massena, New York, to Cornwall, Ontario. The licensee, using the ALP process, developed 

a comprehensive settlement agreement with 13 other entities, including federal and state resource 

agencies, local governments, and non-governmental organizations (NGOs). The license was issued 

less than two years from the filing date of the application.

In July, the Commission issued new licenses for Madison Paper Industries, Inc.’s (Madison) 

Anson and Abenaki Project Nos. 2365 and 2364, located on the Kennebec River in Maine. Madison 

filed a settlement agreement in 2002 with 16 other entities, including federal and state agencies, local 

governments and NGOs. The licenses were issued less than 15 months after the ALP-prepared license 

applications were filed.

In December 2002, the Commission issued three new license orders for Northern States 

Power Company’s (NSP) Holcombe, Wissota and Dells Project Nos. 1982, 2567, and 2670 and three 

license amendments for NSP’s Cornell, Jim Falls, and Chippewa Falls Project Nos. 2639, 2491, 

and 2440 located on the Chippewa River in Rusk and Eau Claire Counties, Wisconsin. The licenses 

incorporated a settlement negotiated among NSP and 10 participants. The settlement resolved all 

outstanding issues involved in the licensing of the Holcombe, Wissota, and Dells Projects and the 

cumulative effects of the operation of all six Chippewa River projects, without any loss of generation 

or dependable capacity, which totaled 190 MW. 

ENERGY PROJECTS
23

In December, the Commission issued an original license to FPL Energy Maine Hydro LLC 

(FPL) for the unlicensed Upper and Middle Dams Storage Project No. 11834 located on the Rapid 

River in Maine. The license application was prepared using the ALP process. FPL reached settlement 

with five participants in a collaborative proceeding. 

In May, the Commission issued a new license to ALLETE, Inc., d.b.a. Minnesota Power for 

the 18-MW Blanchard Project No. 346 located on the Mississippi River in Minnesota. The license 

incorporated the terms of the settlement between ALLETE and the Minnesota Department of Natural 

Resources, including enhancements to fish and wildlife resources and improvements to recreational 

facilities. The license was issued less than two years from the filing date of the application.

In July, the Commission issued a new license for the 4.15-MW Bigfork Project No. 2652 

located on the Swan River in Flathead County, Montana. The new license incorporated the provisions 

of a settlement agreement between PacifiCorp (licensee) and other stakeholders which resolved all 

recreational issues at the project. 

In August, the Commission issued a new license to Orion Power New York GP II, Inc. for 

its 2.22-MW Newton Falls Hydroelectric Project No. 7000 located on the Oswegatchie River in 

New York. The license order also approved a settlement agreement among eight participants for the 

project’s Upper and Lower Developments. 

In August, the Commission issued an order approving a settlement agreement and issuing 

a new license to the Upper Peninsula Power Company (UPPC) for the 12-MW Bond Falls Project 

No. 1864 located in Michigan and Wisconsin. UPPC reached settlement with 10 parties using a 

collaborative approach that resolved relicensing issues concerning project operations. 

Also in August, the Commission issued a license for the 20-MW Crane Valley Project No. 

1354, one of the oldest pending licensing cases. Parties to the proceeding agreed to develop an 

amendment to the application using the ALP in an effort to address the outstanding licensing issues. 

HYDROPOWER LICENSING RULE

In February 2003, the Commission issued a Notice of Proposed Rulemaking (NOPR) in 

which it proposed a new licensing process. The proposed rule was, in large part, the culmination of 

an interagency effort that included the Departments of Commerce, Agriculture and the Interior and 

suggestions from the National Review Group, which included representatives from the hydropower 

industry, NGOs, and Native Americans. This initial effort was designed to develop a process that 

would arrest some of the inefficiencies of the traditional licensing process. Most notably, the proposal 

would better coordinate NEPA scoping, study development and execution, and agency comment 

and recommendations so that multiple agency steps in the hydro licensing process would occur 

simultaneously rather than sequentially.

The Commission staff held a series of 12 public and tribal workshops across the country in 

March and April 2003. The goals of the workshops were to hear and consider stakeholder concerns 

about proposed rule language and find avenues for stakeholder consensus on solutions to those 

concerns. In addition, in April Commission staff sponsored a four-day stakeholder drafting session to 

provide an opportunity for federal and state agencies, Native Americans, NGOs, and other interested 

stakeholders to participate in drafting concepts and language for the final rule.

