To amend the Federal Power Act to reform the hydroelectric licensing process, and for other purposes.

February 27, 2002

Mr. DINGELL (for himself and Mr. MARKEY) introduced the following bill; which was referred to the Committee on Energy and Commerce

To amend the Federal Power Act to reform the hydroelectric licensing process, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

(a) SHORT TITLE- This Act may be cited as the `Federal Investment in Sustainable Hydropower Act'.

(b) TABLE OF CONTENTS-

Sec. 1. Short title and table of contents.

Sec. 2. Incentives for turbine upgrades.

Sec. 3. FERC report on hydroelectric licensing.

Sec. 4. Rehearing petitions.

Sec. 5. Licensing schedule and environmental review.

Sec. 6. Agency conditions.

Sec. 7. License duration.

Sec. 8. Fees and charges.

Sec. 9. Availability of sufficient funds.

Sec. 10. Baseline.

Sec. 11. Annual licenses.

Sec. 12. Agency costs.

Sec. 13. Office of public participation.

Sec. 14. Royalty for use of public waters.

Sec. 15. Multiple projects on a waterway.

Sec. 16. Alternative conditions and fishways.

Sec. 17. FERC data on hydroelectric licensing.

Sec. 18. Enforcement.

Sec. 19. Sunshine in financial accounting.

SEC. 2. INCENTIVES FOR TURBINE UPGRADES.

(a) ADVANCED TURBINES- The term `advanced turbine' means a hydroelectric generation turbine that achieves the maximum feasible generation of electricity per gallon of water together with the maximum feasible reduction in fish mortality.

(b) STANDARDS- The Secretary of Energy, in consultation with other appropriate Federal and State departments and agencies, and after receiving comments from representatives of the hydroelectric power generation industry and other affected interests, shall, by rule, promulgate standards for advanced turbines. Such standards shall be promulgated not later than 180 days after the enactment of this Act and shall be revised to insure conformity with subsection (a) at 5-year intervals thereafter.

(c) INCENTIVES FOR INSTALLATION OF ADVANCED TURBINES- (1) The Federal Energy Regulatory Commission shall modify the fees imposed under the Federal Power Act in association with the licensing and operation of hydroelectric facilities under that Act so that the fees imposed on licensees that have installed advanced turbines meeting or exceeding the standards under subsection (b) shall be entitled to a discount.

(2) In issuing new licenses for hydroelectric facilities under section 15 of the Federal Power Act after the expiration of existing licenses, the Federal Energy Regulatory Commission shall give a priority in the scheduling of its licensing processes to licensees that have installed advanced turbines meeting or exceeding the standards under subsection (b).

SEC. 3. FERC REPORT ON HYDROELECTRIC LICENSING.

Section 4(d) of the Federal Power Act (16 U.S.C. 797(d)) is amended by inserting `(1)' after `(d)' and by adding the following at the end thereof:

`(2) The Commission shall publish an annual, nonclassified, report describing--

`(A) the status and schedule of pending permit, licensing, and enforcement proceedings, including annual licenses, rehearing requests, and judicial appeals;

`(B) the collection of annual charges and the reimbursement of a portion to agencies that incurred reasonable and necessary costs; and

`(C) recurring disputes or problems in implementation of this part.

After consultation with other affected Federal and State agencies, the Commission shall publish a draft report in draft form for public comment. The final report shall include the Commission's responses to comments filed with the Commission on the draft report.'.

SEC. 4. REHEARING PETITIONS.

Section 313 (a) of the Federal Power Act (16 U.S.C. 313(a)) is amended by adding the following at the end thereof: `The Commission shall make a final determination of each rehearing petition with respect to an order issued under Part I of this Act on the merits within 6 months after receiving the petition.'.

SEC. 5. LICENSING SCHEDULE AND ENVIRONMENTAL REVIEW.

