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Federal FERC Exemption Process (7-FD-g)

Certain hydropower projects may qualify for an exemption from the standard Federal Energy Regulatory Commission (FERC) licensing requirements. If the developer obtains an exemption, then they are exempt from the licensing provisions contained within Part 1 of the Federal Power Act. The project will be subject only to the terms and conditions attached to the exemption. 16 USC § 823A(c).


FERC Exemption Process Process

7-FD-g.1 – Is the Project a Small Conduit Hydroelectric Facility up to 40MW?

A small conduit hydroelectric facility of up to 40 MW that uses a man-made conduit operated primarily for non-hydroelectric purposes may be eligible for a conduit exemption. The term “conduit” means any tunnel, canal, pipeline, aqueduct, flume, ditch, or similar manmade water conveyance that is operated for the distribution of water for agricultural, municipal, or industrial consumption and not primarily for the generation of electricity. The project can be located on federal lands; however, if the project is located on non-federal lands then the developer must have all the real property interests necessary to develop and operate the project or an option to obtain the interests. 18 CFR § 4.31(b). The conduit on which the project is located is not included as a project work. Applications for exemptions of small hydroelectric conduits are categorically excluded from the requirement for preparation of an Environmental Assessment (EA) or Environmental Impact Statement (EIS). 18 CFR § 380.4(a)(14). However, this does not mean that FERC cannot require the preparation of an EA or EIS.

A “small conduit hydroelectric facility” means an existing or proposed hydroelectric facility that is constructed, operated, or maintained for the generation of electric power, and includes all structures, fixtures, equipment, and lands used and useful in the operation or maintenance of the hydroelectric facility, but excludes the conduit on which the hydroelectric facility is located or the transmission lines associated with the hydroelectric facility. The facility must also:

  • Utilize for electric power generation the hydroelectric potential of a conduit;
  • Have an installed generating capacity of 40MW or less;
  • Not be an integral part of a dam;
  • Discharge the water it uses for power generation either into a conduit, directly to a point of agricultural, municipal, or industrial consumption, or into a natural water body if a quantity of water equal to or greater than the quantity discharged from the hydroelectric facility is withdrawn from that water body downstream into a conduit that is part of the same water supply system as the conduit on which the hydroelectric facility is located. 18 CFR § 4.30(b)(30).


7-FD-g.2 to 7-FD-g.3 – Does the Project Have a Generating Capacity of 10MW or Less?

Developers of a small hydroelectric project of 10MW or less may be eligible for a 10MW exemption. The developer must propose to install or add capacity to a project located at a non-federal, pre-2005 dam, or at a natural water feature. The project can be located on federal lands but cannot be located at a federal dam. The developer must have all the real property interests or an option to obtain the interests in any non-federal lands.

A “small hydroelectric power project” means “any project in which capacity will be installed or increased after the date of notice of exemption or application, which will have a total installed capacity of not more than 10MW, and which:

  • Would utilize for electric power generation the water power potential of an existing dam that is not owned or operated by the United States or by an instrumentality of the federal government, including the Tennessee Valley Authority; or
  • Would utilize for the generation of electricity a natural water feature, such as a natural lake, waterfall, or the gradient of a natural stream, without the need for a dam or man-made impoundment; and would not retain water behind any structure for the purpose of a storage and release operation.” 18 CFR § 4.30(29).

(16 USC 2705 as amended by the Hydropower Regulatory Efficiency Act of 2013).

If the project does not qualify for a conduit exemption or a 10MW exemption, then the developer must go through the FERC licensing Process.

FERC Hydropower Overview:
7-FD-e

7-FD-g.4 – Conduct Initial Consultations

The developer must promptly contact each of the appropriate resource agencies, affected Indian tribes, and members of the public likely to be interested in the proceeding. The developer must provide them with a description of the proposed project and supporting information, and confer with them on project design, the impact of the proposed project, reasonable hydropower alternatives, and what studies the developer should conduct. 18 CFR § 4.38(b)(2).

7-FD-g.5 – Notice of Intent to File for an Exemption

Developers must notify each fish and wildlife agency consulted that it will seek an exemption from licensing. 18 CFR § 4.301(a)(2).