ENERGY PROJECTS
24 

The product of this collaborative effort was issuance of a final rule that substantially modifies 

the licensing process. The new ILP process effectively ensures significant and early stakeholder 

involvement and provides for more timely completion of the licensing process. Specifically, the new 

process calls for more Commission staff and public involvement in the pre-filing phase of the process, 

increased stakeholder involvement in study plan resolution, and improved consultation between the 

Commission and Native Americans. 

TRIBAL POLICY STATEMENT

In July, the Commission issued a policy statement on Consultation with Native Americans in 

Commission Proceedings in an effort to promote government-to-government relationships between 

the Commission and federally-recognized tribes. To help facilitate communication between the tribes 

and the Commission, a tribal liaison position was created. 

ADDITIONAL HYDROPOWER CAPACITY

During FY 2003, the Commission issued a number of relicenses that, while including 

measures to protect and enhance environmental resources, also approved proposals to enhance power 

production. Specifically, licenses issued for the Abenaki, Wissota, Dells and Newton Falls Projects 

(Project Nos. 2364, 2567, 2670, and 7000) approved proposals to increase energy production by 

more than 10 MWs. In addition, an original license was issued for the Latteral 993 Project No. 12423 

authorizing the construction of a new 1.5-MW hydropower facility in Idaho. License amendments 

authorizing the development of an additional 186 MWs of energy at existing projects were also issued 

in FY 2003. Finally, new capacity is being sought for less conventional hydropower facilities such as 

wave action facilities. The Commission approved AquaEnergy Group, Ltd.’s (AquaEnergy) request 

to use the ALP to prepare a license application for the Makah Bay Wave Energy Project, a pilot 

project designed to test the relatively new and developing wave energy technology off the coast of 

Washington State. 

HYDRO LICENSING STATUS WORKSHOP

In November 2002, the Commission sponsored the second in a series of workshops on 

hydropower licensing proceedings that are five years old or older. Interested stakeholders were invited 

to discuss, on a project-specific basis, procedural impediments that precluded the Commission from 

taking final action. At least in part due to the actions spurred by the first workshop, the number of old 

cases had dropped from 51 in December 2001 to 35. As with the first workshop, the second workshop 

identified a key source of licensing delay--receipt of necessary state certifications and permits by 

applicants. 

ENERGY PROJECTS
25

ADMINISTRATION AND COMPLIANCE

AUTHORIZING FEASIBILITY STUDIES FOR NEW HYDROPOWER PROJECTS

In FY 2003, approximately 80 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 permit holder conducts investigations and secures data necessary to determine 

the feasibility of the proposed project and prepares a developmental application. During FY 2003, the 

Commission authorized the feasibility studies of about 100 hydropower projects, with a combined 

capacity of over 0.5 GW.

ASSISTANCE PROGRAM

The Commission held shoreline management workshops in South Carolina and Wisconsin 

allowing staff and licensees to meet face to face with over 100 licensee representatives to discuss 

shoreline management issues. The Commission also held a technical meeting in Maine with resource 

agencies and the public to discuss the fish pump technology for passing fish over the Fort Halifax 

dam. Further, staff attended several workshops in Bedford and Franklin Counties, Virginia to assist 

Appalachian Power Company in developing its shoreline management plan for the Smith Mountain 

Pumped Storage Project No. 2210. In addition, Commission staff met with property owners in 

Leaburg, Oregon to assist them in understanding the license conditions for the Leaburg/Walterville 

Project No. 2496. The property owners were concerned about water levels, recreational facilities, 

aesthetics, and fish passage facilities.

Staff held a working session with shoreline property owners at the Biron Project No. 

2192 in Wisconsin to discuss leases of project lands. As a result of the meeting, Wisconsin Valley 

Improvement Company (WVIC) revised its plan and built a boat launch that is more suited to the 

physical attributes of the site. Commission staff also conducted workshops in Maine, Vermont, and 

Wisconsin to brief officials of those states on the Commission’s compliance program. Likewise, at the 

invitation of the Lake Lynn Advisory Council, Commission staff attended a working session at Lake 

Lynn Hydropower Project No. 2459 to advise the licensee, the Council, and the resource agencies of 

the Commission’s role in reviewing changes and improvements to the project’s recreation plan.

