[Federal Register Volume 62, Number 214 (Wednesday, November 5, 1997)]
[Rules and Regulations]
[Pages 59802-59812]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-29196]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 4 and 375

[Docket No. RM95-16-000; Order No. 596]


Regulations for the Licensing of Hydroelectric Projects; Final 
Rule

Issued October 29, 1997.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Final rule.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) is 
revising its procedural regulations governing applications for licenses 
and exemptions for hydroelectric projects. The regulations offer an 
alternative administrative process whereby in appropriate circumstances 
the pre-filing consultation process and the environmental review 
process will be combined. This alternative process is designed to 
improve communication among affected entities and to be flexible and 
tailored to the facts and circumstances of the particular proceeding. 
The final rule does not delete or replace any existing regulations.

EFFECTIVE DATE: December 5, 1997.

FOR FURTHER INFORMATION CONTACT:

Edward Abrams, Office of Hydropower Licensing, 888 First Street, N.E., 
Washington, DC 20426, (202) 219-2773
Merrill Hathaway, Office of the General Counsel, 888 First Street, 
N.E., Washington, DC 20426, (202) 208-0825


[[Page 59803]]


SUPPLEMENTARY INFORMATION: In addition to publishing the full text of 
this document in the Federal Register, the Commission provides all 
interested persons an opportunity to inspect or copy the contents of 
this document during normal business hours in Room 2A, 888 First 
Street, N.E., Washington DC 20426.
    The Commission Issuance Posting System (CIPS), an electronic 
bulletin board service, provides access to the texts of formal 
documents issued by the Commission. CIPS is available at no charge to 
the user and may be accessed using a personal computer with a modem by 
dialing 202-208-1397 if dialing locally or 1-800-856-3920 if dialing 
long distance. To access CIPS, set your communications software to 
19200, 14400, 12000, 9600, 7200, 4800, 2400, or 1200 bps, full duplex, 
no parity, 8 data bits and 1 stop bit. The full text of this order will 
be available on CIPS in ASCII and WordPerfect 6.1 format. CIPS user 
assistance is available at 202-208-2474.
    CIPS is also available on the Internet. Telnet software is 
required. To access CIPS via the Internet, point your browser to the 
URL address: http://www.ferc.fed.us and select the Bulletin Board 
System. Read instructions on the next page, select FedWorld Dialup/
Telnet. A screen will appear presenting you with several options, 
select option 1. There will be a welcome message from FedWorld and a 
log on prompt. Enter your user ID and password (if you already have an 
account). To establish an account, type the word NEW and answer the 
questions which follow. Upon establishing an account, the FedWorld Main 
Menu will appear. From the Main Menu, type /go ferc.
    Finally, the complete text on diskette in WordPerfect format may be 
purchased from the Commission's copy contractor, La Dorn Systems 
Corporation. La Dorn Systems Corporation is also located in the Public 
Reference Room at 888 First Street, N.E., Washington, DC 20426.

    Before Commissioners: James J. Hoecker, Chairman; Vicky A. 
Bailey, and William L. Massey.

I. Introduction

    On November 26, 1996, the Federal Energy Regulatory Commission 
(Commission) issued a Notice of Proposed Rulemaking (NOPR) to revise 
its procedural regulations governing applications for licenses for 
hydroelectric projects.\1\ In response to the comments received,\2\ the 
Commission adopts a final rule in this proceeding which offers an 
alternative administrative process in which the pre-filing consultation 
and the environmental review processes will be combined. This 
alternative process is designed to improve communication between 
affected entities and to be flexible and tailored to the facts and 
circumstances of the particular proceeding. The final rule does not 
delete or replace any existing regulations.
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    \1\ 77 FERC para. 61,209 (1996).
    \2\ The commenters are listed in Appendix A.
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II. Purpose of the Final Rule

    The NOPR was issued in response to a petition by the National 
Hydropower Association (NHA), seeking completely new Commission 
regulations to improve the licensing process for hydropower applicants. 
The Commission agreed with commenters on NHA's petition, that adoption 
of its proposed rules would not be fair to other entities interested in 
the licensing process, such as resource agencies, Indian tribes and 
citizens' groups, and would not in fact expedite licensing proceedings. 
The Commission noted, however, that the collaborative option in NHA's 
proposal resembled the alternative procedures that the Commission had 
been developing for use on a case-by-case basis as requested by the 
applicant, pursuant to waivers granted by the Office of Hydropower 
Licensing. The Commission determined that the experience with the 
alternative procedures had been positive, that many applicants and 
interested entities appeared to be interested in pursuing the 
alternative procedures, and that it would be helpful to refine, 
clarify, and codify the procedures in the regulations.
    A wide range of entities, representing the hydropower industry, 
state and federal resource agencies, citizens' groups, and an Indian 
tribe, filed comments generally supporting adoption of the rule 
proposed in the NOPR. The commenters made a number of recommendations 
for improving the proposed rule, many of which are adopted in the final 
rule, as discussed in detail below.
    The final rule offers alternative administrative procedures for the 
processing of applications for licenses to construct, operate, and 
maintain hydropower projects, including applications for certain major 
amendments to such licenses, and for applications for exemption. Under 
the final rule, in appropriate circumstances pre-filing consultation 
and environmental review can be combined into a single process. This 
alternative process can be used only if there is a consensus among the 
interested entities to make use of it (consent of the applicant is 
required but agreement of everyone interested is not), and is designed 
to be flexible and tailored to the facts and circumstances of the 
particular proceeding. The final rule does not delete or replace any 
existing regulations, but would supplement the existing regulations by 
offering applicants an opportunity to use the alternative procedures.
    The present regulations require applicants for a license to engage 
in consultation with federal and state resource agencies and Indian 
tribes during the preparation of the application for the license and 
prior to filing it. Thereafter the Commission performs an environmental 
review of the application pursuant to the National Environmental Policy 
Act (NEPA) <SUP>3</SUP> and related statutes. The final rule is 
intended to simplify and expedite the licensing process by combining 
the pre-filing consultation and environmental review processes into a 
single process, and by improving communication among the participants 
in the licensing process. We hope that adoption and use of the 
alternative procedures, on a voluntary basis by applicants, will result 
in expedited licensing proceedings before the Commission, including the 
narrowing of contested issues and the submission of offers of 
settlement that can be used as a basis for licensing orders.
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    \3\ 42 U.S.C. 4321 et seq.
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III. Discussion

A. Application for and Scope of Alternative Procedures

    In proposed Sec. 4.34(i)(1) we set forth the scope of the 
alternative procedures and who could request them. The proposed 
regulatory text stated that the applicant could submit a request to the 
Commission to use the alternative procedures where it intended to file 
an application for a hydropower license or for the amendment of a 
license subject to the provisions of the pre-filing consultation 
regulations at Sec. 4.38.
    Some commenters pointed out that the title of the rule in the 
notice in the Federal Register indicated it only applied to 
applications for relicense and that it should be changed to include all 
applications for license. A commenter recommended that an applicant be 
required to join with other interested entities, such as resource 
agencies, in making such a request.<SUP>4</SUP> Commenters also have 
asked whether the alternative

