[Senate Report 106-430]
[From the U.S. Government Publishing Office]
Calendar No. 852
106th Congress Report
SENATE
2d Session 106-430
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HYDROELECTRIC PROJECTS IN WEST VIRGINIA
_______
September 28 (legislative day, September 22), 2000.--Ordered to be
printed
_______
Mr. Murkowski, from the Committee on Energy and Natural Resources,
submitted the following
R E P O R T
[To accompany S. 2942]
The Committee on Energy and Natural Resources, to which was
referred the bill (S. 2942) to extend the deadline for
commencement of construction of certain hydroelectric projects
in the State of West Virginia, having considered the same,
reports favorably thereon without amendment and recommends that
the bill do pass.
purpose of the measure
The purposes of S. 2942 is to authorize the FERC, upon the
request of the licensee for projects Nos. 6901, 6902, and 7307
to extend for 3 consecutive 2-year periods the time period for
the commencement of construction. It also provides for the
reinstatement of the license for such project if it has
expired.
background and need
Section 13 of the Federal Power Act requires a
hydroelectric licensee to commence the construction of its
project within two years of the date of the issuance of the
license. That deadline can be extended by the FERC one time for
as much as two additional years. Unless additional legislation
is enacted, if construction has not commenced by the end of the
time period the license is terminated by the FERC.
New Cumberland, FERC Project No. 6901. On September 27,
1989, the Commission issued an original license to the city of
New Martinsville, West Virginia, to construct and operate the
37-megawatt New Cumberland Project No. 6901, to be located at
an existing U.S. Corps of Engineers dam on the Ohio River in
Hancock County, West Virginia.
The original deadline for commencement of project
construction was September 26, 1991. The Commission rescinded
the license for lack of a grant or waiver of State water
quality certification for the project, and subsequently
reissued the license once that certification was issued. This
resulted in a new deadline of October 3, 1993, for commencing
construction. This deadline was subsequently extended by the
Commission to October 3, 1995, in order to give the licensee
additional time to secure project financing. In 1996, Congress
passed Public Law 104-173, which authorized the Commission to
extend the deadline for the commencement of Project No. 6901
construction to October 3, 1999, which the Commission did. On
June 28, 2000 (91 FERC para.61,309), the Commission issued an
order finding that construction did not timely commerce and
terminating the license. The licensee's request for rehearing
of the termination order is currently pending before the
Commission.
Willow Island Lock and Dam, FERC Project No. 6902. On
September 27, 1989, the Commission issued an original license
to the city of New Martinsville, West Virginia, to construct
and operate the 35-megawatt Willow Island Lock and Dam Project
No. 6902, to be located at an existing U.S. Corps of Engineers
dam on the Ohio River in Pleasant County, West Virginia, and
Washington County, Ohio.
The Commission stayed, pending judicial review, most of the
requirements of the license for Project No. 6902 (including the
construction deadline) from March 28, 1991, to April 16, 1992,
which resulted in a new construction deadline of October 15,
1992. This deadline was subsequently extended to October 15,
1994, in order to give the licensee additional time to secure
project financing. In 1996, Congress passed Public Law 104-173,
which authorizing the Commission to extend the deadline for the
commencement of Project No. 6902 construction to October 3,
1999, which the Commission did. On June 28, 2000 (91 FERC
para.61,309), the Commission issued an order finding that
construction had not timely commence and terminating the
license. The licensee's request for rehearing of the
termination order is currently pending before the Commission.
Tygart Dam, FERC Project No. 7307. On September 27, 1989,
the Commission issued an original license to the city of
Grafton, West Virginia, to construct and operate the Tygart Dam
Project No. 7307, to be located at an existing U.S. Corps of
Engineers dam on the Tygart River in Taylor County, West
Virginia.
The original deadline for commencement of project
construction was September 26, 1991. The Commission stayed,
pending judicial review, most of the license (including the
construction deadlines) from September 27, 1990, to April 16,
1992 (nearly 19 months), which resulted in a new deadline of
April 15, 1993, to commence construction. This deadline was
subsequently extended April 15, 1995, because the licensee
needed additional time to consult with the Corp regarding
access to the site and project design and construction, and to
obtain a power sales contract. Pursuant to Public Law 104-246,
the Commission granted extensions until September 26, 1999.
On February 9, 2000, the Commission Secretary dismissed as
moot the licensee's request for a stay of the licensee's
requirement to submit plans prior to beginning construction.