Commission staff conducted a drought management workshop in Atlanta which resulted in 

an exchange of ideas and information on recognizing droughts and identifying ways to improve and 

maintain coordination and cooperation among stakeholders during developing drought conditions. 

Commission staff also conducted a noxious plants workshop in Wisconsin. 

ENERGY PROJECTS
26 

COMPLIANCE WORKLOAD PROJECTION

The issuance of 220 new licenses (see following graph) will add about 2,200 more license 

articles, requiring numerous compliance filings and amendment applications. The annual workload 

receipts in this area have become increasingly complex as agencies and the public participate more 

fully and vigorously in setting license requirements, and negotiating settlements and agreements 

that are incorporated as conditions of the license. As a result, average annual workload receipts are 

expected to increase about 15 percent each year.

ENERGY PROJECTS

FY

2000

FY

2001

FY

2010

FY

2009

FY

2008

FY

2007

FY

2006

FY

2005

FY

2004

FY

2003

FY

2002

0

500

1000

1500

2000

2500

Projected Additional Articles

(Cumulative)

COMPLIANCE PLANS AND REPORTS

Licenses include conditions that will protect and enhance environmental resources. These 

conditions require licensees to prepare and file plans or reports with the Commission. These plans 

and reports may deal with project operation, development of recreational resources, improvements to 

fishery habitat, water quality protection, wildlife benefits, wetlands and vegetation improvements, and 

cultural resources protection. In FY 2003, the Commission completed reviews of about 1,000 of these 

applications.

COMPLIANCE REVIEWS

In FY 2003, the Commission completed over 230 reviews of reports of non-compliance 

incidents related to environmental requirements and completed seven reviews of reports of noncompliance incidents related to engineering. 

EFFECTIVENESS OF ENVIRONMENTAL MEASURES

In FY 2003, the Commission continued to review the results of its monitoring efforts to 

evaluate whether the environmental measures in licenses were providing the appropriate levels of 

protection, mitigation, and enhancement for environmental resources. The Commission issued a 

final report entitled “Mitigation Effectiveness Studies at Hydropower Projects: Water Quality” and 

a draft report entitled “Mitigation Effectiveness Studies at Hydropower Projects: Fish Passage.” The 

final water quality report analyzed 81 hydropower projects and found that water quality monitoring 
27

and mitigation plans were well designed for their intended purpose to assess compliance with state 

standards and to identify water quality problems. The draft fish passage report analyzed 213 licensed 

projects with requirements concerning upstream and/or downstream fish passage (see map for 

geographical distribution of projects). These reviews will allow for improvements to environmental 

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

improving the environmental performance of hydropower projects.

JURISDICTIONAL REVIEW

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

of all hydroelectric projects with licenses expiring within five years. In addition, staff evaluates the 

jurisdictional status of proposed projects, as well as licensed and unlicensed operating hydropower 

projects. Staff completed jurisdictional reviews for 10 projects. 

ENERGY PROJECTS

Fish Passage Review: Geographical distribution of 213 projects 

with at least one article that addressed fish passage.

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HEADWATER BENEFITS STUDIES

 During FY 2003, pursuant to section 10(f) of the FPA, staff conducted the Allegheny 

River Basin Headwater Benefits study using the Commission’s Headwater Benefits Energy Gains 

(HWBEG) computer model. The owners of hydropower plants were assessed over $300,000 for 

energy gains benefits provided by the regulation of federal headwater storage projects in the basin 

during the period 1989 though 2001.

In FY 2003, about $6 million was collected in headwater benefits assessments for energy 

benefits provided by federal headwater storage projects in several river basins. Headwater benefits 

assessments are returned to the U.S. Treasury to offset headwater project construction costs.

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

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, and special. The Commission’s Division of Dam 

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

PERFORMANCE MONITORING

In FY 2003, the Commission began full implementation of an important aspect of its 

performance monitoring program–potential failure modes analysis. In addition, new Engineering 

Guidelines on Monitoring Performance of Dams were developed by the Commission, in coordination 

with licensees. This program helps safeguard important hydropower infrastructure, and provides costeffective, targeted results. 

