II

106TH CONGRESS

1ST SESSION S. 740

To amend the Federal Power Act to improve the hydroelectric licensing

process by granting the Federal Energy Regulatory Commission statutory

authority to better coordinate participation by other agencies and entities,

and for other purposes.

IN THE SENATE OF THE UNITED STATES

MARCH 25, 1999

Mr. CRAIG (for himself, Mr. CRAPO, Mr. BURNS, and Mr. GRAMS) introduced

the following bill; which was read twice and referred to the Committee

on Energy and Natural Resources

A BILL

To amend the Federal Power Act to improve the hydroelectric licensing process by granting the Federal Energy

Regulatory Commission statutory authority to better coordinate participation by other agencies and entities, and

for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Hydroelectric Licens5 ing Process Improvement Act of 1999’’.

6 SEC. 2. FINDINGS.

7 Congress finds that—
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1 (1) hydroelectric power is an irreplaceable

2 source of clean, economic, renewable energy with the

3 unique capability of supporting reliable electric serv4 ice while maintaining environmental quality;

5 (2) hydroelectric power is the leading renewable

6 energy resource of the United States;

7 (3) hydroelectric power projects provide mul8 tiple benefits to the United States, including recre9 ation, irrigation, flood control, water supply, and

10 fish and wildlife benefits;

11 (4) in the next 15 years, the bulk of all non12 Federal hydroelectric power capacity in the United

13 States is due to be relicensed by the Federal Energy

14 Regulatory Commission;

15 (5) the process of licensing hydroelectric

16 projects by the Commission—

17 (A) does not produce optimal decisions, be18 cause the agencies that participate in the proc19 ess are not required to consider the full effects

20 of their mandatory and recommended condi21 tions on a license;

22 (B) is inefficient, in part because agencies

23 do not always submit their mandatory and rec24 ommended conditions by a time certain;
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1 (C) is burdened by uncoordinated environ2 mental reviews and duplicative permitting au3 thority; and

4 (D) is burdensome for all participants and

5 too often results in litigation; and

6 (6) while the alternative licensing procedures

7 available to applicants for hydroelectric project li8 censes provide important opportunities for the col9 laborative resolution of many of the issues in hydro10 electric project licensing, those procedures are not

11 appropriate in every case and cannot substitute for

12 statutory reforms of the hydroelectric licensing proc13 ess.

14 SEC. 3. PURPOSE.

15 The purpose of this Act is to achieve the objective

16 of relicensing hydroelectric power projects to maintain

17 high environmental standards while preserving low cost

18 power by—

19 (1) requiring agencies to consider the full ef20 fects of their mandatory and recommended condi21 tions on a hydroelectric power license and to docu22 ment the consideration of a broad range of factors;

23 (2) requiring the Federal Energy Regulatory

24 Commission to impose deadlines by which Federal
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1 agencies must submit proposed mandatory and rec2 ommended conditions to a license; and

3 (3) making other improvements in the licensing

4 process.

5 SEC. 4. PROCESS FOR CONSIDERATION BY FEDERAL AGEN6 CIES OF CONDITIONS TO LICENSES.

7 (a) IN GENERAL.—Part I of the Federal Power Act

8 (16 U.S.C. 791a et seq.) is amended by adding at the end

9 the following:

10 ‘‘SEC. 32. PROCESS FOR CONSIDERATION BY FEDERAL

11 AGENCIES OF CONDITIONS TO LICENSES.

12 ‘‘(a) DEFINITIONS.—In this section:

13 ‘‘(1) CONDITION.—The term ‘condition’

14 means—

15 ‘‘(A) a condition to a license for a project

16 on a Federal reservation determined by a con17 sulting agency for the purpose of the first pro18 viso of section 4(e); and

19 ‘‘(B) a prescription relating to the con20 struction, maintenance, or operation of a

21 fishway determined by a consulting agency for

22 the purpose of the first sentence of section 18.