Construction did not timely commence. An order terminating the
license was issued on March 27, 2000. No rehearing request was
filed, and the termination became final on April 26, 2000.
On May 8, 2000, Universal Electric Power Corp. filed a
preliminary permit application (docketed as Project No. 11840)
for the site. No action has been taken on the permit
application.
legislative history
S. 2942 was introduced on July 27, 2000. A hearing was held
by the Subcommittee on Water and Power on September 19, 2000.
committee recommendation and tabulation of votes
The Senate Committee on Energy and Natural Resources, in
open business session on September 20, 2000, by a voice vote
with a quorum present,recommends that the Senate pass the bill
without amendment.
cost and budget considerations
The Congressional Budget Office estimate of the costs of
this measure has been requested but was not received at the
time the report was filed. When the report is available, the
Chairman will request it to be printed in the Congressional
Record for the advice of the Senate.
regulatory Impact Evaluation
In compliance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee makes the following
evaluation of the regulatory impact which would be incurred in
carrying out this measure.
The bill is not a regulatory measure in he sense of
imposing Government-established standards or significant
economic responsibilities on private individuals and
businesses.
No personal information would be collected in administering
the provisions of the bill. Therefore, there would be no impact
on personal privacy.
Little, if any, additional paperwork would result from the
enactment of this measure.
executive communications
The pertinent communications received by the Committee from
the Federal Energy Regulatory Commission setting forth
Executive agency views relating to this measure are set forth
below:
Statement of James J. Hoecker, Chairman, Federal Energy Regulatory
Commission
Mr. Chairman and Members of the Subcommittee, thank you for
the opportunity to comment on S. 2942, a bill to extend the
construction deadlines applicable to three hydroelectric
projects licensed by the Federal Energy Regulatory Commission.
Section 13 of the Federal Power Act requires that
construction of a licensed project be commenced within two
years of issuance of the license. Section 13 authorizes the
Commission to extend this deadline once, for a maximum of two
additional years. If project construction has not commenced by
this deadline, Section 13 requires the Commission to terminate
the license.
S. 2942 would authorize the Commission, at the request of
the licensee and in accordance with the good faith, due
diligence, and public interest requirements of Section 13 of
the FPA, to extend, by up to 3 additional 2-year periods, the
period during which the licensee is required to commence
construction of the three licensed projects described below.
New Cumberland, FERC Project No. 6901. On September 27,
1989, the Commission issued an original license to the City of
New Martinsville, West Virginia, to construct and operate the
37-megawatt New Cumberland Project No. 6901, to be located at
an existing U.S. Corps of Engineers dam on the Ohio River In
Hancock County, West Virginia. Construction entails the
addition of a 600-foot-long intake channel, a powerhouse, a
649-foot-long tailrace, a primary transmission line, and
related facilities.
The original deadline for commencement of project
construction was September 26, 1991. The Commission rescinded
the license for lack of a grant or waiver of state water
quality certification for the project, and subsequently
reissued the license once that certification was issued. This
resulted in a new deadline of October 3, 1993, for commencing
construction. This deadline was subsequently extended by the
Commission to October 3, 1995, in order to give the licensee
additional time to secure project financing. In 1996, Congress
passed Pub. L. No. 104-173, which authorized the Commission to
extend the deadline for the commencement of Project No. 6901
construction to October 3, 1999, which the Commission did. On
June 28, 2000 (91 FERC para. 61,309), the Commission issued an
order finding that construction did not timely commence and
terminating the license. The licensee's request for rehearing
of the termination order is currently pending before the
Commission.
S. 2942 would authorize the Commission to reinstate the
Project No. 6901 license and extend the deadline for commencing
construction, in two-year increments, to October 3, 2005. This
deadline would be 16 years after the date the license was
issued. Even a single 2-year extension under the legislation
would extend the construction deadline to 12 years after the
license was issued.
Willow Island Lock and Dam, FERC Project No. 6902. On
September 27, 1989, the Commission issued an original license
to the City of New Martinsville, West Virginia, to construct
and operate the 35-megawatt Willow Island Lock and Dam Project
No. 6902, to be located at an exiting U.S. Corps of Engineers
dam on the Ohio River in Pleasant County, West Virginia, and
Washington County, Ohio. Construction entails the addition of a
980-foot-long approach channel, a powerhouse, an 865-foot-long
exit channel, a 1.5-mile-long transmission line, and related
facilities.