PROVIDING DAM SAFETY ASSISTANCE TO FEDERAL AND STATE AGENCIES AND OTHER

ORGANIZATIONS

The Commission is an active member of the Interagency Committee on Dam Safety, the 

U.S. Society on Dams, and the Association of State Dam Safety Officials, and shares its dam safety 

expertise internationally as well. During FY 2003, the Commission also provided dam inspection 

and evaluation services to the Nuclear Regulatory Commission and the Department of Energy, and 

assisted the Director of the Federal Emergency Management Agency (FEMA) in implementing the 

National Dam Safety Program. 

ENERGY PROJECTS
29

EMERGENCY ACTION PLANNING

During FY 2003, Commission staff developed and held a workshop at the U.S. Society 

on Dams annual conference on Security and Emergency Preparedness at Dams. Action items for 

improving the national program resulted, and are being followed up on. The importance of a wellfunctioning Emergency Action Plan (EAP) has been heightened because of the threat of terrorist 

attacks on infrastructure. The EAP role has now been expanded to further provide a secondary line 

of defense against terrorist attacks. In the event that a security plan at a project does not thwart an 

attack, the project EAP serves as an additional mechanism to protect the public. The importance of 

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

action plan test continues to be a point of emphasis. 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 managers. 

SECURITY AT DAMS

During FY 2003, the Commission further developed the FERC Hydropower Security 

Program and implemented new components, such as requiring vulnerability and security assessments 

at approximately 1,000 high-risk dams and providing guidance to dam owners in conducting 

these assessments. Coordination of Commission security efforts with the FBI and the Office of 

Homeland Security continued. Staff participated in workgroups, including the Interagency Forum on 

Infrastructure Protection, a Security Task Force of the National Dam Safety Review Board, and the 

FERC Hydro Security Task Force, comprised of FERC staff and licensee representatives, to assist in 

developing a unified and effective national response to security at dams.

ENERGY PROJECTS
30 

Security and emergency preparedness at dams was the topic at this FERC workshop held in 