[[Page 59804]]

procedures apply to applications for preliminary permits or exemption.
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    \4\ Comments of U.S. Department of Commerce, National Marine 
Fisheries Service (NMFS), at 5.
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    We will not require the applicant to obtain the express consent of 
others in order to submit a request to use alternative procedures in 
preparing its application. An applicant may voluntarily request to use 
the alternative procedures. As provided in the final rule and discussed 
below, the Commission will give public notice of, and interested 
entities may submit comments on, the applicant's request to use 
alternative procedures. If an applicant for a hydropower license wishes 
to use the standard procedures in preparing its application, it may 
comply with the pre-filing consultation requirements of Sec. 4.38 or 
Sec. 16.8 of the regulations and need not prepare a preliminary draft 
NEPA document.
    The title of the notice accompanying this final rule in the Federal 
Register accurately describes the application of the new rule, 
extending to all applications for the licensing of hydroelectric 
projects. The alternative procedures apply only to applications for 
license and amendments to licenses that are subject to the pre-filing 
consultation rules contained in Sec. 4.38 and Sec. 16.8 of the 
regulations. Since applications for preliminary permit are not subject 
to such requirements, we see no reason to make the alternative 
procedures available to such applicants. On the other hand, 
applications for exemption are subject to the pre-filing consultation 
requirements of Sec. 4.38, and we conclude that these alternative 
procedures should be available to applicants for exemption, if they 
wish to take advantage of them and meet the applicable requirements of 
the final rule. Accordingly, we are making changes in the rule to 
clarify that it also applies to applicants for exemption.

B. Objectives of Process

    In the proposed regulatory text at Sec. 4.34(i)(2), we set forth 
the goals of the alternative procedures, which included integrating the 
pre-filing consultation process and the environmental review process, 
facilitating greater participation by Commission staff and the public 
in the pre-filing consultation process, allowing the applicant to 
prepare an environmental assessment (EA) or a contractor to prepare an 
environmental impact statement (EIS), encouraging the applicant and 
interested persons to narrow any areas of disagreement, and promoting 
settlement of the issues raised by the hydropower proposal.
    Commenters have recommended that these statements of objective be 
broadened in the final rule. They have asked that the interests of 
Indian tribes be kept in mind.<SUP>5</SUP> A commenter has also asked 
that the stated objectives include providing for effective 
participation in the process by citizens' groups, including the 
provision of financial assistance where appropriate, and allowing such 
participants a role in selecting contractors to conduct scientific 
studies and prepare required documents.<SUP>6</SUP> Commenters have 
asked the Commission to keep in mind in regard to the proposed 
regulations the goal of promoting competition between rival applicants 
for proposed hydropower facilities.<SUP>7</SUP> A commenter was 
concerned that the proposed rule may suggest that under the alternative 
procedures the Commission would delegate to an outside party its 
responsibility for NEPA documents.<SUP>8</SUP>
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    \5\ Comments of Penobscot Nation (Penobscots), U.S. Dept. of the 
Interior (Interior) at 4, 10.
    \6\ Hydropower Reform Coalition (HRC) Comments at 8-10.
    \7\ Comments of Holyoke Gas & Electric Dept. and the Northern 
California Power Agency.
    \8\ Comments of NMFS at 3.
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    We believe that the language of the objectives of the alternative 
procedures should be revised. We have changed proposed 
Sec. 4.34(i)(2)(i) to reflect the goal of combining into one process 
not only the pre-filing consultation procedures and the environmental 
review process under NEPA, but also those administrative processes 
associated with section 401(a) of the Clean Water Act <SUP>9</SUP> and 
other statutes. We are revising proposed Sec. 4.34(i)(2)(ii) to make 
clear that the goal of the alternative procedures includes greater 
participation in the process by and improved communication among all 
concerned entities, including the applicant, resource agencies, Indian 
tribes, the public and Commission staff. While meeting certain minimum 
requirements of openness and fairness, the process is designed to be as 
flexible as possible, tailored to the circumstances of each case.
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    \9\ 33 U.S.C. 1341(a)(1).
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    Section 4.34(i)(2)(iv) is revised to state that the rule is 
designed to promote cooperative efforts by the applicant and interested 
entities, including the sharing of pertinent information about the 
resource impacts of the applicant's hydropower proposal and appropriate 
mitigation and enhancement measures. The goal of encouraging settlement 
is not confined to submitting a formal offer of settlement among 
parties on the application when it is filed, but includes any agreement 
that can be reached that narrows the range of contested issues, both on 
necessary studies and on mitigation and enhancement measures.
    We decline to modify the goal statement in the regulations as 
recommended by HRC. We have no objection to an applicant voluntarily 
deciding to provide financial assistance to citizens' groups to 
facilitate their effective participation in the alternative process or 
to allowing such groups an appropriate role in choosing contractors to 
do necessary studies. We believe that if any participant believes such 
measures are important and would further the successful completion of 
the process and the achievement of its other objectives, these 
questions should be discussed among the participants. But we do not 
believe it would be appropriate or helpful for the Commission to 
attempt to force participants to make such arrangements, which should 
be strictly voluntary and arise from the particular circumstances and 
dynamics of each case.
    The final rule establishing alternative procedures for hydropower 
applications is neutral in regard to its impact on potential rival 
applicants for hydropower facilities, such as an applicant seeking to 
renew its license for such facilities and a municipal competitor 
seeking a license for the same facilities. No applicant in a 
competitive proceeding has asked the Commission to use the alternative 
procedures. However, nothing in the final rule precludes granting such 
a request. If it is made, we will consider whether it should be 
granted, considering all the relevant factors presented.
    We are changing the language of Sec. 4.34(i)(2)(iii) to state that 
the applicant or its contractor or consultant will only prepare a 
preliminary draft EA or a preliminary draft EIS, which after filing 
(with the related application) will be subject to complete review, 
revision and issuance for comment by the Commission.
    Finally, we are adding a Sec. 4.34(i)(2)(v) to the rules, to make 
it clear that another objective of the alternative procedures is the 
orderly and expeditious review by the Commission of any agreement or 
offer of settlement filed to resolve issues raised by an application 
for hydropower license, amendment, or exemption. We hope that 
involvement of the Commission's staff, prior to the filing of an 
application and agreement or offer of settlement with the Commission, 
together with the preparation of preliminary draft NEPA documents 
during the pre-filing consultation process, will result in filings that 
the Commission can expeditiously review. These filings should include 
water quality certification under section 401 of the Clean Water Act, 
with any

[[Page 59805]]

applicable conditions, and (after filing of the application) a final 
decision by any land management agency under section 4(e) of the 
Federal Power Act (FPA),<SUP>10</SUP>/ with mandatory conditions, 
should be submitted to the Commission so that we can make a prompt 
decision on the license or exemption application.
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    \10\ 16 U.S.C. 791a et seq.
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C. Demonstration Required of Applicant