7-FD-g.6 to 7-FD-g.7 – Does the State Require a 401 Water Quality Certification?

FERC does not require a 401 Water Quality Certification before acting on an exemption application. The Federal Power Act subjects FERC exempt projects only to the terms and conditions attached to the exemption. 16 U.S.C § 823a(c).

Nevertheless, certain states may still require a 401 Water Quality Certification for FERC exempted projects as a term or condition to the exemption. 16 U.S.C § 823a(c). If the state requires a certification, the developer should request a water certification early on in the FERC exemption process.

Alaska


In Alaska, the Alaska Department of Environmental Conservation (ADEC) reviews and issues 401 Water Quality Certifications. ADEC reviews hydropower projects filed with the Federal Energy Regulatory Commission (FERC) in accordance with 18 AAC 15.180 and may issue a 401 WQC or waiver. For more information, see: 401 Water Quality Certification:
14-AK-d

California


In California, the California State Water Resources Control Board and the regional water quality control boards implement Section 401 of the Clean Water Act. For more information, see:

401 Water Quality Certification:
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Colorado


In Colorado, the Colorado Department of Public Health and Environment Water Quality Control Division regulates water quality and wetlands through the State’s 401 Water Quality Certification Program. For more information, see:

401 Water Quality Certification:
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New York


In New York, the New York State Department of Environmental Conservation (DEC) Division of Water Resources reviews and issues 401 Water Quality Certifications (WQC).

401 Water Quality Certification:
14-NY-d

Vermont


In Vermont, the Vermont Department of Environmental Conservation regulates water quality and issues 401 Water Quality Certifications pursuant to the Clean Water Act. For more information, see:

401 Water Quality Certification:
14-VT-d

Washington


In Washington, the Washington State Department of Ecology (WSDE) reviews and issues 401 Water Quality Certifications (WQC). The developer must submit a 401 WQC application for any hydropower project requiring a FERC license, license amendment, or re-licensing. Washington currently does not require a 401 WQC for FERC exempted projects. For more information, see:

401 Water Quality Certification:
14-WA-d


7-FD-g.8 - Initiate FERC NEPA Process

A FERC exemption may be an action categorically excluded from NEPA requirements. There are two types of small hydroelectric exemptions from licensing: (1) small conduit hydroelectric facilities up to 40MW (16 USC § 823a(b)); and (2) small hydroelectric project of 10MW or less (16 USC § 2705). Only small conduit hydroelectric facilities are categorically excluded under (18 CFR § 380.4(a)(14)) (see also, FERC Small, Low-Impact Hydropower Projects Webpage). Projects exempted as small hydroelectric projects require that an environmental document be prepared consistent with NEPA.

However, even where an authorization is within a categorical exclusion, FERC may determine that extraordinary circumstances exist such that the authorization is a major federal action requiring an environmental document be prepared consistent with NEPA. Such circumstances exist when the action may have an effect on one of the following:

  • Indian lands;
  • Wilderness areas;
  • Wild and scenic rivers;
  • Wetlands;
  • Units of the National Park System, National Refuges, or National Fish Hatcheries;
  • Anadromous fish or endangered species; or
  • Where the environmental effects are uncertain.

18 CFR § 380.4(b)(2). FERC-NEPA Process:
9-FD-i

7-FD-g.9 – Schedule Consultation Meeting

The developer must consult with the agencies, tribes, and public to schedule a joint meeting to discuss the notice of intent and project details. FERC Handbook, page 4-4. The developer must provide to the resource agencies, Indian tribes and FERC the following information:

  • Detailed maps showing project boundaries, if any, proper land descriptions of the entire project area by township, range, and section, and also showing the specific location of all proposed project facilities, including roads, transmission lines, and any other appurtenant facilities;
  • A general engineering design of the proposed project, with a description of any proposed diversion of a stream through a canal or penstock;
  • A summary of the proposed operational mode of the project;
  • Identification of the environment to be affected, the significant resources present, and the developer’s proposed environmental protection, mitigation, and enhancement plans, to the extent known at that time;
  • Streamflow and water regime information, including drainage area, natural flow periodicity, monthly flow rates and durations, mean flow figures illustrating the mean daily streamflow curve for each month of the year at the point of diversion or impoundment, with location of the stream gauging station;
  • A statement of whether or not the developer will seek benefits under section 210 of the Public Utility Regulatory Policies Act (PURPA);
  • Detailed descriptions of any proposed studies and the proposed methodologies to be employed; and
  • Any statement required by 18 CFR § 4.301(a).