Charleston, South Carolina.
31

 1/31/2003 WOODS LAKE HYDRO 3410 CO EAGLE LIME CR 45 20 DM PH N

2/28/2003 NY STATE ELEC & GAS CORP 2852 NY STEUBEN KEUKA LK 2000 20 DM PH Y

2/28/2003 ENTERGY, ARKANSAS INC. 271 AR HOT SPRING OUACHITA R 65300 23 DM PH Y

3/31/2003 AVONDALE MILLS INC. 5044 GA RICHMOND AUGUSTA 2475 20 DM PH Y

4/26/2003 SOUTHERN CALIF EDISON CO 344 CA RIVERSIDE SAN GORGONIO CR 2250 20 DM PH Y

4/30/2003 PAROWAN CITY CORPORATION 2782 UT IRON RED CR 500 25 DM PH N

 6/6/2003 FORD MOTOR COMPANY 362 MN HENNEPIN MISSISSIPPI R 18000 23 DM PH Y

6/30/2003 PCA HYDRO INC. 2180 WI LINCOLN WISCONSIN R 3000 26 DM PH Y

7/31/2003 JUDITH A. BURFORD 6418 CO EAGLE E BRUSH CR 8 20 PH N

8/24/2003 ALLETE, INC 346 MN MORRISON MISSISSIPPI R 18000 23 DM PH Y

8/31/2003 SOUTHERN CALIF EDISON CO 2086 CA FRESNO MONO CR 0 50 DM PH N

9/18/2003 INDIANA MICHIGAN PWR CO 401 MI ST JOSEPH ST JOSEPH R 1750 25 DM PH Y

9/30/2003 CHARTER TWNSHP OF YPSILANTI 5334 MI WASHTENAW HURON R 1920 20 DM PH N

9/30/2003 PACIFIC GAS & ELECTRIC CO 2107 CA PLUMAS N FK FEATHER R 142830 50 DM PH Y

10312003 NEW YORK POWER AUTHORITY 2000 NY ST LAWRENCE ST LAWRENCE R 912000 50 DM PH N

10312003 PACIFIC GAS & ELECTRIC CO 233 CA SHASTA PIT R 325000 22 DM PH Y

10312003 ALLETE, INC 469 MN LAKE KAWISHIWI R 4000 22 DM PH Y

12312003 ALLEGHENY ENERGY SUPPLY 2516 WV BERKELEY POTOMAC R 1900 27 PH Y

12312003 ALLEGHENY ENERGY SUPPLY 2517 WV BERKELEY POTOMAC R 1200 27 PH N

 3/31/2004 PUD NO. 1 CHELAN, WA 637 WA CHELAN CHELAN R 48000 30 DM PH N

 3/31/2004 S. D. WARREN COMPANY 2984 ME CUMBERLAND PRESUMPSCOT R 1800 20 DM PH Y

 4/10/2004 HYDRO-OP ONE ASSOC. 287 IL LA SALLE FOX R 3680 25 DM PH Y

 4/30/2004 UNITED WATER CONS DIST 2153 CA VENTURA PIRU CR 1420 50 DM PH Y

 4/30/2004 MERIMIL LIMITED PARTNERSHIP 2574 ME KENNEBEC KENNEBEC R 6915 35 DM PH Y

 4/30/2004 MADISON PAPER INDUSTRIES 2364 ME SOMERSET KENNEBEC R 16977 40 DM PH Y

 4/30/2004 MADISON PAPER INDUSTRIES 2365 ME SOMERSET KENNEBEC R 9000 40 DM PH Y

 6/30/2004 WISCONSIN PUBLIC SERVICE 1979 WI LINCOLN WISCONSIN R 4200 30 DM PH Y

 7/31/2004 NORWAY CITY OF MICHIGAN 2720 MI MARINETTE MENOMINEE R 5636 20 DM PH N

 7/31/2004 IDAHO POWER CO 2726 ID GOODING MALAD R 21770 25 DM PH Y

 9/30/2004 PPL HOLTWOOD, LLC 487 PA PIKE WALLENPAUPACK CR 44000 24 DM PH Y

 9/30/2004 BARTON VILLAGE, VT 7725 VT ORLEANS CLYDE R 1300 20 DM PH N

