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FERC Hydropower Overview (7-FD-e)

Pursuant to the Federal Power Act, the Federal Energy Regulatory Commission (FERC) has exclusive authority to license most nonfederal hydropower projects located on navigable waters or federal lands, or connected to the interstate electric grid. FERC Handbook, page 1-1. FERC may issue an original license for up to 50 years. When a license expires, the federal government may choose to take over the project, decommission the project, or may re-license the project. FERC Handbook, page 1-1. The re-licensing procedures are very similar to those used for original licenses. Any deviations from the original licensing process for re-licensing are indicated.

FERC Hydropower Overview Process

7-FD-e.1 to 7-FD-e.2 - Could the Project be a Qualifying Conduit Facility?

Developers of hydropower facilities located on non-federally owned conduits with installed capacities up to 5 MW are not required to be licensed or exempted by FERC. The developer must file a Notice of Intent to Construct a Qualifying Conduit Hydropower Facility with FERC, and show that the conduit is not primarily for the generation of electricity and was not licensed or exempted on or before August 9, 2013. 16 USC § 823a(a). Developers will be required to obtain authorization from FERC to qualify as such a facility.

FERC Qualifying Conduit Hydropower Facility Authorization Process:

7-FD-e.3 to 7-FD-e.4 – Does the Project Qualify for an Exemption?

Certain hydropower projects may qualify for an exemption from the FERC licensing provisions outlined in FPA Part 1. If the project qualifies for an exemption, then the project will be subject only to the conditions attached to that exemption. 16 USC § 823a.

The developer’s project may qualify for one of two types of small hydroelectric exemptions from licensing:

See also Hydropower Regulatory Efficiency Act of 2013.

Any developer seeking a small conduit hydroelectric (40MW) exemption must have all the real property interests in the lands necessary to develop and operate the project, or the option to obtain those interests. 18 CFR § 4.31(b).

The hydropower project may qualify for a 10MW exemption if the developer seeks to install or add capacity to a project located at a non-federal, pre-2005 dam, or at a natural water feature. If only rights to use or occupy federal lands would be necessary to develop and operate the proposed small hydroelectric power project, then any person may apply for the exemption. 18 CFR § 4.31(c)(2)(i). If real property interests in any non-federal lands would be necessary to develop and operate the proposed project, then any person who has all of the real property interests in non-federal lands necessary for the project (or an option to obtain those interests) may apply for the exemption. 18 CFR § 4.31(c)(2)(ii).

FERC Exemption Process:

7-FD-e.5 - Does the Developer Possess a Current FERC License or Exemption?

If the developer does not possess an existing FERC License or Exemption, then they may choose to seek a preliminary permit. If the developer already possesses a license or exemption, then they must decide whether or not to seek re-licensing.

7-FD-e.6 to 7-FD-e.7 – Does the Developer Seek an Amendment?

If the developer seeks to make certain changes to a project authorized under an existing Federal Energy Regulatory Commission (FERC) license, the developer must apply for a license amendment from FERC. Prior to submitting an amendment application, the developer must complete a pre-filing consultation process that may involve resource agencies, Indian tribes, or the public. Generally, amendments can be broken into two categories: capacity changes and non-capacity changes.

(See generally, FERC Other Licenses and Exemptions Handbook).

The developer must follow the amendment application requirements found at 18 CFR § 4.200 et seq., if the developer seeks to:

  • Make a change in the physical features of the project or its boundary, or make an addition, betterment, abandonment, or conversion, of such character as to constitute an alteration of the license;
  • Make a change in the plans for the project under license; or
  • Extend the time fixed on the license for commencement or completion of project works.

(18 CFR § 4.200).

FERC Authorization Amendment Process:

7-FD-e.8 to 7-FD-e.9 – Does the Developer Seek Re-Licensing of an Existing Project?

A developer with an existing license must file a Notice of Intent to Seek Re-Licensing and a Pre-Application Document (PAD) with FERC at least 5 but not more than 5.5 years before expiration of the existing license. 18 CFR § 5.5(d). Requirements for the PAD are contained within the pages dedicated to the applicable FERC licensing processes described below.

A developer with an existing license must then file an application for a new license at least 24 months in advance of the existing license expiration, or it will be barred from filing an application for re-licensing. 18 CFR § 5.17(a). The developer will complete either the Integrated, Traditional, or Alternative licensing processes discussed below to obtain re-licensing from FERC. If the developer does not wish to seek re-licensing, then they must go through the process of license surrender with FERC.

7-FD-e.10 to 7-FD-e.11 - Does the Developer Seek to Surrender the Authorization?

Developers with a FERC license or exemption may decide to surrender their authorization. FERC may also require surrender of a license. Under any of these circumstances, the developer must complete the relevant FERC surrender process. The Division of Hydropower Administration and Compliance within FERC processes applications to surrender authorizations.

FERC Surrender of Authorization Overview: 20

If the developer possesses a license or exemption, but does not plan to seek an amendment, re-license, or plan to surrender the authorization, then the developer may continue with the project.

7-FD-e.12 to 7-FD-e.13 – Will the Developer Seek a Preliminary Permit?

Developers may apply for a Preliminary Permit with FERC to establish priority for their application for a license while the developer obtains data and performs the acts required to determine the feasibility of the project and to support an application for a license. 18 CFR 4.80. FPA Part 1(f). Each preliminary permit will maintain priority of application for a maximum of three years. 16 USC 798.

FERC Preliminary Permit:

7-FD-e.14 to 7-FD-e.15 – Will the Developer Seek to Use the Traditional Licensing Process?

All developers applying for a FERC license must use the Integrated Licensing Process unless they apply for and receive authorization from FERC to use the Traditional Licensing Process or the Alternative Licensing Process. 18 CFR § 5.1(f).

With the Traditional Licensing Process, scoping under the National Environmental Policy Act (NEPA) is conducted after an application is accepted for filing by FERC. FERC is only involved in the pre-filing consultation process in a very limited capacity before the application is filed. FERC Handbook, page 1-2. For a comparison of the ILP and TLP process, see the FERC Licensing Processes Matrix.

FERC Traditional Licensing Process:

7-FD-e.16 to 7-FD-e.17 – Will the Developer Seek to Use the Alternative Licensing Process?

With the Alternative Licensing Process, scoping under the NEPA is conducted during the pre-filing consultation process. Developers using the Alternative Licensing Process will substitute a preliminary draft Environmental Assessment (EA) or Environmental Impact Statement (EIS) for Exhibit E of the license or re-license application. FERC Handbook, page 5-1. For a comparison of the ILP and ALP process, see the FERC Licensing Processes Matrix.

FERC Alternative Licensing Process:

7-FD-e.18 – Initiate FERC Integrated Licensing Process

If the developer does not obtain permission to use the Traditional or Alternative Licensing Process, then the default Integrated Licensing Process (ILP) must be used for the project. 18 CFR § 5.1(f). The ILP was adopted in 2003 in order to integrate the development of a FERC licensing application and environmental review under NEPA and other environmental requirements. The purpose of ILP is to provide an efficient and timely licensing process that ensures appropriate resource protections through coordination of FERC’s processes with those of other federal and state agencies and Indian tribes that have authority to condition FERC licenses. 18 CFR § 5.1(e).

With the Integrated Licensing Process, FERC’s involvement begins during the pre-filing consultation process and is constant through the entire licensing process. FERC Handbook, page 1-2.

FERC Integrated Licensing Process:

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