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                                                       Calendar No. 471
107th Congress                                                   Report
                                 SENATE
 2d Session                                                     107-194

======================================================================



 
                   HYDRO-ELECTRIC LICENSES IN ALASKA

                                _______
                                

                 June 28, 2002.--Ordered to be printed

                                _______
                                

   Mr. Bingaman, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 1843]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 1843) to extend certain hydro-electric 
licenses in the State of Alaska, having considered the same, 
reports favorably thereon without amendment and recommends that 
the bill do pass.

                         PURPOSE OF THE MEASURE

    The purpose of S. 1843 is to direct the Federal Energy 
Regulatory Commission, upon request of the licensee, to issue 
an order staying the license of a hydroelectric project in the 
State of Alaska until the construction of an associated power 
transmission line is completed. The Commission is also directed 
to extend the deadline for commencing construction of the 
project once the stay is lifted.

                          BACKGROUND AND NEED

    Section 13 of the Federal Power Act requires a 
hydroelectric licensee to commence the construction of its 
project within 2 years of the date of the issuance of the 
license. That deadline can be extended by the Federal Energy 
Regulatory Commission one time for a maximum of 2 additional 
years. If construction has not commenced by the end of the time 
period, the licensee is terminated by the Commission unless 
legislation authorizing an additional extension is enacted. 
This legislation, in recognition of the need for construction 
of a power transmission line in association with project No. 
11393, directs the Commission to stay the license for the 
project and extend the construction deadline once the stay is 
lifted.
    The Federal Energy Regulatory Commission issued an original 
license to the city of Saxman, Alaska on January 22, 1998, to 
construct, operate, and maintain the 96-megawatt Mahoney Lake 
Hydroelectric Project No. 11393 to be located on Upper Mahoney 
Lake and Upper Mahoney Creek near Ketchikan in the Ketchikan 
Gateway Borough of southeast Alaska. The original deadline for 
commencement of the project was January 21, 2000. The 
Commission extended this deadline until January 21, 2002.
    Project No. 11393 includes the installation of a tap into 
Upper Mahoney Lake, a 1,700-foot-long upper tunnel, a value 
house, a buried bypass pipe, a 1,370-foot-long vertical shaft, 
an 8-foot-diameter, 3,350-foot-long lower tunnel, a semi-
underground powerhouse, a 200-foot-long tailrace channel, 1.5 
miles of buried, and 3.1 miles of overhead, transmission line, 
a switchyard, and 2.6. miles of new access road.

                          LEGISLATIVE HISTORY

    S. 1843 was introduced by Senators Stevens and Murkowski on 
December 18, 2001. The views of the Federal Regulatory 
Commission were sought on January 30, 2002 and March 1 2002, 
and provided by the Chairman of the Commission on March 19, 
2002.

                       COMMITTEE RECOMMENDATIONS

    The Committee on Energy and Natural Resources, in open 
business session on June 5, 2002, by a voice vote of a quorum 
present, recommends that the Senate pass S. 1843, as described 
herein.

                      SECTION-BY-SECTION ANALYSIS

    Section 1 directs the Federal Energy Regulatory Commission, 
upon licensee request, to (1) issue an order staying the 
hydroelectric license for project No. 11393 in the State of 
Alaska; (2) lift such stay not later than 6 years after the 
date of the Commission receives written notice that 
construction of the Swan-Tyee transmission line is completed; 
and (3) extend for not more than three consecutive two-year 
periods the time during which the licensee is require to 
commence project construction.

                   COST AND BUDGETARY CONSIDERATIONS

    The following estimate of the cost of this measure has been 
provided by the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 14, 2002.
Hon. Jeff Bingaman,
Chairman, Committee on Energy and Natural Resources,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1843, a bill to 
extend certain hydroelectric licenses in the state of Alaska.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Lisa Cash 
Driskill.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

S. 1843--A bill to extend certain hydroelectric licenses in the state 
        of Alaska

    CBO estimates that implementing S. 1843 would have no net 
effect on the federal budget. The bill contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act and would impose no costs on 
state, local or tribal governments.
    S. 1843 would authorize the Federal Energy Regulatory 
Commission (FERC) to stay the license for hydroelectric project 
number 11393 until a specific transmission line is constructed. 
When the line is completed, FERC would be required to lift the 
stay and extend the deadline for beginning construction of the 
project for up to six years. This project is near Ketchican, 
Alaska, and is subject to licensing by FERC. This provision may 
have a minor impact on FERC's workload. Because FERC recovers 
100 percent of its costs through user fees, any change in its 
administrative costs would offset by an equal change in the 
fees that the commission charges. Hence, the bill's provisions 
would have no net budgetary impact.
    Because FERC's administrative costs are set in annual 
appropriations, enactment of this legislation would not affect 
direct spending or receipts. Therefore, pay-as-you-go 
procedures would not apply to S. 1843.
    The CBO staff contact for this estimate is Lisa Cash 
Driskill. This estimate was approved by Peter H. Fontaine, 
Deputy Director for Budget Analysis.