10/31/2004 FALL RIVER RURAL ELECTRIC 1413 ID FREMONT BUFFALO R 250 24 DM PH Y

10/31/2004 PACIFIC GAS & ELECTRIC CO 2105 CA PLUMAS N FK FEATHER R 342628 50 DM PH Y

11/16/2004 PORTLAND GENERAL ELEC CO 477 OR CLACKAMAS BULL RUN R 21000 30 DM PH Y

11/30/2004 INTERNATIONAL PAPER CO 4914 WI BROWN FOX R 1078 20 DM PH Y

12/30/2004 CITY OF PAROWAN, UT 1273 UT IRON PAROWAN CR 600 30 DM PH N

12/31/2004 OAKDALE & S SAN JOAQUIN 2005 CA TUOLUMNE M FK STANISLAUS 63990 50 DM PH N

12/31/2004 OAKDALE & S SAN JOAQUIN 2067 CA CALAVERAS STANISLAUS R 17100 50 DM PH N

12/31/2004 PACIFIC GAS & ELECTRIC CO 2130 CA TUOLUMNE M FK STANISLAUS 87900 50 DM PH Y

12/31/2004 GEORGIA POWER CO 2177 GA HARRIS CHATTAHOOCHEE 129300 50 DM PH Y

12/31/2004 MOSINEE PAPER MILLS CO 2207 WI MARATHON WISCONSIN R 3050 22 DM PH Y

12/31/2004 PORTLAND/BLUE HERON PAPER 2233 OR LACKAMAS WILLAMETTE R 17500 50 DM PH Y

 2/28/2005 SOUTHERN CALIF EDISON CO 382 CA KERN KERN R 12000 30 DM PH Y

 2/28/2005 TAPOCO INC 2169 NC BLOUNT TENNESSEE 326500 50 DM PH Y

 3/31/2005 SOUTHERN CALIF EDISON CO 2174 CA FRESNO RANCHERIA CR 10800 50 DM PH Y

 3/31/2005 WISCONSIN ELECTRIC POWER 2181 WI DUNN RED CEDAR R 5400 50 DM PH Y

 3/31/2005 WISCONSIN ELECTRIC POWER 2697 WI DUNN RED CEDAR R 6000 49 DM PH Y

 4/30/2005 PACIFIC GAS & ELECTRIC CO 178 CA KERN KERN R 9540 30 DM PH Y

 4/30/2005 ALABAMA ELECTRIC COOP 2586 AL COVINGTON CONECUH R 8250 25 DM PH Y

 5/31/2005 GRAND RIVER DAM AUTH 2183 OK MAYES NEOSHO R 100000 50 DM PH N

 5/31/2005 CITY OF MARSHALL, MICHIGAN 6514 MI CALHOUN KALAMAZOO R 319 20 DM PH N

 6/30/2005 FPL ENERGY MAINE HYDRO 2194 ME YORK SACO R 4000 50 DM PH Y

 6/30/2005 N. E. W. HYDRO INC ET AL 7264 WI OUTAGAMIE FOX R 1390 20 DM PH N

 7/01/2005 PACIFICORP 2630 OR JACKSON N FK ROGUE R 36760 25 DM PH Y

 7/31/2005 IDAHO POWER CO 1971 ID ADAMS SNAKE R 1166900 50 DM PH Y

 7/31/2005 DUKE ENERGY CORPORATION 2601 NC SWAIN OCONALUFTEE R 980 25 DM PH N

 7/31/2005 DUKE ENERGY CORPORATION 2602 NC JACKSON TUCKASEGEE R 225 25 DM PH N

 7/31/2005 DUKE ENERGY CORPORATION 2603 NC MACON LITTLE TENNESSEE 1040 25 DM PH N

 8/01/2005 DUKE ENERGY CORPORATION 2619 NC CHEROKEE HIWASSEE R 1800 25 DM PH Y

HYDROELECTRIC POWER TABLE

 (PROJECTS FOR WHICH LICENSES WILL EXPIRE BETWEEN JANUARY 1, 2003 AND DECEMBER 31, 2008

License FERC Period Facilities

Expiration Project Installation of Under Subj.