    The NOPR proposed in Sec. 4.34(i)(3)(i) to require that the 
applicant, in its request to the Commission for use of the alternative 
procedures, demonstrate that it had made a reasonable effort to contact 
all resource agencies, Indian tribes, citizens' groups and others 
affected by the hydropower proposal, and that a ``consensus'' exists 
that the use of alternative procedures is appropriate.
    This proposed regulatory text generated the most controversy in the 
rulemaking. Commenters disagreed vigorously as to what ``consensus'' 
should mean, with some arguing that it should mean unanimous agreement 
by all concerned,<SUP>11</SUP>/ and others arguing that it should mean 
the preponderance of views, at least by the major participants in the 
process.<SUP>12</SUP>/ Some commenters have proposed elaborate voting 
schemes in this regard,<SUP>13</SUP>/ while others have claimed that 
certain entities, such as resource agencies, should have a veto power 
over use of the alternative procedures.<SUP>14</SUP>/ Some commenters 
have asked the Commission to specify in the rule exactly what the 
requester should include in its showing.<SUP>15</SUP>/
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    \11\ E.g., Comments of HRC at 4-5, Interior at 3-4.
    \12\ E.g., Comments of NHA at 4, 15-18, Alabama Power Co. and 
Georgia Power Co. at 3-5.
    \13\ E.g., Comments of Public Generating Pool at 6-8.
    \14\ Comments of U.S. Dept. of Agriculture, Forest Service, at 
2.
    \15\ Comments of NMFS at 5.
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    The term ``consensus'' in ordinary usage means ``general 
agreement'' or ``collective opinion: the judgment arrived at by most of 
those concerned.'' <SUP>16</SUP>/ That is how the Commission employs 
the term here. While unanimous views obviously reflect consensus, 
unanimity is not always essential to a fundamentally consensual 
approach in a multi-party situation. The final rule does not require 
the applicant, in the request for use of the alternative procedures, to 
show that everyone concerned supports the use of these procedures. The 
applicant need only show that the weight of opinions expressed make it 
reasonable to conclude that under the circumstances it appears that use 
of the alternative procedures will be productive. We do not require the 
applicant to make any formal showing, such as a signed agreement
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    \16\ Webster's Third New International Dictionary (1981), or use 
of a particular voting procedure, to memorialize the consensus on 
use of the procedures. We do not give any single interested entity a 
veto power over the applicant's use of alternative procedures.
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    We envision a series of interactions between the applicant and 
participants that goes beyond an exchange of letters. Such interactions 
could include teleconferences and meetings involving Commission staff 
to explore the alternative procedures. In some cases the applicant's 
showing may rely on a lack of objections raised in such meetings. This 
situation may arise at the outset of the pre-filing consultation 
process, when interested entities are unsure of how the alternative 
procedures may compare to those otherwise required under Commission 
regulations and are unaware of the relative benefits of the 
alternative. The Commission believes that in these situations it is 
worth allowing the applicant and participants to try the alternative 
process rather than closing the door on this option.
    To protect the rights of all interested entities to be advised of 
the request for alternative procedures and to file comments on the 
request in order to make their views known directly to the Commission, 
the final rule specifies, as proposed in the NOPR, that in all cases 
the Commission will give public notice in the Federal Register of the 
filing by an applicant of a request to use alternative procedures. 
Comments may be filed in response to this notice, and the Commission 
will take them into account in deciding whether or not to grant the 
request. The decision on the request will be final and not subject to 
interlocutory rehearing or appeal.<SUP>17</SUP>
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    \17\ The Commission will place a copy of the decision (on the 
request to use alternative procedures) on the Commission Issuance 
Posting System (CIPS), so that it can readily be found by anyone 
interested.
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D. Required Steps to Follow

    In Sec. 4.34(i)(4), the NOPR set forth certain minimum steps that 
all alternative procedures should include as appropriate: (1) The 
initial information meeting; (2) the scoping of environmental issues; 
(3) the analysis of scientific studies and further scoping; and (4) the 
preparation of a preliminary draft NEPA document and related 
application. Participants would be free, under the communications 
protocol to be submitted with the request to use alternative 
procedures, to describe those steps in greater detail or to agree to 
steps in addition to those set forth in the proposed rule.
    Some commenters objected to the statement that these steps would 
only be included ``as appropriate,'' and expressed their stongly held 
views that the steps were the minimum that should be required in any 
alternative procedure.<SUP>18</SUP> Others argued in general for more 
flexibility.<SUP>19</SUP> Some commenters wanted more requirements in 
the regulatory text, to make clear that the alternative process must 
include distribution by the applicant of an initial information 
package, that the initial information meeting should be open to the 
public, and that there should be cooperation between the applicant and 
interested persons on the determination of necessary studies and their 
design and scope.<SUP>20</SUP>
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    \18\ E.g., Comments of Interior at 4, Forest Service at 3.
    \19\ NMFS Comments at 4-5.
    \20\ HRC Comments at 9-10, 13.
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    Commenters also requested that the Commission specify in detail in 
the regulations the deadlines that would apply during the alternative 
process.<SUP>21</SUP>
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    \21\ E.g., Comments of Forest Service at 4.
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    We have set forth in the final rule a list of the minimum steps we 
think should be a part of any alternative process, if it is to serve 
its objectives of expediting the completion of the administrative 
process, while at the same time being fair to all participants. The 
final rule adopted provides for the inclusion of three steps by 
combining the second and third steps (dealing with the scoping and 
study processes, as outlined above) that were proposed in the NOPR. We 
do not believe that the requirement that these three steps be included 
restricts the flexibility of the alternative process.
    We do not, however, make the inclusion of these three steps 
mandatory in every alternative process, as there may be special 
circumstances where some of them are not possible or necessary.
    The best example of such a case is if the alternative process 
begins after the applicant has already completed the first step in the 
standard pre-filing consultation process (the initial information 
meeting open to the public). The Commission will entertain requests to 
use the alternative process at any reasonable time, and they need not 
be submitted before the commencement of the standard pre-filing 
consultation process. In such a case, if the Commission grants the 
request, it would make no sense to require by rule that the applicant 
repeat a step that is the same as or substantially similar to a step it

[[Page 59806]]

has already taken under the standard process. The Commission is 
sensitive to the concerns expressed in the comments and will not 
abridge procedures allowed in the alternative process in a way that 
would curtail notice to or participatory rights of any interested 
entity. We wish to be flexible and fair to all concerned.
    We agree with the comments asking for changes in the regulatory 
text to clarify the basic requirements for the completion of these 
minimum steps in the alternative process. Accordingly, Sec. 4.34(i)(4) 
of the final rule makes clear that the applicant must distribute an 
initial information package and conduct an initial information meeting 
open to the public, as required in the standard process, and that the 
approved procedures must include provisions for the cooperative scoping 
of environmental issues with all participants, including the selection 
and design of required scientific studies and any further scoping. Our 
goal is to promote as much candid communication as possible among the 
participants about the applicant's proposal, its resource impacts, and 
the proposals and views of the other participants.
    We do not think it is necessary or appropriate to spell out, in 
greater detail in the regulations, deadlines for the alternative 
process. The establishment of these deadlines should be done 
cooperatively by the participants in a manner that fits the 
circumstances and needs of each case, with the guidance and support of 
Commission staff. We believe that the successful use of the alternative 
procedures is predicated on a climate of cooperation among the 
applicant and interested entities. Therefore we do not believe that the 
Commission should mandate by rule exactly how the alternative process 
may unfold in every case. To do so would unnecessarily repeat 
requirements in the standard pre-filing consultation process, which 
remains available for use in appropriate cases, and would undercut the 
flexibility and spirit of cooperation and open communiciation that lie 
at the heart of the alternative process.