23 ‘‘(2) CONSULTING AGENCY.—The term ‘con24 sulting agency’ means—
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1 ‘‘(A) in relation to a condition described in

2 paragraph (1)(A), the Federal agency with re3 sponsibility for supervising the reservation; and

4 ‘‘(B) in relation to a condition described in

5 paragraph (1)(B), the Secretary of the Interior

6 or the Secretary of Commerce, as appropriate.

7 ‘‘(b) FACTORS TO BE CONSIDERED.—

8 ‘‘(1) IN GENERAL.—In determining a condition,

9 a consulting agency shall take into consideration—

10 ‘‘(A) the impacts of the condition on—

11 ‘‘(i) economic and power values;

12 ‘‘(ii) electric generation capacity and

13 system reliability;

14 ‘‘(iii) air quality (including consider15 ation of the impacts on greenhouse gas

16 emissions); and

17 ‘‘(iv) drinking, flood control, irriga18 tion, navigation, or recreation water sup19 ply;

20 ‘‘(B) compatibility with other conditions to

21 be included in the license, including mandatory

22 conditions of other agencies, when available;

23 and
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1 ‘‘(C) means to ensure that the condition

2 addresses only direct project environmental im3 pacts, and does so at the lowest project cost.

4 ‘‘(2) DOCUMENTATION.—

5 ‘‘(A) IN GENERAL.—In the course of the

6 consideration of factors under paragraph (1)

7 and before any review under subsection (e), a

8 consulting agency shall create written docu9 mentation detailing, among other pertinent

10 matters, all proposals made, comments received,

11 facts considered, and analyses made regarding

12 each of those factors sufficient to demonstrate

13 that each of the factors was given full consider14 ation in determining the condition to be sub15 mitted to the Commission.

16 ‘‘(B) SUBMISSION TO THE COMMISSION.—

17 A consulting agency shall include the docu18 mentation under subparagraph (A) in its sub19 mission of a condition to the Commission.

20 ‘‘(c) SCIENTIFIC REVIEW.—

21 ‘‘(1) IN GENERAL.—Each condition determined

22 by a consulting agency shall be subjected to appro23 priately substantiated scientific review.

24 ‘‘(2) DATA.—For the purpose of paragraph (1),

25 a condition shall be considered to have been sub-
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1 jected to appropriately substantiated scientific review

2 if the review—

3 ‘‘(A) was based on current empirical data

4 or field-tested data; and

5 ‘‘(B) was subjected to peer review.

6 ‘‘(d) RELATIONSHIP TO IMPACTS ON FEDERAL RES7 ERVATION.—In the case of a condition for the purpose of

8 the first proviso of section 4(e), each condition determined

9 by a consulting agency shall be directly and reasonably

10 related to the impacts of the project within the Federal

11 reservation.

12 ‘‘(e) ADMINISTRATIVE REVIEW.—

13 ‘‘(1) OPPORTUNITY FOR REVIEW.—Before sub14 mitting to the Commission a proposed condition, and

15 at least 90 days before a license applicant is re16 quired to file a license application with the Commis17 sion, a consulting agency shall provide the proposed

18 condition to the license applicant and offer the li19 cense applicant an opportunity to obtain expedited

20 review before an administrative law judge or other

21 independent reviewing body of—

22 ‘‘(A) the reasonableness of the proposed

23 condition in light of the effect that implementa24 tion of the condition will have on the energy

25 and economic values of a project; and
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1 ‘‘(B) compliance by the consulting agency

2 with the requirements of this section, including

3 the requirement to consider the factors de4 scribed in subsection (b)(1).

5 ‘‘(2) COMPLETION OF REVIEW.—

6 ‘‘(A) IN GENERAL.—A review under para7 graph (1) shall be completed not more than 180

8 days after the license applicant notifies the con9 sulting agency of the request for review.

