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115th Congress      }                                       {     Report
                                  SENATE
 2d Session         }                                       {    115-310

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



 
   TO REQUIRE THE FEDERAL ENERGY REGULATORY COMMISSION TO SUBMIT TO 
            CONGRESS A REPORT ON CERTAIN HYDROPOWER PROJECTS

                                _______
                                

                 July 31, 2018.--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. 1030]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 1030) to require the Federal Energy 
Regulatory Commission to submit to Congress a report on certain 
hydropower projects, 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.

                               AMENDMENT

    The amendment is as follows:
    Strike all after the enacting clause and insert the 
following:

SECTION 1. FERC REPORT ON CERTAIN HYDROPOWER PROJECTS.

    Not later than 180 days after the date of enactment of this Act, 
the Federal Energy Regulatory Commission (referred to in this section 
as the ``FERC'') shall submit to the Committee on Energy and Natural 
Resources of the Senate and the Committee on Energy and Commerce of the 
House of Representatives a report that--
          (1) identifies each hydropower project licensed by the FERC 
        (referred to in this section as an ``identified project'') that 
        is--
                  (A) located at a nonpowered site that serves as 
                storage to support downstream power generation; and
                  (B) not part of a generation project licensed by 
                FERC;
          (2) analyzes the financial value of electric power generation 
        associated with each identified project, relative to the best 
        available estimates of the financial value of nonpower 
        generation functions associated with the identified project, 
        including recreation and environmental functions;
          (3) describes the range of options available under existing 
        law with respect to the surrender or transfer of a FERC license 
        for an identified project, including a representative range of 
        actual measures required by the FERC of identified project 
        owners that have surrendered or transferred a FERC license;
          (4) identifies any general or readily identifiable project-
        specific barriers to the surrender or transfer of a FERC 
        license for an identified project; and
          (5) to the extent the information is available, identifies 
        the financial costs incurred by identified project owners 
        resulting from the requirements imposed by a FERC license or 
        other FERC requirements, including applicable costs broken down 
        by categories relating to--
                  (A) the environment, including fish and wildlife 
                measures;
                  (B) human safety;
                  (C) electric reliability;
                  (D) recreation;
                  (E) cultural resources;
                  (F) flood control; and
                  (G) any other relevant category, as determined by the 
                FERC.

                                PURPOSE

    The purpose of S. 1030 is to require the Federal Energy 
Regulatory Commission (FERC or Commission) to submit to 
Congress a report on certain hydropower projects.

                          BACKGROUND AND NEED

    In unique instances, the Commission has required non-power 
producing dams to obtain a FERC license because the dams 
contribute a small percentage of water that generates power 
downstream. In a number of cases, license conditions have led 
to operating costs that may be higher than the value of power 
produced by the downstream facilities. In a specific case in 
Maine, several non-powered dams that provide some local 
ecological and recreational value have uncertain futures 
because their owner prefers to surrender a license rather than 
implement new fish and wildlife conditions. Further 
identification and analysis of similar non-powered dams will 
help understand the scope and impact of this situation 
nationally.

                          LEGISLATIVE HISTORY

    S. 1030 was introduced by Senator King on May 3, 2017. The 
Subcommittee on Water and Power held a legislative heating on 
S. 1030 on June 14, 2017.
    The Committee on Energy and Natural Resources met in open 
business session on May 17, 2018, and ordered S. 1030 favorably 
reported, as amended.

                        COMMITTEE RECOMMENDATION

    The Senate Committee on Energy and Natural Resources, in 
open business session on May 17, 2018, by majority voice vote 
of a quorum present recommends that the Senate pass S. 1030, if 
amended as described herein.

                          COMMITTEE AMENDMENT

    During its consideration of S. 1030, the Committee adopted 
an amendment in the nature of a substitute to specify, for 
purposes of FERC's report, that an identified hydropower 
project shall not be part of a generation project licensed by 
the Commission. The amendment also makes technical changes and 
is further described in the section-by-section analysis.

                      SECTION-BY-SECTION ANALYSIS

Section 1. FERC report on certain hydropower projects

    Section 1 directs FERC to submit a report to the 
Congressional authorizing committees identifying each 
hydropower project licensed by the Commission that is located 
at a non-powered site and is not part of a licensed generation 
project within 180 days of the Act's enactment. This section 
further specifies the additional information required for the 
report, including analyzing the financial value of the electric 
power generation associated with each project compared to the 
estimated financial value of the project's nonpower generation 
functions; describing the range of legal options available for 
the surrender or transfer of FERC licenses; identifying any 
project-specific barriers to the surrender of FERC licenses; 
and, to the extent possible, identifying the financial costs 
incurred by project owners in compliance with FERC license 
requirements, including costs relating to the environment, 
safety, electric reliability, recreation, cultural resources, 
flood control, and any other relevant category identified by 
the Commission.

