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Dam relicensing should reflect ‘early action’

Fri., Nov. 25, 2016

The Northwest is blessed with a hydropower system that is efficient, clean and the envy of the rest of the nation. But it could be an even bigger asset if federal relicensing rules were revamped to encourage and reward timely improvements.

But that would require action by Congress or the Federal Energy Regulatory Commission, which oversees the relicensing process.

Northwest utilities, including the Chelan Public Utility District and Avista, would like to see the change made at the congressional level during the current lame-duck session as part of an update to federal energy policy.

A bipartisan bill, led by Sen. Lisa Murkowski, R-Alaska, and Sen. Maria Cantwell, D-Wash., was passed by the Senate in April. The House has its own version, and conferees are trying to resolve the differences and produce a bill that could be signed before the new Congress is seated.

Rep. Cathy McMorris Rodgers and Sen. Cantwell agree on the concept of “early action,” where utilities would get credit for improvements they’ve made to dams under their current license as they head into the relicensing process, which can take up to 10 years.

It may sound arcane, but it matters. FERC determines the length of a license – between 30 and 50 years – and one of the key factors is the size of investments on environmental and economics improvements.

But as utilities point out, this creates an incentive to delay improvements under their current license because they won’t get credit. If they wait, they can add projects to their portfolio of future plans and increase their chances of being granted a longer license.

For instance, in 2004, Chelan PUD built a bypass system that helps young salmon and steelhead move safely past the Rocky Reach Dam and downstream on the Columbia River. The PUD didn’t get credit for that $107 million investment when the dam was relicensed in 2009. Had the utility waited to gain credit, the benefits to fish would’ve been delayed.

Hydropower interests would prefer that “early action” be enshrined in law. FERC could change its rules, but those could be altered by future commissions.

The good news is that FERC is considering a policy change, which utilities find encouraging, especially if Senate and House conferees can’t reach a compromise on the larger energy bill.

The commission announced on Nov. 17 that it is opening a 60-day comment period on whether it should revise its policy for determining the length of a license for hydroelectric projects. One of the changes under consideration is whether the commission should “consider measures implemented under the prior license.”

In other words, early action.

This is a welcome indicator that FERC is listening to the argument that its current policy may discourage prompt investments that provide tangible benefits.

If the current Congress gets on board, all the better.

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