Hydropower Relicensing
Stakeholders' Views on the Energy Policy Act Varied, but More Consistent Information Needed Gao ID: GAO-10-770 August 4, 2010Under the Federal Power Act, the Federal Energy Regulatory Commission (FERC) issues licenses for up to 50 years to construct and operate nonfederal hydropower projects. These projects must be relicensed when their licenses expire to continue operating. Relevant federal resource agencies issue license conditions to protect federal lands and prescriptions to assist fish passage on these projects. Under section 241 of the Energy Policy Act of 2005, parties to the licensing process may (1) request a "trial-type hearing" on any disputed issue of material fact related to a condition or prescription and (2) propose alternative conditions or prescriptions. In this context, GAO was asked to (1) determine the extent to which stakeholders have used section 241 provisions in relicensing and their outcomes and (2) describe stakeholders' views on section 241's impact on relicensing and conditions and prescriptions. GAO analyzed relicensing documents filed with FERC and conducted a total of 61 interviews with representatives from relevant federal resource agencies, FERC, licensees, tribal groups, industry groups, and environmental groups.
Since the passage of the Energy Policy Act in 2005, nonfederal stakeholders--licensees, states, environmental groups, and an Indian tribe--used section 241 provisions for 25 of the 103 eligible hydropower projects being relicensed, most of which occurred within the first year. Of these 25 projects, stakeholders proposed a total of 211 alternative conditions and prescriptions. In response, the federal resource agencies (U.S. Department of Agriculture's Forest Service, Department of Commerce's National Marine Fisheries Service, and several bureaus in the Department of the Interior) accepted no alternatives as originally proposed but instead modified a total of 140 and removed a total of 9 of the agencies' preliminary conditions and prescriptions and rejected 42 of the 211 alternatives; the remaining alternatives are pending as of May 17, 2010. Under section 241, resource agencies must submit a statement to FERC explaining the basis for accepting or rejecting a proposed alternative. While agencies generally provided explanations for rejecting alternative conditions and prescriptions, with few exceptions, they did not explain the reasons for not accepting alternatives when they modified conditions and prescriptions. As a result, it is difficult to determine the extent, type, or basis of changes that were made and difficult to determine if and how the proposed alternatives affected the final conditions and prescriptions issued by the agencies. As of May 17, 2010, nonfederal stakeholders requested trial-type hearings for 18 of the 25 projects in which section 241 provisions were used, and three trial-type hearings were completed. Of the remaining 15 projects, requests for hearings were withdrawn for 14 of them when licensees and agencies negotiated a settlement agreement before the administrative law judge made a ruling, and one is pending because the licensee is in negotiations to decommission the project. In the three hearings held to date, the administrative law judge ruled in favor of the agencies on most issues. According to the federal and nonfederal relicensing stakeholders GAO spoke with, the section 241 provisions have had a variety of effects on the relicensing process and on the license conditions and prescriptions. While most licensees and a few agency officials said that section 241 encourages settlement agreements between the licensee and resource agency, some agency officials said that section 241 made agreements more difficult because efforts to negotiate have moved to preparing for potential hearings. Regarding conditions and prescriptions, some stakeholders commented that under section 241, agencies put more effort into reviewing and providing support for their conditions and prescriptions, but environmental groups and some agency officials said that in their opinion, agencies issued fewer or less environmentally protective conditions and prescriptions. Many agency officials also raised concerns about increases in workload and costs as a result of section 241. For example, their estimated costs for the three hearings to date totaled approximately $3.1 million. Furthermore, many of the stakeholders offered suggestions for improving the use of section 241, including adjusting the time frame for a trial-type hearing. GAO recommends that cognizant officials who do not adopt a proposed alternative include reasons why in their statement to FERC. The resource agencies generally agreed, but commented that no explanation is required when an alternative is withdrawn as a result of negotiations.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Franklin W. Rusco Team: Government Accountability Office: Natural Resources and Environment Phone: (202) 512-4597GAO-10-770, Hydropower Relicensing: Stakeholders' Views on the Energy Policy Act Varied, but More Consistent Information Needed
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Report to the Chairman, Committee on Energy and Natural Resources,
United States Senate:
United States Government Accountability Office:
GAO:
August 2010:
Hydropower Relicensing:
Stakeholders' Views on the Energy Policy Act Varied, but More
Consistent Information Needed:
GAO-10-770:
GAO Highlights:
Highlights of GAO-10-770, a report to the Chairman, Committee on
Energy and Natural Resources, United States Senate.
Why GAO Did This Study:
Under the Federal Power Act, the Federal Energy Regulatory Commission
(FERC) issues licenses for up to 50 years to construct and operate
nonfederal hydropower projects. These projects must be relicensed when
their licenses expire to continue operating. Relevant federal resource
agencies issue license conditions to protect federal lands and
prescriptions to assist fish passage on these projects. Under section
241 of the Energy Policy Act of 2005, parties to the licensing process
may (1) request a ’trial-type hearing“ on any disputed issue of
material fact related to a condition or prescription and (2) propose
alternative conditions or prescriptions. In this context, GAO was
asked to (1) determine the extent to which stakeholders have used
section 241 provisions in relicensing and their outcomes and (2)
describe stakeholders‘ views on section 241‘s impact on relicensing
and conditions and prescriptions. GAO analyzed relicensing documents
filed with FERC and conducted a total of 61 interviews with
representatives from relevant federal resource agencies, FERC,
licensees, tribal groups, industry groups, and environmental groups.
What GAO Found:
Since the passage of the Energy Policy Act in 2005, nonfederal
stakeholders”licensees, states, environmental groups, and an Indian
tribe”used section 241 provisions for 25 of the 103 eligible
hydropower projects being relicensed, most of which occurred within
the first year. Of these 25 projects, stakeholders proposed a total of
211 alternative conditions and prescriptions. In response, the federal
resource agencies (U.S. Department of Agriculture‘s Forest Service,
Department of Commerce‘s National Marine Fisheries Service, and
several bureaus in the Department of the Interior) accepted no
alternatives as originally proposed but instead modified a total of
140 and removed a total of 9 of the agencies‘ preliminary conditions
and prescriptions and rejected 42 of the 211 alternatives; the
remaining alternatives are pending as of May 17, 2010. Under section
241, resource agencies must submit a statement to FERC explaining the
basis for accepting or rejecting a proposed alternative. While
agencies generally provided explanations for rejecting alternative
conditions and prescriptions, with few exceptions, they did not
explain the reasons for not accepting alternatives when they modified
conditions and prescriptions. As a result, it is difficult to
determine the extent, type, or basis of changes that were made and
difficult to determine if and how the proposed alternatives affected
the final conditions and prescriptions issued by the agencies. As of
May 17, 2010, nonfederal stakeholders requested trial-type hearings
for 18 of the 25 projects in which section 241 provisions were used,
and three trial-type hearings were completed. Of the remaining 15
projects, requests for hearings were withdrawn for 14 of them when
licensees and agencies negotiated a settlement agreement before the
administrative law judge made a ruling, and one is pending because the
licensee is in negotiations to decommission the project. In the three
hearings held to date, the administrative law judge ruled in favor of
the agencies on most issues.
According to the federal and nonfederal relicensing stakeholders GAO
spoke with, the section 241 provisions have had a variety of effects
on the relicensing process and on the license conditions and
prescriptions. While most licensees and a few agency officials said
that section 241 encourages settlement agreements between the licensee
and resource agency, some agency officials said that section 241 made
agreements more difficult because efforts to negotiate have moved to
preparing for potential hearings. Regarding conditions and
prescriptions, some stakeholders commented that under section 241,
agencies put more effort into reviewing and providing support for
their conditions and prescriptions, but environmental groups and some
agency officials said that in their opinion, agencies issued fewer or
less environmentally protective conditions and prescriptions. Many
agency officials also raised concerns about increases in workload and
costs as a result of section 241. For example, their estimated costs
for the three hearings to date totaled approximately $3.1 million.
Furthermore, many of the stakeholders offered suggestions for
improving the use of section 241, including adjusting the time frame
for a trial-type hearing.
What GAO Recommends:
GAO recommends that cognizant officials who do not adopt a proposed
alternative include reasons why in their statement to FERC. The
resource agencies generally agreed, but commented that no explanation
is required when an alternative is withdrawn as a result of
negotiations.
View [hyperlink, http://www.gao.gov/products/GAO-10-770] or key
components. For more information, contact Frank Rusco at (202) 512-
3841 or RuscoF@gao.gov.
[End of section]
Contents:
Letter:
Background:
Section 241 Provisions Were Used in 24 Percent of Eligible Relicensing
Projects, Resulting in Modified Conditions or Prescriptions for Most
Projects and Three Hearings:
Stakeholders Cited a Variety of Effects from Section 241 Provisions on
the Relicensing Process and on the License Conditions and
Prescriptions and Suggested Improvements:
Conclusions:
Recommendations for Executive Action:
Agency Comments, Third-Party Views, and Our Evaluation:
Appendix I: Comments from the U.S. Department of Agriculture:
Appendix II: Comments from the U.S. Department of Commerce:
Appendix III: Comments from the U.S. Department of the Interior:
Appendix IV: Comments from the Hydropower Reform Coalition:
Appendix V: Comments from the National Hydropower Association:
Appendix VI: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: The 25 Projects That Used Section 241 Provisions, Nonfederal
Stakeholder Proposing Alternatives, Affected Federal Resource Agency,
and Requests for Trial-Type Hearing, November 17, 2005, to May 17,
2010:
Table 2: Number of Nontransition Projects Eligible for Section 241
Provisions and Number of Projects for Which Nonfederal Stakeholders
Used These Provisions, Fiscal Years 2006 through 2010:
Table 3: Number of Alternative Conditions Proposed, Accepted,
Rejected, and Pending and Preliminary Conditions Modified or Removed
for 19 Projects, November 17, 2005, through May 17, 2010:
Table 4: Number of Alternative Prescriptions Proposed, Accepted,
Rejected, and Pending, and Preliminary Prescriptions Modified and
Removed, for 9 Projects, November 17, 2005, through May 17, 2010:
Table 5: Projects with Trial-Type Hearings, the Affected Federal
Agency, and Their Outcomes:
Abbreviations:
ALJ: administrative law judge:
Commerce: U.S. Department of Commerce:
FERC: Federal Energy Regulatory Commission:
FPA: Federal Power Act:
FWS: Fish and Wildlife Service:
Interior: U.S. Department of the Interior:
NMFS: National Marine Fisheries Service:
NOAA: National Oceanic and Atmospheric Administration:
USDA: U.S. Department of Agriculture:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
August 4, 2010:
The Honorable Jeff Bingaman:
Chairman:
Committee on Energy and Natural Resources:
United States Senate:
Dear Mr. Chairman:
U.S. hydroelectric power (hydropower) projects generated over 272
gigawatt hours of power in 2009, or about 7 percent of all electricity
generated in the United States. Hydropower projects--which include
dams, reservoirs, stream diversion structures, powerhouses containing
turbines driven by falling water, and transmission lines--have several
advantages over other energy sources. Hydropower generation from
existing facilities produces little, if any, air pollution and
greenhouse gas emissions and can be adjusted quickly to match real-
time changes in the demand for electricity. In addition, hydropower
projects can provide other benefits, including flood control,
irrigation, and recreation. However, hydropower also has some
disadvantages. For example, hydropower projects may prevent fish from
moving upstream or downstream, disrupting the spawning cycle, and the
projects' turbines can kill or injure fish passing through them.
Hydropower projects can also alter stream flows in ways that impair
wildlife habitats and water quality.
Under the Federal Power Act (FPA),[Footnote 1] as amended, the Federal
Energy Regulatory Commission (FERC)[Footnote 2] issues licenses to
construct and operate nonfederal hydropower projects, such as those
owned by public utilities or private industry, including those located
on federal lands. As of May 17, 2010, FERC has issued licenses for
1,016 hydropower projects. FERC can issue licenses for up to 50 years,
and when these licenses expire, projects must be relicensed in order
to continue operating.[Footnote 3]
While resource agencies and licensees may begin the relicensing
process up to 10 years before its expiration, the current FERC
relicensing process--the Integrated Licensing Process--begins 5 to 5-
1/2 years before a license is due to expire according to FERC's
timeline. After initial meetings with FERC and other stakeholders, the
licensee proposes a study plan to review project operations and
potential impacts of the hydropower project, including environmental,
recreational, and cultural impacts. FERC reviews this plan and
comments from other stakeholders, such as federal resource agencies;
makes revisions; and finalizes this plan. The licensee conducts the
studies identified in the plan and submits a license application with
proposed mitigations for impacts. After FERC receives the application,
federal resource agencies may submit preliminary conditions,
prescriptions, and recommendations. Section 4(e) of FPA makes licenses
for projects on federal lands reserved by Congress for other purposes--
such as national forests--or that use surplus water from federal dams
subject to mandatory conditions imposed by the head of the federal
agency responsible for managing the lands or facilities.[Footnote 4]
These conditions may be used to protect federal lands and their
environmental, recreational, and cultural resources; for this report,
these are referred to as conditions. Similarly, section 18 of FPA
requires FERC to include license prescriptions for fish passage issued
by federal fish and wildlife agencies;[Footnote 5] for this report,
these are referred to as prescriptions. In addition, the Electric
Consumers Protection Act of 1986 added section 10(j) to FPA. This
section authorizes federal and state fish and wildlife agencies to
recommend license conditions to benefit fish and wildlife that FERC
must include in the license unless it (1) finds them to be
inconsistent with law and (2) has already established license
conditions that adequately protect fish and wildlife.
For many years the hydropower industry had expressed concerns that
agency conditions and prescriptions added unnecessary costs to their
hydropower operations. Licensees contend that prior to the
implementation of section 241 of the Energy Policy Act of 2005, if
they disagreed with the preliminary conditions and prescriptions their
only option was to ask the resource agencies to hold further
discussions and to review the license terms.[Footnote 6] The agencies
could decide on further review or issue final conditions and
prescriptions. Section 241 of the Energy Policy Act of 2005 authorizes
parties to the licensing process to (1) request a "trial-type hearing"
of not more than 90 days on any disputed issue of material fact
related to a condition or prescription and (2) propose alternative
conditions or prescriptions.[Footnote 7] Section 241 also requires the
U.S. Department of Agriculture (USDA), U.S. Department of the Interior
(Interior), and U.S. Department of Commerce (Commerce)--in
consultation with FERC--to jointly establish by rule, procedures
governing the processes for trial-type hearings and alternative
conditions and prescriptions. The agencies issued three substantively
identical interim rules on November 17, 2005, addressing trial-type
hearings and procedures for the consideration of alternative
conditions and prescriptions submitted by any party to a license
proceeding. These interim rules allow licensees and other nonfederal
stakeholders to request a hearing or submit alternatives within 30
days after the deadline for the agencies' filing of preliminary
conditions and prescriptions with FERC. When the interim rules were
issued, some projects had already passed the phase of the relicensing
process where the section 241 provisions could be used under the
normal procedures defined by the interim rules, but were allowed to
use the provisions because they had not had new licenses issued as of
November 17, 2005. These projects are referred to as "transition
projects" in this report. In 2005, the resource agencies stated they
would consider revising the interim rules based on the comments
received and the initial results of implementation, and issue revised
final rules within 18 months of the effective date of the interim
rules. However, the 2005 interim rules remain in effect because the
agencies have not yet issued final rules.
In this context, you asked us to (1) determine the extent to which
licensees and other nonfederal stakeholders have used the section 241
provisions in relicensing projects and the outcomes associated with
their use and (2) describe federal and nonfederal stakeholders' views
on section 241's impact on the relicensing process and on the
conditions and prescriptions in relicensing.
