Overview. This Act provides for federal regulation and development of water power and resources, authorizing the Federal Energy Regulatory Commission (FERC) to issue licenses for hydroelectric project works, including dams, reservoirs and other works to develop and improve navigation and to develop and use power. The Act also authorizes FERC to regulate the transmission and sale of electric energy in interstate commerce. This summary focuses on the licensing provisions for hydroelectric projects.
Selected Definitions. Navigable waters: parts of streams or other bodies of water over which Congress has jurisdiction under its authority to regulate commerce with foreign nations and among the several states and which, either in their natural or improved condition, notwithstanding interruptions between the navigable parts by falls, shallows or rapids, are used, or are suitable for use, to transport persons or property in interstate or foreign commerce. The term includes the interrupting falls, shallows or rapids, and other parts of streams authorized by Congress for improvement after investigation. Project: a complete unit of improvement or development, consisting of a power house, water conduits, dams and appurtenant works and structures (including navigation structures) which are part of the unit, and connected storage, diverting or forebay reservoirs, primary lines transmitting power from the unit to the point of junction with the distribution system, miscellaneous structures used in connection with the unit or a part of it, and water rights, rights-of-way, ditches, dams, reservoirs, lands or interest in lands the use of which are necessary for maintenance and operation of the unit. Project works: the physical structures of a project. § 796.
Project Licensing. The Act contains provisions detailing the Federal Energy Regulatory Commission's authority to issue licenses to: construct, operate and maintain dams, water conduits, reservoirs, power houses, transmission lines or other project works to develop and improve navigation; develop, transmit and use power across, along, from or in navigable bodies of water; use, with certain provisos, surplus water or water power from government dams. In addition to considering power and development purposes, FERC must give equal consideration to energy conservation; the protection, mitigation of damage to, and enhancement of fish and wildlife, including related spawning grounds and habitat; protection of recreational opportunities; and preservation of other aspects of environmental quality. Licenses are not to exceed 50 years in length. §§ 797 and 798-802.
License Conditions. The Act requires that licenses contain certain conditions. Projects must be adapted to a comprehensive plan for: improving or developing a waterway for the use or benefit of interstate or foreign commerce; improving and using water-power development; adequately protecting, mitigating and enhancing fish and wildlife, including related spawning grounds and habitat; beneficial public uses, including irrigation, flood control, water supply and recreational purposes. FERC is required to consider certain factors to ensure that the project is adapted to the plan. The recommendations of relevant federal and state agencies and Indian tribes affected by the project also must be considered.
Licenses also must contain conditions that adequately and equitably protect, mitigate damages to, and enhance fish and wildlife affected by the development, operation and management of projects. Fish and wildlife conditions must be based on recommendations received pursuant to the Fish and Wildlife Coordination Act from the National Marine Fisheries Service, the U.S. Fish and Wildlife Service, and state fish and wildlife agencies. § 803.
FERC is to require licensees, at their own expense, to construct, maintain and operate fishways prescribed by the Secretary of the Interior or the Secretary of Commerce. A statute passed in 1992 provided that the items which may constitute a fishway for the safe and timely upstream and downstream passage of fish are to be limited to physical structures, facilities or devices necessary to maintain all life stages of the fish, and related operations and measures to ensure the effectiveness of the structures, facilities or devices for the fish. §§ 811 and 811 note.
Project Relicensing. With at least a two-year notice to the licensee, the U.S. has the right to take over and maintain and operate projects covered by the license once the license expires. If the U.S. does not exercise its take-over right, FERC may issue a new license to the existing licensee upon terms and conditions authorized under the then-existing laws, or issue a new license to a new licensee. A new license must be issued to the applicant with the proposal FERC determines is best adapted to serve the public interest. The Act lists a number of factors FERC must consider in acting on an application. The terms and conditions in the license for protecting, mitigating, or enhancing fish and wildlife resources affected by the development, operation and management of the project must be determined in accordance with the section of the Act dealing with initial licenses. The plans of the applicant concerning fish and wildlife are not subject to a comparative evaluation.
Existing licensees must notify FERC at least five years before the license expires if the licensee intends to file an application for a new license. At the time of notification, the licensee must make certain information available to the public, including pertinent energy conservation, recreation, fish and wildlife, and other environmental information to the greatest extent practicable. After receipt of the notice, FERC must notify the National Marine Fisheries Service, the U.S. Fish and Wildlife Service, and appropriate state fish and wildlife agencies. The Act requires applications for a new license to be filed with FERC at least two years before the existing license expires. Applicants are required to consult with the fish and wildlife agencies listed above and, as appropriate, conduct studies with the agencies. §§ 807 and 808.
Eminent Domain. Licensees may acquire unimproved dam sites or the right to use or damage the lands or property of others by eminent domain or certain conditions, when necessary for the construction or operation of dams, reservoirs, diversion structures or related works. In 1992, however, Congress amended the law to prohibit licensees from using the right of eminent domain to acquire lands or other property that, prior to October 24, 1992, were owned by a state or political subdivision and included within a public park, recreation area or wildlife refuge established under state or local law. In the case of lands or property of this nature established under state or local law on or after October 24, 1992, no licensee may use the right of eminent domain to acquire lands or property unless there has been a public hearing in the affected community and FERC has found that the license will not interfere or be inconsistent with the purposes for which the lands or property are owned. § 814.
