The Relicensing Process

At least five years before a project license expires, a project owner files a notice with FERC stating the intent to seek a new license. The utility prepares a package of information on current project operations and future relicensing plans, which serves as a starting point for consultations and meetings with state and federal resource agencies, tribes, conservation groups and members of the public, to identify the actions needed to protect fish and wildlife and provide recreation enhancements.

Once additional information needs have been agreed upon, the licensee conducts studies that will produce data to be used in the licensee's application, and ultimately influence FERC's decisions for license conditions. These new license conditions will govern project operations and provide protection and mitigation measures for environmental and recreational resources for at least the next 30 years.

FERC Licensing Procedures

FERC employs three processes for relicensing hydropower projects: 1) the Traditional Process; 2) Alternative Licensing Process; 3) the Integrated Licensing Process. A fourth process known as the Hybrid process has been used by utilities but is recognized by FERC as the Traditional Process with enhanced communication. Starting in July 23, 2005 all utilities will be required to use the FERC's new Integrated Licensing Procedures. In some relicense proceedings the process evolves into a Settlement Proceeding. There are a variety of sources to learn more about the hydropower relicensing process. The FERC released a Hydropower Licensing Handbook in April 2004. The FERC also provides flow chart diagrams for licensing procedures and other FERC regulatory processes. The National Hydropower Association Relicensing Handbook provides useful insights on hydropower licensing procedures from a trade organization perspective. The Hydropower Reform Coalition recently published a Citizen Toolkit for Effective Participation in the Hydropower Relicensing Process that provides an overview of relicensing and helpful strategies.

The following descriptions of the three FERC Licensing Procedures is adapted from a paper titled, Will the Integrated Licensing Process Foster Ecological Sustainability?, presented December 4-5, 2003, Charlottesville, Virginia by Richard Roos-Collins,

Traditional Process (TLP)

The Traditional Licensing Process (18 CFR §§ 4.34, 4.38 and Part 16) has been in place in its current form since 1985, and in some form since the enactment of the Federal Power Act Part I in 1935. It relies on a procedural format whereby participants respond via formal comments to FERC notices. In this procedural format the licensee proposes a document (such as a study plan) and other stakeholders comment. It requires in-person consultation at specified stages. In its minimal form, it is like litigation, where the general strategy is to win the paper war in the eyes of the judge - the FERC.

Alternative Licensing Process (ALP)

Under the Alternative Licensing Process adopted in 1997 (18 CFR § 4.34(i)), the licensee commits to work collaboratively with stakeholders to develop and implement a study plan, and to negotiate a settlement that will become the basis for the license applications. While the statutory steps occur in the statutory sequence, the ALP creates substantial incentives for the stakeholders to collaboratively resolve their disputes about the study plan, and more importantly, the conditions of a new license. It thus tends to reduce the process costs of relicensing.

The FERC's intent in the ALP was to foster collaborative processes. In some proceedings Licensees have requested the ALP process but behaved in the traditional licensing fashion—adversarial with unilateral decision making authority. Because the FERC lacks a regulatory definition or means to measure collaboration there is no means for enforcement. American Whitewater recommends the following procedural method to avoid dysfunctional ALPs that lack collaboration.

The Licensee must specifically request use of the ALP procedure to the FERC. This request must be accompanied by a list of stakeholders supporting use of the ALP procedures along with a Communications Protocol developed collaboratively with the stakeholders. FERC regulations do not specify the contents of the Communications Protocol other than a list of the parties in support of the ALP.

American Whitewater recommends stakeholders insist the Licensee develop collaboratively the Communications Protocol in detail prior to submission to the FERC. The Communications Protocol is the only regulatory FERC step in the ALP allowing stakeholders to shape the collaborative procedures. Do not sign in support of the ALP until this step is taken. Encourage other stakeholders to withhold their support as well until the collaborative protocols are agreed upon. The Communications Protocol should clearly spell out procedural rules defining collaboration, decision making processes, dispute resolution procedures, technical work group and plenary structure, and timelines. Ultimately, this step in every stakeholders best interest including the Licensee since this is the initial building block for establishing trust. With trust comes a more efficient licensing process which in turn saves the Licensee money.

Integrated Licensing Process (ILP)

In July 2003, the FERC adopted the Integrated Licensing Process (104 FERC ¶ 61,109). The ILP will presumptively replace TLP or ALP after a transition period ending July 2005, unless the licensee for a given project persuades FERC to allow the use of one of those existing processes due to special circumstances (18 CFR § 5.3(a), (e)). The ILP is intended to: (A) establish a parallel track for development of the license application and environmental review; (B) pro-actively resolve disputes about study plans before that application is filed; and (C) encourage the FERC and other agencies with prescriptive authority to cooperate in the environmental review process necessary for their respective decisions. Since the ILP is new and the FERC's preferred licensing procedure the FERC has developed an ILP workflow diagram depicting the key steps in the process. Since this will be the default relicense procedure starting in July 2005 American Whitewater recommends stakeholders become familiar with the accelerated procedural timelines. The California Hydropower Reform Coalition has developed an ILP Guidance document describing the procedural steps and timelines.

Hybrid Process

Relicense proceedings using the Traditional Licensing Process with “enhanced communication” have been labeled “Hybrid Processes”. The FERC regulations do not recognize or codified the Hybrid Process. This process has become common practice and deserves mention. The Hybrid Process is intended to improve communication in the Traditional Process while avoiding the regulatory and associated procedural burdens of the ALP. Because there are no regulatory requirements or FERC policy for Hybrid Processes caution should be used. The Licensee has no requirement to collaborate fairly or honor informal agreements in a Hybrid Process. With that cautionary note aside, Hybrid Processes have proved to be an effective means for reaching agreement and often are the precursor to a formal ”Settlement Agreement”. If you are asked to participate in a Hybrid Process be sure to insist on development of collaborative protocols prior to signing on in support of this procedure. Some federal and state agencies will not sign-on to Hybrid Processes because it potentially compromises their legal authority.

Settlement Agreements

In addition to participating in relicensing, many resource agencies and public stakeholders have chosen to negotiate directly with the license applicant to develop license terms and conditions that include conservation and recreation enhancements. These settlements have generally yielded faster and more creative improvements for rivers than those achieved in traditional relicensings. Settlement agreements establish a framework for long-term cooperation between resource agencies, the public, and project owners. The typical adversarial nature of hydropower vs.conservation is alleviated through the settlement process, as the concerns of all parties can often be equitably addressed.

FERC generally welcomes the settlement process as it often allows for more expeditious relicensing. Settlements can occur at any time during the relicensing process, however, it is best to develop an agreement before the environmental review has been conducted. This way, FERC can evaluate proposed settlement terms and conditions as possible alternatives in the EA or EIS. Once a settlement has been negotiated and signed, it is submitted to FERC with the request that all settlement terms and conditions be included as part of the official license. However, because FERC may omit or alter terms of the agreement which are not “conventional” FERC provisions, many settlement parties have included a clause in the settlement making all settlement terms legally binding regardless of whether the FERC includes them in the license.

If you are asked to participate in a Settlement be sure to insist on development of collaborative protocols prior to signing on in support of this procedure.If you are asked to participate in a Settlement be sure to insist on development of collaborative protocols prior to signing on in support of this procedure.

Dr. Ken Kimball, Conservation Director for the Appalachian Mountain Club and expert hydro relicense practitioner, has developed a presentation on the successes and failures of Settlement Agreements in the New England states.

Settlement Examples:

Nantahala River, NC

Tuckasegee River, NC