To determine the extent to which licensees and other nonfederal
stakeholders have used section 241's provisions for trial-type
hearings and alternative conditions and prescriptions, we analyzed
FERC summary documents. To determine the outcomes of the use of
section 241 provisions, we analyzed the relicensing documents filed
with FERC for all 25 projects in which nonfederal stakeholders used
section 241 between November 17, 2005, and May 17, 2010. Our review
included an analysis of whether each alternative condition or
prescription was accepted or rejected and whether the preliminary
condition or prescription associated with this alternative was
modified or removed. We have included criteria for our categorization
in tables 3 and 4 in this report. We also met with FERC officials for
further information about the use and results of the section 241
provisions. To determine stakeholders' views on section 241's impact
on the relicensing process and the license conditions and
prescriptions, we conducted 32 interviews with officials from FERC;
Interior's Bureau of Indian Affairs, Bureau of Land Management, Bureau
of Reclamation, National Park Service, Office of the Solicitor, Office
of Environmental Policy and Compliance, Office of Hearings and
Appeals, Fish and Wildlife Service (FWS), and U.S. Geological Survey;
USDA's Forest Service; Commerce's National Marine Fisheries Service
(NMFS); and the U.S. Department of Energy's Bonneville Power
Authority. We also conducted 29 interviews with nonfederal
stakeholders involved in the relicensing process about their views of
section 241. These stakeholders included all of the licensees who used
the section 241 provisions for the 25 relicensing projects, as well as
a nonprobability sample of three other licensees that have been
engaged or recently engaged in the relicensing process during the
period of our review; environmental organizations involved in
hydropower issues; hydropower industry groups; and tribal groups that
have been affected by hydropower. We visited stakeholders and
hydropower projects in California, Oregon, North Carolina, and
Washington State. We selected these projects because their licensees
were either undergoing relicensing or had recently been relicensed and
these projects offered a variety of different characteristics
including public and private ownerships and eastern and western U.S.
locations. While we collected a variety of views on the effects of
section 241, each hydropower project is unique, and the effects of
section 241 on one project may not apply or may apply differently to
another project. Thus, the results of our interviews cannot be
projected to the entire universe of all hydropower projects in
relicensing.
We conducted this performance audit from May 2009 to August 2010 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
Background:
FPA includes several provisions designed to protect fish, wildlife,
and the environment from the potentially damaging effects of a
hydropower project's operations. Specifically:
* Section 4(e) states that licenses for projects on federal lands
reserved by Congress for other purposes--such as national forests--are
subject to the mandatory conditions set by federal resource agencies,
including the Forest Service and the Bureau of Indian Affairs, Bureau
of Land Management, Bureau of Reclamation, and FWS.[Footnote 8]
* Section 10(a) requires FERC to solicit recommendations from federal
and state resource agencies and Indian tribes affected by a hydropower
project's operation on the terms and conditions to be proposed for
inclusion in a license.
* Section 10(j) authorizes federal and state fish and wildlife
agencies to recommend license conditions to benefit fish and wildlife.
FERC must include section 10(j) recommendations in the hydropower
licenses unless it (1) finds them to be inconsistent with law and (2)
has already established license conditions that adequately protect
fish and wildlife.
* Section 18 requires FERC to include license prescriptions for fish
passage prescribed by resource agencies, such as FWS and NMFS.
Under section 241 and the interim rules, licensees and other
nonfederal stakeholders may request a trial-type hearing with duration
of up to 90 days on any disputed issue of material fact with respect
to a preliminary condition or prescription. An administrative law
judge (ALJ), referred by the relevant resource agency, must resolve
all disputed issues of material fact related to an agency's
preliminary conditions or prescriptions in a single hearing. The
interim rules contain procedures for consolidating multiple hearing
requests involving the same project.
Under section 241 and the interim rules, licensees and other
nonfederal stakeholders may also propose alternatives to the
preliminary conditions or prescriptions proposed by the resource
agencies. Under section 241, resource agencies are required to adopt
the alternatives if the agency determines that they adequately protect
the federal land and either cost significantly less to implement or
result in improved electricity production.[Footnote 9] If the
alternatives do not meet these criteria, the agencies may reject them.
In either case, under section 241, resource agencies must formally
submit a statement to FERC explaining the basis for any condition or
prescription the agency adopts and reason for not accepting any
alternative under this section. The statement must demonstrate that
the Secretary of the department gave equal consideration to the
effects of the alternatives on energy supply, distribution, cost, and
use; flood control; navigation; water supply; and air quality (in
addition to the preservation of other aspects of environmental
quality). In addition, the resource agencies often negotiate with the
stakeholders who submitted the alternatives and settle on
modifications of the agencies' preliminary conditions and
prescriptions.
FPA requires licensees to pay reasonable annual charges in amounts
fixed by FERC to reimburse the United States for, among other things,
the costs of FERC's and other federal agencies' administration of the
act's hydropower provisions. To identify these costs--virtually all of
which are related to the relicensing process--FERC annually requests
federal agencies to report their costs related to the hydropower
program for the prior fiscal year. FERC then bills individual
licensees for their share of FERC's and the other federal agencies'
administrative costs, basing these shares largely on the generating
capacity and amount of electricity generated by the licensees'
projects. FERC deposits the licensees' reimbursements--together with
other annual charges and filing fees that it collects--into the U.S.
Treasury as a direct offset to its annual appropriation. Receipts that
exceed FERC's annual appropriation are deposited in the General Fund
of the U.S. Treasury.
Section 241 Provisions Were Used in 24 Percent of Eligible Relicensing
Projects, Resulting in Modified Conditions or Prescriptions for Most
Projects and Three Hearings:
Nonfederal stakeholders--licensees, states, environmental groups, and
an Indian tribe--used the section 241 provisions for 25 of the 103 (24
percent) eligible hydropower projects being relicensed, although the
use of these provisions has decreased since its first year. In
response to the use of these provisions, resource agencies modified
most of the conditions and prescriptions that they had originally
proposed. In addition, trial-type hearings were completed for three
projects, with the resource agencies prevailing in most of the issues
in these hearings.
Nonfederal Stakeholders for 25 Projects Have Used Section 241
Provisions, but Use Has Decreased Since Fiscal Year 2006:
From November 17, 2005, through May 17, 2010, 103 hydropower projects
being relicensed, including 49 transition projects, were eligible for
nonfederal stakeholders to use the section 241 provisions to submit
alternative conditions or prescriptions or request a trial-type
hearing. Nonfederal stakeholders have used the provisions for 25 of
these 103 projects, including 15 of the 49 transition projects. Table
1 shows the 25 projects, the nonfederal stakeholder proposing
alternatives, the affected federal resource agency, and whether the
stakeholder requested a trial-type hearing. In each of these projects,
the licensee submitted one or more alternatives. In addition, in the
DeSabla-Centerville, Klamath, and McCloud-Pit projects, stakeholders
other than the licensee also submitted alternatives.
Table 1: The 25 Projects That Used Section 241 Provisions, Nonfederal
Stakeholder Proposing Alternatives, Affected Federal Resource Agency,
and Requests for Trial-Type Hearing, November 17, 2005, to May 17,
2010:
Project name (State): Ames (Colorado);
Nonfederal stakeholder proposing alternatives[A]: Public Service
Company of Colorado;
Affected federal resource agency: Forest Service;
Trial-type hearing requests: No.
Project name (State): Bar Mills (Maine);
Nonfederal stakeholder proposing alternatives[A]: FPL Energy Maine
Hydro LLC;
Affected federal resource agency: FWS, NMFS;
Trial-type hearing requests: Yes.
Project name (State): Borel (California);
Nonfederal stakeholder proposing alternatives[A]: Southern California
Edison Company;
Affected federal resource agency: Forest Service;
Trial-type hearing requests: No.
Project name (State): Boulder Creek (Utah);
Nonfederal stakeholder proposing alternatives[A]: Garkane Energy
Cooperative, Inc.;
Affected federal resource agency: Forest Service;
Trial-type hearing requests: Yes.
Project name (State): Condit (Washington);
Nonfederal stakeholder proposing alternatives[A]: PacifiCorp;
Affected federal resource agency: FWS, NMFS;
Trial-type hearing requests: Yes.
Project name (State): DeSabla-Centerville (California);
Nonfederal stakeholder proposing alternatives[A]: Pacific Gas and
Electric Company;
California Sportfishing Protection Alliance, Friends of Butte Creek,
American Whitewater, and Friends of the River;
Affected federal resource agency: Bureau of Land Management, Forest
Service;
Trial-type hearing requests: Yes.
Project name (State): Donnells-Curtis (California);
Nonfederal stakeholder proposing alternatives[A]: Pacific Gas and
Electric Company;
Affected federal resource agency: Forest Service;
Trial-type hearing requests: No.
Project name (State): Hells Canyon (Idaho and Oregon);
Nonfederal stakeholder proposing alternatives[A]: Idaho Power Company;
Affected federal resource agency: Bureau of Land Management, FWS,
Forest Service;
Trial-type hearing requests: Yes.
Project name (State): Kern Canyon (California);
Nonfederal stakeholder proposing alternatives[A]: Pacific Gas and
Electric Company;
Affected federal resource agency: Forest Service;
Trial-type hearing requests: Yes.
Project name (State): Klamath (California and Oregon);
Nonfederal stakeholder proposing alternatives[A]: PacifiCorp, Oregon
Department of Fish and Wildlife, California Department of Fish and
Game, Hoopa Valley Tribe[B];
Affected federal resource agency: Bureau of Land Management, Bureau of
Reclamation, FWS, NMFS;
Trial-type hearing requests: Yes.
Project name (State): McCloud-Pit (California);
Nonfederal stakeholder proposing alternatives[A]: Pacific Gas and
Electric Company;
American Whitewater and Friends of the River;
McCloud RiverKeepers;
California Trout, Trout Unlimited and McCloud River Club;
Affected federal resource agency: Forest Service;
Trial-type hearing requests: No.
Project name (State): Merrimack River (New Hampshire);
Nonfederal stakeholder proposing alternatives[A]: Public Service
Company of New Hampshire;
Affected federal resource agency: FWS;
Trial-type hearing requests: Yes.
Project name (State): Pit 3, 4, and 5 (California);
Nonfederal stakeholder proposing alternatives[A]: Pacific Gas and
Electric Company;
Affected federal resource agency: Forest Service;
Trial-type hearing requests: Yes.
Project name (State): Poe (California);
Nonfederal stakeholder proposing alternatives[A]: Pacific Gas and
Electric Company;
Affected federal resource agency: Forest Service;
Trial-type hearing requests: Yes.
Project name (State): Portal (California);
Nonfederal stakeholder proposing alternatives[A]: Southern California
Edison Company;
Affected federal resource agency: Forest Service;
Trial-type hearing requests: Yes.
Project name (State): Priest Rapids (Washington);
Nonfederal stakeholder proposing alternatives[A]: Public Utility
District No. 2 of Grant County, Washington;
Affected federal resource agency: FWS, Bureau of Reclamation;
Trial-type hearing requests: Yes.
Project name (State): Rocky Reach (Washington);
Nonfederal stakeholder proposing alternatives[A]: Public Utility
District No. 1 of Chelan County, Washington;
Affected federal resource agency: FWS;
Trial-type hearing requests: No.
Project name (State): Santee Cooper (South Carolina);
Nonfederal stakeholder proposing alternatives[A]: South Carolina
Public Service Authority;
Affected federal resource agency: FWS, NMFS;
Trial-type hearing requests: Yes.
Project name (State): South Feather (California);
Nonfederal stakeholder proposing alternatives[A]: South Feather Water
and Power Agency;
Affected federal resource agency: Forest Service;
Trial-type hearing requests: No.
Project name (State): Spokane River (Idaho and Washington);
Nonfederal stakeholder proposing alternatives[A]: Avista Corporation;
Affected federal resource agency: Bureau of Indian Affairs;
Trial-type hearing requests: Yes.
Project name (State): Spring Gap-Stanislaus (California);
Nonfederal stakeholder proposing alternatives[A]: Pacific Gas and
Electric Company;
Affected federal resource agency: Forest Service;
Trial-type hearing requests: Yes.
Project name (State): Tacoma (Colorado);
Nonfederal stakeholder proposing alternatives[A]: Public Service
Company of Colorado;
Affected federal resource agency: Forest Service;
Trial-type hearing requests: Yes.
Project name (State): Upper North Fork Feather River (California);
Nonfederal stakeholder proposing alternatives[A]: Pacific Gas and
Electric Company;
Affected federal resource agency: Forest Service;
Trial-type hearing requests: Yes.
Project name (State): Vermilion Valley (California);
Nonfederal stakeholder proposing alternatives[A]: Southern California
Edison Company;
Affected federal resource agency: Forest Service;
Trial-type hearing requests: No.
Project name (State): Yadkin-Pee Dee (North Carolina);
Nonfederal stakeholder proposing alternatives[A]: Progress Energy Inc.;
Affected federal resource agency: FWS, NMFS;
Trial-type hearing requests: Yes.
Source: GAO analysis of FERC data.
[A] The "Nonfederal stakeholders proposing alternatives" column does
not include stakeholders whose submission of an alternative was
rejected by the resource agency because the alternative did not meet
the requirements of the regulations for section 241.
[B] The Hoopa Valley Tribe submitted an alternative on April 27, 2006,
but withdrew it on January 8, 2007, according to NMFS records.
[End of table]
The use of section 241 provisions has decreased since the first year.
In fiscal year 2006, nonfederal stakeholders used section 241
provisions for 19 projects undergoing relicensing. By comparison,
after fiscal year 2006, nonfederal stakeholders used the provisions
for only 6 projects. Fifteen of the 19 projects in which stakeholders
used the provisions in fiscal year 2006 were transition projects.
These transition projects included 11 projects that had expired
original licenses and were operating on annual licenses at the time
that the interim rules were implemented, which helped create the
initial surge of projects eligible to use section 241.
As table 2 shows, the number of eligible nontransition projects--
projects that had received preliminary conditions and prescriptions
from federal resource agencies after section 241 was enacted--for
which nonfederal stakeholders have sought to use section 241
provisions has declined since the first year. However, the number of
nontransition projects becoming subject to these provisions has not
widely varied.
Table 2: Number of Nontransition Projects Eligible for Section 241
Provisions and Number of Projects for Which Nonfederal Stakeholders
Used These Provisions, Fiscal Years 2006 through 2010:
Fiscal year: 2006[A];
Number of eligible nontransition projects: 13;
Number of projects for which nonfederal stakeholders used section 241:
4.
Fiscal year: 2007;
Number of eligible nontransition projects: 9;
Number of projects for which nonfederal stakeholders used section 241:
1.
Fiscal year: 2008;
Number of eligible nontransition projects: 12;
Number of projects for which nonfederal stakeholders used section 241:
2.
Fiscal year: 2009;
Number of eligible nontransition projects: 12;
Number of projects for which nonfederal stakeholders used section 241:
2.
Fiscal year: 2010[B];
Number of eligible nontransition projects: 8;
Number of projects for which nonfederal stakeholders used section 241:
1.
Fiscal year: Total;
Number of eligible nontransition projects: 54;
Number of projects for which nonfederal stakeholders used section 241:
10.
Source: GAO analysis of FERC data.
[A] Data for fiscal year 2006 are from November 17, 2005, through
September 30, 2006.
[B] Data for fiscal year 2010 are from October 1, 2009, through May
17, 2010.
[End of table]
Proposed Alternatives Often Resulted in Modified Conditions and
Prescriptions:
Licensees and other nonfederal stakeholders had proposed a total of
211 alternatives--194 alternative conditions and 17 alternative
prescriptions--for the 25 projects where section 241 provisions were
used. However, these numbers do not necessarily reflect the number of
issues considered because section 4(e) conditions and section 18
fishway prescriptions are counted differently. For example, a resource
agency may issue a section 4(e) condition for each part of a
particular topic. However, NMFS or FWS will typically issue single
section 18 fishway prescriptions with multiple sections. Of the 25
projects, stakeholders proposed alternative conditions for 19 and
alternative prescriptions for 9.[Footnote 10] Table 3 provides the
number of alternative conditions proposed, accepted, rejected, and
pending, and the number of preliminary conditions modified or removed
for 19 of the 25 projects.
Table 3: Number of Alternative Conditions Proposed, Accepted,
Rejected, and Pending and Preliminary Conditions Modified or Removed
for 19 Projects, November 17, 2005, through May 17, 2010:
Project name: Ames;
Alternative condition: Proposed[A]: 2;
Alternative condition: Accepted[B]: 0;
Alternative condition: Rejected[C]: 0;
Alternative condition: Pending: [Empty];
Preliminary condition: Modified in settlement[D]: 2;
Preliminary condition: Removed: 0.