The Commission stayed, pending judicial review, most of the
requirements of the license for Project No. 6902 (including the
construction deadline) from March 28, 1991, to April 16, 1992,
which resulted in a new construction deadline of October 15,
1992. This deadline was subsequently extended to October 15,
1994, in order to give the licensee additional time to secure
project financing. In 1996, Congress passed Pub. L. No. 104-
173, which authorized the Commission to extend the deadline for
the commencement of Project No. 6902 construction to October 3,
1999, which the Commission did. On June 28, 2000 (91 FERC para.
61,309), the Commission issued an order finding that
construction had not timely commenced and terminating the
license. The licensee's request for rehearing of the
termination order is currently pending before the Commission.
S. 2942 would authorize the Commission to reinstate the
Project No. 6902 license and extend the deadline for commencing
construction, in two-year increments, to October 3, 2005. This
deadline would be nearly 15 non-stayed years from the date the
license was issued. Even a single 2-year extension under the
legislation would extend the construction deadline to nearly 11
non-stayed years after the license was issued.
Tygart Dam, FERC Project No. 7307. On September 27, 1989,
the Commission issued an original license to the City of
Grafton, West Virginia, to construct and operate the Tygart Dam
Project No. 7307, to be located at an existing U.S. Army Corps
of Engineers dam on the Tygart River in Taylor County, West
Virginia. Construction of the project entails the addition of
an intake structure, a 350-foot-long penstock, a powerhouse, a
1-mile-long transmission line, and related project facilities.
The original deadline for the commencement of project
construction was September 26, 1991. The Commission stayed,
pending judicial review, most of the license (including the
construction deadlines) from September 27, 1990, to April 16,
1992 (nearly 19 months), which resulted in a new deadline of
April 15, 1993, to commence construction. This deadline was
subsequently extended to April 15, 1995, because the licensee
needed additional time to consult with the Corps regarding
access to the site and project design and construction, and to
obtain a power sales contract. Pursuant to Public Law No. 104-
246, the Commission granted extensions until September 26,
1999.
On February 9, 2000, the Commission Secretary dismissed as
moot the licensee's request for a stay of the licensee's
requirement to submit plans prior to beginning construction.
Construction did not timely commence. An order terminating the
license was issued on March 27, 2000. No rehearing request was
filed, and the termination became final on April 26, 2000.
On May 8, 2000, Universal Electric Power Corp. filed a
preliminary permit application (docketed as Project No. 11840)
for the site. No action has been taken on the permit
application.
S. 2942 would authorize the Commission to reinstate the
Project No. 7303 license and extend the deadline for commencing
construction, in two-year increments, to September 26, 2005.
This deadline would be nearly 14\1/2\ non-stayed years from the
date the license was issued. Even a single 2-year extension
under the legislation would extend the construction deadline to
nearly 10\1/2\ non-stayed years after the license was issued.
Comments. As a general matter, enactment of bills
authorizing or requiring commencement-of-construction
extensions for individual projects delays utilization in the
public interest of an important energy resource and therefore
is inappropriate. In cases where project-specific extensions
are authorized by the Congress, however, they should be of
relatively short duration and respond only to the practical but
unforeseeable needs of the licensee. Absent a showing of
extraordinary circumstances, granting a licensee more than ten
years from the issuance date of the license to commence
construction does not meet these criteria. (Where the
Commission has stayed the construction deadlines, or the entire
license, for example pending judicial appeal of the license,
the period of the stay should not be counted in applying this
10-year policy.) I believe ten years is a more than reasonable
period for a licensee to determine whether a project is
economically viable, to sign a power purchase agreement, and to
begin construction. If a licensee cannot meet such a deadline,
then I believe as a general matter the license should be
terminated pursuant to the requirements of Section 13, so that
the site is once again available for whatever uses current
circumstances may warrant, based on up-to-date information on
economic and environmental considerations.
H.R. 2942 would provide for the extension of the deadline
for the commencement of construction of Project No. 6901 to 16
years after license issuance; Project No. 6902 to 15 non-stayed
years after license issuance; and Project No. 7307 to nearly
14\1/2\ non-stayed years after license issuance. Because the
bill would extend the commencement of construction deadlines to
more than 10 years after license issuance, I do not support its
enactment.
changes in existing law
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, the Committee notes that no
changes in existing law are made by S. 2942 as ordered
reported.