10 ‘‘(B) FAILURE TO MAKE TIMELY COMPLE11 TION OF REVIEW.—If review of a proposed con12 dition is not completed within the time specified

13 by subparagraph (A), the Commission may

14 treat a condition submitted by the consulting

15 agency as a recommendation is treated under

16 section 10(j).

17 ‘‘(3) REMAND.—If the administrative law judge

18 or reviewing body finds that a proposed condition is

19 unreasonable or that the consulting agency failed to

20 comply with any of the requirements of this section,

21 the administrative law judge or reviewing body

22 shall—

23 ‘‘(A) render a decision that—

24 ‘‘(i) explains the reasons for a finding

25 that the condition is unreasonable and may
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1 make recommendations that the adminis2 trative law judge or reviewing body may

3 have for the formulation of a condition

4 that would not be found unreasonable; or

5 ‘‘(ii) explains the reasons for a finding

6 that a requirement was not met and may

7 describe any action that the consulting

8 agency should take to meet the require9 ment; and

10 ‘‘(B) remand the matter to the consulting

11 agency for further action.

12 ‘‘(4) SUBMISSION TO THE COMMISSION.—Fol13 lowing administrative review under this subsection, a

14 consulting agency shall—

15 ‘‘(A) take such action as is necessary to—

16 ‘‘(i) withdraw the condition;

17 ‘‘(ii) formulate a condition that fol18 lows the recommendation of the adminis19 trative law judge or reviewing body; or

20 ‘‘(iii) otherwise comply with this sec21 tion; and

22 ‘‘(B) include with its submission to the

23 Commission of a proposed condition—

24 ‘‘(i) the record on administrative re25 view; and
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1 ‘‘(ii) documentation of any action

2 taken following administrative review.

3 ‘‘(f) SUBMISSION OF FINAL CONDITION.—

4 ‘‘(1) IN GENERAL.—After an applicant files

5 with the Commission an application for a license, the

6 Commission shall set a date by which a consulting

7 agency shall submit to the Commission a final condi8 tion.

9 ‘‘(2) LIMITATION.—Except as provided in para10 graph (3), the date for submission of a final condi11 tion shall be not later than 1 year after the date on

12 which the Commission gives the consulting agency

13 notice that a license application is ready for environ14 mental review.

15 ‘‘(3) DEFAULT.—If a consulting agency does

16 not submit a final condition to a license by the date

17 set under paragraph (1)—

18 ‘‘(A) the consulting agency shall not there19 after have authority to recommend or establish

20 a condition to the license; and

21 ‘‘(B) the Commission may, but shall not be

22 required to, recommend or establish an appro23 priate condition to the license that—

24 ‘‘(i) furthers the interest sought to be

25 protected by the provision of law that au-
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1 thorizes the consulting agency to propose

2 or establish a condition to the license; and

3 ‘‘(ii) conforms to the requirements of

4 this Act.

5 ‘‘(4) EXTENSION.—The Commission may make

6 1 extension, of not more than 30 days, of a deadline

7 set under paragraph (1).

8 ‘‘(g) ANALYSIS BY THE COMMISSION.—

9 ‘‘(1) ECONOMIC ANALYSIS.—The Commission

10 shall conduct an economic analysis of each condition

11 submitted by a consulting agency to determine

12 whether the condition would render the project un13 economic.

14 ‘‘(2) CONSISTENCY WITH THIS SECTION.—In

15 exercising authority under section 10(j)(2), the Com16 mission shall consider whether any recommendation

17 submitted under section 10(j)(1) is consistent with

18 the purposes and requirements of subsections (b)

19 and (c) of this section.