Project name: Borel;
Alternative condition: Proposed[A]: 4;
Alternative condition: Accepted[B]: 0;
Alternative condition: Rejected[C]: 0;
Alternative condition: Pending: [Empty];
Preliminary condition: Modified in settlement[D]: 4;
Preliminary condition: Removed: 0.
Project name: Boulder Creek;
Alternative condition: Proposed[A]: 6;
Alternative condition: Accepted[B]: 0;
Alternative condition: Rejected[C]: 0;
Alternative condition: Pending: [Empty];
Preliminary condition: Modified in settlement[D]: 4;
Preliminary condition: Removed: 2.
Project name: DeSabla-Centerville;
Alternative condition: Proposed[A]: 7;
Alternative condition: Accepted[B]: 0;
Alternative condition: Rejected[C]: 5;
Alternative condition: Pending: [Empty];
Preliminary condition: Modified in settlement[D]: 2;
Preliminary condition: Removed: 0.
Project name: Donnells-Curtis;
Alternative condition: Proposed[A]: 11;
Alternative condition: Accepted[B]: 0;
Alternative condition: Rejected[C]: 0;
Alternative condition: Pending: [Empty];
Preliminary condition: Modified in settlement[D]: 11;
Preliminary condition: Removed: 0.
Project name: Hells Canyon;
Alternative condition: Proposed[A]: 38;
Alternative condition: Accepted[B]: 0;
Alternative condition: Rejected[C]: 13;
Alternative condition: Pending: [Empty];
Preliminary condition: Modified in settlement[D]: 25;
Preliminary condition: Removed: 0.
Project name: Kern Canyon;
Alternative condition: Proposed[A]: 11;
Alternative condition: Accepted[B]: 0;
Alternative condition: Rejected[C]: 0;
Alternative condition: Pending: [Empty];
Preliminary condition: Modified in settlement[D]: 11;
Preliminary condition: Removed: 0.
Project name: Klamath;
Alternative condition: Proposed[A]: 18;
Alternative condition: Accepted[B]: 0;
Alternative condition: Rejected[C]: 16;
Alternative condition: Pending: [Empty];
Preliminary condition: Modified in settlement[D]: 2;
Preliminary condition: Removed: 0.
Project name: McCloud-Pit;
Alternative condition: Proposed[A]: 19;
Alternative condition: Accepted[B]: [Empty];
Alternative condition: Rejected[C]: [Empty];
Alternative condition: Pending: 19;
Preliminary condition: Modified in settlement[D]: [Empty];
Preliminary condition: Removed: [Empty].
Project name: Pit 3, 4, and 5;
Alternative condition: Proposed[A]: 8;
Alternative condition: Accepted[B]: 0;
Alternative condition: Rejected[C]: 0;
Alternative condition: Pending: [Empty];
Preliminary condition: Modified in settlement[D]: 8;
Preliminary condition: Removed: 0.
Project name: Poe;
Alternative condition: Proposed[A]: 14;
Alternative condition: Accepted[B]: 0;
Alternative condition: Rejected[C]: 0;
Alternative condition: Pending: [Empty];
Preliminary condition: Modified in settlement[D]: 14;
Preliminary condition: Removed: 0.
Project name: Portal;
Alternative condition: Proposed[A]: 6;
Alternative condition: Accepted[B]: 0;
Alternative condition: Rejected[C]: 0;
Alternative condition: Pending: [Empty];
Preliminary condition: Modified in settlement[D]: 6;
Preliminary condition: Removed: 0.
Project name: Priest Rapids;
Alternative condition: Proposed[A]: 3;
Alternative condition: Accepted[B]: 0;
Alternative condition: Rejected[C]: 0;
Alternative condition: Pending: [Empty];
Preliminary condition: Modified in settlement[D]: 0;
Preliminary condition: Removed: 3.
Project name: South Feather;
Alternative condition: Proposed[A]: 2;
Alternative condition: Accepted[B]: 0;
Alternative condition: Rejected[C]: 0;
Alternative condition: Pending: [Empty];
Preliminary condition: Modified in settlement[D]: 2;
Preliminary condition: Removed: 0.
Project name: Spokane River;
Alternative condition: Proposed[A]: 12;
Alternative condition: Accepted[B]: 0;
Alternative condition: Rejected[C]: 4;
Alternative condition: Pending: [Empty];
Preliminary condition: Modified in settlement[D]: 7;
Preliminary condition: Removed: 1.
Project name: Spring Gap-Stanislaus;
Alternative condition: Proposed[A]: 14;
Alternative condition: Accepted[B]: 0;
Alternative condition: Rejected[C]: 0;
Alternative condition: Pending: [Empty];
Preliminary condition: Modified in settlement[D]: 14;
Preliminary condition: Removed: 0.
Project name: Tacoma;
Alternative condition: Proposed[A]: 2;
Alternative condition: Accepted[B]: 0;
Alternative condition: Rejected[C]: 2;
Alternative condition: Pending: [Empty];
Preliminary condition: Modified in settlement[D]: 0;
Preliminary condition: Removed: 0.
Project name: Upper North Fork Feather River;
Alternative condition: Proposed[A]: 12;
Alternative condition: Accepted[B]: 0;
Alternative condition: Rejected[C]: 0;
Alternative condition: Pending: [Empty];
Preliminary condition: Modified in settlement[D]: 12;
Preliminary condition: Removed: 0.
Project name: Vermilion Valley;
Alternative condition: Proposed[A]: 5;
Alternative condition: Accepted[B]: 0;
Alternative condition: Rejected[C]: 0;
Alternative condition: Pending: [Empty];
Preliminary condition: Modified in settlement[D]: 4;
Preliminary condition: Removed: 1.
Project name: Total;
Alternative condition: Proposed[A]: 194;
Alternative condition: Accepted[B]: 0;
Alternative condition: Rejected[C]: 40;
Alternative condition: Pending: 19;
Preliminary condition: Modified in settlement[D]: 128;
Preliminary condition: Removed: 7.
Source: GAO analysis of FERC data.
[A] Proposed alternatives do not include an alternative in which the
resource agency rejected its submission because the alternative did
not meet the requirements of the regulations for section 241.
[B] An alternative is counted as accepted if the resource agency
states it is accepting the alternative on the basis that the
alternative meets both of the section 241 criteria of adequate
protection and less costly to implement.
[C] An alternative is counted as rejected if the resource agency
states it is not accepting the alternative on the basis that the
alternative does not meet one or both of the section 241 criteria of
adequate protection and less costly to implement.
[D] A condition is counted as modified in settlement if the resource
agency does not explicitly accept or reject the proposed alternative.
If an alternative is withdrawn in settlement and the resource agency
does not explicitly accept or reject the proposed alternative, this
outcome is included in this column.
[End of table]
Table 4 provides the number of alternative prescriptions proposed,
accepted, rejected, and pending and the number of Preliminary
prescription modified or removed in settlement for 9 of the 25
projects.[Footnote 11]
Table 4: Number of Alternative Prescriptions Proposed, Accepted,
Rejected, and Pending, and Preliminary Prescriptions Modified and
Removed, for 9 Projects, November 17, 2005, through May 17, 2010:
Project name: Bar Mills;
Alternative prescription: Proposed[A]: 2;
Alternative prescription: Accepted[B]: 0;
Alternative prescription: Rejected[C]: 0;
Alternative prescription: Pending: [Empty];
Preliminary prescription: Modified in settlement[D]: 2;
Preliminary prescription: Removed: 0.
Project name: Condit;
Alternative prescription: Proposed[A]: 1;
Alternative prescription: Accepted[B]: [Empty];
Alternative prescription: Rejected[C]: [Empty];
Alternative prescription: Pending: 1;
Preliminary prescription: Modified in settlement[D]: [Empty];
Preliminary prescription: Removed: [Empty].
Project name: Hells Canyon;
Alternative prescription: Proposed[A]: 1;
Alternative prescription: Accepted[B]: 0;
Alternative prescription: Rejected[C]: 1;
Alternative prescription: Pending: [Empty];
Preliminary prescription: Modified in settlement[D]: 0;
Preliminary prescription: Removed: 0.
Project name: Klamath;
Alternative prescription: Proposed[A]: 1;
Alternative prescription: Accepted[B]: 0;
Alternative prescription: Rejected[C]: 1;
Alternative prescription: Pending: [Empty];
Preliminary prescription: Modified in settlement[D]: 0;
Preliminary prescription: Removed: 0.
Project name: Merrimack River;
Alternative prescription: Proposed[A]: 1;
Alternative prescription: Accepted[B]: 0;
Alternative prescription: Rejected[C]: 0;
Alternative prescription: Pending: [Empty];
Preliminary prescription: Modified in settlement[D]: 1;
Preliminary prescription: Removed: 0.
Project name: Priest Rapids;
Alternative prescription: Proposed[A]: 6;
Alternative prescription: Accepted[B]: 0;
Alternative prescription: Rejected[C]: 0;
Alternative prescription: Pending: [Empty];
Preliminary prescription: Modified in settlement[D]: 4;
Preliminary prescription: Removed: 2.
Project name: Rocky Reach;
Alternative prescription: Proposed[A]: 1;
Alternative prescription: Accepted[B]: 0;
Alternative prescription: Rejected[C]: 0;
Alternative prescription: Pending: [Empty];
Preliminary prescription: Modified in settlement[D]: 1;
Preliminary prescription: Removed: 0.
Project name: Santee Cooper;
Alternative prescription: Proposed[A]: 2;
Alternative prescription: Accepted[B]: 0;
Alternative prescription: Rejected[C]: 0;
Alternative prescription: Pending: [Empty];
Preliminary prescription: Modified in settlement[D]: 2;
Preliminary prescription: Removed: 0.
Project name: Yadkin-Pee Dee;
Alternative prescription: Proposed[A]: 2;
Alternative prescription: Accepted[B]: 0;
Alternative prescription: Rejected[C]: 0;
Alternative prescription: Pending: [Empty];
Preliminary prescription: Modified in settlement[D]: 2;
Preliminary prescription: Removed: 0.
Project name: Total;
Alternative prescription: Proposed[A]: 17;
Alternative prescription: Accepted[B]: 0;
Alternative prescription: Rejected[C]: 2;
Alternative prescription: Pending: 1;
Preliminary prescription: Modified in settlement[D]: 12;
Preliminary prescription: Removed: 2.
Source: GAO analysis of FERC data.
[A] Proposed alternatives do not include an alternative in which the
resource agency rejected its submission because the alternative did
not meet the requirements of the regulations for section 241.
[B] An alternative is counted as accepted if the resource agency
explicitly states it is accepting the alternative on the basis that
the alternative meets both of the section 241 criteria of no less
protective and less costly to implement.
[C] An alternative is counted as rejected if the resource agency
explicitly states it is not accepting the alternative on the basis
that the alternative does not meet one or both of the section 241
criteria of no less protective and less costly to implement.
[D] A prescription is counted as modified in settlement if the
resource agency does not explicitly accept or reject the proposed
alternative. If an alternative was withdrawn in settlement, and the
resource agency does not explicitly accept or reject the proposed
alternative, this outcome is included in this column.
[End of table]
As the tables show, instead of accepting or rejecting alternative
conditions and prescriptions, resource agencies most frequently
modified the original conditions and prescriptions in settlement
negotiations with the nonfederal stakeholders. In all, resource
agencies did not formally accept any alternatives as originally
proposed and instead:
* modified a total of 140 preliminary conditions and prescriptions for
22 of the 25 projects,
* rejected a total of 42 alternative conditions and prescriptions in 5
projects, and:
* removed a total of 9 preliminary conditions and prescriptions in 4
projects.
Licensees submitted 204 of the 211 alternative conditions and
prescriptions. State agencies or nongovernmental organizations
submitted the remaining 7 alternative conditions, 4 of which were
rejected by the resource agencies, and 3 were being considered as of
May 17, 2010.
Section 241 directs the Secretary of the relevant resource agency to
explain the basis for any condition or prescription the agency adopts,
provide a reason for not accepting any alternative condition under
this section, and demonstrate that it gave equal consideration to the
effects of the alternatives on energy supply, distribution, cost, and
use; flood control; navigation; water supply; and air quality (in
addition to the preservation of other aspects of environmental
quality). Similarly, the agencies' interim rules provide, "The written
statement must explain the basis for the modified conditions or
prescriptions and, if the Department did not accept an alternative
condition or prescription, its reasons for not doing so."[Footnote 12]
While the agencies provided an explanation for rejecting all 42
alternative conditions and prescriptions, they did not explain the
reasons for not accepting a proposed alternative for 127 of the 140
modified conditions and prescriptions. Without an explanation, it is
difficult to determine the extent, type, or basis of changes that were
made and difficult to determine if and how the proposed alternatives
affected the final conditions and prescriptions issued by the agencies.
Three Trial-Type Hearings Were Completed, and Resource Agencies Have
Prevailed on Most of the Issues Decided in These Hearings:
As of May 17, 2010, nonfederal stakeholders requested trial-type
hearings for 18 of the 25 projects in which the section 241 provisions
were used, and 3 trial-type hearings were completed. Most of these
requests were made by licensees. The requests for hearings in 14 of
the 18 projects were withdrawn when nonfederal stakeholders and
resource agencies reached a settlement agreement before the ALJ made a
ruling, and 1 request is pending as of May 17, 2010, because the
licensee is in negotiations to decommission the project.
Prior to a trial-type hearing, an ALJ holds a prehearing conference to
identify, narrow, and clarify the disputed issues of material fact.
The ALJ must issue an order that recites any agreements reached at the
conference and any rulings made by the ALJ during or as a result of
the prehearing conference, which can include dismissing issues the ALJ
determines are not disputed issues of material fact. For the three
projects that have completed trial-type hearings, the number of issues
in these projects was reduced from 96 to 37 after prehearing
conferences. In addition, in a fourth project in which the federal
resource agencies and the licensee eventually reached a settlement
before going to a hearing, the number of issues was reduced from 13 to
1 after the prehearing conference.
As table 5 shows, the three trial-type hearings were held for the
Klamath project, in California and Oregon; the Spokane River project,
in Idaho and Washington; and the Tacoma project, in Colorado, all of
which are nontransition projects. In addition to the licensees
requesting hearings, one nongovernmental organization and one tribe
requested a hearing for the Klamath project. The Spokane River and
Tacoma hearings were completed in 90 days, the time allotted by the
interim rule, while Klamath required 97 days. As table 5 shows, of the
37 issues presented, the ALJ ruled in favor of the federal resource
agency on 25 issues, ruled in favor of the licensee on 6 issues, and
offered a split decision on 6 issues.
Table 5: Projects with Trial-Type Hearings, the Affected Federal
Agency, and Their Outcomes:
Project name: Klamath;
Affected federal resource agency: Bureau of Land Management, FWS, NMFS;
Outcome: Rule for licensee: 1;
Outcome: Rule for federal resource agency: 10;
Outcome: Split ruling: 3;
Outcome: Total issues presented: 14.
Project name: Spokane River;
Affected federal resource agency: Bureau of Indian Affairs;
Outcome: Rule for licensee: 4;
Outcome: Rule for federal resource agency: 9;
Outcome: Split ruling: 3;
Outcome: Total issues presented: 16.
Project name: Tacoma;
Affected federal resource agency: Forest Service;
Outcome: Rule for licensee: 1;
Outcome: Rule for federal resource agency: 6;
Outcome: Split ruling: 0;
Outcome: Total issues presented: 7.
Total:
Outcome: Rule for licensee: 6;
Outcome: Rule for federal resource agency: 25;
Outcome: Split ruling: 6;
Outcome: Total issues presented: 37.
Source: GAO analysis of FERC data.