E. Notice, Filings and Service Requirements

    The NOPR proposed in Sec. 4.34(i)(5) that the Commission would give 
public notice of the filing of the applicant's request to use the 
alternative procedures, inviting comment on the request. Proposed 
Sec. 4.34(6)(i) would require the Commission and the applicant to give 
public notice of each of the four steps required in the alternative 
process under proposed Sec. 4.34(i)(4). The applicant would be required 
to give notice of each of these stages to entities on a mailing list 
approved by the Commission. The proposal required the applicant to file 
with the Commission quarterly reports on the progress of the 
alternative process, pursuant to Sec. 4.34(i)(6)(ii), and implied in 
Sec. 4.34(i)(6)(iii) that the applicant would also have to file with 
the Commission the critical documents generated in the process, namely 
the initial information package, scoping documents, and the preliminary 
draft environmental review document.
    Some commenters have urged the Commission to add language to the 
rule in order to make it clear how the Commission and the applicant 
would give notice.<SUP>22</SUP> A commenter urged that, in the case of 
an applicant seeking a new license, the applicant be required to give 
notice at the outset to (1) any entity that had contacted the 
Commission during the period of the previous license about the project 
in question and (2) published lists of citizens' groups that may have 
an interest.<SUP>23</SUP> The Commission was also asked to require that 
various filings made by the applicant in the course of the alternative 
process be served on all participants in the process.<SUP>24</SUP> 
Resource agencies requested that the Commission require the applicant, 
at the conclusion of the alternative process, to index its public file 
(which documents the pre-filing consultation and environmental review 
processes) and submit all of these documents, together with the index, 
to the Commission with its application.<SUP>25</SUP> Commenters also 
expressed concern that omission of Exhibit E would eliminate important 
information from the Commission's record.<SUP>26</SUP>
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    \22\ E.g., Comments of Interior at 5.
    \23\ HRC Comments at 5-6.
    \24\ Comments of Interior at 6-7.
    \25\ Comments of Interior at 6-7 and Forest Service at 1.
    \26\ Comments of Interior at 7.
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    We agree that revisions should be made in the final rule about the 
requirements for notice, filings and service of documents. New 
Sec. 4.34(i)(3)(iii) requires the applicant, when it files its request 
for alternative procedures with the Commission, to serve copies on all 
affected resource agencies and Indian tribes and all entities that have 
expressed an interest in the alternative process. As provided in 
Sec. 4.34(i)(5), the Commission will give notice in the Federal 
Register of receipt of the request. We believe that these requirements, 
together with the rule's requirement that the applicant must have made 
reasonable efforts to contact interested entities prior to the filing 
of its request (see Sec. 4.34(i)(3)(i)), will be sufficient to put the 
public on notice of the request. As discussed in section III.C above, 
the Commission will consider any comments received in determining 
whether to grant the request.
    Section 4.34(6)(i) is also revised from the proposal to make clear 
that the Commission's public notice of each of the first two stages in 
the alternative process, described in Sec. 4.34(i)(4), will appear in 
the Federal Register, and that the applicant's public notice of these 
stages is required to appear in local newspapers in the county or 
counties in which the project is located. Section 4.34(i)(6)(ii) is 
revised to make clear that reports to the Commission on the pre-filing 
consultation process are required only every six months, and that this 
requirement can be satisfied by the submission of documents already 
available, such as summaries or minutes of meetings held. This section 
also clarifies what critical documents in the process the applicant 
must file with the Commission and provides that copies of these 
documents must be served on each participant in the process that 
requests a copy.<SUP>27</SUP>
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    \27\ Applicants should note that in order to have sufficient 
copies for internal distribution, the Commission requires the 
submission of an original and eight copies of all filings in 
hydropower matters. See 18 CFR 4.34(h). The final rule makes clear 
that this requirement applies to filings with the Commission that 
are made in the course of the alternative pre-filing process 
described in Sec. 4.34(i). See Sec. 4.34(i)(6)(ii).
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    When the applicant files its application and preliminary draft 
environmental review document with the Commission, these filings, and 
such additional material as will be specified by the Commission in each 
case, will replace the Exhibit E material that is required in the 
standard process. We will not permit applicants to omit material 
necessary for the Commission's review in these filings.
    We do not think it necessary to require the applicant to index all 
of the documents in its public file compiled during the alternative 
process and to submit those documents, together with the index, to the 
Commission with its application.<SUP>28</SUP> Any party to the 
proceeding before the Commission may file any material it wishes as 
part of its comments on the application, or the party may request that 
materials in the possession of the applicant be filed with the 
Commission. The Commission may order such filings if it believes they

[[Page 59807]]

would be in the public interest. See the final rule 
Sec. 4.34(i)(6)(iv).
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    \28\ The final rule requires the applicant to maintain a public 
file of all relevant documents in the pre-filing consultation 
process. See Sec. 4.34(i)(6)(iii).
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F. Requests for Scientific Studies

    Under the proposed rule Sec. 4.34(i)(6)(v), the procedures approved 
in the alternative process may require all participants in the process 
to submit during the pre-filing consultation period their requests for 
scientific studies by the applicant. The proposal also allowed requests 
for such studies to be filed with the Commission after the filing of 
the application for good cause, with an explanation of why it was not 
possible to request the study during the pre-filing period.
    This proposal was controversial. Some commenters pointed out that 
it was too restrictive, and that any party should be able to file a 
request for scientific studies by the applicant after the filing of its 
application, so long as good cause is shown. The Commission was also 
asked to give examples of situations in which a party would be able to 
show good cause.<SUP>29</SUP> Other commenters wanted the rule to be 
tightened to eliminate in whole or in part the right of any party to 
request scientific studies after the filing of the 
application.<SUP>30</SUP>
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    \29\ HRC Comments at 11-12, U.S. Environmental Protection Agency 
at 1, Washington Dept. of Fish and Wildlife at 3-4.
    \30\ Reply Comments of EEI at 4-6.
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    We believe that an important result of the alternative process, and 
the greater participation and communication among participants it 
encourages, should be the amicable resolution among participants of 
disputes about necessary scientific studies during the pre-filing 
consultation period, not after the application is filed with the 
Commission. With improved communication among the participants and the 
availability of dispute resolution in the alternative process, we do 
not expect to receive frequent requests for additional studies after 
the filing of an application that is subject to the alternative 
process. We understand, however, that not all such disputes will be so 
resolved, and that some participants, even though they have 
participated actively and in good faith in the alternative process, may 
be unwilling thereby to waive their requests for certain studies, even 
if the other participants in the process do not think they are 
necessary. The alternative process does not require such a waiver. We 
hope that through the alternative process, with the assistance of 
Commission staff, participants will be able to resolve all important 
differences about a hydropower proposal, including disputes about 
necessary studies. If the participants cannot resolve such a dispute, 
even with the dispute resolution procedure discussed in the next 
section, a party may raise it to the Commission's attention after the 
filing of the application. In such a case, the Commission will rule on 
the request, either by separate order or when issuing a decision on the 
application.
    The requirement of good cause is self-explanatory, and the 
Commission does not wish to bind by rule the discretion of future 
Commissions to do justice in a particular case. We will not, therefore, 
encumber the final rule or include in this preamble additional language 
that would attempt to explain what would suffice to make a showing of 
good cause in a particular case.

G. Dispute Resolution

    The proposed rule was silent on whether the Commission's provisions 
for dispute resolution, available in the standard pre-filing 
consultation process, would apply to the alternative process. 
Commenters asked whether they could seek resolution of disputes by the 
Commission in the alternative process, should it be 
necessary.<SUP>31</SUP>
---------------------------------------------------------------------------

    \31\ Comments of Interior at 8.
---------------------------------------------------------------------------

    We believe that participants should be able to ask the Commission 
to resolve disputes arising during the alternative process, but only if 
they have first made reasonable efforts to resolve the disputes with 
other participants, using any mechanisms established by agreement among 
the participants and the help of Commission staff, where appropriate. 
Any such request should be served on all participants and must document 
what efforts have been made to resolve the dispute.

