The Leading Edge

FERC denies pilot status to 10-MW Indian River Inlet project

The Federal Energy Regulatory Commission has denied an application by UEK Delaware for status of its 10-MW Indian River Inlet project as a hydrokinetic pilot project that would not require a FERC license.

The project, on the Indian River in Sussex County, Del., would use 25 bi-directional underwater electric kite turbine-generators that would be anchored to a 400-foot-long cable on the channel floor. They would generate electricity for sale to an interstate transmission system.

UEK Delaware filed a declaration of intention application in April, seeking a FERC determination that the project does not need to be licensed. It says FERC should consider the project a pilot unit of limited duration.

The commission noted it has issued two orders concerning experimental hydrokinetic projects that do not require a license, one involving Verdant Power LLC and the other the Maine Maritime Academy. FERC decided not to require a license for experimental hydrokinetic facilities if: the technology is experimental; they will be used for a short period for the purpose of conducting studies necessary for a license application; and the power generated will not be transmitted into, nor will displace power from, a national grid.

"The proposed Indian River Inlet Hydrokinetic Tidal Facility does not meet the required criteria for consideration as a pilot or experimental project," FERC said in June. "Power generated from the test facility will affect interstate commerce because it will be transmitted and sold into the Pennsylvania-New Jersey-Maryland grid, a national electric energy grid."

As a result, FERC says UEK Delaware must obtain a FERC hydro license for construction, maintenance and operation of the Indian River facility.

OPT readies hydrokinetic unit for next test

Wave energy company Ocean Power Technologies Inc. has successfully completed the first phase of testing for its next generation "power take-off" units.

The new PTO units will replace those currently used on the company's PB150 PowerBuoy units and will be integrated into the spar of a buoy that will soon be deployed off the coast of Reedsport, Ore.

The company says the PTO was subjected to varying simulated wave conditions to measure its functionality and reliability. OPT also says the new PTO is a "much larger" version of one that was used in a recent two-year study conducted with the U.S. Navy.

In July, OPT announced its financial results for the fiscal 2012 fourth quarter and the year that ended April 30, 2012. The company showed an operating loss of US$16.6 million for the fiscal year, compared with operating losses of $21.3 million for the year prior. The company says it primarily credits a 37% decrease in product development costs for the difference.

FERC rejects challenge to hydrokinetic permit issuances

The Federal Energy Regulatory Commission has rejected a challenge by Northland Power Mississippi River LLC to the issuance of preliminary permits to competitor Free Flow Power Corp. for hydrokinetic projects on the lower Mississippi River.

Between them the two developers hold, or have applied for, preliminary permits to study more than 140 sites covering all but a few miles of the 850-mile river reach between Cairo, Ill., and the Gulf of Mexico. In 2011, FERC considered, then dropped, plans to refuse to issue additional preliminary permits for hydrokinetic projects on the lower Mississippi due to the many projects proposed by the two developers.

In the latest dispute, Northland asked for rehearing of FERC staff orders issuing successive permits to Free Flow for projects whose three-year original permits had expired.

First-to-file policy challenged

As a number of Free Flow's permits were to expire Dec. 31, 2010, both companies filed competing applications for 11 of the sites on Jan. 3, 2011. FERC rejected all the filings as premature because, due to the Dec. 31 federal holiday, the original permits did not expire until end of day Jan. 3.

FERC notified both developers of the rejections by e-mail at 1:59 p.m. Jan. 11. Free Flow personnel refiled applications by 2:13 p.m. that day, while Northland personnel did not refile until 4:43 p.m. As a result, Free Flow was awarded the 11 permits under FERC rules favoring the first applicant to file, if all other factors are equal.

On rehearing, FERC rejected Northland's contention that the 11 sites should have been allotted by lottery because the applications were all filed the same day. FERC cited its long-standing practice of awarding to the first to file, even if the difference is only by minutes.

On Feb. 1, 2012, Free Flow and Northland filed competing permit applications for 13 other sites that had been subject to Free Flow permits that expired Jan. 31, 2012. In this case, all permit filings were time-stamped 8:30 a.m. at the opening of FERC's office that day. Because of the simultaneous filings, FERC allotted those 13 permits by lottery. Nine went to Free Flow and four to Northland.

Free Flow's diligence challenged

On rehearing, Northland also argued that Free Flow did not display sufficient diligence in studying the project sites during the original permit terms and that granting Free Flow successive permits is inconsistent with FERC precedent. The commission rejected both of these arguments.

FERC acknowledged Northland's accusation that Free Flow had previously filed identical permit progress reports that did not provide information on the progress of individual projects. However, the commission cited portions of the entire record that showed many examples of Free Flow's progress on individual projects.

In terms of diligence, Northland also argued that Free Flow has not conducted a meaningful on-site demonstration of its hydrokinetic technology. FERC disagreed. "All preliminary permits state specifically that the permit does not authorize the holder to conduct ground-disturbing activities or enter onto lands," FERC's June 1 order says. "Thus, in many cases it may not be possible for a permittee to test equipment at the proposed project site."

Issue of FERC precedent raised

Northland says FERC's grant of 21 successive permits to Free Flow Power is inconsistent with the commission's past dealings with holders of multiple permits. The company pointed to FERC's 2003 correspondence with multiple permit holder Symbiotics LLC, in which FERC encouraged the permit holder to evaluate its many hydroelectric sites for viability in order to decide whether to file license applications or surrender permits.

"The commission rarely encounters cases involving large numbers of permits held by one entity, and so has not developed a policy applicable to such instances," FERC said. "With regard to Symbiotics, staff encouraged the company to consider the viability of its proposed projects, but imposed no further requirements."

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