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                                                      Calendar No. 330
114th Congress        }                         {               Report
                                 SENATE
 1st Session          }                         {              114-185
======================================================================



 
                   TERROR LAKE HYDROELECTRIC PROJECT

                                _______
                                

               December 16, 2015.--Ordered to be printed

                                _______
                                

        Ms. Murkowski, from the Committee on Energy and Natural 
                   Resources, submitted the following

                              R E P O R T

                         [To accompany S. 1583]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 1583) to authorize the expansion of an 
existing hydroelectric project, having considered the same, 
reports favorably thereon with an amendment in the nature of a 
substitute and recommends that the bill, as amended, do pass.
    The amendment is as follows:
    1. Strike all after the enacting clause and insert the 
following:

SECTION 1. TERROR LAKE HYDROELECTRIC PROJECT UPPER HIDDEN BASIN 
                    DIVERSION AUTHORIZATION.

    (a) Definitions.--In this section:
          (1) Terror lake hydroelectric project.--The term ``Terror 
        Lake Hydroelectric Project'' means the project identified in 
        section 1325 of the Alaska National Interest Lands Conservation 
        Act (16 U.S.C. 3212), and which is Federal Energy Regulatory 
        Commission project number 2743.
          (2) Upper hidden basin diversion expansion.--The term ``Upper 
        Hidden Basin Diversion Expansion'' means the expansion of the 
        Terror Lake Hydroelectric Project as generally described in 
        Exhibit E to the Upper Hidden Basin Grant Application dated 
        July 2, 2014 and submitted to the Alaska Energy Authority 
        Renewable Energy Fund Round VIII by Kodiak Electric 
        Association, Inc.
    (b) Authorization.--The licensee for the Terror Lake Hydroelectric 
Project may occupy not more than 20 acres of Federal land to construct, 
operate, and maintain the Upper Hidden Basin Diversion Expansion 
without further authorization of the Secretary of the Interior or under 
the Alaska National Interest Lands Conservation Act (16 U.S.C. 3101 et 
seq.).
    (c) Savings Clause.--The Upper Hidden Basin Diversion Expansion 
shall be subject to appropriate terms and conditions included in an 
amendment to a license issued by the Federal Energy Regulatory 
Commission pursuant to the Federal Power Act (16 U.S.C. 791a et seq.), 
including section 4(e) of that Act (16 U.S.C. 797(e)), following an 
environmental review by the Commission under the National Environmental 
Policy Act of 1969 (42 U.S.C. 4321 et seq.).

                                PURPOSE

    The purpose of S. 1583 is to authorize the expansion of the 
existing Terror Lake hydroelectric project in Alaska.

                          BACKGROUND AND NEED

    Approval to construct the Terror Lake Hydroelectric Project 
in Alaska was granted by the Federal Energy Regulatory 
Commission in 1981. The 36 MW project has been in operation 
since the 1980s and the Kodiak Electric Association (KEA), 
which serves the city of Kodiak, including the nation's largest 
U.S. Coast Guard Base and one of the country's largest 
commercial fishing ports, now obtains 99.7 percent of its 
electric power from the hydroelectric project and another 
nearby wind farm.
    In order to avoid burning approximately two million gallons 
of diesel fuel to produce additional power, KEA, seeks to 
increase the amount of hydropower generated at the facility by 
expanding operations through the Upper Hidden Basin Diversion 
Expansion. The proposed expansion involves diverting five small 
streams located on Alaska State lands in the adjacent Upper 
Hidden Basin and allowing that water to flow into Terror Lake 
through an underground tunnel. The project would not involve 
adding turbines or equipment to the existing Terror Lake 
powerhouse. The expansion would increase the total production 
of electricity from the existing project by an additional 30 
gigawatt-hours annually, representing a 25 percent increase in 
power production. This will allow KEA to enhance its wind-
hydropower integration system and its micro-grid energy storage 
technology.
    The existing Terror Lake Project is located within the 
Kodiak National Wildlife Refuge pursuant to a Special Use 
Permit granted by the U.S. Fish and Wildlife Service in 1981. 
S. 1583 authorizes construction, operation, and maintenance of 
the underground tunnel within the Kodiak National Wildlife 
Refuge as well. Insofar as the Upper Hidden Basin Diversion 
Expansion is an expansion of the Terror Lake Hydroelectric 
Project, the Committee expects the terms and special conditions 
of the Special Use Permit KD-81-0040 issued on July 21, 1981, 
as amended, to remain in effect and to apply to the expansion.

