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Hydro Relicensing Redux: Will Dams Be Saved?

Fortnightly Magazine - April 1 2000

authorized by FPA Section 18 were to be resolved by the courts, not the FERC.

The ruling came down in response to the commission's belief that it may reject and reclassify "improperly prescribed" Section 18 fishways. FERC's reasoning was that unqualified reservation or prescription authority for the secretaries of the resource agencies invites a unilateral fishways determination by two agencies not concerned with the delicate economic vs. environmental balancing required in every licensing.

But courts found that there was nothing in the statute nor the review scheme to indicate that Congress wanted FERC to second-guess the secretaries of the resource agencies. According to Congressional documents, Congress intended that the FERC would have exclusive authority to issue all licenses, but wanted the individual agency secretaries to continue to play the major role in determining what conditions would be included in the license in order to protect the resources under their respective jurisdictions.

Meanwhile, the 9th Circuit Court in also held that the commission is authorized to decide whether a condition recommended under FPA Section 10(j) is properly within the scope of that section.

Can operators decline unprofitable licenses? Tacoma Power's hydroelectric project is an example of a case that challenges what FERC's role should be when disputes arise in relicensing.

Steve Klein, head of Tacoma Power, believes FERC overstepped its authority in imposing uneconomic mandatory conditions on the Cushman hydroelectric project. Tacoma and FERC have been wrangling over the Cushman project relicensing for more than 25 years.

Klein believes that hydropower operators should be able to reject the terms of the license if agreement cannot be found. "If we reject the license, then we no longer have the right to run the turbines. We would just drop the spill gates. We will put the water back in; that is all we are obligated to do," he says.

Klein is worried that FERC would force the company to implement the uneconomic mandatory conditions even if no accord can be reached among parties. He believes that Congress, which initially induced hydro plant development, made a contract with hydro operators ensuring they would receive a relicense on reasonable terms.

"A license that bankrupts you is not reasonable terms," he says.

"If they said it was better to release flows for fish, the federal government ought to take the project over, compensate us for taking the asset, and operate it as a flood control project." - R.S.

Water Wars: Should Cost Be Part of Equation?
Environmentalists flatly reject Sen. Craig's proposal.

"I don't like Sen. Craig's legislation. It is developing the wrong remedy. It is only going to lead to further complication and litigation," says Andrew Fahlund, policy director for hydropower programs at American Rivers, an environmentalist group.

Fahlund denies that environmental agencies are holding up the process. In fact, he argues, it is the other way around - the hydro operators are the ones that delay the process.

According to FERC, says Fahlund, of the license applications submitted by dam owners since 1993, approximately 43 percent were deemed deficient and more than 93 percent required additional