H. Collapse of Consensus

    The NOPR asked the commenters to address what they thought should 
happen if the consensus that had appeared to exist when the Commission 
granted an applicant's request for alternative procedures subsequently 
collapsed.
    Many commenters attempted to answer this question. Most seemed to 
recognize that in certain circumstances it would make no sense to 
continue with the alternative process,<SUP>32</SUP> and some asked the 
Commission to direct what should happen in such circumstances.\33\
---------------------------------------------------------------------------

    \32\ Comments of Duke Power Co. at 2-3, Pacific Gas & Electric 
Co. at 4; HRC Comments at 7, Reply Comments at 11-12. asked the 
Commission to direct what should happen in such circumstances.
    \33\ Comments of Forest Service at 4, Montana Power Co. at 6-7, 
EEI Reply Comments at 6.
---------------------------------------------------------------------------

    Despite the best of intentions of the participants, it is possible 
in some instances for the consensus supporting the continued use of the 
alternative procedures to collapse. We do not mean by this loss of 
consensus a disagreement on what studies should be conducted or what 
mitigation or enhancement measures should be required in response to 
the applicant's proposal, or loss of confidence on the part of one 
participant or a few participants in the process. We believe that a 
consensus will collapse if the weight of opinion of the applicant and 
the other participants is that the process has become a waste of their 
valuable time and resources and that the public interest would be 
better served under the circumstances by the Commission's directing a 
completion of the pre-filing process and what further steps are 
required of the applicant. In such a situation an alternative pre-
filing process directed by the Commission would be required in order to 
clarify what steps the applicant would have to take in the time 
remaining to file an acceptable application.
    Accordingly, the final rule adds Sec. 4.34(i)(7) to allow a 
participant (including the applicant), in the event that a consensus 
supporting the alternative process is lost, to file a request that the 
Commission direct what steps should be taken to complete the pre-filing 
consultation process.

I. Grandfather Provision

    The NOPR asked what should be done about alternative processes 
already approved by the Commission, pursuant to case-by-case waivers of 
current regulatory requirements, if the Commission adopts a final rule 
establishing alternative procedures.
    All commenters addressing this question felt that the rule should 
grandfather such already approved processes.
    We agree and are adding Sec. 4.34(i)(9) to the final rule to 
grandfather existing alternative processes. Steps already taken do not 
have to be repeated, and applicants are not required to act 
inconsistently with written agreements already reached by participants 
in such cases. Other provisions of the new rule, however, such as 
public file requirements or requirements to file materials with the 
Commission (consisting of an original and eight copies) and serve 
copies on other participants, that may be in addition to those already 
agreed to in cases where waivers have been granted, will apply to all 
such cases after the effective date of the final rule.

J. Miscellaneous

    NHA asked the Commission to improve its public noticing of

[[Page 59808]]

hydropower applications, by including the licensee name and the name of 
the project in addition to the project number, and to use public 
libraries to facilitate notice to the public. NHA also asked the 
Commission to explain what the NOPR meant in stating that staff could 
participate in cases where there was no alternative process proposed 
and approved, pursuant to proposed Sec. 4.34(i)(7).
    Resource agencies were concerned about the impact of the 
alternative procedures on the Commission's obligations under NEPA, 
section 10(j) of the FPA and the Endangered Species Act 
(ESA).<SUP>34</SUP> Federal agencies were concerned about whether the 
alternative procedures would affect their participation as cooperating 
agencies for NEPA purposes.<SUP>35</SUP> A number of commenters asked 
the Commission to explain how the alternative pre-filing procedures 
would affect the Commission's conduct of the hearing process on the 
application when it is filed.<SUP>36</SUP>
---------------------------------------------------------------------------

    \34\ 16 U.S.C. 1531-1544. Comments of Interior at 9 and NMFS at 
4.
    \35\ Comments of Forest Service at 4, Interior at 10.
    \36\ Comments of NMFS at 3, Western Urban Water Coalition at 4, 
Public Generating Pool at 14-29, Sacramento Municipal Utility 
District at 18-36, and the City and County of Denver at 2-3.
---------------------------------------------------------------------------

    Regarding notices concerning a hydropower project, the Commission 
agrees with NHA that all public notices of a hydropower application 
should include not only the project number but also the name of the 
licensee and the name of the project. Participants in the alternative 
process may agree to use public libraries to facilitate notice and to 
provide information to the public, in addition to complying with the 
notice and public file requirements contained in the final rule.
    The final rule contains a provision at Sec. 4.34(i)(8) making it 
clear that, at the Commission's discretion, its staff may participate 
not only in the pre-filing consultation process where alternative 
procedures are in use, but also in other cases where these procedures 
are not being used. The Commission may commit its staff, upon request 
and on a case-by-case basis, to limited participation in the pre-filing 
consultation process in connection with the preparation of any 
application for license, exemption, or license amendment. The goals of 
such participation may include exploring whether the participants in 
the process should consider the use of alternative procedures and, to 
the extent feasible and appropriate, assisting in the informal 
resolution of disputes and the combination of the pre-filing 
consultation process with the NEPA process and related processes, such 
as the grant of water quality certification under the Clean Water Act 
and the issuance of mandatory conditions pursuant to section 4(e) of 
the FPA.
    In such cases, on request and at its discretion, the Commission may 
approve suitable modifications to the procedures otherwise applicable 
during the pre-filing and post-filing periods, similar to those made 
for alternative procedures set forth in the proposed rule. If the 
applicant subsequently requests and is granted permission to use 
alternative procedures, the Commission may direct how the applicant and 
interested entities may shift from the standard pre-filing consultation 
process to the alternative process.
    The final rule does not affect the Commision's compliance with 
NEPA, section 10(j) of the FPA, or the ESA, nor does it in any way 
deprive a party of the right to contest issues before the Commission 
and obtain a decision on these issues based on the administrative 
record before the Commission. The Commission will review the 
application for adequacy, and if it is accepted for filing the 
Commission will invite interventions and set a deadline for the 
submission of final recommendations, prescriptions, mandatory 
conditions, and comments. Upon receipt of the application the 
Commission will not issue a notice inviting additional study requests, 
and the Commission will not issue a notice that the application is 
ready for environmental analysis, as would occur under the standard 
procedures. The Commission will review the preliminary draft NEPA 
document, prepared in the course of the pre-filing consultation period 
under the alternative procedures, and issue a draft NEPA document for 
comment. The Commission will take any steps required to examine 
contested issues and comply in its usual manner with statutory mandates 
applicable to the case, such as section 10(j) of the FPA and the ESA. 
The Commission will then issue the NEPA document in final form and an 
order on the application for license, exemption, or license amendment.
    If an agreement or offer of settlement is filed in connection with 
an application that the Commission grants, the order will address the 
agreement or offer of settlement. If contested issues remain, as 
determined by the position of the parties and resource agencies before 
the Commission, the order will resolve the issues based on the 
administrative record before the Commission.
    Finally, an agency, such as a federal land management agency with 
authority over the proposed project under FPA section 4(e) or a state 
agency with responsibility for issuing a certification for the project 
under the Clean Water Act, is free to participate fully in any 
alternative procedures under the final rule and subsequently to elect 
to be a cooperating agency with the Commission for NEPA purposes. The 
Commission will continue to enforce its policy, however, that such an 
agency cannot intervene as a party in the proceeding and at the same 
time be a cooperating agency for NEPA purposes. We believe that 
allowing an agency to pursue both of these roles simultaneously could 
raise concerns about compliance by the Commission with its ex parte 
rule.<SUP>37</SUP>
---------------------------------------------------------------------------