Section 4 of the Federal Power Act (16 U.S.C. 797) is amended by adding the following at the end thereof:

`(h)(1) As promptly as practicable following acceptance of an original license, permit, or exemption application, or receipt of notice of intent to file a new license application, the Commission shall notify the Secretaries of departments referred to in the first proviso of subsection (e), the Secretary referred to in section 18, the agencies referred to in section 10(j), and affected State agencies. Within 30 days of receiving such notice, such Secretaries shall submit to the Commission a proposed schedule for completing such department's actions with respect to the application concerned. Not later than 60 days following acceptance of such an application or receipt of such notice of intent, the Commission shall publish an estimated schedule for all actions by the applicant, Commission, and other parties to the proceeding concerned. The Commission may periodically amend the schedule in the course of the proceeding and undertake affirmative actions, including substantial cooperation with other jurisdictional agencies, to assure an expeditious decision.

`(2) As promptly as practicable following acceptance of an original license, permit, or exemption application, or receipt of notice of intent to file a new license application, the Commission shall commence all environmental studies to be carried out by the Commission.

`(3) The Commission shall require any person applying for an original license, permit, or exemption or for a new license to conduct all studies required by the Secretaries of departments referred to in the first proviso of subsection (e), the Secretary referred to in section 18, the

agencies referred to in section 10(j), and affected State agencies. The Commission shall incorporate the environmental studies provided by such Secretaries and agencies into any environmental review provided by the Commission in connection with the application.

`(4) After notice and opportunity for comment, the Commission shall prepare and make public draft license articles for purposes of environmental review, including any environmental review conducted by the departments referred to in the first proviso of subsection (e), the Secretary referred to in section 18 and the agencies referred to in section 10(j).

`(5) Each agency prescribing conditions under the first proviso of subsection (e) and the Secretary referred to in section 18 shall each promulgate rules that set forth procedures for issuance of draft and final conditions consistent with the development of the Commission's draft and final environmental review documents and decision documents if all information deemed necessary by the Secretary of the agency concerned is furnished by the Commission or the license applicant in a timely manner. The rule shall include opportunities for public comment on both draft and final conditions. Such agencies shall adopt a final condition not later than 3 months after publication of final environmental review document.'.

SEC. 6. AGENCY CONDITIONS.

Section 10(j) of the Federal Power Act (16 U.S.C. 803(j)) is amended by adding the following before the last sentence: `Such findings shall be submitted to the agency concerned, together with the Commission's justification for the findings, and such agency may resubmit the agency's recommendations to the Commission under this subsection with such modifications as the agency deems necessary.'.

SEC. 7. LICENSE DURATION.

Section 6 and section 10(i) of the Federal Power Act (16 U.S.C. 799 and 803(i)) are each amended by striking `fifty' and inserting `thirty' and section 15(e) of such Act is amended by striking `not less than 30 years, nor more than 50' and inserting `not more than 15'.

SEC. 8. FEES AND CHARGES.

Section 10(e) of the Federal Power Act (16 U.S.C. 797(e)) is amended by adding the following at the end thereof:

`(5) The Commission shall collect fees on behalf of State agencies as well as Federal agencies. Annual charges shall include the reasonable and necessary costs of the State agencies issuing certifications of compliance with section 401 of the Clean Water Act. The agency incurring costs collected for administration of this part shall provide adequate and timely documentation according to procedures adopted by the Commission. This portion of such annual charges shall be paid into a revolving fund administered by the Commission, to be available to the Commission to reimburse the agencies without annual appropriation. The charge for use and occupancy of Federal lands shall be set at fair market value. 50 percent of the fees collected for the use of those lands (other than tribal lands) shall be deposited in a river restoration revolving fund administered by the land managing agency and the remaining 50 percent shall be transferred to the county in which the project resides to be expended for watershed and streambed conservation and protection and for water quality protection and improvement.'.

SEC. 9. AVAILABILITY OF SUFFICIENT FUNDS.

(a) BOND- Section 10(c) of the Federal Power Act (16 U.S.C. 803(c)) is amended by adding the following at the end thereof: `The Commission shall require each licensee to maintain a bond or other proof of financial responsibility adequate to assure that sufficient funds will be available at the end of the useful life of the project, or in the event of abandonment of the project, for the decommissioning of the project and the restoration of the lands and waters affected by the project to the conditions that existed prior to construction of the project, to the extent feasible.'.

(b) EFFECTIVE DATE- The amendment made by this section shall take effect on the date one year after the enactment of this Act. The Commission shall promulgate regulations under the amendment made by this paragraph not later than 6 months after the enactment of this Act.

SEC. 10. BASELINE.

