FERC claims jurisdiction over ocean energy projects

The Federal Energy Regulatory Commission asserted Oct. 16 it has jurisdiction over hydroelectric projects on the offshore Outer Continental Shelf, despite a competing claim by the U.S. Department of Interior's Minerals Management Service.

FERC addressed the jurisdictional question in a rehearing order involving two preliminary permits granted to Pacific Gas &Electric Co. to study developing wave energy projects on the Outer Continental Shelf off the California coast. The projects are 40-MW PG&E Humboldt WaveConnect (No. 12779) and 40-MW Mendocino WaveConnect (No. 12781). (HNN 7/25/08) FERC issued both permits in March.

FERC, the U.S. hydropower licensing agency, noted the Minerals Management Service asserted FERC only has jurisdiction to issue preliminary permits and licenses for projects within state waters, typically extending three nautical miles offshore. Projects beyond state waters are considered to be on the OCS.

FERC said the Federal Power Act gives it authority to issue preliminary permits and licenses for projects on the OCS.

First, FERC said, the law expressly grants FERC jurisdiction to license in �navigable waters� without limitation, as is the case in �streams or other bodies of water over which Congress has jurisdiction.� That, FERC said, means the commission has jurisdiction over hydropower projects such as those being studied under the two preliminary permits held by PG&E.

The second authority, it said, stems from the projects being on �reservations� of the United States. FERC concluded the OCS is land owned by the United States, qualifying it as a �reservation� under FPA. It noted the U.S. Supreme Court has held the U.S. owns the submerged lands off its shores.

FERC also disputed an Interior Department assertion the Energy Policy Act of 2005 intended for Interior to be the lead federal regulatory authority over wave and ocean current energy projects in the OCS. In its order, FERC said the Energy Policy Act does not limit the scope of FERC's authority over hydroelectric power or withdraw FERC jurisdiction over projects on the OCS.

�I am confident that today's decision puts to rest any questions about FERC's jurisdiction over hydroelectric projects on the OCS,� FERC Chairman Joseph Kelliher said. �This will allow applicants; local, state, and federal agencies; and other interested groups to work together more effectively and expeditiously to develop appropriate projects that utilize our renewable ocean resources.�

The Minerals Management Service issued proposed rules in July in which it maintained MMS is the lead federal agency for regulating ocean and tidal energy projects on the OCS. In September, FERC staff urged MMS to back away from plans to regulate ocean energy projects. (HNN 9/5/08) MMS has said it expects to complete the final rules by December.

Kelliher: FERC ready to enter agreement with MMS

Although MMS and FERC at one time agreed to develop a memorandum of understanding to resolve jurisdictional issues, MMS has not signed the memorandum.

�We have proposed a memorandum of understanding with MMS that carefully delineates the roles of the two agencies in a manner that respects both our licensing, and Interior's resources, roles,� Kelliher said. �We stand ready to enter into the MOU to clarify those roles.�

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