FERC Hydropower Authorization Overview (7-FD-e)
The Federal Energy Regulatory Commission (FERC) has authority to authorize the construction, operation, and maintenance of certain non-federal hydropower projects pursuant to the Federal Power Act, 16 U.S.C. §§ 791-828c (FPA). FERC has the authority to authorize (i.e., license or exemption) the construction, operation, maintenance of certain hydroelectric dams, run-of-river, pumped storage, or small hydropower projects, including conduits that are:
- Located on navigable waters of the United States;
- Occupying U.S. federal land;
- Utilizing surplus water or water power of a U.S. government dam; or
- Located on a stream over which Congress has Commerce Clause jurisdiction, where project construction or expansion occurred on or after August 26, 1935, and the project affects the interests of interstate or foreign commerce.
Under certain specified criteria, a project may receive an exemption from FERC licensing as a qualifying conduit hydropower facility, a small conduit hydroelectric facility (40 MW or less), or a small hydroelectric facility (10 MW or less) ( 16USC § 832a(a), 16 USC § 823a(b), 16 USC § 2705). Projects that do not meet the qualification requirements for an exemption from FERC hydropower licensing must complete the FERC hydropower licensing process utilizing one of FERC’s three licensing processes: The Integrated Licensing Process (ILP), Traditional Licensing Process (TLP), or Alternative Licensing Process (ALP). Effective after July 23, 2005, the ILP became the default hydropower licensing process under the FPA 18 CFR § 5.3(a)(2). FERC may issue an original license for the construction, operation, and maintenance of a non-federal hydropower facility up to 50 years. Federal Power Act, 16 USC § 799. If the developer seeks to make certain changes to a project authorized under an existing FERC license or exemption, the developer must apply for a license or exemption amendment from FERC. 18 C.F.R. §§ 4.96, 4.108, 4.200. When a license expires, FERC may choose to take over the project, decommission the project, or may re-license (issue a new operating license) the project. FERC Handbook, page 1-1. The re-licensing procedures are very similar to those used for original licenses. FERC may issue a new license (relicense) for continued operation of an existing non-federal hydropower facility for a term of 30-50 years. Federal Power Act, 16 USC § 808(e).
In 2017, FERC established a 40-year license term default for original and new licenses (relicense) for hydropower projects located at non-federal dams. Federal Energy Regulatory Commission – Policy Statement on Establishing License Terms for Hydroelectric Projects Docket No. PL17-3-000. FERC can shorten or lengthen the term based on:
- A need for more coordination between stakeholders;
- Deference to generally-supported comprehensive settlement agreements; and
- Previously-authorized voluntary actions.
FERC Hydropower Authorization Overview Process
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7-FD-e.1 – Does the Project Have an Existing FERC License or Exemption ?
If the project has an existing FERC license or exemption the developer may seek a license or exemption amendment or seek to relicense the project (if applicable) or surrender the FERC authorization. If the developer does not have an existing license, they may seek qualifying conduit facility status, an exemption, preliminary permit, or an original license.
7-FD-e.2 to 7-FD-e.3 – Does the Developer Seek an License or Exemption Amendment?
If the developer seeks to make certain changes to a project authorized under an existing FERC license or exemption, the developer must apply for a license or exemption amendment from FERC. 18 C.F.R. §§ 4.96, 4.108, 4.200. 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).
- 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 C.F.R. § 4.200). For more information on the FERC authorization amendment process, see:
7-FD-e.4 – Does the Developer Seek to Relicense an Existing Project?
If the developer seeks relicense (obtain a new license) from FERC for the continued operation (30 to 50 years) of an existing hydropower project the developer must at least five (5) years, but no more than 5.5 year, before the license expiration date, file a notice of intent (NOI) and a Pre-Application Document (PAD) with FERC stating whether they intend to seek a new license. 18 C.F.R. § 5.5.
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 operating license (relicense) at least 2 years before the existing license expires. 18 C.F.R. § 5.17(a). The developer must complete either the Integrated, Traditional, or Alternative licensing processes discussed below to obtain a new operating license from FERC. If the developer does not wish to seek re-licensing, then they must go through the process to surrender the license with FERC.
7-FD-e.5 to 7-FD-e.6– Does the Developer Seek to Surrender the Authorization?
A developer 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. For more information, see:
7-FD-e.7 to 7-FD-e.8 – Is the Project a “Qualifying Conduit” Facility?
Certain hydropower projects may not require a FERC license or exemption if FERC determines that the project is a qualifying conduit hydropower facility. A qualifying conduit hydropower facility is one that is located on a non-federally owned conduit that is not used primarily for the generation of electricity with an installed capacity of 40 MW or less that was not licensed or exempted from FERC licensing on or before August 9, 2013. 16 U.S.C. § 823a(a). A developer must submit notice to obtain a qualifying conduit hydropower facility authorization from FERC. For more information, see:
7-FD-e.9 to 7-FD-e.10 – Does the Developer Seek a Preliminary Permit?