Section 10(j) of the Federal Power Act (16 U.S.C. 803(j)) is amended by adding the following at the end thereof:

`(3) In its analysis of project impacts, the Commission shall consider its baseline of analysis to be the river without the project.'.

SEC. 11. ANNUAL LICENSES.

Section 15(a)(1) of the Federal Power Act (16 U.S.C. 808(a)(1)) is amended by adding the following at the end thereof: `Annual licenses shall contain interim terms and conditions deemed necessary by Federal and State resource agencies to comply with standards and other legal requirements for beneficial uses of affected waters. The terms of any new license for a project shall be reduced by one year for each annual license issued for such project.'.

SEC. 12. AGENCY COSTS.

The first proviso of section 10(e)(1) of the Federal Power Act (16 U.S.C. 803(e)(1)) is amended by striking `subject to annual appropriations Acts' and by striking `shall be available' and inserting `shall be retained by the Commission and transferred to each such consulting agency by the Commission and available, without further appropriation,'.

SEC. 13. OFFICE OF PUBLIC PARTICIPATION.

Section 319(b) of the Federal Power Act (16 U.S.C. 825q-1(b)is amended as follows:

(1) Paragraph (2) is amended to read as follows:

`(2) The Commission shall reimburse any person granted intervener status in any proceeding under Part I of this Act for reasonable attorney's fees, expert witness fees, and other costs incurred by such person to intervene and participate in such proceeding.'.

(2) Paragraph (4) is amended to read as follows:

`(4) There are authorized to be appropriated to the Commission to carry out this section $5,000,000 for each fiscal year beginning after the enactment of this paragraph.'.

SEC. 14. ROYALTY FOR USE OF PUBLIC WATERS.

Section 10(e) of the Federal Power Act (16 U.S.C. 803(e)) is amended by adding the following at the end thereof:

`(5) In addition to the annual charges under the preceding provisions of this subsection, the Commission shall require the licensee of each project under this part to pay to the United States for deposit into the General Fund of the Treasury a royalty in the amount of 1 mill per kilowatt hour of electricity generated by the project. Such royalty shall be paid at such times and in such manner as the Commission shall prescribe. 50 percent of amount of such royalties received with respect to licensed projects in each State in each fiscal year are authorized to be appropriated to the State for purposes of fish and wildlife enhancement projects in such State.'.

SEC. 15. MULTIPLE PROJECTS ON A WATERWAY.

Section 10 of the Federal Power Act (16 U.S.C. 803) is amended by adding the following new subsection at the end thereof:

`(k) MULTIPLE PROJECTS- In the case of a project in a watershed in which other projects licensed by the Commission are operating, to the maximum extent practicable, the Commission shall establish license conditions for each of such projects such as will adequately and equitably protect, mitigate damages to, and enhance fish and wildlife (including relating spawning grounds and habitat) affected by the cumulative impacts of all such projects on fish and wildlife.'.

SEC. 16. ALTERNATIVE CONDITIONS AND FISHWAYS.

(a) ALTERNATIVE MANDATORY CONDITIONS- Section 4 of the Federal Power Act (16 U.S.C. 797) is amended by adding at the end the following:

`(h)(1) Whenever any person applies for a license for any project works within any reservation of the United States, and the Secretary of the department under whose supervision such reservation falls deems a condition to such license to be necessary under the first proviso of subsection (e), the license applicant or any other party to the licensing proceeding may propose an alternative condition.

`(2) Notwithstanding the first proviso of subsection (e), the Secretary of the department under whose supervision the reservation falls shall accept the proposed alternative condition referred to in paragraph (1), and the Commission shall include in the license such alternative condition, if the Secretary of the appropriate department determines, based on substantial evidence provided by the party proposing such alternative condition, that the alternative condition--

`(A) provides equal or greater protection for the reservation than provided by the condition deemed necessary by the Secretary; and

`(B) will either--

`(i) cost less to implement, or

`(ii) result in improved operation of the project works for electricity production,

than the condition deemed necessary by the Secretary.

`(3) Within one year after the enactment of this subsection, each Secretary concerned shall, by rule, establish a process to expeditiously resolve conflicts arising under this subsection.'.