Date Licensee No. State County River {KW} Years License Fed.
32 

HYDROELECTRIC POWER TABLE

 10/4/2005 NORQUEST SEAFOODS, INC. 620 AK ALEUTIAN DIV INDIAN CR 60 30 DM PH N

10/31/2005 GRANT CTY PUD 2 2114 WA GRANT COLUMBIA R 1755000 50 DM PH N

10/31/2005 ERIE BOULEVARD HYDROPOWER 7387 NY ST LAWRENCE RAQUETTE R 2700 20 DM PH Y

11/10/2005 LOUISVILLE GAS AND EL CO 289 KY JEFFERSON OHIO R 80320 24 DM PH Y

12/31/2005 PUBLIC SERVICE CO OF NH 1893 NH MERRIMACK MERRIMACK R 29700 25 DM PH Y

 1/31/2006 DUKE ENERGY CORPORATION 2686 NC JACKSON TUCKASEGEE R 24600 25 DM PH Y

 1/31/2006 DUKE POWER 2698 NC JACKSON TUCKASEGEE R 26175 25 DM PH Y

 2/14/2006 MONROE CITY CORPORATION 632 UT SEVIER MONROE CR 250 28 DM PH N

 2/28/2006 UNION ELECTRIC CO 459 MO MILLER OSAGE R 176200 25 DM PH Y

 2/28/2006 PACIFICORP 2082 OR KLAMATH KLAMATH R 151000 50 DM PH Y

 2/28/2006 DUKE ENERGY CORPORATION 2692 NC MACON NANTAHALA R 43200 25 DM PH Y

 3/31/2006 SOUTH CAROLINA PUBLIC 199 SC BERKELEY SANTEE R 134520 27 DM PH Y

 4/12/2006 N Y ST ELEC & GAS CORP 2738 NY CLINTON SARANAC R 38950 50 DM PH Y

 4/30/2006 PACIFICORP 935 WA CLARK LEWIS R 136000 22 DM PH Y

 4/30/2006 PACIFICORP 2111 WA SKAMANIA LEWIS R 240000 50 DM PH Y

 4/30/2006 PUGET SOUND PWR AND LT CO 2150 WA WHATCOM BAKER R 162400 50 DM PH Y

 4/30/2006 COWLITZ CO PUD NO 1 2213 WA SKAMANIA LEWIS R 70000 50 DM PH N

 6/30/2006 CHELAN CO PUD NO 1 2145 WA DOUGLAS COLUMBIA R 1237400 50 DM PH N

 8/31/2006 PORTLAND GENERAL ELEC CO 2195 OR CLACKAMAS CLACKAMAS R 136600 50 DM PH Y

11/30/2006 ERIE BOULEVARD HYDROPOWER 7321 NY FRANKLIN SALMON R 1000 20 DM PH N

12/31/2006 CITY & COUNTY OF DENVER 2204 CO GRAND WILLIAMS FK R 3000 50 DM PH N

 1/31/2007 CA DEPT OF WATER RES 2100 CA BUTTE FEATHER R 762850 50 DM PH N

 2/28/2007 HOLYOKE CITY OF MA 7758 MA HAMPDEN HOLYOKE CNL 760 20 PH N

 3/27/2007 PACIFIC GAS & ELECTRIC CO 606 CA SHASTA COW CR 4440 27 DM PH Y

 3/31/2007 FLAMBEAU HYDRO, LLC 9185 WI BURNETT CLAM R 1200 20 DM PH N

 4/30/2007 CHUGACH ELEC ASSN ,INC 2170 AK SEWARD DIV COOPER CR 15000 50 DM PH Y

 4/30/2007 GARKANE POWER ASSOC, INC. 2219 UT GARFIELD W FK BOULDER 4300 50 DM PH Y

 6/09/2007 FLAMBEAU HYDRO, LLC 9184 WI BURNETT YELLOW R 1076 20 DM PH N

 7/31/2007 ALABAMA POWER CO 82 AL CHILTON COOSA R 170000 32 DM PH Y

 7/31/2007 ALABAMA POWER CO 618 AL ELMORE COOSA R 100000 27 DM PH Y

 7/31/2007 SACRAMENTO M U D 2101 CA PLACER GERLE CR 640950 50 DM PH N 

 7/31/2007 ALABAMA POWER CO 2146 AL ELMORE COOSA R 690900 50 DM PH Y

 7/31/2007 PACIFIC GAS & ELECTRIC CO 2155 CA EL DORADO S FK AMERICAN R 7000 45 DM PH Y

 8/01/2007 RESOURCES WEST ENERGY 2545 ID SPOKANE SPOKANE R 1366000 35 DM PH Y

 8/29/2007 ALASKA POWER & TEL CO 1051 AK SKAGWAY-YAKUTAT DEWEY CR 943 27 DM PH N

 8/31/2007 SOUTH CAROLINA ELEC & GAS 516 SC NEWBERRY SALUDA R 207300 23 DM PH Y

 8/31/2007 ALABAMA POWER CO 2165 AL TUSCALOOSA BLACK WARRIOR 203250 50 DM PH Y

 8/31/2007 NEW YORK POWER AUTHORITY 2216 NY NIAGARA NIAGARA R 2755500 50 DM PH Y

11/30/2007 SOUTHERN CALIF EDISON CO 2085 CA FRESNO SAN JOAQUIN R 150938 50 DM PH Y

11/30/2007 WOLVERINE HYDROELECTRIC 2785 MI MIDLAND TITTABAWASSEE 3300 20 DM PH Y

12/31/2007 MONTANA POWER, L.L.C. 2543 MT MISSOULA CLARK FK R 3200 40 DM PH Y

 3/31/2008 SITKA CITY OF & BOROUGH AK 2230 AK SITKA DIVISION SAWMILL CR 7540 50 DM PH N

 4/30/2008 OTTUMWA CITY OF IOWA 925 IA WAPELLO DES MOINES R 3250 26 DM PH N

 4/30/2008 HYRUM CITY CORP UTAH 946 UT CACHE BLACKSMITH FK 400 27 DM PH N

 4/30/2008 ALCOA GENERATING 2197 NC DAVIDSON YADKIN R 209520 50 DM PH Y

 4/30/2008 CAROLINA POWER AND LT CO 2206 NC STANLY PEE DEE R 108600 50 DM PH Y

 6/15/2008 VIRGINIA ELEC & PWR CO 906 VA AMHERST JAMES R 7500 28 DM PH Y

 8/09/2008 CRISP COUNTY POWER COMM 659 GA WORTH FLINT R 15200 28 DM PH N

 8/31/2008 DUKE POWER CO 2232 NC ALEXANDER CATAWBA R 804940 50 DM PH Y

 9/30/2008 PEND OREILLE CTY PUD 1 2225 WA PEND OREILLE SULLIVAN CR 0 50 DM PH N

11/30/2008 EUGENE CITY OF OR 2242 OR LINN MCKENZIE R 124500 50 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 OR 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.
33
34

For Additional Information, Contact:

Federal Energy Regulatory Commission

Office of External Affairs

888 First Street, NE

Washington, DC 20426

202/502-8004