License Exemptions. FERC may exempt from the Act's licensing provisions facilities, other than dams and other impoundments, which are constructed, operated or maintained to generate electric power and are located on non-federal lands if they use only the hydroelectric potential of man-made conduits operated for distributing water for agricultural, municipal or industrial consumption and not primarily for generating electricity. In determining whether to grant an exemption, FERC must consult with the National Marine Fisheries Service, the U.S. Fish and Wildlife Service, and the state fish and wildlife agency in the manner provided by the Fish and Wildlife Coordination Act. An exemption must include terms and conditions these fish and wildlife agencies determine are appropriate to prevent loss of, or damage to, fish and wildlife resources. § 823a.
License Revocation and Enforcement. The Act sets forth time limits for the licensee to commence and to complete project construction and provisions for terminating or revoking the license if the licensee fails to meet the time limits. The Act authorizes the Attorney General, on request of FERC or the Secretary of the Army, to institute proceedings to revoke a license for violation of its terms. The Attorney General also may institute proceedings to remedy or correct acts in violation of the Act or regulations issued pursuant to the Act. §§ 806 and 820.
The Act directs FERC to monitor and investigate compliance with licenses and permits issued and exemptions granted under the Act. After notice and opportunity for public hearing, FERC may issue orders to require compliance with terms and conditions of licenses, permits or exemptions granted. After notice and opportunity for an evidentiary hearing, FERC may issue an order revoking a license or exemption granted if FERC finds the licensee or exemptee knowingly has violated a final order with which the licensee or exemptee has had reasonable time to comply.
A licensee, permittee or exemptee who violates a term or condition of the license, permit or exemption, or who violates an order issued by FERC, is subject to a civil penalty not to exceed $10,000 for each day the violation continues. No civil penalty will be assessed where revocation is ordered. § 823b.
Procedures and Administration. The Act sets forth procedural and administrative provisions governing licensees and public utilities. Complaints regarding an act or omission by a licensee or public utility contrary to the Act may be filed with FERC by a person, state, municipality or state commission. FERC is required to forward the complaint to the licensee or public utility who is to satisfy the complaint or answer it in writing within a reasonable time specified by FERC. If the licensee or public utility does not satisfy the complaint, or there are reasonable grounds to investigate, FERC is required to investigate. The Act also authorizes FERC to investigate facts, conditions, practices, or matters it considers necessary to determine if a person has violated or is about to violate a provision of the Act. The Act describes the administrative powers of FERC, including the authority to issue orders, and sets forth the review and appeal process for persons aggrieved by an order.
FERC may bring an injunctive action in federal court if it appears that a person is engaged in or about to engage in an act that constitutes a violation of the Act. A licensee or public utility that willfully fails to comply with a FERC order, or take other specified action, will forfeit to the U.S. an amount up to $1,000, in addition to other penalties prescribed by the Act. A person who willfully and knowingly does or causes an act prohibited by law or willfully and knowingly fails to do an act required by law, will be punished by a fine of up to $5,000, or by imprisonment for up to two years, or both. §§ 825-825r.
Editor's Note. The Federal Power Act refers extensively to the Federal Power Commission (FPC), which was terminated and its functions transferred to the Secretary of Energy and FERC. FERC is substituted for the FPC in this summary because the functions discussed in the summary were transferred to FERC by virtue of 42 U.S.C. §§ 7151, 7171 and 7172.
A number of laws have been codified with the Federal Power Act but are not part of the Act. A law passed by Congress in 1921, found at 16 U.S.C. § 797a, prohibits the issuance of licenses for hydroelectric projects within the boundaries of national parks and monuments as constituted in 1921, unless specifically authorized by Congress. Section 797c was added in 1992 to prohibit the issuance of licenses for new projects within the boundaries of a National Park System unit if the project would have a direct adverse effect on federal lands within the unit.
Section 824a-3 also has wildlife-related provisions. The statute directs FERC to adopt rules by November 9, 1979, to encourage cogeneration and small power production, in particular by requiring electric utilities to offer to sell electric energy to qualifying cogeneration facilities and small power production facilities and to purchase electric energy from those facilities. The law also directs FERC to adopt rules to exempt the facilities in whole or in part from particular laws, including the Federal Power Act, if necessary to encourage cogeneration and small power production. This does not apply, however, to a hydroelectric project that impounds or diverts the water of a natural watercourse by a new dam or diversion unless: FERC finds the project will not have substantial adverse effects on the environment, including recreation and water quality; the project is not located on a segment of a natural watercourse included in, or designated for potential inclusion in, a state or national wild and scenic river system or a segment of a natural watercourse the state has determined to possess unique natural, recreational, cultural or scenic attributes that would be affected adversely by hydroelectric development; the project meets the terms and conditions set by fish and wildlife agencies under the procedures set forth in § 823a(c) of the Federal Power Act.