FERC Approved First Pilot Project to Test the Fast-Track Licensing Process Provided in the Hydropower Regulatory Efficiency Act of 2013

8.8.14

By: Debbie A. Swanstrom and Andrea I. Sarmentero

The Federal Energy Regulatory Commission (“FERC” or “Commission”) approved this week the first pilot project to test a fast-track licensing process for hydropower development pursuant to the Hydropower Regulatory Efficiency Act of 2013 (the “Act”).

The Act directed FERC to investigate the feasibility of a two-year licensing process for low impact hydropower developments at non-powered dams and closed-loop pumped storage projects. FERC held an initial workshop on October 22, 2013 and sought comments and recommendations. On January 6, 2014, FERC issued a Notice opening a three-month window to file petitions for an expedited hydropower license under a pilot program starting February 5, 2014 and ending on May 5, 2014. These fast-track pilot projects were required to comply with following minimum criteria:

  • Have minimal change to existing surface and groundwater flows and uses;
  • Have no adverse effect on federally listed threatened and endangered species;
  • Include a letter from the implicated federal dam owner saying the plan is feasible (if applicable);
  • Include a letter from the managing entity of any public park, recreation area, or wildlife refuge giving its approval to use the site (if applicable); and
  • For closed-loop pumped storage projects, the project must not be continuously connected to a naturally flowing water feature.

The first approved fast-track pilot project is Free Flow Power Project 92, LLC's (“Free Flow”) 5-megawatt hydropower project located at the Kentucky River in Estill and Madison Counties, Kentucky (Docket No. P-14276).  In March of 2012, the Commission granted a preliminary permit to study the feasibility of Free Flow’s hydropower project. After filing its petition for the expedited licensing process, Free Flow filed, in June of 2014, a notice of intent to file a license application and a pre-application document (“PAD”). The PAD contained: (1) a detailed project description; (2) a list of potential environmental effects; (3) a proposed study plan to fill information gaps; (4) a process plan and schedule; and (5) documentation of consultation with affected federal and state resource agencies, Indian tribes, non-government organizations, and the public.

In this first pilot, FERC did not require additional studies and approved Free Flow’s proposed studies for hydraulics, fish entrainment, and aquatic habitat without modifications. However, FERC required amendments to Free Flow’s proposed water quality study, endangered species survey, and cultural resource assessments. Remarkably, the letter approving the pilot also includes a process plan and a schedule with milestones that not only Free Flow, but also FERC Staff and the Kentucky DEP must meet.