[End of table]
Stakeholders Cited a Variety of Effects from Section 241 Provisions on
the Relicensing Process and on the License Conditions and
Prescriptions and Suggested Improvements:
According to the relicensing stakeholders we spoke with, section 241
provisions have had a variety of effects on relicensing in three
areas: (1) settlement agreements between licensees and resource
agencies, (2) conditions and prescriptions that the resource agencies
set, and (3) agencies' workload and cost. Most licensees and a few
resource agency officials that we spoke with said that section 241
encourages settlement agreements between the licensee and resource
agency. In contrast, other agency officials we spoke with said that
section 241 made the relicensing process more difficult to reach a
settlement agreement with the licensee. Regarding conditions and
prescriptions, some stakeholders commented that under section 241,
resource agencies generally researched their conditions and
prescriptions more thoroughly, while all seven of the environmental
groups' representatives and some resource agency officials we spoke
with said that resource agencies issued fewer or less environmentally
protective conditions and prescriptions. Resource agency officials
also raised concerns about increases in workload and costs as a result
of section 241. Finally, many of the stakeholders offered suggestions
for improving the use of section 241.
Most Licensees Reported That Section 241 Made Settlements Easier, but
Some Resource Agency Officials Said It Made Settlements More Difficult:
Most of the licensees and a few resource agency officials we spoke
with said that section 241 encourages settlement agreements between
the licensee and resource agency. Several licensees commented that
before section 241 was enacted, they had little influence on the
mandatory conditions and prescriptions and that the resource agencies
had made decisions on which conditions and prescriptions to issue
without the potential oversight of a third-party review. One licensee
commented that resource agencies had little incentive to work
collaboratively with the licensee during relicensing prior to section
241. Several licensees and a few resource agency officials said that
under section 241, some resource agencies have been more willing to
negotiate their conditions and prescriptions to avoid receiving
alternatives and requests for trial-type hearings.
Some resource agency officials, however, said that in some cases,
reaching a settlement with the licensee has been more difficult under
section 241 than in previous negotiations. Specifically, they noted
the following:
* If licensees request a trial-type hearing, resource agencies and
licensees have to devote time and resources to preparing for the
potential upcoming trial-type hearing instead of negotiating a
settlement.
* Section 241 made the relicensing process less cooperative and more
antagonistic when, for example, a licensee did not conduct the
agencies' requested studies, the agencies had less information to
support their conditions and prescriptions. As a case in point, one
NMFS regional supervisor told us that a licensee declined to conduct a
study about the effects of its dams' turbines on fish mortality.
However, the licensee subsequently requested a trial-type hearing
because, it argued, the agency had no factual evidence to support the
agency's assertion that the turbines injured or killed fish.
* Some licensees used their ability to request a trial-type hearing as
a threat against the agencies' issuance of certain conditions,
prescriptions, or recommendations. For example, two NMFS biologists
and their division chief told us that a licensee had threatened to
issue a trial-type hearing request on fish passage prescriptions if
NMFS made flow rate recommendations that it did not agree with.
The Hydropower Reform Coalition, a coalition of conservation and
recreational organizations, commented that from its experience,
participation in settlement negotiations under section 241 is "almost
exclusively limited to licensees." It also commented that agreements
reached by the license applicant and resource agency are not
comprehensive settlement agreements in which licensees, state and
federal resource agencies, tribes, nongovernmental organizations, and
other interested parties are involved in the agreement.
Stakeholders Differed on the Effects of Section 241 on the Resource
Agencies' Conditions and Prescriptions:
Some licensees said agencies now put more effort into reviewing and
providing support for their conditions and prescriptions because
licensees or other nonfederal stakeholders could challenge the terms
in a trial-type hearing. Several agency officials commented that they
generally conduct more thorough research and provide a more extensive
explanation about mandatory conditions and prescriptions than they had
for projects prior to section 241. A few agency officials also
commented they are requesting licensees to conduct more extensive
studies about the effects of their hydropower projects to ensure that
the agencies have sufficient information for writing conditions and
prescriptions.
Views differed on whether conditions and prescriptions were as
protective or less protective since section 241 was enacted. All seven
environmental group representatives that we spoke with expressed
concerns that resource agencies were excluding and writing less
protective conditions, prescriptions, and recommendations to avoid
trial-type hearings. For example, one group commented that in one
hydropower project, under section 241, agency officials settled for
stream flow rates that were lower than necessary for protecting and
restoring the spawning habitat for fish that swam in the project area.
Some agency officials said the conditions and prescriptions they have
issued are as protective as those issued prior to the enactment of
section 241. Others said that they now issue fewer or less
environmentally protective conditions or prescriptions to avoid a
costly trial-type hearing. In addition, some other officials commented
that instead of issuing conditions and prescriptions that could result
in a trial-type hearing, agencies have either issued recommendations
or reserved authority to issue conditions and prescriptions at a later
time. While a reservation of authority allows the resource agency to
issue conditions and prescriptions after the issuance of the license,
one regional agency official told us that in his experience, this
rarely occurs. At one regional office, two staff biologists and their
division chief told us that while they still issue prescriptions that
meet the requirements of resource protection, these prescriptions are
less protective than they would have been without the possibility of a
trial-type hearing.
Many Agency Officials Said That Section 241 Has Increased Their
Workload, Added Costs, and Adversely Affected Their Ability to
Complete Other Work:
Many agency officials said that the added efforts they put into each
license application since the passage of section 241 has greatly
increased their workloads for relicensing. Several agency officials
also told us that even greater efforts are needed when a trial-type
hearing is requested. To complete the work needed for a trial-type
hearing, agencies often need to pull staff from other projects.
According to these officials, at the local level, pulling staff from
other projects can result in the agency's neglect of its other
responsibilities. Officials commented that whether they win or lose a
trial-type hearing, agencies must provide the funding for an ALJ,
expert witnesses, and their attorneys at a trial-type hearing.
Although they did not track all costs, the Bureau of Indian Affairs,
Bureau of Land Management, Interior's Office of the Solicitor, FWS,
Forest Service, and NMFS provided individual estimates that totaled to
approximately $3.1 million in trial-type hearings for the following
three projects:[Footnote 13]
* Approximately $300,000 for the Tacoma project.
* Approximately $800,000 for the Spokane River project.
* Approximately $2 million for the Klamath project.[Footnote 14]
Among all the resource agencies, only NMFS has dedicated funding for
section 241 activities. However, this funding only covers
administrative costs related to a trial-type hearing and does not fund
NMFS's program staff or General Counsel staff for a hearing.
Stakeholders Have Suggestions to Improve Section 241:
Many of the agency officials, licensees, and other stakeholders we
spoke with had suggestions on how to improve section 241 and the
relicensing process. For example, several licensees and agency
officials raised concerns that the 90-day period for a trial-type
hearing, including a decision, was too short and resulted in the need
to complete an enormous amount of work in a compressed time frame.
Some said that an ALJ who did not have a background in hydropower
issues needed more time to review the information presented following
the hearing. Some stakeholders suggested allowing the ALJ to make his
or her decision outside of the 90-day period. Other stakeholders,
however, commented that an extension of the 90-day period could result
in greater costs for all parties. One regional hydrologist suggested
using a scientific peer review panel rather than an ALJ to hear
arguments. Some stakeholders also suggested providing an opportunity
to delay the start date of a trial-type hearing if all parties were
close to reaching a settlement.
The stakeholders we spoke with also had several suggestions that were
specific to their interests, which included the following:
* A couple of licensees noted that while the provisions of section 241
may be used after preliminary conditions and prescriptions are issued,
they would like to be able to use these provisions after the issuance
of final conditions and prescriptions because of concerns that the
final conditions and prescriptions could differ from the agreed-upon
terms that were arrived at through negotiations. These licensees
assert that if they do not have this option, their only recourse is to
sue in an appeals court, after the license has been issued. These
licensees were not aware of any instance in which the terms had
drastically changed between negotiations and the issuance of the final
license.
* Several environmental group representatives commented that while
section 241 allows stakeholders to propose alternative conditions and
prescriptions, they would like to be allowed to propose additional
conditions and prescriptions to address issues that the resource
agencies have not addressed in their preliminary conditions and
prescriptions. Three of these representatives also commented that the
section 241 criteria for the acceptance of an alternative--adequately
or no less protective and costs less to implement--favored licensees,
not conservation groups. Instead, one representative suggested that
the criterion for an alternative should be that it is more
appropriately protective and not that it costs less to implement. In
addition, another representative suggested that all interested parties
should be allowed to participate in negotiations to modify the
preliminary conditions and prescriptions after the submission of an
alternative. In his experience, these negotiations have been limited
to the stakeholder who uses the provisions of section 241 and the
resource agency.
* A few resource agency officials suggested that licensees who lose
the trial-type hearing should pay court costs, such as the costs of
the ALJ. They also suggested that licensee reimbursements for the
relicensing costs go directly to the resource agencies rather than the
General Fund of the U.S. Treasury.
* Almost 5 years have passed since the interim rules were issued, and
several stakeholders that we spoke with expressed interest in having
an opportunity to comment on a draft of the revised rules when they
become available and before these rules become final. In addition, on
June 2, 2009, the National Hydropower Association--an industry trade
group--and the Hydropower Reform Coalition submitted a joint letter
addressed to Interior, NMFS, and USDA expressing interest in an
opportunity to comment on the revised rules before they become final.
[Footnote 15]
Conclusions:
Section 241 of the Energy Policy Act of 2005 changed the hydropower
relicensing process, including permitting licensees and other
nonfederal stakeholders to propose alternative conditions and
prescriptions. All parties involved in relicensing a hydropower
project have an interest in understanding how the conditions and
prescriptions for a license were modified, if at all, in response to
proposed alternatives. Indeed, the interim rules require agencies to
provide, for any condition or prescription, a written statement
explaining the basis for the adopted condition and the reasons for not
accepting any alternative condition or prescription. While we found
that the agencies have provided a written explanation for all 42
rejected conditions and prescriptions, they provided a written
explanation of the reasons for not accepting a proposed alternative
for only 13 of the 140 modified conditions and prescriptions. The
absence of an explanation makes it difficult to determine the extent
or type of changes that were made.
Furthermore, when the interim rules that implemented section 241 were
issued on November 17, 2005, the federal resource agencies stated that
they would consider issuing final rules 18 months later. Instead,
nearly 5 years later, final rules have not yet been issued. Given this
delay and the amount of experience with section 241's interim rules,
many stakeholders we spoke with had ideas on how to improve section
241 and several expressed interest in providing comments when a draft
of the final rules becomes available.
Recommendations for Executive Action:
To encourage transparency in the process for relicensing hydropower
projects, we are recommending that the Secretaries of Agriculture,
Commerce, and the Interior take the following two actions:
* Direct cognizant officials, where the agency has not adopted a
proposed alternative condition or prescription, to include in the
written statement filed with FERC (1) its reasons for not doing so, in
accordance with the interim rules and (2) whether a proposed
alternative was withdrawn as a result of negotiations and an
explanation of what occurred subsequent to the withdrawal; and:
* Issue final rules governing the use of the section 241 provisions
after providing an additional period for notice and an opportunity for
public comment and after considering their own lessons learned from
their experience with the interim rules.
Agency Comments, Third-Party Views, and Our Evaluation:
We provided the departments of Agriculture, Commerce, and the
Interior; FERC; the Hydropower Reform Coalition; and the National
Hydropower Association with a draft of this report for their review
and comment. FERC had no comments on the report. Commerce's National
Oceanic and Atmospheric Administration (NOAA), Interior, USDA's Forest
Service, the Hydropower Reform Coalition, and the National Hydropower
Association provided comments on the report and generally agreed with
the report's recommendations.
While Forest Service, Interior, and NOAA generally agreed with our
recommendation that they file a written statement with FERC on their
reasons for not accepting a proposed alternative, they all cited a
circumstance in which they believed that they were not required to do
so. Specifically, the three agencies commented that under the interim
rules, they do believe that they are required to explain their reasons
for not accepting a proposed alternative when the alternatives were
withdrawn as a result of negotiations. Two of the agencies, Interior
and NOAA, agreed to indicate when a proposed alternative was
voluntarily withdrawn, and NOAA acknowledged that providing an
explanation on what occurred after the withdrawal of an alternative
may be appropriate in some circumstances. We continue to believe that
providing an explanation for not accepting a proposed alternative is
warranted, even when the proposed alternative is voluntarily withdrawn
as a result of negotiations, and we have modified our recommendation
to address this situation. The agencies could add transparency to the
settlement process by laying out the basis for the modifications made
to the preliminary conditions and prescriptions; the reasons the
agencies had for not accepting the proposed alternative, including
those alternatives withdrawn as a result of negotiations; and an
explanation of what occurred subsequent to the withdrawal. Further, no
provision of the interim rules discusses withdrawal of proposed
alternatives or provides an exemption from the requirement to explain
why a proposed alternative was not accepted.[Footnote 16] The agencies
have an opportunity to clarify their approach to withdrawn conditions
and prescriptions as they consider revisions to the interim rules.
Interior and NOAA commented that they agreed with our recommendation
regarding the issuance of final rules and are considering providing an
additional public comment opportunity. According to Interior and NOAA,
the resource agencies are currently working on possible revisions to
the interim rules.
NOAA also commented that resource agencies use the term "modified
prescription" as a "term of art" to refer to the agencies' final
prescription, regardless of whether the final prescription actually
differs from the preliminary one. As we noted in table 4 of this
report, we counted a preliminary prescription as modified if the
resource agency does not explicitly accept or reject the proposed
alternative. In response to this comment, we added an additional
clarifying footnote in the report.
Interior suggested that we clarify in our report that agencies have no
reason to write less protective recommendations because
recommendations cannot be the basis for trial-type hearing requests.
We did not change the language in our report because we believe that
Interior's assertion that agencies have no reason to write less
protective recommendations may not always be the case. For example, as
stated in our report, NMFS officials told us that a licensee had
threatened to issue a trial-type hearing request on fish passage
prescriptions if NMFS made flow rate recommendations that it did not
agree with.
The Hydropower Reform Coalition suggested that we collect additional
information and conduct further analysis on the use of the section 241
provisions. We did not gather the suggested additional information or
conduct additional analysis because in our view, they fell outside of
the scope and methodology of our report.
Appendixes I, II, III, IV, and V present the agencies', the Hydropower
Reform Coalition's, and the National Hydropower Association's comments
respectively. Interior, NOAA, and the Hydropower Reform Coalition also
provided technical comments, which we incorporated into the report as
appropriate.
As agreed with your office, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days
from the report date. At that time, we will send copies of this report
to the appropriate congressional committees; the Secretaries of
Agriculture, Commerce, and the Interior; the Chairman of the Federal
Energy Regulatory Commission; and other interested parties. In
addition, this report will be available at no charge on the GAO Web
site at [hyperlink, http://www.gao.gov].
If you or your staff have any questions about this report, please
contact me at (202) 512-3841 or ruscof@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. GAO staff who made major contributions
to this report are listed are listed in appendix VI.
Sincerely yours,
Signed by:
Frank Rusco:
Director, Natural Resources and Environment:
[End of section]
Appendix I: Comments from the U.S. Department of Agriculture:
USDA:
United States Department of Agriculture:
Forest Service:
Washington Office:
1400 Independence Avenue, SW:
Washington, DC 20250:
File Code: 1430-1:
Date: July 20, 2010:
Frank Rusco:
Director, Natural Resources and Environment:
U.S. Government Accountability Office:
441 G. Street, N.W.
Washington, DC 20548:
Dear Mr. Rusco:
We appreciate the opportunity to review and comment on the draft
Government Accountability Office (GAO) Report Number GA0-10-770,
"HYDROPOWER RELICENSING: Stakeholders' Views on the Energy Policy Act
Varied, but More Consistent Information Needed." The Forest Service
generally concurs with the report's finding and recommendations, and
appreciates the time and effort of the GAO to understand a highly
complex, interagency process, and to assist in improving our
procedures. The agency's comments on the two recommendations are as
follows:
* Recommendation Number 1: The Secretary of Agriculture...shall direct
cognizant officials, where the agency has not adopted a proposed
alternative condition or prescription, to include in a written
statement filed with FERC its reasons for not doing so, in accordance
with the interim rules.
Agency Response: The Agency currently does provide analyses of and
reasons for accepting or rejecting every proposed alternative pending
at the time written statements are filed with FERC. The Agency does
not include proposed alternatives that have been withdrawn by
proponents prior to the Agency providing written statements to FERC.
