FERC hydrokinetic policy to speed licensing of innovative projects

The Federal Energy Regulatory Commission issued a policy statement Nov. 30 under which it plans to expedite license issuance for hydrokinetic projects generating electricity from currents, ocean waves, and tides.

Unlike its standard hydropower licenses, which cannot be issued until all terms and conditions are submitted by state and federal resource agencies, FERC said it plans to issue conditional hydrokinetic project licenses quickly, without waiting for authorizations from other agencies.

However, the statement said, the hydrokinetic licenses would be conditioned to prevent a licensee from actually starting construction until it obtains all necessary authorizations. FERC said issuance of a conditioned license would be a final commission action, as is the case with hydropower licenses that contain reservations of authority -- �license reopeners� -- permitting subsequent amendments by FERC or other agencies.

Thus, FERC said, the licenses would be subject to rehearing and, once accepted, terms would be binding on licenses. Licensees would be able, and required, to comply with all license terms that do not involve construction, such as those that could require the development of plans and consultation with stakeholders.

The licensing procedure is one of several steps by FERC to accelerate development of the innovative projects. FERC said issuing conditioned licenses for hydrokinetic technologies will improve the ability of project developers to secure financing of demonstration projects.

Hydrokinetics could double U.S. hydropower production

�Estimates suggest that new hydrokinetic technologies, if fully developed, could double the amount of hydropower production in the United States, bringing it from just under 10 percent to close to 20 percent of the national electric supply,� the policy statement said.

The commission adopted an interim process in February for handling hydrokinetic preliminary permit filings, including a �strict scrutiny� approach to reviewing permits to prevent �site banking� and promote competition. (HNN 2/15/07)

�FERC has been flexible with its regulatory abilities with respect to hydrokinetic projects so that these new projects can move forward as quickly as possible,� FERC Chairman Joseph Kelliher said. �Today's policy statement continues that tradition and provides regulatory certainty to developers.�

FERC follows natural gas facility certification model

In the policy statement, the commission said it adopted a procedure similar to its certification procedure for natural gas facilities, even when applicants still await permits from other agencies. FERC said it chose the gas facility certification model over the conventional hydropower licensing model because issuing the licenses: would have no effect on the environment; would not diminish the authority of the states or other federal agencies; and would allow preparation for demonstration projects to proceed quickly, leaving state and federal agencies to complete their actions on their own timetables.

The policy statement (PL08-1-000), effective immediately, is on FERC's Internet site, www.ferc.gov. FERC said it would accept comments submitted by Dec. 14. Comments can be submitted electronically via the eFiling link on FERC's website, or mailed to FERC, Office of the Secretary, 888 First St., N.E., Washington, DC 20426.

In October, FERC held a technical conference to discuss a pilot project license process proposed by FERC staff that would enable applicants of some projects to complete licensing in six months, provide FERC oversight and agency input, and allow developers to generate electricity while testing. (HNN 10/4/07)

Another federal agency, the Department of Interior's Minerals Management Service (MMS) announced Nov. 6 an interim policy that would authorize developers to collect data and establish test facilities on the Outer Continental Shelf. The final EIS did not resolve a question of jurisdictional issues involving MMS and FERC for projects on the Outer Continental Shelf. (HNN 11/7/07)

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