    \37\ 18 CFR 385.2201.
---------------------------------------------------------------------------

IV. Environmental Analysis

    Commission regulations describe the circumstances where preparation 
of an environmental assessment or an environmental impact statement 
will be required.<SUP>\38\</SUP> The Commission has categorically 
excluded certain actions from this requirement as not having a 
significant effect on the human environment.<SUP>\39\</SUP> No 
environmental consideration is necessary for the promulgation of a rule 
that is clarifying, corrective, or procedural, or that does not 
substantially change the effect of legislation or regulations being 
amended.<SUP>\40\</SUP>
---------------------------------------------------------------------------

    \\38\\ Regulations Implementing National Environmental Policy 
Act, 52 FR 47897 (Dec. 17, 1987), codified at 18 CFR Part 380.
    \\39\\ 18 CFR 380.4(a)(2)(ii).
    \\40\\ 18 CFR 380.4.
---------------------------------------------------------------------------

    This final rule is procedural in nature. It proposes alternative 
procedures that participants to a hydroelectric licensing or exemption 
proceeding may wish to use. Thus, no environmental assessment or 
environmental impact statement is necessary for the requirements 
proposed in the rule.

V. Regulatory Flexibility Certification

    The Regulatory Flexibility Act of 1980 (RFA) <SUP>\41\</SUP> 
generally requires a description and analysis of final rules that will 
have significant economic impact on a substantial number of small 
entities. Pursuant to section 605(b) of the RFA, the Commission hereby 
certifies that the regulations promulgated will not have a significant 
economic impact on a substantial number of small entities.
---------------------------------------------------------------------------

    \\41\\ 5 U.S.C. 601-612.
---------------------------------------------------------------------------

    The procedures adopted herein are purely voluntary in nature, and 
are designed to reduce burdens on small entities (as well as large 
entities) rather

[[Page 59809]]

than to increase them. More fundamentally, the alternative process we 
are proposing herein is voluntary. The procedures constitute an 
alternative to the procedures currently prescribed in our regulations, 
and will not be available unless it is the consensus of the persons and 
entities interested in the proceeding, as discussed herein, to use the 
alternative procedures. Under this approach, each small entity will be 
able to evaluate for itself whether the alternative procedures are 
beneficial or burdensome, and oppose their adoption if they appeared to 
be more burdensome than beneficial. Under these circumstances, the 
economic impact of the proposed rule will be either neutral or 
beneficial to the small entities affected by it.

VI. Information Collection Requirements

    The Office of Management and Budget (OMB) regulations require OMB 
to approve certain reporting and recordkeeping requirements 
(collections of information) imposed by agency rule.<SUP>\42\</SUP> OMB 
has reviewed the NOPR without comment. The final rule adopted herein 
will impose reporting burdens only on those applicants that voluntarily 
choose to use the alternate procedures. Respondents subject to the 
filing requirements of this final rule will not be penalized for 
failing to respond to these collections of information unless the 
collections of information display a valid OMB control number. The 
Final Rule will affect two existing data collections, FERC-500 and 
FERC-505. Most of the reporting burdens associated with preparing and 
filing an application for a hydropower license, exemption, or amendment 
to license are imposed by existing regulations.
---------------------------------------------------------------------------

    \\42\\ 5 CFR 1320.11.
---------------------------------------------------------------------------

Public Reporting Burden

    The alternative procedures will only require minor additional 
filing requirements with the Commission. The other additional burdens 
of the alternative procedures, as compared to the standard procedures, 
do not involve filings with the Commission, but will consist of various 
outreach efforts of the applicant and related interactions with 
entities interested in its hydropower proposal. An applicant would 
presumably only incur such additional burdens if it believed that, in 
the long run, it would save on litigation and other costs incurred to 
pursue the standard procedures.
    The Commission has made approximate estimates of the additional 
time that may be required of an applicant to comply with the 
alternative procedures, as compared with the standard procedures. It is 
difficult to be precise about such estimates, because the time required 
for one applicant could vary considerably from the time required for 
other applicants, depending upon the circumstances involved, including 
the complexity of the issues raised, the total number of participants 
in the pre-filing process, and how cooperatively those participants 
worked together. If the alternative procedures were successful and 
resulted, for example, in the filing of an agreement or offer of 
settlement with the Commission, the applicant may be able to save 
substantially more time by avoiding litigation than was invested in the 
alternative procedures. If an applicant requested and was allowed to 
use the alternative procedures, the main additional burden, with the 
estimated hours to comply with each, are estimated to be:

------------------------------------------------------------------------
                                                               Burden   
                          Process                             (hours of 
                                                               effort)  
------------------------------------------------------------------------
(1) Contact interested entities...........................            80
(2) Prepare and submit request, including communications                
 protocol.................................................            80
(3) Prepare and distribute scoping and hold related                     
 meetings.................................................            50
(4) Develop agenda and other documents, including minutes,              
 for all meetings and prepare and distribute them (only                 
 additional time as compared to presently required                      
 meetings.................................................           600
(5) Prepare and publish public notices....................            24
(6) Prepare and submit semi-annual progress reports and                 
 make other required Commission filings...................            48
(7) Maintain a complete record of the pre-filing                        
 consultation proceedings that would be open to the public           250
------------------------------------------------------------------------

    It is estimated that to prepare and distribute the preliminary 
draft environmental review document would not take any more time than 
to prepare Exhibit E under the standard process. Therefore, the 
estimated additional burden of the tasks required of an applicant if it 
voluntarily undertakes the alternative process totals 1132 hours.
    The OMB regulations require OMB to approve certain information 
collection requirements imposed by agency rule. Accordingly, pursuant 
to OMB regulations, the Commission is providing notice of its proposed 
information collections to OMB.
    Title: FERC-500 ``Application for License for Water Projects with 
More than 5MW Capacity''; FERC-505 ``Application for Water Projects 5MW 
or Less Capacity''.
    Action: Proposed Data Collections.
    OMB Control No.: 1902-0058; 1902-0115.
    Respondents: Businesses or other for profit.
    Frequency of Responses: On Occasion.
    Necessity of Information: There are approximately 1,021 hydropower 
licenses issued by the Commission that are currently outstanding. These 
licenses all expire at the completion of fixed terms, and at expiration 
the license holders may apply for a new licenses. Other applicants may 
apply for exemptions or original licenses to construct and operate new 
or existing hydropower projects.
    The final rule authorizes a potential applicant for a license, 
exemption or certain major amendments to a license to file a request 
for alternative procedures if the applicant wants to use such 
procedures, as authorized by the rule. The rule also requires the 
filing of a communications protocol with the request for alternative 
procedures. The applicant will have to do a number of other things in 
the pre-filing consultation process, including distribution of an 
initial information package and conduct an initial public meeting, 
which are required under existing Commission regulations. The 
applicant, possibly with a contractor's assistance, would have to 
conduct the scoping of environmental issues; this is a new requirement, 
not now imposed on applicants, but which is related to currently 
required pre-filing consultation duties of the applicant and would 
substitute in part for the environmental review process traditionally 
done by the Commission after the filing of an application for 
hydropower license or for certain major license amendments.
    The applicant would have to do studies of the resource impacts of 
its proposal, as it now must do under current Commission regulations 
governing the pre-filing consultation process. The applicant or the 
contractor would also have to prepare a preliminary draft NEPA document 
and submit additional information in lieu of what is now required as 
Exhibit E to a hydropower application. These two filing requirements--
what is now required and what would be required under the regulations 
for the alternative procedures--are similar.
    The applicant would have to file with the Commission semi-annual 
reports on