We often negotiate a mutually acceptable revised condition and the
proponent subsequently withdraws its alternative from consideration.
We believe this is an appropriate protocol and compliant with the
interim rules.
* Recommendation Number 2: The GAO recommended on page 21, "Issue
final rules ... after providing an additional period for notice and
comment opportunity and after considering their own lessons learned
from their experiences with the interim rules." On page 3. GAO states,
"In 2005, the resource agencies stated that they would revise the
interim rules based on comments received and the initial results of
implementation and issue revised rules within 18 months of the
effective date of the interim rules." GAO makes essentially the same
statement on page 20. In fact, the interim final rule reads, "Based on
the comments received and the initial results of implementation, we
will consider promulgation of [a) revised final rule within 18 months
of the effective date of this rule." Reference 70 Fed. Reg. 69804
(2005).
If you have any questions or concerns please contact Donna M.
Carmical, Chief Financial Officer, at 202-205-1321
ordcarmical@fs.fed.us.
Sincerely,
Signed by:
Thomas L. Tidwell:
Chief:
cc: Mona M Koerner, Robert Cunningham, Sandy T Coleman, Jennifer
McGuire:
[End of section]
Appendix II: Comments from the U.S. Department of Commerce:
United States Department Of Commerce:
The Secretary of Commerce:
Washington, D.C. 20230:
July 16, 2010:
Mr. Frank Rusco:
Director:
Natural Resource and Environment:
U.S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Mr. Rusco:
Thank you for the opportunity to review and comment on the Government
Accountability Office's draft report entitled, "Hydropower
Relicensing: Stakeholders' Views on the Energy Policy Act Varied, but
More Consistent Information Needed" (GA0-10-770). On behalf of the
Department of Commerce, I have enclosed the National Oceanic and
Atmospheric Administration's programmatic comments to the draft report.
Sincerely,
Signed by:
Gary Locke:
Enclosure:
[End of letter]
Department of Commerce:
National Oceanic and Atmospheric Administration:
Comments to the Draft GAO Report Entitled "Hydropower Relicensing:
Stakeholders' Views on the Energy Policy Act Varied, but More
Consistent Information Needed" (GAO-10-770, August 2010):
The Department of Commerce's National Oceanic and Atmospheric
Administration (NOAA) appreciates the opportunity to review the
Government Accountability Office's (GAO) draft report. NOAA
acknowledges GAO's efforts and provides the following general comment,
followed by NOAA's responses to the two GAO report recommendations.
General Comments:
The term "modified" in relation to prescriptions needs clarification
in the report. A final prescription does not necessarily contain any
modifications at suggested by the resource agencies during the
relicensing process. Any final prescription is a "modified"
prescription. GAO's draft report appears to assume that resource
agencies' final "modified" prescriptions always contain modifications
(i.e., changes) to the original relicensing proposal. While the final
modified prescription may in fact be modified in the common sense of
the word, this is not always the case. In some cases, the modified
prescription is not modified at all (or is not modified in any
significant, substantive manner) and actually mirrors the preliminary
prescription in all pertinent respects. In the exercise of their
Federal Power Act (FPA) section 18 authority, resource agencies file
"preliminary" prescriptions with the Federal Energy Regulatory
Commission (FERC) followed, 60-days after the close of the National
Environmental Policy Act comment period, by "modified" prescriptions
(i.e., final prescriptions). In this context, the term "modified" is
used as a term of art to refer to the agencies' final prescription.
NOAA Response to GAO Recommendations:
The draft GAO report states, "To encourage transparency in the process
for relicensing hydropower projects, we are recommending that the
Secretaries of Agriculture, Commerce, and the Interior take the
following two actions:"
Recommendation 1: "Direct cognizant officials, where the agency has
not adopted a proposed alternative condition or prescription, to
include in the written statement filed with FERC its reasons for not
doing so, in accordance with the interim rules;"
NOAA Response: NOAA agrees that Section 241 of the Energy Policy Act
of 2005 and the November 2005 interim rules require NOAA to include a
written statement filed with FERC setting forth the reasons for not
adopting a proposed alternative condition or prescription.
However, in many cases a proposed alternative may be voluntarily
withdrawn by the proponent as a result of settlement or other
negotiations with the agency. In those cases, there is no longer any
alternative to adopt and, therefore, NOAA does not view the statutory
requirement to provide a reason for not adopting an alternative to
apply. We do, of course, agree that we are required to explain the
basis for our final modified condition or prescription in all cases.
In addition, in those cases where a proposed alternative is
voluntarily withdrawn, we believe that additional explanation in the
administrative record (as set forth in our written statement) of what
occurred subsequent to withdrawal of the proposed alternative may in
some circumstances be appropriate. We further agree that our written
statement should include an explanatory notation indicating that the
proposed alternative was voluntarily withdrawn.
Recommendation 2: "Issue final rules governing the use of the section
241 provisions after providing an additional period for notice and an
opportunity for public comment and after considering their own lessons
learned from their experience with the interim rules."
NOAA Response: Approximately 18 months after the effective date of the
interim rule, the resource agencies (including the Department of
Commerce as represented by NOAA) reconvened to consider promulgation
of a revised final rule. The agencies tentatively agreed that issuance
of a revised final rule was appropriate, making some adjustments to
the interim rule and responding to the public comments received.
Unfortunately, progress on a revised final rule was interrupted by the
transition to the new Administration, but the agencies have recently
resumed their work.
The agencies are continuing to work on possible revisions to the
interim rules in light of the public comments they received and their
own experience, and they are considering providing an additional
public comment opportunity.
Recommended Changes for Factual/Technical Information:
Page 1, first paragraph, after sentence 6: Add sentence to further
clarify potential impacts of hydropower projects: "Hydropower projects
can delay or block the necessary migrations of ecologically and
economically important fish, including species of Pacific salmon that
support commercial and recreational fisheries or are threatened or
endangered."
Page 2, first paragraph, footnote 4: Add sentence to further clarify
that NOAA, through its National Marine Sanctuaries Program has
asserted, and will continue to assert, its FPA section 4(e)
conditioning authority. In NOAA's view, a National Marine Sanctuary is
a "reservation" for FPA section 4(e) purposes. Although FERC has once
rejected NOAA's assertion of authority, no federal court of appeals
has yet weighed in on this matter.
Page 3, lines 1-2: Add clarification that requests for rehearing and
court of appeals challenges were/are options available to licensees.
Page 3, first paragraph, lines 21-23: Note that the resource agencies
stated: "Based on the comments received and the initial results of
implementation, we will consider promulgation of [a] revised final
rule within 18 months of the effective date of this rule." 70 Fed.
Reg. 69,804 (Nov. 17, 2005).
Page 5, bullet 1: Add sentence to further clarify that NOAA's National
Marine Sanctuaries Program asserts that projects within National
Marine Sanctuaries are also subject to mandatory 4(e) conditions. In
NOAA's view, a National Marine Sanctuary is a "reservation" for FPA
section 4(e) purposes. Although FERC has once rejected NOAA's
assertion of authority, no federal court of appeals has yet weighed in
on this matter.
Page 6, second paragraph, line 2: Correction - add 'preliminary'
before conditions or prescriptions.
Page 7, footnote 8: Provide a more comprehensive explanation of
alternatives to fishway prescriptions.
Page 12, table 4: For the Santee Cooper Project, NMFS rejected the
alternatives per the requirements of Section 33 of the FPA. See
Section 3 of NMFS' Modified Prescriptions for Fishways (July 20, 2007).
Page 13, lines 9-12: This statement is not clear - ("While the
agencies provided an explanation for rejecting all 43 alternative
conditions and prescriptions, they did not explain the reasons for not
accepting a proposed alternative for 127 of the 139 modified
conditions and prescriptions.")
Page 20, first full paragraph, lines 8-12: This statement is not clear
(see comment above for page 13).
Page 20, second full paragraph: Note that the resource agencies
stated: "Based on the comments received and the initial results of
implementation, we will consider promulgation of [a] revised final
rule within 18 months of the effective date of this rule." 70 Fed.
Reg. 69,804 (Nov. 17, 2005).
[End of section]
Appendix III: Comments from the U.S. Department of the Interior:
United States Department of the Interior:
Office Of The Secretary:
Washington, D.C. 20240:
July 19, 2010:
Mr. Frank Rusco:
Director, Natural Resources and Environment:
U.S. Government Accountability Office:
441 G Street, N.W.
Washington, DC 20548:
Dear Mr. Rusco:
Thank you for providing the Department of the Interior the opportunity
to review and comment on the draft Government Accountability Office
Report entitled, Hydropower Relicensing: Stakeholders' Views on the
Energy Policy Act Varied, but More Consistent Information Needed (GA0-
10-770). The Department shares GAO's interest in encouraging
transparency in the process for relicensing hydropower projects and
generally concurs with the recommendations made in the draft Report.
The Department's comments and suggestions are enclosed for your
consideration.
If you have any questions or need additional information, please
contact Kathy Garrity, Acting Chief, Division of Policy and Directives
Management, U.S. Fish and Wildlife Service at (703) 358-2551.
Sincerely,
Signed by:
Rhea S. Suh:
Assistant Secretary:
Policy, Management and Budget:
Enclosure:
[End of letter]
Enclosure:
Government Accountability Office (GAO) Draft Report:
Hydropower Relicensing: Stakeholders' Views on the Energy Policy Act
Varied, but More Consistent Information Needed (GAO-10-770):
Technical Comments:
* Pages 6, last line of the second full paragraph, add an apostrophe
at the end of "agencies."
* Page 13, middle of top paragraph: The reference to 43 alternative
conditions and prescriptions should be corrected to 42, as noted in
all other areas of report.
* Page 17, first three lines: The concern described here should be
clarified. Recommendations cannot be the basis for trial-type hearing
requests, so the agencies have no reason to write "less protective ...
recommendations to avoid trial-type hearings." Presumably the concern
is that the agencies may be excluding conditions and prescriptions,
writing less protective conditions and prescriptions, or writing
recommendations in lieu of conditions and prescriptions, all to avoid
trial-type hearings.
Comments on GAO's First Recommendation:
The first recommendation in the draft report states that the Secretary
of the Interior should "direct cognizant officials, where the agency
has not adopted a proposed alternative condition or prescription, to
include in the written statement filed with FERC its reasons for not
doing so, in accordance with the interim rules." Draft Report at 21.
GAO based this recommendation on its observation that "while we found
that the agencies have provided a written explanation for all 42
rejected conditions and prescriptions, they provided a written
explanation of the reasons for not accepting a proposed alternative,
in accordance with the interim rules, for only 12 of the 139 modified
conditions and prescriptions." Draft Report at 20.
The Department agrees that Section 241 of the Energy Policy Act of
2005 and the Department's interim rules require the Department to
prepare a written statement explaining the reasons for not accepting a
proposed alternative condition or prescription. However, the
Department views this requirement to apply in cases where an
alternative condition or prescription is before the Department for
consideration. Many of the Department's modified conditions and
prescriptions are developed pursuant to settlement agreements or other
negotiated agreements that result in the voluntary withdrawal of
alternatives by their proponents. In such cases, the alternative is no
longer before the Department for consideration and thus, the
Department does not view Section 241 or the interim rules as requiring
the Department to provide reasons for not accepting the withdrawn
alternative. Because the Department is required to include in its
administrative record and written statement an explanation of the
basis for any final modified condition or prescription, the Department
intends to identify in such explanations when an alternative is
withdrawn.
Comments on GAO's Second Recommendation:
The second recommendation in the draft report is that the agencies
"issue final rules governing the use of the section 241 provisions
after providing an additional period for notice and an opportunity for
public comment and after considering their own lessons learned from
their experience with the interim rules." Draft Report at 21. This
recommendation follows from a statement earlier in the draft report
that, "Din 2005, the resource agencies stated that they would revise
the interim rules based on comments received and the initial results
of implementation and issue revised rules within 18 months of the
effective date of the interim rules." Draft Report at 3 (a similar
statement appears on page 20).
In fact, what the agencies said in the interim final rule was, "Based
on the comments received and the initial results of implementation, we
will consider promulgation of [a] revised final rule within 18 months
of the effective date of this rule." 70 Fed. Reg. 69804 (Nov. 17,
2005). The agencies did confer 18 months after the effective date of
the interim rule to consider promulgation of a revised final rule.
They tentatively agreed that issuance of a revised final rule was
appropriate, making some adjustments to the interim rule and
responding to the public comments received. Progress on a revised
final rule was interrupted by the transition to the new
Administration, but the agencies have recently resumed their work.
The Department agrees with the recommendation that the agencies revise
the interim rules in light of the public comments received and the
agencies' own experience, and it is consulting with the Departments of
Agriculture and Commerce on providing an additional public comment
opportunity.
[End of section]
Appendix IV: Comments from the Hydropower Reform Coalition:
Hydropower Reform Coalition:
1101 14th Street N.W.
Suite 1400:
Washington, DC 20005:
T: 202-347-7550:
F: 202-347-9240:
[hyperlink: http://www.hydroreform.org]
E-mail: coordinator@hydrorcform.org:
Steering Committee:
Alabama Rivers Alliance:
American Rivers:
American Whitewater:
Appalachian Mountain Club:
California Hydropower Reform Coalition:
California Sportfishing Protection Alliance:
Friends of the River:
Idaho Rivers United:
Michigan Hydro Relicensing Coalition:
Natural Heritage Institute:
New England FLOW:
New York Rivers United:
Coastal Conservation League:
Trout Unlimited.
July 12, 2010:
Mr. Frank Rusco:
Director, Natural Resources and Environment:
Government Accountability Office:
441 G St., NW:
Washington, DC 20548:
Dear Mr. Rusco:
On behalf of the Steering Committee and members of the Hydropower
Reform Coalition (HRC), thank you for the opportunity to submit
comments on the GAO's draft report on the effects of section 241 of
the Energy Policy Act of 2005 (EPAct §241). The Hydropower Reform
Coalition (FIRC) consists of more than 150 member organizations that
seek to improve the water quality, fisheries, recreation, and general
environmental health of rivers that have been degraded by hydropower
dam operations. Our member organizations have a strong interest in the
Federal Energy Regulatory Commission's (FERC) hydropower licensing
process and have appeared before FERC in numerous licensing
proceedings and rulemakings. HRC members have also participated in all
of the proceedings before FERC where the EPAct § 241 provisions were
used. Additionally, the HRC actively participated in the rulemaking
proceeding implementing EPAct §241.
On balance, we think that GAO did an excellent job. We agree with most
of the report's substantive findings, and strongly support both of
GAO's recommendations. We also feel that the draft report would
benefit both from minor clarifications and from additional information
and analysis. Our comments address those areas and clarify HRC's
position on EPAct §241.
GAO's draft report has three sections: the first quantifies the
outcomes of EPAct §241, the second reports on stakeholders'
experiences with the provisions, and the third makes two
recommendations for how the process could be improved. Our comments
will address each section in turn. For each of the three sections, we
offer our interpretation and views on the report's findings based on
our experience with EPAct §241. For the first section, we recommend
several minor changes and clarifications that we believe would improve
the report. For the second section, we clarify HRC's views on EPAct
§241 and offer our interpretation of some of the report's findings
based on our own experience. For the third section, we address GAO's
recommendations and offer some of our own recommendations for how the
EPAct §241 process could be improved.
Section 1: Quantifying Outcomes of EPAct §241:
In general, we agree with GAO's findings on the use of EPAct §241. Our
comments on this section of the draft report can be summarized as
follows:
* HRC agrees with the figures in GAO's draft report.
* The report could benefit from additional figures and analysis on the
use of the EPAct §241 provisions.
* The report should clarify what is meant by "conditions" and
"prescriptions."
* The report would benefit from additional analysis of the economics
of these provisions.
* The report should qualify the use of the term "settlement."
HRC agrees with the figures in GAO's draft report:
The draft report provides an accurate high-level description of how
the EPAct §241 provisions are being used:
* The provisions have been used in about one fourth of all eligible
licensings (a total of 25) since passage of EPAct in 2005.