                          LEGISLATIVE HISTORY

    S. 1583 was introduced by Senator Murkowski on June 16, 
2015. The Committee on Energy and Natural Resources held a full 
committee hearing on October 8, 2015 to consider the bill.
    At its business meeting on November 19, 2015, the Committee 
on Energy and Natural Resources, on a voice vote, ordered S. 
1583 favorably reported as amended.

            COMMITTEE RECOMMENDATION AND TABULATION OF VOTES

    The Senate Committee on Energy and Natural Resources, in 
open business session on November 19, 2015, by a majority voice 
vote of a quorum present, recommends that the Senate pass S. 
1583, if amended as described herein.

                          COMMITTEE AMENDMENTS

    During its consideration of S. 1583, the Committee on 
Energy and Natural Resources adopted an amendment in the nature 
of a substitute to: provide definitions for the Terror Lake 
Hydroelectric Project and the Upper Hidden Basin Diversion 
Expansion; limit the Federal land that may be used for the 
project to no more than 20 acres; legislatively authorize use 
of the refuge for the construction, operation, and maintenance 
of the diversion tunnel without further action by the Secretary 
of the Interior; and clarify that the Federal Energy Regulatory 
Commission's authorization of the diversion project will not be 
subject to the provisions of title XI of the Alaska National 
Interest Lands Conservation Act. The amendment is further 
described in the section-by-section analysis.

                      SECTION-BY-SECTION ANALYSIS

Section 1. Terror Lake Hydroelectric Project Upper Hidden Basin 
        Diversion Authorization.

    Section 1(a) defines key terms.
    Section 1(b) authorizes the licensee to occupy up to 20 
acres of Federal land to construct, operate, and maintain the 
Upper Hidden Basin Diversion Expansion without further 
authorization of the Secretary. It also clarifies that 
authorization of the expansion is not subject to title XI of 
the Alaska National Interest Lands Conservation Act.
    Section 1(c) clarifies that the expansion of the Terror 
Lake Hydroelectric Project is still subject to the Federal 
Energy Regulatory Commission's hydropower licensing proceedings 
pursuant to the Federal Power Act, including section 4(e) of 
that Act, as well as the National Environmental Policy Act of 
1969.

                   COST AND BUDGETARY CONSIDERATIONS

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

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, December 9, 2015.
Hon. Lisa Murkowski,
Chairman, Committee on Energy and Natural Resources,
U.S. Senate, Washington, DC.
    Dear Madam Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1583, a bill to 
authorize the expansion of an existing hydroelectric project.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Megan 
Carroll.
            Sincerely,
                                                        Keith Hall.
    Enclosure.

S. 1583--A bill to authorize the expansion of an existing hydroelectric 
        project

    S. 1583 would specify that the licensee of the Terror Lake 
hydroelectric project (number 2743), located within the Kodiak 
National Wildlife Refuge in Alaska, can expand that project to 
occupy not more than 20 acres of additional federal land. Under 
the bill, the proposed expansion would require no further 
approval by the Secretary of the Interior.
    CBO estimates that enacting S. 1583 would not significantly 
affect the federal budget. According to the Department of the 
Interior, the federal lands that would be affected by the 
proposed expansion currently generate no significant receipts 
from programs to develop natural resources and are not expected 
to do so in the future. As a result, CBO expects that the 
proposed expansion would not affect offsetting receipts (which 
are treated as reductions in direct spending). CBO also expects 
that enacting S. 1583 could have a minor impact on spending by 
the Federal Energy Regulatory Commission (FERC), which 
regulates the Terror Lake hydroelectric project. Because FERC 
recovers 100 percent of its costs through user fees, however, 
any change in that agency's costs (which are controlled through 
annual appropriation acts) would be offset by an equal change 
in fees that the commission charges, resulting in no net change 
in federal spending.
    Enacting S. 1583 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply. CBO 
estimates that enacting S. 1583 would not increase net direct 
spending or on-budget deficits in any of the four consecutive 
10-year periods beginning in 2026.
    S. 1583 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.
    The CBO staff contact for this estimate is Megan Carroll. 
The estimate was approved by H. Samuel Papenfuss, Deputy 
Assistant 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. 1583. 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. 1583, as ordered reported.

                   CONGRESSIONALLY DIRECTED SPENDING

    S. 1583, as ordered reported, does not contain any 
congressionally directed spending items, limited tax benefits, 
or limited tariff benefits as defined in rule XLIV of the 
Standing Rules of the Senate.

                        EXECUTIVE COMMUNICATIONS

    The letter from the Chairman of the Federal Energy 
Regulatory Commission on S. 1583 follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                        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 as ordered 
reported.

                                  [all]