Several recent studies have identified tremendous growth potential in the tens of thousands of megawatts of clean, renewable hydropower capacity.

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1 June 27, 2013 The Hnrable Nancy Sutley Chair White Huse Cuncil n Envirnmental Quality 1600 Pennsylvania Ave, NW Washingtn, D.C RE: Natinal Hydrpwer Assciatin s Cmments n the Cuncil n Envirnmental Quality s Principles and Requirements fr Federal Investment in Water Resurces and Interagency Guidelines Dear Chair Sutley: On March 22, the Cuncil n Envirnmental Quality (CEQ) released the Principles and Requirements fr Federal Investment in Water Resurces (P&R) and asked fr cmments n the accmpanying draft Interagency Guidelines (Draft Guidelines). The Natinal Hydrpwer Assciatin (NHA) 1 is pleased t submit the fllwing cmments. I. Intrductin As America s leading renewable electricity resurce, hydrpwer prvides apprximately 8 percent f ur natin s ttal electricity supply and tw-thirds f America s ttal renewable electricity. This results in hundreds f thusands f dmestic jbs. NHA s members and hydrelectric facility wners and peratrs are stewards f the rivers where their facilities are lcated, and value river resurces and a diverse ecsystem. As such, they spend hundreds f millins f dllars every year n envirnmental cnservatin, mitigatin, and prtectin and enhancement measures related t water quality and quantity. Several recent studies have identified tremendus grwth ptential in the tens f thusands f megawatts f clean, renewable hydrpwer capacity. 2 The hydrpwer industry is pised t realize this grwth 1 NHA is a natinal nn-prfit assciatin dedicated exclusively t advancing the interests f the U.S. hydrpwer industry, including cnventinal, pumped strage, and new marine and hydrkinetic technlgies. NHA s membership cnsists f mre than 180 rganizatins, including cnsumer-wned utilities, investr-wned utilities, independent pwer prducers, prject develpers, equipment manufacturers, envirnmental and engineering cnsultants, and attrneys. 2 See, Bureau f Reclamatin, U.S. Dep t f the Interir, Site Inventry and Hydrpwer Energy Assessment f Reclamatin Owned Cnduits (Mar. 2012), Office f Energy Efficiency and Renewable Energy, Wind and Water Pwer Prgram, U.S. Dep t f Energy, An Assessment f Energy Ptential at Nn-Pwered Dams in the United States (Apr. 2012), Navigant Cnsult., Jb Creatin Opprtunities in Hydrpwer (Sept. 20, 2009), 1

2 ptential and meet the grwing demand fr renewable and emissin free electricity. Hwever, in respnse t the P&R s and Draft Guidelines, NHA pints ut that the existing prcess fr licensing nn-federal hydrpwer prjects under Part I f the Federal Pwer Act (FPA), and administered by the Federal Energy Regulatry Cmmissin (FERC), is a cmprehensive and rigrus prcess that evaluates and balances the scial and public benefits, envirnmental and ecsystem impacts, nndevelpmental values, and csts assciated with develpment and peratins. As an independent agency under the Department f Energy, FERC is nt subject t the P&R s; hwever, the CEQ needs t clearly state that the P&R s are nt applicable t agencies acting pursuant t their respnsibilities under Part I f the FPA. At a time when the Administratin is fcused n imprving the perfrmance f federal permitting and review f infrastructure prjects, and reducing delay, redundancy and incnsistency in licensing thrugh retrspective regulatry review f existing regulatins 3, these P&R s and Draft Guidelines, withut further clarificatin, have the ptential t unnecessarily cmplicate and further delay the established but cumbersme and difficult regulatry regime fr hydrpwer prject apprvals. Further, the P&R s and Draft Guidelines culd have the unfrtunate effect f undercutting the President s clean energy agenda and gal f building a 21 st Century Infrastructure. 4 II. Applicability f P&R s The P&R s and Draft Guidelines are meant t prvide a cmmn framewrk fr analyzing a diverse range f water resurce prjects invlving Federal investment, but als prvide directin t agencies fr the develpment f agency-specific prcedures (ASP) t determine the applicability and implementatin f the P&R s. Federal investment is brad, and is intended t capture the wide array f prjects, prgrams, and plans that the federal gvernment undertakes in the arena f water resurces and is intended t apply t Federal investments that by purpse, either directly r indirectly, affect water quality and quantity, including ecsystem restratin r land management activities. Hydrpwer generatin is specifically mentined as falling under the purview f the P&R s. The P&R s and the Draft Guidelines are vague and imprecise regarding their applicability t nn-federal hydrpwer develpment. NHA recmmends that the P&R s and Draft Guidelines clarify that FERC s licensing and administratin f nn-federal hydrpwer prjects under Part I f the FPA are excluded frm 3 See, Exec. Order N , 60 Fed. Reg (Mar. 22, 2012); Federal Plan fr Implementing Executive Order (Jun. 15, 2012); Exec. Order N , 93 Fed. Reg (May 14, 2012); Exec. Order N , 14 Fed. Reg (January 18, 2011). 4 Federal Plan fr Implementing Executive Order 13604, p. 1 (Jun. 15, 2012). 2