* Of the 25 projects where the provisions were used, 18 projects
involved requests for trial-type hearings.
* Of those 18 projects, only three went to hearing. The issues
surrounding 14 of the remaining 15 projects were resolved mainly
through bilateral negotiations between the license applicant and the
conditioning or prescribing agency. One project is still pending.
* 3 projects did go to a trial-type hearing in order to resolve 96
disputed issues of material fact.
* Of those 96 disputed issues, 59 issues were discarded after pre-
trial conferences held before an ALJ.
* Of the remaining 37 issues that went to trial, only 6 were resolved
in favor of the license applicant.
* The three hearings that were completed were estimated to cost more
than $3 million.
* Out of 211 alternative conditions and prescriptions studied, no
alternatives were formally accepted. 42 alternatives were formally
rejected. Agencies modified 139 conditions and prescriptions and
withdrew 10, usually after bilateral negotiations between the license
applicant and the conditioning or prescribing agency.
These figures tell a compelling story about the use of the EPAct §241
provisions. Most proposals for alternative conditions were accompanied
by a request for a trial-type hearing. Nearly all of those requests
were made by license applicants. License applicants have not fared
particularly well in trial-type hearings. In the few cases where an
agency did decide to see a hearing through to completion, most (61%)
disputed issues were thrown out after a prehearing conference where
the ALJ can dismiss issues that are not material or factual. Only 16%
of the issues that remained after prehearing conference (or 6% of all
issues that went to a trial-type hearing) were resolved in favor of
the license applicant. The cost, however, is high, with agencies
estimating that the 3 hearings cost them more than $3 million. If the
goal of the EPAct §241 provisions was to provide increased oversight
over agencies' mandatory conditioning and prescription authorities,
then it has been a mixed success: very little such oversight has
actually taken place (only 3 out of 25 hearing requests ended up
having issues argued before an ALJ), and the oversight that has taken
place has been extraordinarily costly. However, the results of the
hearings suggest that agencies' are doing a good job justifying their
conditions and prescriptions, and that they can stand up to intense
scrutiny.
The draft GAO report describes several licensees as commenting that
"before section 241 was enacted, they had little influence on the
mandatory conditions and prescriptions" imposed by agencies. If the
goal of §241 was simply to increase licensees' influence over the
conditions and prescriptions that agencies can require to protect
resources impacted by their hydropower projects, then licensees have
achieved their desired result. In most cases (83%), when faced with
the threat of a trial-type hearing requested by the license applicant,
agencies chose to withdraw or modify their conditions or prescriptions
after bilateral negotiations with the license applicant. Once
agencies had agreed to modify or withdraw their conditions or
prescriptions, applicants withdrew their requests for a hearing. The
EPAct §241 provisions ” particularly the threat of a costly trial-type
hearing ” appears to give license applicants enormous leverage over
the agencies.
The report could benefit from additional figures and analysis on the
use of the EPAct §241 provisions:
While we agree with the figures in the draft report, we do feel that
it could have provided a clearer picture of how the process is being
used by focusing on the details of individual cases. For instance, the
report could include included a summary or table describing the
various conditions and prescriptions before and after they were
modified by agencies in order that the reader might be able to assess
how EPAct §241 has resulted in different requirements for
environmental and/or resource protection. The report could also
compare the substance of preliminary and final conditions with
alternatives proposed by licensees and other non-federal stakeholders
so that readers could better understand the role that the alternatives
process is playing in the modification of conditions and
prescriptions. Finally, the report would benefit from an analysis of
the issues raised in trial-type hearing requests ” including those
requests for hearings that did not go to trial ” to determine the
extent to which issues being raised are limited to material and
factual issues as required by EPAct §241.
We understand from discussing this draft report with GAO staff that
some of the above recommendations may be beyond the scope of the
originating request for this report. There are, however, several other
figures that could be obtained fairly easily (where possible, we
identify potential sources of this information below) and would
provide similar additional insights into the effects of the EPAct §241
provisions. These figures would provide better context for the various
stakeholder views presented in the second section of the report. To
the extent that these figures are within the scope of the originating
request for the report, we recommend that GAO amend the draft report
to include:
1. The total number of "eligible" preliminary conditions and
prescriptions issued by agencies for which the §241 provisions could
have been applied. These figures should be freely available from
FERC's eLibrary, and GAO has likely already obtained many of the
relevant documents in the course of this study. Alternately, GAO could
ask agencies for copies of all preliminary and final conditions and
prescriptions submitted since the passage of the 2005 EPAct.
2. The percentage of "eligible" preliminary conditions or
prescriptions for which alternatives were actually proposed (e.g.
"Agencies received a total of X proposed alternatives for Y
out of Z eligible preliminary conditions and prescriptions. Out of the
Y preliminary conditions and prescriptions where alternatives were
proposed, M preliminary conditions and prescriptions involved more
than one proposed alternative"). In other words, how many conditions
and prescriptions went unchallenged? This figure could be obtained by
applying the figures in GAO's draft report to the figures in #1 above.
3. The number of discrete conditions and prescriptions that were
modified when a request for a trial-type hearing was withdrawn. This
figure could also be obtained by applying the figures in GAO's draft
report to the figures in #1 above.
4. The number of discrete conditions and prescriptions that were
modified via the alternatives process in the absence of a formal
request for a trial-type hearing. This figure could be obtained by
applying the figures in GAO's draft report to the figures in #1 above.
5. A more detailed description of which "nonfederal stakeholders" are
exercising their rights to use these provisions, using the materials
that GAO relied on to prepare its report. For instance:
a. The number of alternatives proposed and/or trial-type hearings
requested by license applicants.
b. The number of alternatives proposed and/or trial-type hearings
requested by NGOs.
c. The number of alternatives proposed and/or trial-type hearings
requested by Tribes.
6. The number of issues that were dismissed in a prehearing conference
because they were neither "material" nor "factual." This information
should be readily available in transcripts or summaries of prehearing
conferences.
7. For each of the projects where a trial-type hearing was requested,
a list of the non-federal stakeholders that formally intervened in the
hearing. These figures can be easily obtained by the agencies case
referrals for hearing requests, which they are obliged to file within
5 days of responding to any hearing request. Each hearing request
referral must contain a list of all intervenors. Additionally,
agencies should have in their records a copy of each notice of
intervention that was filed for each proceeding.
8. For each of the projects where a trial-type hearing was requested
and later withdrawn as the result of a negotiated agreement, a list of
the non-federal stakeholders that participated or were invited to
participate in such negotiations. These figures could be obtained
relatively easily by asking each of the parties identified in #7 above
if they participated or were invited to participate in such
negotiations.
The report should clarify what is meant by "conditions" and
"prescriptions:"
On page 5 of the draft report, GAO briefly describes the various
authorities available to federal and state agencies for recommending
or prescribing hydropower license conditions, describing
sections 4(e), 10(j), 10(a), and i 8 of the Federal Power Act. While
GAO's description is accurate, we recommend that GAO clarify that the
EPAct §24 I provisions are only applicable to mandatory conditions
under section 4(e) and fishway prescriptions under section 18 of the
Federal Power Act (FPA). We also recommend that GAO clarify the key
difference between mandatory conditions or prescriptions and advisory
recommendations: While FERC does not have the authority to reject
mandatory conditions or prescriptions issued pursuant to sections 4(e)
or 18 of the FPA, it has the discretion to reject agency
recommendations made pursuant to sections 10(a) or 10(j). GAO's
description of the various authorities is not incorrect, but it could
be clearer. We also recommend that GAO clarify the headings of table 3
and 4 slightly to reflect the relevant sections of the
Federal Power Act to which they refer: Section 4(e) for alternative
conditions (table 3) and section 18 for alternative prescriptions
(table 4).
The report would benefit from additional analysis of the economics of
these provisions:
On page 7 of the draft report, GAO refers to FERC's cost recovery
mechanism for agency participation. Section 10(e) of the Federal Power
Act allows FERC to charge licensees for "reasonable and necessary
costs incurred by Federal and State fish and wildlife agencies and
other natural and cultural resource agencies in connection with
studies or other reviews carried out by such agencies for purposes of
administering their responsibilities [for hydroelectric licensing]."
While FERC does collect costs from licensees based on Federal
Agencies' reporting, we feel that GAO's draft report would benefit
from a more detailed explanation of how this cost recovery process
works in practice.
First, FERC is required to consider whether agencies' costs are
"reasonable and necessary" before charging licensees. It often does so
by revising agencies' cost estimates downward, leaving taxpayers to
fill any gap. Second, the annual fees collected by FERC are deposited
into the General Fund of the U.S. Treasury rather than being paid
directly to the agencies that have actually incurred the costs of
administering the EPAct §241 provisions.[Footnote 1] Because of the
relatively unpredictable timing of the FERC licensing process ” and
because agencies cannot anticipate the number, scope, or content of a
licensee applicant's disputed issues ” these provisions are in effect
an unfunded mandate. Agencies cannot accurately predict whether or
when they will incur the costs of complying with EPAct §241; by the
time the costs have been incurred, it is for too late for the
administration to request the necessary funds from Congress through
the annual appropriations process.[Footnote 2] For agencies, there is
a significant economic incentive to avoid a hearing altogether.
For individual license applicants, however, there is almost no
financial disincentive to requesting a hearing: win or lose, most of
the costs will be borne by taxpayers in the short term and if these
costs to the public are recovered later through FERC's annual fees,
the costs of one licensee's hearing will be distributed among all FERC
licensees. If a license applicant is a regulated utility, it can also
recover its own costs associated with a hearing from its ratepayers.
Agencies do not report their costs to FERC on a per-project basis, and
FERC does not collect funds from individual license applicants on a
per-project basis. Costs are reported to FERC in the aggregate, with
the only reporting distinction being between costs associated with
municipal and non-municipal license applicants. FERC apportions these
costs among individual licensees based on their annual generation
and/or installed capacity. Individual license applicants are not charged
for the actual costs associated with relicensing their project.
Licensees therefore have no incentive to help agencies control these
costs, and since a hearing (or, as the draft GAO report demonstrates,
the mere threat of a hearing) can lead to costly license conditions
being withdrawn or modified, they have a powerful incentive to use
these provisions in every proceeding, even if they are raising issues
which could not withstand the scrutiny of a hearing.
The report should qualify the use of the term "settlement:"
Throughout the GAO's draft report conditions and prescriptions are
described as having been modified through "settlements" or "settlement
negotiations." See:
p. 12: "instead of accepting or rejecting alternative conditions and
prescriptions, resource agencies most frequently modified the original
conditions and prescriptions in settlement negotiations with the
nonfederal stakeholders."
p. 13 "The requests for hearings in 14 of the 18 projects were
withdrawn when nonfederal stakeholders and resource agencies reached a
settlement agreement before the ALI made a ruling."
(Emphasis added)
While these statements are technically correct, they are somewhat
misleading. The term "nonfederal stakeholders" implies that all non-
federal parties to a proceeding have an opportunity to participate in
settlement negotiations. In fact, that opportunity is almost
exclusively limited to licensees. While the rules implementing EPAct
§241 give stakeholders the opportunity to formally intervene in trial-
type hearings, those rules do not prohibit ex parte communications
among the various parties or guarantee intervenors a seat at the
negotiating table.
Several of HRC's members have formally intervened in trial-type
hearings that were ultimately "settled," but they were not invited to
participate ” and in some cases, were actively barred from
participating ” in "settlement" negotiations. In our experience, this
has been the case in nearly every proceeding, and several of our
members described this situation in interviews with GAO prior to the
development of the draft report. We recommend that GAO clarify this
point by referring to "licensees" instead of "nonfederal stakeholders"
in the context of "settlement negotiations." We also recommend that
GAO modify its draft report to reflect the makeup of such settlement
negotiations and to clarify that non-licensee nonfederal stakeholders
were almost always excluded from such negotiations. We recommend that
GAO use the phrase "bilateral negotiations between the licensee[s] and
resource agencies" to describe such negotiations.
In addition, the draft GAO report describes some confusion amongst
licensees and resource agencies as to whether EPAct §241 encourages
"settlements" or not:
p. 14: Most licensees and a few resource agency officials that we
spoke with said that section 241 encourages settlement agreements
between the licensee and resource agency. In contrast, other agency
officials we spoke with said that section 241 made the relicensing
process more difficult to reach a settlement agreement."
On its face, this disconnect might seem confusing, especially given
that more than three-fourths of all hearing requests analyzed in GAO's
draft report were withdrawn after bilateral negotiations or
"settlement" talks between licensees and resource agencies. However,
it is much clearer when one realizes that the terms "settlement" and
"settlement agreement" have a very specific meaning and connotation in
the context of hydropower licensing. All of the agency officials
quoted in the paragraph above are technically correct. Their differing
views on how EPAct §241 has affected "settlements" reflect the fact
that the different groups of officials are almost certainly referring
to two different types of "settlement" agreements.
Over the past 20 years, an increasing number of contentious hydropower
licensings have been resolved by "comprehensive settlement
agreements," in which licensees, state and federal resource agencies,
Tribes, NGOs, and other interested parties came together to negotiate
a collaborative, mutually-agreeable outcome for the continued
operation of a hydropower project. Such settlement agreements are
typically submitted to FERC as a formal "offer of settlement," and
FERC often uses these agreements as the basis for its license
conditions. Under such a settlement, a wide range of federal and non-
federal stakeholders agree to support the licensing of the project if
it is operated according to the terms of the agreement. These
comprehensive settlement agreements make licensing more efficient:
parties can amicably resolve the entire spectrum of issues in a
relicensing and agree to mutually support the project rather than
challenge it in court.[Footnote 3]
While the agreements described in GAO's draft report are technically
"settlement agreements," they do not resemble "settlement agreements"
in the sense that the term is typically used in the context of a FERC
hydropower licensing. While comprehensive settlement agreements
generally involve the major parties to a given licensing proceeding,
the "settlement agreements" described in GAO's draft report are
typically limited to the license applicant and the resource agency
that issued the preliminary condition or prescription. Other parties
are not invited to participate. Instead of addressing a comprehensive
suite of issues, the agreements described in GAO's draft report
resolve a much more limited set of issues: agencies agree to withdraw
or modify their conditions or prescriptions, and licensees agree to
withdraw their request for a trial-type hearing. So while EPAct §241
has arguably increased the number of "settlements," these settlements
are far less comprehensive, less transparent, and less open to the
public. They are also much less likely to lead to unchallenged
licenses. These limited "settlements" have also made it much more
difficult for parties to engage in truly collaborative discussions and
achieve settlements (i.e. comprehensive settlement agreements) as they
are typically defined in the context of hydropower licensing, since
the hearing process necessarily forces parties into an adversarial
relationship where they must spend time preparing their cases rather
than finding a truly collaborative solution.
This is a critical distinction. While the term "settlement agreement"
in hydropower licensing generally refers to a settlement that features
agreement among a wide variety of stakeholders on a comprehensive set
of issues ranging from flows to shoreline management to license
implementation, the term "settlement" is used in this draft report to
refer to negotiations wherein a licensee agrees to withdraw a request
for a costly trial-type hearing in exchange for a resource agency
withdrawing or modifying its preliminary terms and conditions. We
recommend that GAO's report clarify that the term "settlement" has a
specific meaning in the context of FERC relicensing, and that
agreements reached under EPAct §241 are distinct from the
comprehensive settlements agreements that are submitted to FERC as
multi-party, collaborative agreements among federal and non-federal
stakeholders that address and resolve multiple issues in a licensing
to the mutual satisfaction of all parties.
Section 2: Stakeholder Views on The Efficacy of EPAct §241:
The comments received from stakeholders in this section are largely
consistent with our experience, and GAO has accurately reported our
views in its draft report. While we would have preferred that GAO's
draft report contain additional analysis to determine the extent to
which stakeholders' views are supported by the record, we understand
from conversations with GAO staff that such additional analysis is
beyond the scope of the originating study request. We therefore make a
general recommendation here that such additional future study is
necessary to fully evaluate the impact of EPAct §241. The remainder of
our comments on this section of the draft report is intended to
further clarify our views of the effects of EPAct §241, using other
stakeholder comments from the draft report to illustrate our concerns.
