On May 13, 2026, FERC granted rehearing, in part, of its November 26, 2025 order issuing a new license to Bear Swamp Power Company, LLC (Bear Swamp) for its 676 megawatt (MW) Bear Swamp Hydroelectric Project (Project) on the Deerfield River in Berkshire and Franklin Counties, Massachusetts. FERC’s order addressed Bear Swamp’s rehearing request challenging license Article 403(2), which required maintenance of impoundment elevations between 830 and 835 feet from 10 a.m. to 12 p.m. on certain days per year to support whitewater boating. In its rehearing order, FERC revised license Article 403(2) to clarify that Bear Swamp would not be in violation of its license for deviating from the impoundment elevation requirements when doing so at ISO-NE’s direction to maintain grid reliability.

The Project consists of two developments: the Bear Swamp Pumped Storage Development, with an authorized capacity of 666 MW, and the Fife Brook Development, with an authorized capacity of 10 MW. During the FERC relicensing proceeding, whitewater boating groups requested that FERC require Bear Swamp to provide additional whitewater boating opportunities at the Project’s impoundment. Bear Swamp and ISO-New England Inc. (ISO-NE) opposed additional whitewater flows, which would decrease Project generation, and emphasized the Project’s importance to regional grid reliability in their arguments on rehearing. In its relicensing order, FERC explained that in order to balance competing interests as required by section 10(a) of the Federal Power Act (FPA), it was imposing Article 403(2) in the new license, which required Bear Swamp to maintain the Fife Brook impoundment elevation between 830 and 835 feet from 10 a.m. to 12 p.m. on 32 days per year to enhance whitewater boating opportunities.

Bear Swamp filed a timely request for rehearing of FERC’s relicensing order, arguing that Article 403(2) would compromise both Project operations and regional grid stability. Bear Swamp contended that FERC staff failed to adequately consider four key issues: (1) the Project’s ability to meet morning peak demand on days the flows are implemented, (2) afternoon grid effects, (3) the financial burden of the constraint, and (4) evolving grid needs over the 40-year license term. ISO-NE filed comments in support of Bear Swamp’s rehearing request, expressing concerns that Article 403(2) would remove 666 MW of the region’s generating capability and available operating reserves during morning hours on affected days. The whitewater boating groups opposed rehearing, arguing that Article 403(2) appropriately balanced power generation with recreational interests under FPA section 10(a)(1) and also noted that Article 403(2) already allowed Bear Swamp to deviate from the impoundment elevation requirements in the event of a system emergency.

In its rehearing order, FERC declined to eliminate Article 403(2) entirely, rejecting each of Bear Swamp’s four arguments. FERC found that morning peak and midday price differences were small, that historical scarcity events generally began after 4 p.m., that negative midday prices occurred less than 3% of the time, and that peak demand forecasts from both ISO-NE and the North American Electric Reliability Corporation showed highest demand continuing to occur after noon over the next 15 to 20 years. FERC also noted that the whitewater experience created by Article 403(2) offered technical features uncommon in the region, further supporting retention of the condition.

Although determining that Article 403(2) should remain in the new license, FERC determined that changes were appropriate in response to the arguments raised on rehearing. Acknowledging that “[e]nsuring the reliability of the bulk electric system is one of the Commission’s key statutory responsibilities,” FERC determined that a modification was warranted to better balance grid reliability with recreational interests, and revised Article 403 to add a carve-out providing that deviations from the impoundment elevation requirements made at ISO-NE’s direction to prepare for or respond to situations affecting the grid’s ability to meet energy, reserve, or ancillary services requirements would not constitute license violations. In reaching this conclusion, FERC “recognize[d] the importance of the project to the regional grid” and emphasized that it “take[s] seriously the concern that the impoundment level requirement could limit the project’s ability to timely supply electricity or respond to other system reliability needs.”

Commissioner LaCerte issued a separate concurrence agreeing that the revised Article 403(2) properly balanced the competing developmental and nondevelopmental interests required under the FPA. LaCerte highlighted the significance of the Electric Consumers Protection Act of 1986 (ECPA) as a guiding framework for future hydropower relicensing proceedings. LaCerte noted that ECPA substantially changed how the Commission evaluates license applications by requiring “equal consideration” of energy conservation, fish and wildlife protection, recreational opportunities, and environmental quality—and that the Bear Swamp proceeding marked the first time the project had been licensed since ECPA’s enactment. With more than 120 Commission-issued licenses set to expire by the end of 2031, many of which were already issued under ECPA’s equal consideration standard, LaCerte urged resource agencies, stakeholders, and the Commission itself to avoid “layering on” new mandatory conditions, protection, mitigation, and enhancement measures, or license articles where equal consideration has already been given in a prior licensing cycle. LaCerte also expressed concern that as the grid faces rapid load growth and increasing integration of intermittent resources, conditions that constrain the flexibility of pumped storage assets may carry real consequences for grid reliability and ratepayers.

FERC’s order, issued in Docket No. P-2669-097, is available here.

*Chloe Campbell is a 2026 summer associate with Troutman Pepper Locke and not admitted to practice law in any jurisdiction.