                   COST AND BUDGETARY CONSIDERATIONS

    The following estimate of the costs of this measure has 
been provided by the Congressional Budget Office:
    CBO estimates that implementing S. 1030 would have no 
significant net effect on the federal budget. The bill would 
require the Federal Energy Regulatory Commission (FERC) to 
report to the Congress on various aspects of hydropower 
projects at nonpowered sites that are not part of FERC-licensed 
projects that generate power. The bill would require FERC to 
identify all such projects and analyze their potential 
financial value with regard to both power and nonpower 
functions.
    Completing the proposed report would increase FERC's 
administrative costs by less than $500,000. However, because 
FERC recovers 100 percent of its costs through user fees, 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 a negligible 
net change in federal spending.
    Enacting S. 1030 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply.
    CBO estimates that enacting S. 1030 would not increase net 
direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2029.
    S. 1030 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.

                      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. 1030. 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. 1030, as ordered reported.

                   CONGRESSIONALLY DIRECTED SPENDING

    S. 1030, 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 written testimony provided by FERC at the June 14, 
2017, hearing on S. 1030 follows:

              Federal Energy Regulatory Commission,
                                    Office of the Chairman,
                                        Washington, DC, May 9, 2017
Hon. Lisa Murkowski,
Chairman, Energy and Natural Resources Committee,
U.S. Senate, Washington, DC.
    Dear Chairman Murkowski: Thank you for the opportunity to 
comment on S. 1029, a bill to amend the Public Utilities 
Regulatory Policies Act of 1978 (PURPA) to exempt certain small 
hydroelectric projects, and S. 1030, a bill to require the 
Federal Energy Regulatory Commission to submit to Congress a 
report on certain hydroelectric projects.

                                S. 1030

    While most of the hydropower projects licensed by the 
Commission include generating facilities, there are some 
reservoirs included in licensed projects, and some stand-alone 
projects, that do not include such facilities, but rather serve 
the purpose of storing and releasing flows to facilitate 
downstream generation.
    S. 1030 would require the Commission to submit to Congress, 
not later than 180 days from the date of enactment of the bill, 
a report that: identifies non-powered storage projects; 
analyzes the value of generation and non-generation aspects of 
those projects; describes the ranges of options with respect to 
surrender or transfer of licenses; identifies barriers to 
surrender or transfer; and identifies the cost of license 
requirements relating to environmental protection, human 
safety, electric reliability, recreation, cultural resources, 
flood control, navigation, irrigation, and other matters.
    The Commission will be pleased to submit to Congress any 
information it requires. It would be helpful to obtain 
clarification regarding some of the items to be covered by the 
report prior to the Commission gathering the information from 
our licensees. For example, is Congress seeking information 
about projects consisting solely of storage reservoirs, or also 
about storage reservoirs that are part of licensed generation 
projects? With respect to the analysis of non-power values, is 
Congress seeking the cost of environmental and recreational 
measures or their financial value? The latter may not be easy 
to establish, given the difficulty in placing an absolute value 
on environmental or other matters. For example, the value of a 
fish or of a recreational opportunity is generally considered 
to be highly subjective. In identifying barriers to license 
surrender or transfer, is Congress looking for general or 
project-specific information? Project specific information may 
be difficult to obtain, since it will depend, in large part, on 
financial and other considerations faced by each licensee, 
which will vary from case-to-case and be best understood by 
licensees.
    As to costs incurred by licensees, the Commission does 
include in licenses the estimated costs of environmental 
measures, recreation, cultural resource protection, and 
Commission-imposed flood control measures. The Commission does 
not impose electric reliability measures in licenses and so 
could have difficulty determining the costs of such measures. 
Likewise, the Commission does not typically require irrigation 
measures, which are usually governed by state water rights, and 
so we would not have information on this topic. Finally, as to 
measures to protect human safety, the Commission requires 
licensees to undertake whatever measures are required to ensure 
public safety at the time these issues are identified through 
the Commission's ongoing, thorough dam safety inspection 
program. These measures are required whenever they are 
necessary and are imposed separately, rather than being 
determined during the licensing process and included in a 
license.
    I hope that these comments have been helpful. Please do not 
hesitate to contact me if I can be of further assistance on 
this or any other Commission matter.
            Sincerely,
                                         Cheryl A. Lafleur,
                                                   Acting Chairman.

                        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.