Our comments on this section of the draft report can be summarized as
follows:
* EPAct §241 gives licensees unprecedented leverage over federal
agencies' decision-making.
* Agencies are responding to this leverage by issuing fewer, less
protective conditions and prescriptions.
* EPAct §241 has made agencies' need for information and studies even
more critical, but they are not getting the information they need.
EPAct §241 gives licensees unprecedented leverage over federal
agencies' decision-making:
HRC has long expressed concern over the effects EPAct §241 on
hydropower licensing. While we are not opposed in principle to a
process that would allow increased oversight or scrutiny over the
scientific underpinnings of agencies' conditions or prescriptions,
EPAct §24I is far from the most efficient way to accomplish this goal,
and it is not used this way in practice. Rather, the rules are used by
licensees to pressure agencies to modify or withdraw their conditions
or prescriptions. In HRC's 2006 comments on the Interim Final Rules
published by the Departments of Agriculture, Commerce, and the
Interior implementing the EPAct §241 provisions, we wrote:
"[The] rules will tend to benefit parties - license applicants in
particular - with plentiful resources, impose undue burdens on all
other stakeholders, and impose such a severe financial burden on the
Departments that they will have an incentive to avoid requiring
controversial conditions or prescriptions altogether. [...] The
EPAct rule contains features that impose significant, unnecessary
burdens on non-licensee stakeholders. For example, we have been
informed by regional staff in your Departments that a hearing request
may often result in a withdrawal of a challenged condition and the
mere reservation of authority to impose the condition in the future,
since costs for the trial-type hearings and other related costs may
not be covered by the budget of the affected Department office."
GAO's report ” and our experience ” confirms that our prediction was
accurate. The EPAct §241 provisions have given hydropower licensees a
powerful tool to assert unprecedented influence and leverage over the
conditions of FERC-issued hydropower licenses, particularly those
license conditions and prescriptions which address environmental
quality, fisheries, recreation, and public lands. This leverage takes
many forms. First, there is extreme financial pressure: the
administrative costs of a single hearing have the potential to drain a
regional office's entire budget. Second, there is workload pressure:
agencies must reassign staff time from other projects for months at a
time in order to adequately staff a trial-type hearing.
Finally, there is intense psychological pressure placed on individual
agency staff. A full trial-type hearing takes place in an extremely
tight timeframe of roughly 10 weeks from the receipt of a
hearing request. In order to defend their position on disputed issues
of material fact, agencies must be able to draw on extremely detailed
technical knowledge and expertise about those issues. Because these
issues are highly place-specific, the burden often falls on the
individual project leads that developed the conditions and
prescriptions. This burden is enormous. A review of documents obtained
via a Freedom of Information Act Request to the National Marine
Fisheries Service showed one individual staff member working 961 hours
(equivalent to 24 working weeks) on the Klamath trial-type hearing
during a 19-week period. This represents an enormous personal
commitment on the part of the staffer, well above and beyond the call
of duty. Our own experience with these hearings suggests that this
experience is not unique. A decision to defend a disputed
condition or prescription ” or even to issue such a condition or
prescription at all ” must weigh very heavily on agency staff, knowing
the impact that such a decision is likely to have on their personal
life.
Here, as elsewhere, EPAct §241 benefits those parties with abundant
resources. For a licensee, the decision to engage outside consultants
and legal counsel to challenge an agency decision is strictly a
business decision: if the cost of challenging an agency condition or
prescription is likely to be less than the cost of implementing the
resource protection, it is logical to challenge it. The costs
associated with EPAct §241 provisions may not even affect a licensee's
bottom line, since they can be recovered from ratepayers as a cost
associated with obtaining a license for their project. For agencies
and other non-federal stakeholders who do not generate revenue from
the project, however, the costs are significant and unsustainable.
Licensees clearly understand the role that this pressure plays on
agencies' decision to issue conditions or prescriptions, and they are
using this pressure to gain greater influence over the process. In the
draft report, one licensee claims: "before section 241 was enacted,
they had little influence on the mandatory conditions and
prescriptions." This statement, however, strikes us as odd. Our
Coalition's members have been participating in hydropower licensing
proceedings for more than two decades. In that time, we have never
known agencies to be unwilling to discuss their conditions with
licensees or to modify their conditions. Indeed, such negotiations
often formed the basis for the comprehensive settlement agreements
described above. Agencies have always been sensitive to the need to
balance competing uses, and licensees have always been able to
influence agency decisions or challenge them in court. The real change
since the passage of EPAct is in the degree of influence that
licensees are able to assert over agencies.
Agencies are responding to this leverage by issuing fewer, less
protective conditions and prescriptions:
The draft report indicates that agencies are responding to the various
pressures being applied by license applicants through the use of EPAct
§241:
"[Agencies admit that they] now issue fewer or less environmentally
protective conditions or prescriptions to avoid a costly trial-type
hearing. In addition, some other officials commented that instead of
issuing conditions and prescriptions that could result in a trial-type
hearing, agencies have either issued recommendations or reserved
authority to issue conditions and prescriptions at a later time. While
a reservation of authority allows the resource agency to issue
conditions and prescriptions after the issuance of the license, one
regional agency official told us that in his experience, this rarely
occurs. At one regional office, two staff biologists and their
division chief told us that while they still issue prescriptions that
meet the requirements of resource protection, these prescriptions are
less protective than they would have been without the possibility of a
trial-type hearing."
Our experience supports these observations. Of particular importance
is agencies' increased use of "reserved authority" to issue conditions
or prescriptions at a later time. The regional agency official's
statement above that agencies rarely exercise this reserved authority
is consistent with our experience. However, with agencies are
refraining from issuing conditions in order to avoid hearings, it is
even more unlikely that agencies will choose to exercise such
authority in the future, since they would still be subject to a
request for a costly trial-type hearing at that time. The rules
implementing EPAct §241 give parties the right to request a trial-type
hearing should an agency reserve this authority. See, for example, 7
C.F.R. § 1.601(c):
c) Reservation of authority. Where the Forest Service notifies FERC
that it is reserving its authority to develop one or more conditions
during the term of the license, the hearing and alternatives processes
under this subpart for such conditions will be available if and when
the Forest Service exercises its reserved authority. The Forest
Service will consult with FERC and notify the license parties
regarding how to initiate the hearing process and alternatives process
at that time."
The reverse, however, does not apply: the rules do not allow other non-
federal stakeholders to challenge the absence of a condition or
prescription or an agency's decision to reserve authority. The Section-
by-Section analysis published together with the rules implementing
EPAct §241 by the Departments of Commerce, Agriculture, and the
Interior states: "license parties cannot request a hearing regarding
the reservation of authority itself, or submit alternatives to such
reservation."
In other words, EPAct §241's leverage only runs in one direction:
towards less environmental protection. While the EPAct §241 rules are
nominally open to all non-federal stakeholders, they are clearly
useful only to those stakeholders with an interest in advocating for
less environmental protection: the licensees. Agencies can only adopt
alternatives that are less costly and either equally (in the case of
prescriptions) or adequately (in the case of conditions) protective.
Alternatives that may offer additional protection ” even if they cost
more ” cannot be accepted. A licensee can request a trial-type hearing
when an agency exercises its conditioning or prescriptive
authority, but other non-federal stakeholders cannot request a similar
hearing to seek review of the facts that led an agency to determine
that such conditions are not necessary. EPAct §241 places non-licensee
stakeholders ” and their interests in the protection of public
resources affected by hydropower projects ” at a significant
disadvantage.
Again, EPAct §241 gives licensees tremendous leverage over agencies,
and agencies are clearly responding to the threat posed by licensee's
trial-type hearing requests:
p. 15: "Several licensees and a few resource agency officials said
that under section 241, some resource agencies have been more willing
to negotiate their conditions and prescriptions to avoid receiving
alternatives and requests for trial-type hearings."
Our experience supports this observation. The Catawba-Wateree project
in the Santee. River basin in North and South Carolina provides one
such example.[Footnote 4] In June 2008, the U.S. Fish and Wildlife
Service recommended a set of flows for the project that were intended
to protect resident species and to provide adequate spawning flows for
restoration of diadromous fish in the Santee basin. These
recommendations were not mandatory conditions or prescriptions ” they
were recommendations made to FERC pursuant to other authorities
contained in the Federal Power Act. FERC must consider such
recommendations, but it is not obliged to include them in any license
for the project. These recommendations are not subject to the
requirements of EPAct §241.
The U.S. Fish and Wildlife Service also filed fishway prescriptions
for the Catawba-Wateree project pursuant to § 18 of the Federal Power
Act. The license filed a request for a trial type hearing to challenge
those fishway prescriptions. The Fish and Wildlife Service and the
licensee subsequently entered into closed-door negotiations. Other non-
federal stakeholders who had legitimately intervened in the trial-type
hearing were not invited or permitted to participate.
At the conclusion of these closed bilateral negotiations, the licensee
withdrew its request for a trial-type hearing. Incredibly, the
negotiated agreement did not address the question of fish passage at
all: the licensee agreed to accept the fish passage prescriptions if
the Fish and Wildlife Service changed its minimum flow
recommendations. The compromise made by the Fish and Wildlife Service
is evident in the text of the agreement.[Footnote 5]
"The Utilities will not pursue Trial Type Hearings ("TTH") before an
Administrative Law Judge pursuant to FPA §§4(e) or 18 to contest the
USFWS's FPA §§4(e) or 18 diadromous fish requirements so long as the
USFWS's ESA §7 requirements, FPA §§4(e) conditions, 10(a) and 10(j)
recommendations, and 18 prescriptions do not materially vary reservoir
elevation limitations, required flow releases, low inflow protocols or
the high inflow protocols as set for the in: (A) the CRA; (B) Existing
project Licenses at the Ninety-Nine Islands and Gaston Shoals
projects; (C) a settlement agreement among the SCDNR, the USFWS, and
SCE&G for the Saluda Hydroelectric Project; and (D) this Accord."
Subsequent to signing and filing with FERC the Santee Accord, the U.S.
Fish and Wildlife Service altered its previous river flow
recommendations for diadromous fish to match flows proposed by the
licensee.[Footnote 6]
Here, the licensee clearly used EPAct §241 as leverage against the
Fish and Wildlife Service. The use of the provisions here do not
appear to have been intended to seek third party oversight over agency
conditions and prescriptions, but rather to simply coerce the agency
into changing its recommendations issued under a separate authority.
The licensee apparently did not even seek changes to the fish passage
prescriptions that triggered the EPAct §241 review. Instead, it used
the threat of a trial-type hearing to pressure the agencies to change
separate recommendations made pursuant to other authorities to which
EPAct §241 does not even apply: Sections 10(a) and 10(j) of the
Federal Power Act, and Section 7 of the Endangered Species Act. When
licensees interviewed for the draft report talk about providing
agencies with an "incentive" or having "influence" over agency
conditions, this is the result they are describing.
The clearest indication that licensees are using EPAct §241 as
leverage over agency decision-making rather than as an opportunity for
oversight over agencies' science is the interest expressed by some
licensees in gaining the ability to request trial-type hearings or
propose alternatives to agencies' final conditions and prescriptions
if they differ from the terms that were agreed upon during
negotiations. Once a licensee has agreed to withdraw a request for a
trial-type hearing (because agencies have agreed to submit final
conditions or prescriptions that are more to the licensee's liking),
it loses its leverage over agencies, and its "only recourse is to sue
in an appeals court, after the license has been issued."[Footnote 7]
If licensees were allowed to challenge final conditions and
prescriptions, agencies could be subject to an endless loop wherein
licensees submitted new requests for trial-type hearings to challenge
new facts or proposed new alternatives until agencies agreed to
withdraw or modify their conditions to licensees' liking.
EPAct §241 has made agencies' need for information and studies even
more critical, but they are not getting the information they need:
Finally, some agency staff interviewed for the draft GAO report
indicated that EPAct §241 has led them to request "licensees to
conduct more extensive studies about the effects of their hydropower
projects to ensure that the agencies have sufficient information for
writing conditions and prescriptions." Unfortunately, agencies lack
the authority to require licensees to conduct such studies, and
licensees often refuse studies requested by agencies and other non-
federal stakeholders. For instance, one agency staffer quoted in the
draft report described a case where a licensee declined to conduct
such a study and then challenged an agency condition on the grounds
that the agencies lacked the supporting factual evidence that the
requested study would have provided.
While agencies with conditioning and prescriptive authority under the
Federal Power Act lack the authority to require licensees to perform
studies, FERC does have this authority. Unfortunately, FERC's record
of cooperation with its sister agencies is uneven at best, and FERC
frequently rejects agencies' requests for studies. EPAct §241 has
given agencies a clear sense of what information they require in order
to prepare Section 4(e) conditions and Section 18 prescriptions that
are based on a solid factual underpinning. Given that these agencies
are now being held to a standard that requires much more detailed
information, it is unclear why FERC would repeatedly choose to deny
them access to the information that they have identified as necessary.
As a result, we have observed a marked increase in formal agency
disputes over FERC's study plan determinations. While FERC's licensing
regulations allow agencies to request a technical panel to resolve
disputes with FERC over which studies should or should not be
performed, FERC is not required to accept the panel's recommendations.
Indeed, on a number of occasions, the Director of FERC's Office of
Energy Projects has overridden an independent technical panel's
recommendation that studies requested by an agency be performed. This
lack of interagency cooperation makes it more likely that licensees
will request trial-type hearings when information gaps lead to
disputes over issues of material fact. FERC's refusal to require
critical studies also leaves agencies without the tools they need to
defend their conditions and prescriptions should a licensee request a
trial-type hearing.
Section 3: GAO's Recommendations:
HRC strongly agrees with both of the recommendations made by the GAO
in its draft report. We are already on record asking the agencies to
finalize their 2005 draft rules implementing EPAct §24 t, and we
recently wrote a joint letter with the National Hydropower Association
asking the agencies to hold an additional public comment period before
issuing their final rules.
We also agree with GAO's recommendation that agencies include
statements explaining their reasons for not adopting proposed
alternative conditions or prescriptions when they submit their final
conditions and prescriptions to FERC, in accordance with the interim
rules. We would further recommend that agencies provide a more
detailed explanation of the material facts underpinning any decision
to modify conditions and prescriptions, especially when those
modifications were the result of a negotiated agreement that also
resulted in the withdrawal of a request for a trial-type hearing.
In conclusion, HRC also has four other recommendations for how the
trial-type hearing and alternatives process could be improved. While
we recognize that some of these recommendations go beyond the scope of
GAO's draft report, we include them here to clarify our views on the
efficacy of §241 of the Energy Policy Act of 2005.
* Agencies need tools to agencies need tools to recover the costs
associated with their compliance with the EPAct §241 provisions,
especially trial-type hearings.
* Agencies should have the express authority to reject trial-type
hearings in which the issues in dispute are not factual, which dispute
conditions and prescriptions rather than the facts underlying them,
and which can be resolved otherwise through the licensing process.
* Agencies need to be able to gather relevant information necessary to
develop ” and defend ” their conditions and prescriptions.
* The rules implementing EPAct §241 should prohibit all ex parte
communications among parties to a trial-type hearing.
First, agencies need tools to recover the costs associated with their
compliance with the EPAct §241 provisions, especially trial-type
hearings. While it is appropriate that EPAct §241 should be used to
improve oversight over agencies' decision-making, licensees are
instead using these provisions to influence agencies' decisions to
issue conditions or prescriptions. For a licensee, there is a clear
economic incentive for requesting a trial-type hearing. For an agency,
there is a clear economic and workload incentive to modify or withdraw
its conditions (or avoid issuing them in the first place) in order to
avoid the high cost of a hearing. We recommend that Congress examine
the post-EPAct §241 Federal Power Act and consider changes that would
result in a more equitable balance of these cost incentives and a
funding mechanism that would allow agencies to provide non-federal
stakeholders with the trial-type hearings that Congress intended
without drawing on funds that Congress has appropriated for the
agencies' other critical work.