3 P&R review and analysis. As mentined abve, nn-federal hydrpwer develpment is regulated thrugh a cmprehensive statutry licensing regime. While FERC acts as the licensing agency, the prcess invlves many federal and state agencies (U.S. Frest Service, U.S Fish & Wildlife Service, Natinal Marine Fisheries Service, U.S. Army Crps f Engineers, Bureau f Reclamatin, and state resurce agencies, amng thers) and includes multiple pprtunities fr public engagement in the review f nn-federal hydrpwer prject applicatins. In additin t the U.S. Army Crps f Engineers (Crps), the Bureau f Reclamatin (Reclamatin) and the Tennessee Valley Authrity, the updated P&R s nw als apply t the resurce agencies (thrugh the Departments f the Interir, Agriculture and Cmmerce) that are key participants, and have an established rle in, the FERC nn-federal hydrpwer licensing prcess. Further, many f NHA s members wrk clsely with the Crps and Reclamatin n develping nn-federal hydrpwer n federal infrastructure, many f which are subject t FERC s jurisdictin. Therefre, it is crucial that the CEQ clearly state that the P&Rs are nt applicable t agencies acting pursuant t their respnsibilities under Part I f the FPA. Each FERC hydrpwer applicatin requires a serius cmmitment f time and resurces by FERC, agency staff, and stakehlders in rder t cmplete the required prcesses. Fr example, licensing a hydrpwer prject cnsists f at least 5 t 5 ½ years fr agency cnsultatin, studying prject effects, preparatin f FERC applicatin dcuments, and envirnmental review under NEPA befre issuance f a license. Additinally, in 1986, Cngress passed the Electric Cnsumers Prtectin Act (ECPA), which amended the FPA and required FERC t balance electricity needs with envirnmental and nndevelpmental values when deciding whether t issue a nn-federal hydrpwer license. FERC s required balancing, r equal cnsideratin f nndevelpmental values, includes envirnmental, recreatinal, cultural, and ecnmic impacts. The ECPA requirement seems t satisfy the CEQ s interest in cnsidering the scial and public benefit with csts f an actin. These prcesses are intended t prvide sufficient time and infrmatin fr FERC, the agencies, the licensee and stakehlders t reach a decisin n all issues assciated with a hydrpwer prject. Because f the substantive review f nn-federal hydrpwer develpment under Part I f the FPA, the issues and cncerns expressed in the P&R s and Draft Guidelines are already being adequately analyzed and managed, and have been fr sme time. 3