[[Page 59810]]

the progress of the pre-filing consultation process under the 
alternative procedures. No such reports are now required, although the 
filing of these reports under the alternative procedures avoids the 
requirement in the current regulations for the applicant to document 
the entire pre-filing consultation process when the application is 
filed. Under the alternative procedures the applicant would have to 
maintain a public file of the pre-filing process and to give various 
public notices during this process, while current regulations do not 
require maintenance of a public file containing all this information or 
the issuance of as many such notices during the pre-filing consultation 
period.
    Internal Review: The Commission has assured itself, by means of its 
internal review, that there is specific, objective support for the 
burden estimates associated with the information requirements. The 
Commission's Office of Hydropower Licensing will upon receipt of the 
application review it to determine the broad impact of the license 
application. Commission staff conducts a systematic review of the 
prepared application with supplemental documentation provided by the 
solicitation of comments from other agencies and the public. The 
Commission will take any steps required to examine contested issues and 
comply with statutory mandates applicable to the case. These reviews 
ensure that the Federal Power Act as amended by other statutory 
provisions is formally administered to ensure compliance by the 
licensee. These requirements conform to the Commission's plan for 
efficient information collection, communication, and management within 
the hydroelectric industry.
    Interested persons may obtain information on the reporting 
requirements by contacting the following: Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426. [Attention: 
Michael Miller, Division of Information Services Phone: (202) 208-1415, 
fax: (202) 273-0873, email: <a href="/cdn-cgi/l/email-protection#670a0a0e0b0b0215270102150449010203491214"><span class="__cf_email__" data-cfemail="a7cacacecbcbc2d5e7c1c2d5c489c1c2c389d2d4">[email protected]</span></a>]
    Comments are solicited on the Commission's need for this 
information, whether the information will have practical utility, the 
accuracy of the provided burden estimates, ways to enhance the quality, 
utility, and clarity of the information to be collected, and any 
suggested methods for minimizing respondents' burden, including the use 
of automated information techniques. For submitting comments concerning 
the collections of information and the associated burden estimates, 
please send your comments to the contact listed above and to the Office 
of Management and Budget, Office of Information and Regulatory Affairs, 
Washington, DC 20503. [Attention: Desk Officer for the Federal Energy 
Regulatory Commission, phone (202) 395-3087, fax: (202) 395-7285]
    Estimated Annual Burden (includes burden hours already approved for 
standard procedures):

----------------------------------------------------------------------------------------------------------------
                                                     Number of       Number of       Hours per     Total annual 
                 Data collection                    respondents      responses       response          hours    
----------------------------------------------------------------------------------------------------------------
FERC-500........................................               6               6             853           5,120
FERC-505........................................              10              10             182           1,818
----------------------------------------------------------------------------------------------------------------

    Total Annual Hours for collections (Reporting + Recordkeeping, (if 
appropriate)) = 6,938.
    Information Collection Costs: The Commission seeks comments on the 
costs to comply with these requirements. It has projected the average 
annualized cost for all respondents to be:

----------------------------------------------------------------------------------------------------------------
                                                                                    Annualized                  
                                                                    Annualized         costs           Total    
                         Data collection                          capital/start-   (operations &    annualized  
                                                                     up costs      maintenance)        costs    
----------------------------------------------------------------------------------------------------------------
FERC-500........................................................        $269,861           $0.00     $269,861.00
FERC-505........................................................          95,822            0.00       95,822.00
                                                                                                 ---------------
      Total.....................................................  ..............  ..............      365,683.00
----------------------------------------------------------------------------------------------------------------



VII. Effective Date

    This rule is effective December 5, 1997. If OMB has not approved 
the information collection provisions at that time, the Commission will 
issue a notice delaying the effective date until OMB approval of the 
final rule.

List of Subjects

18 CFR Part 4

    Electric power, Reporting and recordkeeping requirements.

18 CFR Part 375

    Authority delegations (Government agencies), Seals and insignia, 
Sunshine Act.

    By the Commission.
Lois D. Cashell,
Secretary.
    In consideration of the foregoing, the Commission amends parts 4 
and 375 of Chapter I, Title 18, Code of Federal Regulations, as set 
forth below.

PART 4--LICENSES, PERMITS, EXEMPTIONS, AND DETERMINATION OF PROJECT 
COSTS

    1. The authority citation for part 4 continues to read as follows:

    Authority: 16 U.S.C. 791a-825r, 2601-2645; 42 U.S.C. 7101-7352.

    2. In Sec. 4.34, the section heading is revised and a new paragraph 
(i) is added to read as follows:


Sec. 4.34  Hearings on applications; consultation on terms and 
conditions; motions to intervene; alternative procedures.

* * * * *
    (i) Alternative procedures. (1) An applicant may submit to the 
Commission a request to approve the use of alternative procedures for 
pre-filing consultation and the filing and processing of an application 
for an original, new or subsequent hydropower license or exemption that 
is subject to Sec. 4.38 or Sec. 16.8 of this chapter, or for the 
amendment of a license that is subject to the provisions of Sec. 4.38.
    (2) The goal of such alternative procedures shall be to:
    (i) Combine into a single process the pre-filing consultation 
process, the

[[Page 59811]]