Second, agencies should have the express authority to reject trial-
type hearings in which the issues in dispute are not factual, which
dispute conditions and prescriptions rather than the - facts
underlying them, and which can be resolved otherwise through the
licensing process. In the three trial-type hearings discussed in GAO's
report, more than 61% of the issues were dismissed after an ALJ's pre-
trial hearing, suggesting that quite a few of those issues were
neither material nor factual. While the draft report does not include
a similar analysis of disputed issues that never went to hearing
because the hearing request was withdrawn, our own experience with the
rules suggests that many issues being raised address points of policy
rather than points of fact (e.g. "the preliminary fish passage
prescription is too expensive and/or unnecessary"), and would be
unlikely to survive a pre-trial hearing before an ALJ. Agencies should
amend the rules implementing EPAct §241 to give staff the authority to
reject disputes over issues that are not material or factual before
the case is referred to an ALJ.
Third, agencies need to be able to gather relevant information
necessary to develop ” and defend ” their conditions and
prescriptions. Given the extraordinarily high standards for supporting
evidence created by EPAct §241, FERC should substantially improve its
cooperation with agencies with mandatory conditioning authority under
Section 4(e) and prescriptive authority under Section 18 of the
Federal Power Act. By refusing to require licensees to perform studies
requested by agencies, FERC effectively prevents those agencies from
exercising their authorities under the Federal Power Act. FERC should
use its existing authorities under the Federal Power Act to require
licensees to perform all studies that agencies have indicated are
necessary to develop such conditions and prescriptions. Alternately,
Congress should amend the Federal Power Act to either a) allow
agencies with mandatory conditioning or prescriptive authority to
require licensees to perform relevant studies, or b) to give agencies
the ability to perform such studies on their own and bill licensees
for the costs.
Finally, the rules implementing EPAct §241 should prohibit all ex
parte communications among parties to a trial-type hearing.
Determinations regarding alternative conditions and all trial-type
hearings should be subject to ex parte rules to prevent parties who
have intervened in a proceeding from being denied equal access to
agency decision-makers. The alternatives process is essentially a
paper hearing conducted by the agency on the record. The prohibition
on ex pane communication is necessary to ensure that the agency's
decision regarding a condition or prescription made on a public record
is not influenced by private, off-the-record communications from any
party interested in the outcome. Such a prohibition is standard in
other regulations for hearings promulgated by these agencies.
Again, we appreciate this opportunity to comment on the GAO's draft
report. If you have any questions about our comments, please feel free
to contact me at 202-347-7550 or jseebach@americanrivers.org.
Sincerely,
Signed by:
John Seebach:
Chair:
Hydropower Reform Coalition:
Appendix IV Footnotes:
[1] GAO's draft report does indirectly reference this situation, but
only in the context of agency officials who "suggested that licensee
reimbursements for the relicensing costs go directly to the resource
agencies rather than the General Fund of the U.S. Treasury."
[2] The GAO's draft report correctly notes that the National Marine
Fisheries Service (NMFS) has managed to secure additional funding to
cover the administrative costs of complying with these provisions, but
that these funds do not cover the costs associated with retasking
program staff or attorneys to analyze alternatives or participate in
trial-type hearings.
[3] We find it odd that a licensee would, as reported in GAO's draft,
comment that agencies " had little incentive to work collaboratively
with the licensee during relicensing prior to section 241." Agencies
had been collaborating”with great success ” with licensees and other
non-federal stakeholders for years before the EPAct §241 provisions
were passed.
[4] The draft GAO report does not directly refer to this project, but
describes a similar set of circumstances in one example.
[5] Santee River Basin Accord for Diadromous Fish Protection,
Restoration, and Enhancement, FERC Accession Number 20080619-5006, p.3.
[6] Errata to Comments and Recommendations, Notice of Application
Ready for Environmental Analysis, Catawba-Wateree Hydroelectric
Project FERC No. 2232-522; North Carolina and South Carolina, FERC
Accession Number 20080718-0219, p.3.
[7] The option to seek judicial review was also available to licensees
before the passage of EPAct §241.
[End of section]
Appendix V: Comments from the National Hydropower Association:
National Hydropower Association:
25 Massachusetts Ave. NW, Ste. 450:
Washington, D.C. 20001:
Tel: 202-682-1700:
Fax: 202-682-9478:
[hyperlink, http://www.hydro.org]
July 9, 2010:
Mr. Frank Rusco:
Director, Natural Resources and Environment:
Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Re: Comments on the GAO EPAct 2005 Section 241 Report:
Dear Mr. Rusco,
The National Hydropower Association (NHA) appreciates this opportunity
to provide comments to the Government Accountability Office (GAO) on
the draft report of the Section 241 trial type hearing and alternative
condition and prescription provisions of the Energy Policy Act of 2005
(EPAct 2005).
NHA is a non-profit national association dedicated exclusively to
advancing the interests of the U.S. hydropower industry, including
conventional, pumped storage and new hydrokinetic technologies. NHA's
membership consists of more than 170 organizations including public
utilities, investor owned utilities, independent power producers,
project developers, equipment manufacturers, consultants and others
involved in the industry.
NHA members have a keen interest in the Section 241 provisions having
participated in the development of the interim final rules and
developing substantial experience with the provisions as utilized in
their re-licensing proceedings.
The following comments are also endorsed by the American Public Power
Association[Footnote 1] and the Edison Electric Institute.[Footnote 2]
History:
NHA and the hydropower industry sought the provisions of Section 241
to inject additional accountability and transparency into the process
for developing mandatory conditions and prescriptions. Prior to EPAct
2005, the hydropower licensing process provided no administrative
mechanism to review preliminary conditions and prescriptions proposed
by the agencies. A licensee's only option was to challenge conditions
in the court of appeals ” a process which only served to delay
implementation of appropriate mitigation and other measures at a
significant cost to both the licensees and the agencies.
The ability to hold a trial-type hearing provides licensees with a
tool to ensure proposed conditions and prescriptions are based on
accurate information and address impacts directly related to the
project.
In addition, the pre-EPAct 2005 process did not afford consideration
of alternatives to agency proposed conditions and prescriptions.
Requiring agency analysis and acceptance of alternatives that meet the
same standard for natural resource protection (though at lower cost or
with increased power savings) allows licensees the ability to fully
realize the clean energy potential of their projects in the most cost
efficient manner.
In the end, the ultimate goal of the industry in supporting the
Section 241 provisions was better, maximized outcomes in the licensing
process both for environmental protection and for needed renewable
energy generation from hydropower.
General Comments and Response to Report Recommendations:
NHA commends the GAO and its staff for the extensive work it undertook
in interviewing licensees, agencies and other stakeholders in meeting
the report's objectives to illustrate the use of the Section 241
provisions, their outcomes, and the views on those outcomes and the
process itself.
Hydropower licensing is one of the most heavily intensive processes
for a generation source in the United States and includes the high
level of input from a wide variety of stakeholders.
Based on the experience of NHA and its members, and a review of the
results of the interviews GAO conducted, the Association believes that
the provisions of EPAct 2005 Section 241 are providing more
transparency and accountability, for all stakeholders, in the process
as Congress intended and leading to better licensing outcomes.
Though some administrative modifications to the agencies' interim
final rules are both needed and useful, NHA believes these can be
accomplished without any statutory changes to the structure of the
program. Additional information on proposed changes is included.
Finally, NHA also fully supports the GAO's recommendations in the
report that: (1) agencies provide in their written statement filed
with the Federal Energy Regulatory Commission (FERC) the reasons for
not adopting proposed alternative conditions or prescriptions, as is
currently required by the interim rule; and (2) the agencies issue a
final rule governing the use of Section 241 provisions with additional
notice and opportunity for public comment.
NHA endorses the above recommendations and looks forward to working
with the agencies and other stakeholders as a final rule is developed.
Specific Comments on the Report:
Based on the extensive research conducted by the GAO in the
preparation of this report, NHA can draw several conclusions. But, in
general, it is clear from the comments and data that Section 241 has
indeed met the goals of transparency and accountability that was
intended.
A. Need for agency statement on modified conditions:
Of the 139 conditions that were modified, only 13 came with
explanations of why the conditions were modified, as opposed to
accepted or rejected. It is important for resource agencies to provide
the reasoning behind the actions they take in accepting, rejecting,
modifying and removing proposed conditions and prescriptions. Without
such reasoning, it is hard for stakeholders to determine, as the GAO
pointed out, the basis of the changes, their extent, and if the
proposed alternatives had any affect on the final licensing
conditions. Providing such reasoning offers a fuller picture of the
licensing process to stakeholders, FERC, and Congress.
B. Settlements not adversely affected by Section 241 provisions:
In the process, we continue to see settlement between involved parties
and less employment of the trial-type hearing. In the few cases where
a trial-type hearing has been utilized, the administrative law judge
(ALJ) has ruled for both the licensee and the agencies.
We believe the Section 241 provisions have fostered a greater
environment of collaboration amongst stakeholders. Of all the proposed
alternative conditions and prescriptions, 72 percent resulted in
modification of conditions, indicating that common ground was found
and agreement reached on mutually beneficial licensing conditions.
And while there is some concern that the trial-type hearings have been
time and resource consuming, only three went to completion, with the
majority of proceedings initiated being settled in negotiations before
an ALJ decision was issued.
C. Section 241 has resulted in the generation of better Information:
NHA also believes that the process has generated better information.
Both licensees and resource agency officials expressed that the
resource agencies put more effort into researching, supporting and
explaining their conditions and prescriptions, as well as requesting
more extensive studies from the licensee. This ensures a complete
scientific and fact-based support of licensing conditions set by the
resource agencies.
D. The process is demanding on all parties involved:
Among the comments from stakeholders and resource agencies, cost to
the resource agencies was often cited as a negative result of Section
241. In addition to the agencies, the process involves extensive
effort and resources on the part of the licensee as well. The goal is
transparency and accountability, and the hydropower industry believes
there should be an appropriate level of investment towards these goals
and feels that it too has made a significant contribution.
Proposed Recommendations for Final Rule Issuance:
On November 17, 2005, the Departments of Agriculture, Interior and
Commerce issued interim final rules for implementing the trial-type
hearing and alternatives provisions of EPAct 2005. In the interim rule
it was indicated that revised final rules would be promulgated within
18 months, based on comments received and the initial results of the
procedures set forth.
NHA filed comments on that rule in January 2006. Over four and a half
years later, the Departments and stakeholders have had extensive
experience with Section 241 provisions and NHA believes the agencies
should proceed with issuing a final rule, after a period of public
comment. As per our June 2009 joint letter with the Hydropower Reform
Coalition, NHA believes that there are opportunities to enhance the
cost effectiveness of the procedures before issuance of a final rule.
For example, with regard to the trial type hearing process, Section
241 provides that the license applicants shall be entitled to trial-
type hearing of no more than 90 days on fact disputes related to the
licensing conditions. As it is now, the ALJ issues his or her decision
within that 90 day time frame. NHA believes those 90 days should be
dedicated to proceedings in order to give parties sufficient time to
develop an adequate record on the facts at issue and to provide
appropriate due process. Therefore, we recommend that in the final
rule making the process be modified to (1) start the 90 day hearing
clock when direct testimony is filed and (2) authorize the ALJ to
write his or her decision following completion of the hearing.
NHA looks forward to providing additional recommendations and
expanding on the recommendations posed here by providing supplementary
input as the agencies work to finalize their interim rule.
Conclusion:
NHA would again like to thank the GAO for this opportunity to provide
comments on the draft report. The Section 241 provisions of EPAct 2005
are important to providing the most cost effective and fact-based
licensing conditions and prescriptions to ensure that hydropower
generation has an opportunity to fully realize its important role in
America's renewable, clean energy portfolio.
Sincerely,
Signed by:
Linda Church Ciocci:
Executive Director:
Appendix V Footnotes:
[1] APPA is a national service organization that represents the
interests of more than 2,000 publicly owned, not-for-profit electric
utilities located in all states except Hawaii. Over 70 percent of
APPA's members serve communities with less than 10,000 residents, and
approximately 45 million Americans receive their electricity from
public power systems operated by municipalities, counties,
authorities, states, or public utility districts.
[2] EEI is the association of U.S. shareholder-owned electric
companies, international affiliates, and industry associates. Our
members represent approximately 70% of the U.S. electric power
industry. They generate electricity from a diverse portfolio of fuel
resources, including hydropower.
[End of section]
Appendix VI: GAO Contact and Staff Acknowledgments:
GAO Contact:
Frank Rusco, (202) 512-3841 or RuscoF@gao.gov:
Staff Acknowledgments:
In addition to the contact named above, Ned Woodward, Assistant
Director; Allen Chan; Jeremy Conley; Richard Johnson; Carol Herrnstadt
Shulman; Jay Smale; and Kiki Theodoropoulos made key contributions to
this report.
[End of section]
Footnotes:
[1] 16 U.S.C. §§ 791a-825r (2010).
[2] FERC is composed of up to five commissioners who are appointed by
the President and confirmed by the Senate.
[3] If a license expires while a project is undergoing relicensing,
FERC issues an annual license, allowing a project to continue to
operate under the conditions found in the original license until the
relicensing process is complete.
[4] These agencies currently include the U.S. Department of
Agriculture's Forest Service and several bureaus in the U.S.
Department of the Interior. In its comments on a draft of this report,
the Department of Commerce's National Oceanic and Atmospheric
Administration noted that the agency considers National Marine
Sanctuaries to be federal reservations under section 4(e), and that
the agency disagrees with FERC's contrary view. See Finavera
Renewables Ocean Energy, Ltd., 124 FERC ¶ 61063 (2008).
[5] These agencies currently include the U.S. Department of the
Interior's Fish and Wildlife Service and the U.S. Department of
Commerce's National Marine Fisheries Service.
[6] Licensees also had and continue to have the option to seek
rehearings of FERC licensing decisions as well as to challenge these
decisions in court.
[7] Material fact is defined as a fact that, if proved, may affect a
federal resource agency's decision whether to affirm, modify, or
withdraw any preliminary condition or prescription.
[8] The Electric Consumers Protection Act of 1986 amended section 4(e)
of FPA to require FERC to give "equal consideration" to water power
development and other resource needs, including protecting and
enhancing fish and wildlife, in deciding whether to issue an original
or a renewed license.
[9] For fishway prescriptions, the alternative must be "no less
protective" than the agency's original prescription.
[10] Stakeholders for three projects--Hells Canyon, Klamath, and
Priest Rapids--proposed both alternative conditions and prescriptions.
[11] In commenting on a draft of this report, Commerce's National
Oceanic and Atmospheric Administration noted that resource agencies
use the term "modified prescription" as a "term of art" to refer to
the agencies' final prescription, regardless of whether the final
prescription actually differs from the preliminary one. In this
report, we count a preliminary prescription as modified if the
resource agency does not explicitly accept or reject the proposed
alternative.
[12] Federal Register, vol. 70, no. 221, November 17, 2005, 69805.
[13] These three figures are based on the agencies' best estimates,
and we did not test for data reliability.
[14] The relicensing of the Klamath project is on hold pending a
decommissioning agreement.
[15] In American Rivers v. U.S. Department of the Interior, Civ. No.
C05-2086P, 2006 WL 2841929 (W.D.Wash.), a federal district court held
that the interim rules were procedural rules exempt from the
requirement that the agency provide the public notice and an
opportunity to comment prior to issuing regulations. Nevertheless, the
agencies are not prohibited from providing an opportunity for notice
and comment before they finalize the existing rules, and indeed did
take comments on the interim rules, although after it went into
effect. See 70 Fed. Reg. 69804 (2005).
[16] The preamble to the interim rules notes that a license party
might choose to withdraw a proposed alternative in the wake of an
ALJ's adverse finding on an issue of material fact, and that in such
circumstances the agencies would not need to address the withdrawn
alternative. 70 Fed. Reg. 69814. As we observed above, however, the
regulatory language itself contains no discussion of withdrawals, even
in the trial-type hearing context. Moreover, an ALJ finding along the
lines discussed in the preamble (and the related agency briefs in the
hearing record) would provide some transparency with regard to the
potential shortcomings of the proposed alternative. In the much more
common case of a settlement between the agencies and the licensee,
such transparency is often lacking.
[End of section]
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