20 ‘‘(h) COMMISSION DETERMINATION ON EFFECT OF

21 CONDITIONS.—When requested by a license applicant in

22 a request for rehearing, the Commission shall make a writ23 ten determination on whether a condition submitted by a

24 consulting agency—
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1 ‘‘(1) is in the public interest, as measured by

2 the impact of the condition on the factors described

3 in subsection (b)(1);

4 ‘‘(2) was subjected to scientific review in ac5 cordance with subsection (c);

6 ‘‘(3) relates to direct project impacts within the

7 reservation, in the case of a condition for the first

8 proviso of section 4(e);

9 ‘‘(4) is reasonable;

10 ‘‘(5) is supported by substantial evidence; and

11 ‘‘(6) is consistent with this Act and other terms

12 and conditions to be included in the license.’’.

13 (b) CONFORMING AND TECHNICAL AMENDMENTS.—

14 (1) SECTION 4.—Section 4(e) of the Federal

15 Power Act (16 U.S.C. 797(e)) is amended—

16 (A) in the first proviso of the first sentence

17 by inserting after ‘‘conditions’’ the following: ‘‘,

18 determined in accordance with section 32,’’; and

19 (B) in the last sentence, by striking the pe20 riod and inserting ‘‘(including consideration of

21 the impacts on greenhouse gas emissions)’’.

22 (2) SECTION 18.—Section 18 of the Federal

23 Power Act (16 U.S.C. 811) is amended in the first

24 sentence by striking ‘‘prescribed by the Secretary of

25 Commerce’’ and inserting ‘‘prescribed, in accordance
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1 with section 32, by the Secretary of the Interior or

2 the Secretary of Commerce, as appropriate’’.

3 SEC. 5. COORDINATED ENVIRONMENTAL REVIEW PROCESS.

4 Part I of the Federal Power Act (16 U.S.C. 791a

5 et seq.) (as amended by section 3) is amended by adding

6 at the end the following:

7 ‘‘SEC. 33. COORDINATED ENVIRONMENTAL REVIEW

8 PROCESS.

9 ‘‘(a) LEAD AGENCY RESPONSIBILITY.—The Commis10 sion, as the lead agency for environmental reviews under

11 the National Environmental Policy Act of 1969 (42 U.S.C.

12 4321 et seq.) for projects licensed under this part, shall

13 conduct a single consolidated environmental review—

14 ‘‘(1) for each such project; or

15 ‘‘(2) if appropriate, for multiple projects located

16 in the same area

17 ‘‘(b) CONSULTING AGENCIES.—In connection with

18 the formulation of a condition in accordance with section

19 32, a consulting agency shall not perform any

20 environmnental review in addition to any environmental

21 review performed by the Commission in connection with

22 the action to which the condition relates.

23 ‘‘(c) DEADLINES.—

24 ‘‘(1) IN GENERAL.—The Commission shall set a

25 deadline for the submission of comments by Federal,
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1 State, and local government agencies in connection

2 with the preparation of any environmental impact

3 statement or environmental assessment required for

4 a project.

5 ‘‘(2) CONSIDERATIONS.—In setting a deadline

6 under paragraph (1), the Commission shall take into

7 consideration—

8 ‘‘(A) the need of the license applicant for

9 a prompt and reasonable decision;

10 ‘‘(B) the resources of interested Federal,

11 State, and local government agencies; and

12 ‘‘(C) applicable statutory requirements.’’.

13 SEC. 6. STUDY OF SMALL HYDROELECTRIC PROJECTS.

14 (a) IN GENERAL.—Not later than 18 months after

15 the date of enactment of this Act, the Federal Energy

16 Regulatory Commission shall submit to the Committee on

17 Energy and Natural Resources of the Senate and the

18 Committee on Commerce of the House of Representatives

19 a study of the feasibility of establishing a separate licens20 ing procedure for small hydroelectric projects.

21 (b) DEFINITION OF SMALL HYDROELECTRIC

22 PROJECT.—The Commission may by regulation define the

23 term ‘‘small hydroelectric project’’ for the purpose of sub24 section (a), except that the term shall include at a min-
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1 imum a hydroelectric project that has a generating capac2 ity of 5 megawatts or less.

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