environmental review process under the National Environmental Policy 
Act and administrative processes associated with the Clean Water Act 
and other statutes;
    (ii) Facilitate greater participation by and improve communication 
among the potential applicant, resource agencies, Indian tribes, the 
public and Commission staff in a flexible pre-filing consultation 
process tailored to the circumstances of each case;
    (iii) Allow for the preparation of a preliminary draft 
environmental assessment by an applicant or its contractor or 
consultant, or of a preliminary draft environmental impact statement by 
a contractor or consultant chosen by the Commission and funded by the 
applicant;
    (iv) Promote cooperative efforts by the potential applicant and 
interested entities and encourage them to share information about 
resource impacts and mitigation and enhancement proposals and to narrow 
any areas of disagreement and reach agreement or settlement of the 
issues raised by the hydropower proposal; and
    (v) Facilitate an orderly and expeditious review of an agreement or 
offer of settlement of an application for a hydropower license, 
exemption or amendment to a license.
    (3) A potential hydropower applicant requesting the use of 
alternative procedures must:
    (i) Demonstrate that a reasonable effort has been made to contact 
all resource agencies, Indian tribes, citizens' groups, and others 
affected by the applicant's proposal, and that a consensus exists that 
the use of alternative procedures is appropriate under the 
circumstances;
    (ii) Submit a communications protocol, supported by interested 
entities, governing how the applicant and other participants in the 
pre-filing consultation process, including the Commission staff, may 
communicate with each other regarding the merits of the applicant's 
proposal and proposals and recommendations of interested entities; and
    (iii) Serve a copy of the request on all affected resource agencies 
and Indian tribes and on all entities contacted by the applicant that 
have expressed an interest in the alternative pre-filing consultation 
process.
    (4) As appropriate under the circumstances of the case, the 
alternative procedures should include provisions for:
    (i) Distribution of an initial information package and conduct of 
an initial information meeting open to the public;
    (ii) The cooperative scoping of environmental issues (including 
necessary scientific studies), the analysis of completed studies and 
any further scoping; and
    (iii) The preparation of a preliminary draft environmental 
assessment or preliminary draft environmental impact statement and 
related application.
    (5) The Commission will give public notice in the Federal Register 
inviting comment on the applicant's request to use alternative 
procedures. The Commission will consider any such comments in 
determining whether to grant or deny the applicant's request to use 
alternative procdures. Such a decision will not be subject to 
interlocutory rehearing or appeal.
    (6) If the Commission accepts the use of alternative procedures, 
the following provisions will apply.
    (i) To the extent feasible under the circumstances of the 
proceeding, the Commission will give notice in the Federal Register and 
the applicant will give notice, in a local newspaper of general 
circulation in the county or counties in which the project is located, 
of the initial information meeting and the scoping of environmental 
issues. The applicant will also send notice of these stages to a 
mailing list approved by the Commission.
    (ii) Every six months, the applicant shall file with the Commission 
a report summarizing the progress made in the pre-filing consultation 
process and referencing the applicant's public file, where additional 
information on that process can be obtained. Summaries or minutes of 
meetings held in the process may be used to satisfy this filing 
requirement. The applicant must also file with the Commission a copy of 
its initial information package, each scoping document, and the 
preliminary draft environmental review document. All filings with the 
Commission under this section must include the number of copies 
required by paragraph (h) of this section, and the applicant shall send 
a copy of these filings to each participant that requests a copy.
    (iii) At a suitable location, the applicant will maintain a public 
file of all relevant documents, including scientific studies, 
correspondence, and minutes or summaries of meetings, compiled during 
the pre-filing consultation process. The Commission will maintain a 
public file of the applicant's initial information package, scoping 
documents, periodic reports on the pre-filing consultation process, and 
the preliminary draft environmental review document.
    (iv) An applicant authorized to use alternative procedures may 
substitute a preliminary draft environmental review document and 
additional material specified by the Commission instead of Exhibit E to 
its application and need not supply additional documention of the pre-
filing consultation process. The applicant will file with the 
Commission the results of any studies conducted or other documentation 
as directed by the Commission, either on its own motion or in response 
to a motion by a party to the licensing or exemption proceeding.
    (v) Pursuant to the procedures approved, the participants will set 
reasonable deadlines requiring all resource agencies, Indian tribes, 
citizens' groups, and interested persons to submit to the applicant 
requests for scientific studies during the pre-filing consultation 
process, and additional requests for studies may be made to the 
Commission after the filing of the application only for good cause 
shown.
    (vi) During the pre-filing process the Commission may require the 
filing of preliminary fish and wildlife recommendations, prescriptions, 
mandatory conditions, and comments, to be submitted in final form after 
the filing of the application; no notice that the application is ready 
for environmental analysis need be given by the Commission after the 
filing of an application pursuant to these procedures.
    (vii) Any potential applicant, resource agency, Indian tribe, 
citizens' group, or other entity participating in the alternative pre-
filing consultation process may file a request with the Commission to 
resolve a dispute concerning the alternative process (including a 
dispute over required studies), but only after reasonable efforts have 
been made to resolve the dispute with other participants in the 
process. No such request shall be accepted for filing unless the entity 
submitting it certifies that it has been served on all other 
participants. The request must document what efforts have been made to 
resolve the dispute.
    (7) If the potential applicant or any resource agency, Indian 
tribe, citizens' group, or other entity participating in the 
alternative pre-filing consultation process can show that it has 
cooperated in the process but a consensus supporting the use of the 
process no longer exists and that continued use of the alternative 
process will not be productive, the participant may petition the 
Commission for an order directing the use by the potential applicant of 
appropriate procedures to complete its application. No such request 
shall be accepted for filing unless the entity submitting it certifies 
that it has been served on all other participants. The

[[Page 59812]]

request must recommend specific procedures that are appropriate under 
the circumstances.
    (8) The Commission may participate in the pre-filing consultation 
process and assist in the integration of this process and the 
environmental review process in any case, including appropriate cases 
where the applicant, contractor, or consultant funded by the applicant 
is not preparing a preliminary draft environmental assessment or 
preliminary draft environmental impact statement, but where staff 
assistance is available and could expedite the proceeding.
    (9) In all cases where the Commission has approved the use of 
alternative pre-filing consultation procedures prior to December 5, 
1997, during the pre-filing process the potential applicant need not 
follow any additional requirements imposed by paragraph (i) of this 
section, if in so doing the applicant would repeat any steps already 
taken in the preparation of its application and supporting 
documentation or act inconsistently with any written agreement signed 
before December 5, 1997 by the applicant and the other participants in 
the alternative process.

PART 375--THE COMMISSION

    3. The authority citation for part 375 continues to read as 
follows:

    Authority: 5 U.S.C. 551-557; 15 U.S.C. 717-717w, 3301-3432; 16 
U.S.C. 791-825r, 2601-2645; 42 U.S.C. 7101-7352.

    4. In Sec. 375.314, paragraph (u) is added to read as follows:


Sec. 375.314  Delegations to the Director of the Office of Hydropower 
Licensing.

* * * * *
    (u) Approve, on a case-specific basis, and issue such orders as may 
be necessary in connection with the use of alternative procedures, 
under Sec. 4.34(i) of this chapter, for the development of an 
application for an original, new or subsequent license, exemption, or 
license amendment subject to the pre-filing consultation process, and 
assist in the pre-filing consultation and related processes.

    Note: The appendix will not appear in the Code of Federal 
Regulations.

Appendix A

Comments

Citizens' Groups

Adirondack Mountain Club
American Rivers
Appalachian Mountain Club
California Hydropower Reform Coalition
Conservation Law Foundation
Hydropower Reform Coalition
Idaho Rivers United
Michigan Hydro Relicensing Coalition
New England FLOW
New York Rivers United
Trout Unlimited

Federal Agencies

U.S. Department of Agriculture, U.S. Forest Service
U.S. Department of Commerce, National Marine Fisheries Service
U.S. Department of the Interior
U.S. Environmental Protection Agency

Indian Tribes

Penobscot Nation

Industry Associations

American Public Power Association
Edison Electric Institute
National Hydropower Association
Public Generating Pool
Western Urban Water Coalition

State Agencies

Georgia Department of Natural Resources
New York State Department of Environmental Conservation
Washington Department of Fish and Game

Licensees

Adirondack Hydro Development Corporation
Alabama Power Company and Georgia Power Company
Denver Water
Duke Power Company
Holyoke Gas & Electric Company and Northern California Water Power 
Agency
Minnesota Power & Light Company
Montana Power Company
Pacific Gas and Electric Company
Portland General Electric Company
Sacramento Municipal Utility District
Seattle City Light

Reply Comments

Alabama Power Company and Georgia Power Company
City of Holyoke, Massachusetts Gas & Electric Department
Duke Power Company
Edison Electric Institute
Hydropower Reform Coalition
National Hydropower Association
Sacramento Municipal Utility District

[FR Doc. 97-29196 Filed 11-4-97; 8:45 am]
BILLING CODE 6717-01-P


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