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                                                      Calendar No. 100
115th Congress      }                                   {       Report
                                 SENATE
 1st Session        }                                   {       115-81

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



 
    AMENDING THE FEDERAL POWER ACT TO MODERNIZE AUTHORIZATIONS FOR 
                     NECESSARY HYDROPOWER APPROVALS

                                _______
                                

                  May 24, 2017.--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. 724]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Natural Resources to which was 
referred the bill (S. 724) to amend the Federal Power Act to 
modernize authorizations for necessary hydropower approvals, 
having considered the same, reports favorably thereon without 
amendment and recommends that the bill do pass.

                                Purpose

    The purpose of S. 724 is to amend the Federal Power Act 
(FPA) to modernize authorizations for necessary hydropower 
approvals.

                          Background and Need

    Pursuant to section 5 of the FPA (16 U.S.C. 798), the 
Federal Energy Regulatory Commission (Commission) is authorized 
to issue preliminary permits for hydropower projects for up to 
three years and may extend the time period of a preliminary 
permit once, for up to two additional years, if the Commission 
finds that the permittee has proceeded in good faith and with 
reasonable diligence. Preliminary permits guarantee that a 
license application filed by a permittee will be considered 
first by the Commission before any other application to 
construct a project at a particular site. Because permittees 
are sometimes unable to complete a license application within 
the necessary time frame due to a variety of extenuating 
circumstances, Congress has occasionally enacted legislation, 
on a case-by-case basis, to extend the time period for 
preliminary permits. These extensions have remained limited in 
time in order to prevent permittees from holding an exclusive 
development right to a particular site indefinitely.
    When a hydropower license is issued by the Commission, 
section 13 of the FPA (16 U.S.C. 806) requires the licensee to 
commence project construction within two years of the issuance 
date and authorizes the Commission to grant a single two-year 
extension of the construction commencement deadline. However, 
because licensees are often unable to begin construction within 
these time limits due to a variety of extenuating 
circumstances, Congress has enacted legislation, on a case-by-
case basis, to extend the construction commencement deadline 
for individual hydropower projects and to reinstate the license 
if it has expired in the interim. The last several Commission 
Chairmen have taken the position of not opposing legislation 
that would extend the commencement of construction deadline no 
further than 10 years from the date that the license in 
question was issued.

                          Legislative History

    Senator Murkowski introduced S. 724 on March 27, 2017.
    In the 114th Congress, Senator Murkowski introduced S. 
1236, which included similar provisions to those in S. 724. The 
Senate Committee on Energy and Natural Resources held a hearing 
on S. 1236 on May 19, 2015.
    These provisions were also included in S. 2012, the Energy 
Policy Modernization Act of 2016, an original bill that was 
reported by the Committee on Energy and Natural Resources on 
July 30, 2015 and passed by the Senate, as amended, on April 
26, 2016.
    The Committee on Energy and Natural Resources met in open 
business session on March 30, 2017, and ordered S. 724 
favorably reported.

                        Committee Recommendation

    The Committee on Energy and Natural Resources, in an open 
business session on March 30, 2017, by a majority voice vote of 
a quorum present, recommended that the Senate pass S. 724.

                      Section-by-Section Analysis


Section 1. Modernizing authorizations for necessary hydropower 
        approvals

    Section 1(a) amends section 5 of the FPA to increase the 
duration for which the Commission can issue preliminary permits 
from three to four years. It further authorizes the Commission 
to extend a preliminary permit from two additional years to up 
to four additional years.
    Subsection (b) amends section 13 of the FPA to authorize 
the Commission to extend the commencement of construction time 
limit for a hydropower project for up to eight years.

                   Cost and Budgetary Considerations

    The following estimate of the costs of this measure has 
been provided by the Congressional Budget Office:
    The Federal Energy Regulatory Commission (FERC) regulates 
nonfederal hydropower projects. Prior to constructing such a 
project, a sponsor must obtain a license from FERC; once 
issued, licensees must commence construction within a specific 
period of time. Before applying for a license to commence 
construction, a potential licensee has the option to seek a 
preliminary permit for a particular site, which guarantees that 
a license application subsequently filed by the permittee will 
be considered before any other applications for licenses to 
construct projects on that site.
    S. 724 would extend, from 4 to 10 years, the maximum length 
of time by which licensees would have to commence construction 
of a hydropower project under a FERC license. The bill also 
would extend, from five to eight years, the maximum length of 
time covered by a preliminary permit.
    CBO estimates that enacting S. 724 would have no 
significant effect on the federal budget. Lengthening the 
timeframes of licenses and permits could affect FERC's annual 
costs to review and approve applications related to hydropower 
projects. 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. 724 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply. CBO 
estimates that enacting S. 724 would not increase net direct 
spending or on-budget deficits in any of the four consecutive 
10-year periods beginning in 2028.
    S. 724 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 the bill.
    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 the bill, as ordered reported.

                   Congressionally Directed Spending

    The bill, as 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

    Executive Communications were not requested by the 
Committee on Energy and Natural Resources in the 115th 
Congress.

                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the original bill, as reported, are shown as follows (existing 
law proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                           FEDERAL POWER ACT

Act of June 10, 1920, Chapter 285, as amended

           *       *       *       *       *       *       *



PART I

           *       *       *       *       *       *       *


    Sec. 5. (a) Each preliminary permit issued under this Part 
shall be for the sole purpose of maintaining priority of 
application for a license under the terms of this Act for such 
period or periods, not exceeding a total of [three] 4 years, as 
in the discretion of the Commission may be necessary for making 
examinations and surveys, for preparing maps, plans, 
specifications, and estimates, and for making financial 
arrangements.
    (b) The [Commission may extend the period of a preliminary 
permit once for not more than 2 additional years beyond the 3 
years] Commission may--
          (1) extend the period of a preliminary permit once 
        for not more than 4 additional years beyond the 4 years 
        permitted by subsection (a) if the Commission finds 
        that the permittee has carried out activities under 
        such permit in good faith and with reasonable 
        diligence[.]; and
          (2) after the end of an extension period granted 
        under paragraph (1), issue an additional permit to the 
        permittee if the Commission determines that there are 
        extraordinary circumstances that warrant the issuance 
        of the additional permit.
    (c) Each such permit shall set forth the conditions under 
which priority shall be maintained.
    (d) Such permits shall not be transferable, and may be 
canceled by order of the Commission upon failure of permittees 
to comply with the conditions thereof or for other good cause 
shown after notice and opportunity for hearing.

           *       *       *       *       *       *       *

    Sec. 13. That the licensee shall commence the construction 
of the project works within the time fixed in the license, 
which shall not be more than two years from the date thereof, 
shall thereafter in good faith and with due diligence prosecute 
such construction, and shall within the time fixed in the 
license complete and put into operation such part of the 
ultimate development as the Commission shall deem necessary to 
supply the reasonable needs of the then available market, and 
shall from time to time thereafter construct such portion of 
the balance of such development as the Commission may direct, 
so as to supply adequately the reasonable market demands until 
such development shall have been completed. The periods for the 
commencement of construction may be extended [once but not 
longer than two additional years] for not more than 8 
additional years, and the period for the completion of 
construction carried on in good faith and with reasonable 
diligence may be extended by the Commission when not 
incompatible with the public interests. In case the licensee 
shall not commence actual construction of the project works, or 
of any specified part thereof, within the time prescribed in 
the license or as extended may demand, as provided for in 
section 26 hereof.

           *       *       *       *       *       *       *


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