                      REGULATORY IMPACT EVALUATION

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S. 1843. The bill is not a regulatory measure in 
the sense of imposing Government-established standards or 
significant economic responsibilities on private individuals 
and businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of S. 1843.

                        EXECUTIVE COMMUNICATIONS

    On, January 30, 2002 and March 1, 2002, the Committee on 
Energy and Natural Resources requested legislative reports from 
the Federal Energy Regulatory Commission and the Office of 
Management and Budget setting forth Executive agency 
recommendations on S. 1843. The report was received on March 
19, 2002. The pertinent communications received by the 
Committee from the Chairman of the Federal Energy Regulatory 
Commission setting forth his views relating to this measure are 
set forth below:

                      Federal Energy Regulatory Commission,
                                    Washington, DC, March 19, 2002.
Hon. Jeff Bingaman,
Chairman, Committee on Energy and Natural Resources,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: Thank you for your letter of January 30, 
2002, requesting comments on S. 1843, a bill to extend the 
construction deadlines applicable to a hydroelectric project in 
Alaska licensed by the Federal Energy Regulatory Commission 
(FERC No. 11393). A report on the project is attached to this 
letter.
    Section 13 of the Federal Power Act requires that 
construction of a licensed project be commenced within two 
years of issuance of the license. Section 13 authorizes the 
Commission to extend this deadline once, for a maximum 
additional two years. If project construction has not commenced 
by this deadline, the Commission is required to terminate the 
license. Section 13 also authorizes the Commission to extend 
the deadline for completion of construction when not 
incompatible with the public interest.
    As a general matter, enactment of bills authorizing or 
requiring commencement-of-construction extensions for 
individual projects delays the development of an important 
energy resource and therefore has not been recommended. In 
cases where project-specific extensions are authorized by the 
Congress, it has been the position of prior Commission chairmen 
that such extensions not go beyond ten years from the date the 
project was licensed. If a licensee cannot meet a ten-year 
deadline, then as a general rule the license should be 
terminated, making the site once again available for such uses 
as current circumstances may warrant based on up-to-date 
information on economic and environmental considerations. I 
have no reason to depart from this extension policy.
    S. 1843 would permit the licensee for Project No. 11393 to 
obtain construction delays of more than 12 years; how much more 
depends on the date of completion of a transmission line not 
under Commission jurisdiction. This means that project 
construction could commence over 16 years after the license was 
issued: the 4 years already allowed under Section 13, and the 
12 years allowed by S. 1843. Accordingly, these bills are not 
consistent with the ten-year extension policy.
    Thank you for the opportunity to comment on S. 1843. If I 
can be of further assistance in this or any other Commission 
matter, please let me know.
            Best regards,
                                              Pat Wood III,
                                                          Chairman.
    Enclosure.

Attachment to Chairman Wood's Response to Chairman Bingaman's Letter of 
                   January 30, 2002 Regarding S. 1843

    S. 1843 would require the Commission, at the request of the 
licensee for FERC Project No. 11393, to issue an order staying 
the project license. Upon the request of the licensee, but not 
later than 6 years after the date the Commission receives 
written notice that construction of the Swan-Tyee transmission 
line is completed, the Commission shall issue an order lifting 
the stay and make the effective date of the license the date on 
which the stay is lifted. Thereafter, at the request of the 
licensee, and notwithstanding the maximum four-year time period 
specified in Section 13 of the Federal Power Act, the 
Commission shall extend the deadline for commencement of 
project construction for not more than 3 consecutive 2-year 
time periods. The total potential construction extensions, 
above and beyond the 4 years permitted by Section 13 of the 
Federal Power Act, would be over 12 years, which means 
construction might not commence until over 16 years from the 
date the license was issued.

                           PROJECT NO. 11393

    On January 22, 1998, the Commission issued a license to the 
City of Saxman, Alaska, to construct, operate, and maintain the 
96-megawatt Mahoney Lake Hydroelectric Project No. 11393, to be 
located on Upper Mahoney Lake and Upper Mahoney Creek near 
Ketchikan in the Ketchikan Gateway Borough of southeast Alaska. 
The original deadline for the commencement of project 
construction, January 21, 2000, was extended by the Commission 
to January 21, 2002. The Commission knows of no other interest 
in the site.
    Construction of Project No. 11393 entails the installation 
of a tap into Upper Mahoney Lake, a 1,700-foot-long upper 
tunnel, a valve house, a buried bypass pipe, a 1,370-foot-long 
vertical shaft, an 8-foot-diameter, 3,350-foot-long lower 
tunnel, a semi-underground powerhouse, a 200-foot-long tailrace 
channel, 1.5 miles of buried, and 3.1 miles of overhead, 
transmission line, a switchyard, and 2.6 miles of new access 
road.

                        CHANGES IN EXISTING LAW

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee notes that no 
changes in existing law are made by the bill S. 1843, as 
ordered reported.