(b) ALTERNATIVE FISHWAYS- Section 18 of the Federal Power Act (16 U.S.C. 811) is amended by--

(1) inserting `(a)' before the first sentence; and

(2) adding at the end the following:

`(b)(1) Whenever the Commission shall require a licensee to construct, maintain, or operate a fishway prescribed by the Secretary of the Interior or the Secretary of Commerce under this section, the licensee or any other party to the proceeding may propose an alternative to such prescription to construct, maintain, or operate a fishway.

`(2) Notwithstanding subsection (a), the Secretary of the Interior or the Secretary of Commerce, as appropriate, shall accept and prescribe, and the Commission shall require, the proposed alternative referred to in paragraph (1), if the Secretary of the appropriate department determines, based on substantial evidence provided by the party proposing such alternative, that the alternative--

`(A) will be equally or more effective than the fishway initially prescribed by the Secretary, and

`(B) will either--

`(i) cost less to implement, or

`(ii) result in improved operation of the project works for electricity production,

than the fishway initially prescribed by the Secretary.

`(3) Within one year after the enactment of this subsection, the Secretary of the Interior and the Secretary of Commerce shall each, by rule, establish a process to expeditiously resolve conflicts arising under this subsection.'.

SEC. 17. FERC DATA ON HYDROELECTRIC LICENSING.

(a) DATA COLLECTION PROCEDURES- The Federal Energy Regulatory Commission shall revise its procedures regarding the collection of data in connection with the Commission's consideration of hydroelectric licenses under the Federal Power Act. Such revised data collection procedures shall be designed to provide the Commission with complete and accurate information concerning the time and costs to parties involved in the licensing process. Such data shall be available for each significant stage in the licensing process and shall be designed to identify projects with similar characteristics so that analyses can be made of the time and costs involved in licensing proceedings based upon the different characteristics of those proceedings.

(b) REPORTS- Within 6 months after the date of enactment of this Act, the Commission shall notify the Committee on Energy and Commerce of the United States House of Representatives and the Committee on Energy and Natural Resources of the United States Senate of the progress made by the Commission under subsection (a), and within one year after such date of enactment, the Commission shall submit a report to such Committees specifying the measures taken by the Commission pursuant to subsection (a).

SEC. 18. ENFORCEMENT.

(a) MONITORING AND INVESTIGATIONS OF MANDATORY CONDITIONS AND FISHWAY PRESCRIPTIONS- The first sentence of section 31(a) of the Federal Power Act (16 U.S.C. 823b(a)) is amended to read as follows: `The Commission shall monitor, investigate, and enforce compliance with each license and permit issued under this part, each condition imposed under section 4(e) or 4(h), each fishway prescription imposed under section 18, conditions of State water quality certification and protection of fish and game, and each exemption granted from any requirement of this part. Nothing in this section shall be construed to limit or abridge the authority of agencies administering section 401 of the Clean Water Act or to affect the applicability of section 1365 of the Clean Water Act.'.

(b) COMPLIANCE ORDERS- The third sentence of section 31(a) of the Federal Power Act (16 U.S.C. 823(a)) is amended to read as follows: `After notice and opportunity for public hearing, the Commission shall issue such orders as necessary to require compliance with all of the terms and conditions of licenses, permits, and exemptions issued under this part, with conditions imposed under section 4(e) or 4(h), with fishway prescriptions imposed under section 18, conditions of State water quality certification and protection of fish and game, and with the terms and conditions of exemptions granted from any requirement of this part.'.

(c) CHANGES IN WATER QUALITY STANDARDS- Within 12 months of the enactment of this section, the Federal Energy Regulatory Commission shall establish procedures to reopen and amend licenses to ensure that a project complies with State water quality standards for the duration of the license term.

SEC. 19. SUNSHINE IN FINANCIAL ACCOUNTING.

Section 9 of the Federal Power Act (16 U.S.C. 802) is amended by redesignating subsection (c) as paragraph (3) of subsection (a) and by adding the following new subsection at the end thereof:

`(c) Each applicant for an original license, permit, or exemption or for a new license under section 15, shall provide to the Commission such financial accounting information, including revenue and net revenue projections, regarding the project as would be provided to potential investors in the project concerned. Such information shall not be considered proprietary, and the Commission shall make such information available to the public. The Commission may prescribe such rules as may be necessary to carry out this subsection.'.

END