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Hydro Relicensing Redux: Will Dams Be Saved?

Fortnightly Magazine - April 1 2000

power, says Klein.

James Hoecker, FERC's chairman, has called the Cushman project the "relicensing case from hell."

Sen. Craig hopes to end such delays and political wrangling by imposing deadlines on the agencies, and making them take note of economic as well as environmental considerations in the hydro relicensing process. "A two- to three-year time line with the ability to extend for cause makes sense," he explains.

Adds Craig, an environmental agency that misses the deadline should lose its chance to participate in the process.

FERC Authority: Watered Down?

Other agencies - federal and state - can issue license conditions at cross-currents with energy regulation.

When environmentalists and hydropower owners lock horns in court, the question always comes up: What authority does the Federal Energy Regulatory Commission have over the hydro-relicensing process?

The question goes to the heart of hydro operators' and environmental groups' woes. At times each group has been alienated by the FERC's balancing act between environmental and economic factors in relicensing. But court challenges to FERC's authority in the last year and subsequent rulings may shed some light on the commission's dominion over the hydro-relicensing process, or lack thereof.

Only courts review state-imposed conditions. In , the court held that the FERC lacked authority to determine whether conditions submitted by state agencies pursuant to Section 401 of the Clean Water Act were beyond the scope of that section. The court held that disputes concerning the lawfulness of conditions submitted under Section 401 should be resolved instead by courts. In a classic state vs. federal jurisdiction debate, FERC's claim to review a state's conditions of certification and reject conditions it believes to be outside of the scope of the state's certification authority were delegated to the courts.

In the past, FERC, using the case as precedent, sought to reject two kinds of certification conditions:

1) Reservations of authority, including reopener clauses allowing a state to revise conditions of certification on its own motion and clauses requiring state review and approval of project modifications.

2) Compliance review and enforcement provisions, such as schedules of compliance and provisions requiring state review of mitigation or monitoring programs.

Critics say the 2nd Circuit Court ruling will delay relicensing by making hydropower companies wade through a state bureaucracy as well as a federal process. The fear is that dual final authority, with a duplicate system of state permits and federal licenses required for each project, will not work. In fact, the Supreme Court has ruled that duplicative authority would vest a veto power in the state agency, an argument that Sen. Larry Craig (R-Idaho) has made.

But others say state and federal resource agencies serve as a backstop to FERC decision-making by counterbalancing hydropower interests to override environmental concerns.

And FERC cannot second-guess Agencies. Moreover, in , the court ruled that the FERC lacked authority in individual cases to determine whether prescriptions submitted under color of Section 18 of the Federal Power Act were, in fact, fishways. As in the 2nd Circuit Court case, the court held that disputes relating to whether a condition was