A developer 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 C.F.R. § 4.80. FPA Part 1(f). Each preliminary permit will maintain priority of application for a maximum of four years. 16 U.S.C. § 798. For more information, see:
7-FD-e.11 to 7-FD-e.12 – Does the Project Qualify for an Exemption?
Certain hydropower projects may qualify for an exemption from the FERC licensing provisions outlined in Part 1 of the Federal Power Act. If the project qualifies for an exemption, then the project is subject only to the conditions attached to that exemption. 16 U.S.C. § 823a.
A developer’s project may qualify for one of two types of small hydroelectric exemptions from licensing:
- A small conduit hydroelectric facility up to 40 MW (16 U.S.C. § 823a(b)); or
- A small hydroelectric project of 10 MW or less. (16 U.S.C. § 2705).
Small Conduit Hydroelectric Facility 40 MW Exemption
A small conduit hydroelectric facility that meets the requirements of 18 C.F.R. §§ 4.30(b)(30), 4.90 may qualify for a small conduit exemption from FERC licensing. A small conduit hydroelectric facility, means an existing or proposed hydroelectric facility that is constructed, operated, or maintained for the generation of electric power, and includes all structures, fixtures, equipment, and lands used and useful for the operation of the hydroelectric facility, but excludes the conduit on which the hydroelectric facility is located and the transmission lines associated with the hydroelectric facility. A conduit:
- Has an installed generating capacity that does not exceed 40 MW;
- Is not an integral part of a dam;
- Discharges the water it uses for power generation either:
- into a conduit;
- directly to a point of agricultural, municipal, or industrial consumption; or
- into a natural water body if a quantity of water equal to or greater than the quantity from the hydroelectric facility is withdrawn from that waterbody downstream into a conduit that is part of the same water supply system as the conduit on which the hydroelectric facility is located; and
- Does not rely upon the construction of a dam, which construction will create any portion of the hydrostatic head that the facility uses for power generation unless that construction would occur for agricultural, municipal, or industrial consumptive purposes even if hydroelectric generating facilities were not installed.
Small Hydroelectric Facility 10 MW Exemption
A small hydroelectric facility that meets the requirements of 18 C.F.R. §§ 4.30(b)(31),4.101 may qualify for a small hydroelectric exemption from FERC licensing. A small hydroelectric facility, means any project in which capacity will be installed or increased after the date of application under subpart K of this chapter, which will have a total installed capacity of not more than 10 MW, and which:
- Would utilize for electric power generation the water power potential of an existing dam that is not owned or operated by the United States or by an instrumentality of the Federal Government, including the Tennessee Valley Authority; or
- Would utilize for the generation of electricity a natural water feature, such as a natural lake, waterfall, or the gradient of a natural stream, without the need for a dam or man-made impoundment; and
- Would not retain water behind any structure for the purpose of a storage and release operation.
18 C.F.R. §§ 4.30(b)(31). For more information regarding the FERC hydropower exemption processes, see:
7-FD-e.13 to 7-FD-e.14 – Does the Developer Seek to Use the Expedited FERC License Process for a Closed-Loop Pumped Storage Project or Qualifying Non-Powered Dam?
A developer may request to use the Expedited Licensing Process (ELP) from FERC on applications for original licenses to operate hydroelectric projects at nonpowered dams and closed-loop pumped storage projects that meet qualifying criteria established by FERC. 18 C.F.R. §§ 7.1-7.9. Any citizen, association of citizens, domestic corporation, municipality, or state that develops and files an application for an original license for a qualifying facility under the ILP may request to use the ELP procedure by submitting an ELP Application and associated documents at the time they file their Original License Application and required associated documents. 18 C.F.R. §§ 7(c)(d)-(e) and 7.2(a)-(b).
For more information on the ELP see:
7-FD-e.15 to 7-FD-e.16 – Will the Developer Seek to Use the Traditional Licensing Process?
A developer 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 C.F.R. § 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. FPA Part 4(e). For a comparison of the ILP and TLP process, see the FERC Licensing Processes Matrix.
7-FD-e.17 to 7-FD-e.18 – 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. A developer using the Alternative Licensing Process substitutes a preliminary draft Environmental Assessment (EA) or Environmental Impact Statement (EIS) for Exhibit E of the license or re-license application. 18 C.F.R. § 4.34(i)(8). For a comparison of the ILP and ALP process, see the FERC Licensing Processes Matrix.
7-FD-e.19 – 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 C.F.R. § 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 C.F.R. § 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.
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- Federal Power Act, 16 U.S.C. §§ 791-828c
- 16 U.S.C. §§ 2701-2708, Small Hydroelectric Power Projects
- Hydropower Regulatory Efficiency Act of 2013
- 18 C.F.R. §§ 4.1 -4.401, Licenses, Permits, Exemptions, and Determination of Project Costs
- 18 C.F.R. §§ 5.1-5.31, Integrated Licensing Process
- 18 C.F.R. §§ 7.1-7.9, Expedited Licensing Process