4 III. Specific Questins & Recmmendatins A. Exclusins & Exemptins The P&R s and Draft Guidelines cntain exclusins and specifically exempt regulatry actins. Alng with ther regulatry actins specifically mentined, NHA recmmends that nn-federal hydrpwer licensing under Part I f the FPA be listed under Sectin 2 (a) f the Draft Guidelines (Page 3): Regulatry actins are thse that restrict private behavir and include, but are nt limited t: permits under sectin 402 and 404 f the Clean Water Act, Endangered Species Act Cnsultatins, hydrpwer licensing and administratin under Part I f the Federal Pwer Act, and requirements under the Safe Drinking Water Act. In additin, the CEQ shuld clarify that ther regulatry permits required fr nn-federal hydrpwer develpment n federal infrastructure, r under the Clean Water Act, are als exempt. Fr example, regulatry actins related t: The issuance f a Lease f Pwer Privilege (LOPP) fr the cnstructin f nn-federal hydrpwer n Bureau f Reclamatin infrastructure. The issuance f a Sectin 408 (Sectin 14 f the Rivers and Harbrs Act f 1899) permit in cnjunctin with building nn-federal hydrpwer n the U.S. Army Crps f Engineers infrastructure. The issuance f a Sectin 401 Clean Water Act Water Quality Certificatin issued by the states, delegated t them by the Envirnmental Prtectin Agency. The Draft Guidelines state that agencies, thrugh their ASP s, have the discretin t deem specific prcesses, planning requirements, r types f analysis as cmpliant with the P&R s and exempt them frm further requirements. NHA recmmends that each agency ASP include a statement that wrk cnducted under Part I f the FPA is exempt frm P&R review and analysis. NHA ntes that Reclamatin s LOPP prcess includes a Categrical Exclusin (CE). If the LOPP prcess is nt cnsidered a regulatry actin, NHA believes the 4

5 LOPP CE is an example f an existing prcess r requirement that wuld be cmpliant with the P&R s and exempt frm review. B. Cmparing Scial and Public Benefits with Csts The Draft Guidelines mentin the imprtance f cnsidering the scial and public benefits against the csts f an actin. The impacts f climate change n ur rivers, ceans, and aquatic species are a tp cncern and pririty. Hydrpwer is a clean and renewable energy resurce aviding millins f metric tns f carbn emissins every year. NHA recmmends that when agencies are cmparing the scial and public benefits and csts f an investment in the federal hydrpwer system they shuld recgnize hydrpwer s climate benefit, as well as the system s ability t mitigate the effects f extreme strms and flds, amng thers. Of nte, the President s recent Climate Actin Plan recgnizes hydrpwer s rle in slwing the effects f climate change, and shuld be used as guidance by the agencies in their scial and public benefits versus cst analysis. 5 C. Grant Prgrams & Federal Financing Grant prgrams are listed as Federal activities subject t the P&R s. The applicability f the P&R s t prgrams f interest t the hydrpwer industry, such as the Prductin Tax Credit, the Investment Tax Credit, the Rural Energy fr America Prgram (REAP), and the Department f Energy ARPA-E grants and lan guarantees is unclear. It is als unclear whether ASP s will retractively evaluate grants in prcess r if they will nly cnsider grants n a prspective basis. As an example, the Department f Energy culd fund a demnstratin prject that requires a FERC license and the invlvement f many f the federal agencies. NHA seeks clarificatin n whether and hw the P&R s may apply. IV. Cnclusin NHA wrks t ensure that any additinal agency reviews and prcedures, such as these P&R s and Draft Guidelines, take int full accunt the existing nn-federal hydrpwer licensing prcess, and d nt subject the industry t cnflicting, redundant r unnecessary requirements, which culd lead t additinal delays and uncertainty in the deplyment f new hydrpwer resurces. 5 President Obama s Plan t Cut Carbn Pllutin Fact Sheet, Exec. Office f the President (Jun. 25, 2013); The President s Climate Actin Plan, Exec. Office f the President (Jun. 25, 2013), 5

6 NHA is cncerned that these P&R s and Draft Guidelines ptentially weaken the Administratin s desire and effrts t increase renewable energy develpment and imprve the permitting and licensing prcesses. The P&R s and Draft Guidelines will nly be meaningful if their applicability is clearly defined. Mrever, ASP s shuld be subject t public review and cmment t ensure the pprtunity t prvide input and identify unintended cnsequences. NHA appreciates the pprtunity t submit cmments n the Draft Guidelines, and we cmmit t wrking with the CEQ and ther stakehlders t prvide perspective n hydrpwer issues. Respectfully submitted, Linda Church Cicci Executive Directr Natinal Hydrpwer Assciatin 6