Electricity Regulation

The Federal Energy Regulatory Commission (FERC) faces a major challenge. By the end of 1993, the long-term operating licenses for more than 15 percent of the nation's nonfederal hydroelectric power projects will expire. In relicensing these projects, FERC must balance electricity needs with environmental and other considerations, as spelled out in the 1986 Electric Consumers Protection Act. This report: (1) reviews the effects of that legislation on FERC's licensing process for and decisions about hydroelectric power projects; (2) provides information on FERC's use of temporary licenses for projects seeking relicensing; and (3) identifies FERC's requirements for ensuring public safety at hydroelectric projects.

GAO found that: (1) the changes in the licensing process include more structured mechanisms for increased interaction between agencies, applicants, and FERC; (2) changes in the licensing process require FERC to formally consider and discuss resource agencies' recommendations; (3) FERC has initiated steps to smooth the transition to the new licensing process; (4) FERC has accepted a higher proportion of resource agencies' recommendations since the enactment of ECPA; (5) ECPA has resulted in greater consideration of nondevelopmental issues; (6) FERC issues temporary licenses to projects that are waiting for a relicensing decision; and (7) FERC promotes public safety by requiring licensees to take specific safety measures and to report all safety-related incidents, and by undertaking some educational efforts.