On April 18, 2019, FERC issued Order No. 858, revising its regulations to conform with the America’s Water Infrastructure Act (“AWIA”), which added sections 34 and 35 to the Federal Power Act (“FPA”) authorizing FERC to issue or amend licenses for: (1) qualifying facilities at an existing nonpowered dams (section 34); and (2) closed-loop pumped storage projects (section 35).  In conformance with AWIA, Order No. 858 establishes an expedited hydropower licensing process for projects covered by newly-added FPA sections 34 and 35. 

On October 23, 2018, President Trump signed AWIA into law, which required FERC to issue a rule within 180 days establishing an expedited licensing process for qualifying projects at existing nonpowered dams and for closed-loop pumped storage projects.  On November 13, 2018, FERC issued a schedule for AWIA implementation and invited federal and state agencies and Indian Tribes to participate in an interagency task force to coordinate the regulatory processes associated with the proposed expedited licensing process.  On January 31, 2019, FERC issued a Notice of Proposed Rulemaking (“NOPR”) for Order No. 858 that contained proposed procedures for FERC to determine, on a case-by-case basis, whether original license applications for projects covered by FPA sections 34 and 35, qualify for expedited processing (see February 6, 2019 edition of the WER).

In Order No. 858, FERC decided to leave the NOPR’s proposed regulations largely unchanged.  Under the expedited licensing process established by Order No. 858, a license application submitted with a request to use the expedited process must demonstrate compliance with certain qualifying criteria.  Section 34(e) of the FPA established qualifying criteria for a facility at an existing, non-powered dam.  Accordingly, FERC adopted the section 34(e) criteria in its regulations by requiring that the facility: (1) as of October 23, 2018, not be licensed under, or exempted from, the license requirements of Part I of the FPA; (2) be associated with a qualifying nonpowered dam; (3) be constructed, operated, and maintained for the generation of electric power; (4) generate electricity by using any withdrawals, diversions, releases, or flows from the associated qualifying nonpowered dam, including its associated impoundment or other infrastructure; and (5) not result, due to operation of the facility, in any material change to the storage, release, or flow operations of the associated qualifying nonpowered dam.

Section 35 of the FPA also directed FERC to establish criteria pertaining to closed-loop pumped storage facilities.  FERC’s regulations now require that a closed-loop pumped storage facility: (1) cause little or no change in existing surface and groundwater flows and uses; (2) be unlikely to adversely affect threatened or endangered species or their designated critical habitat under the Endangered Species Act of 1973; (3) utilize only reservoirs situated at locations other than natural waterways, lakes, wetlands, and other natural surface water features; and (4) rely only on temporary withdrawals from surface waters or groundwater for the sole purposes of initial fill and periodic recharge needed for project operation.

Additionally, FERC’s regulations will now require FERC to issue a final licensing decision no later than two years after FERC’s receipt of a completed license application.  In order to facilitate this process, FERC will require applicants to submit, at the time the application is filed, documentation to show that the applicant consulted with stakeholders, including tribes and federal and state agencies that are part of required authorizations under the Clean Water Act, the Endangered Species Act, and the National Historic Preservation Act.  Applications for projects covered by FPA section 34 must also provide documentation indicating that the dam owner is not opposed to the project at that location.  Additionally, for projects using public parks, recreation areas and wildlife refuges, the applicant must submit documentation showing that the managing entity does not oppose use of the project at that location.  Lastly, Order No. 858 provides processes for FERC’s application review, including application deficiencies, environmental analysis, application amendments, and other related provisions.

Order No. 858 will become effective 90 days after publication in the Federal Register.  A copy of Order No. 858 is available here.