18 CFR § 4.38(b)(2).

7-FD-g.10 – Publish Notice of Consultation Meeting and Site Visit

The developer must provide public notice of the consultation meeting and site visit. The developer must provide FERC with written notice of the meeting’s time, place, and agenda at least 15 days before the scheduled joint meeting date. The developer must provide public notice of the meeting arrangements and agenda in a daily or weekly newspaper in each county in which the project is located.

18 CFR § 4.38(g)(2)(i).

7-FD-g.11 to 7-FD-g.12 – Hold Public Consultation Meeting

The developer must hold a public consultation meeting. Members of the public are invited to attend the meeting. The meeting must include an opportunity for a site visit. The objectives of the joint meeting are:

  • To develop a common understanding of the project;
  • Discuss current and potential resource needs and management objectives for the project area; and
  • Agree on a timeframe and format for discussion of study results.

18 CFR § 4.38.

7-FD-g.13 to 7-FD-g.14 – Comment on Meeting and Site Visit

Any interested resource agency, Indian tribe, and members of the public may provide the developer with written comments and study requests not later than 60 days after the joint meeting. The written comments should include:

  • Identifying its determination of necessary studies to be performed or information to be provided by the developer;
  • The basis for the agency’s determination;
  • The agency’s understanding of the resource issues involved, and its goals and objectives for these resources;
  • Justification of recommended study methodology;
  • Documentation that the use of each study method it recommends is a generally accepted practice; and
  • Explanation of how the studies and information requested will be useful to the agency, Indian tribe, or members of the public in furthering its resource goals and objectives as related to the project.

18 CFR § 4.38(b)(5).

7-FD-g.15 – Study Plans

Following the required consultations, the developer with the assistance of participating agencies will have completed a set of resource-by-resource study plans and detailed documentation of the consultations. FERC Handbook for Hydroelectric Project Licensing and 5 MW Exemptions from Licensing, page 4-7.

7-FD-g.16 – Has a Study Dispute Been Filed?

Any participant and the developer may disagree on the need or method of a study. Any dispute may be referred to FERC for resolution.

7-FD-g.17 – Has the Dispute Been Referred to FERC for Resolution?

If the developer and a resource agency or Indian tribe disagree as to any matter arising during the first stage of consultation or as to the need to conduct a study, then the dispute may be referred to FERC for resolution. 18 CFR § 4.38(b)(6).

7-FD-g.18 – Provide Notice of Referral

The entity referring the dispute to FERC must serve a copy of its written request for resolution on the disagreeing party and any affected resource agency or Indian tribe, which may submit a written response to the referral within 15 days of the referral’s submission. 18 CFR § 4.38(b)(6)(ii).

7-FD-g.19 – Review and Provide Resolution to Dispute

FERC will resolve the disputes by letter provided to the developer and all affected resource agencies and Indian tribes. 18 CFR § 4.38(b)(6)(iv).

7-FD-g.20 – Implement Study Plan

The developer must implement the approved study plans once all disputes have been resolved.

7-FD-g.21 to 7-FD-g.22 – Is an Additional Study Requested?

If a participant requests an additional study, then the developer must promptly initiate the study unless the study is unreasonable or unnecessary for an informed decision by FERC on the merits of the application or use of the methodology requested by a resource agency or Indian tribe for conducting the study is not a generally accepted practice. 18 CFR § 4.38(c)(2).

7-FD-g.23 – Draft Application

The developer must provide each resource agency and Indian tribe a copy of its draft application that:

  • Indicates the type of application the developer expects to file with FERC;
  • Responds to any comments and recommendations made by any resource agency and Indian tribe either during the consultation process.

18 CFR 4.38(c)(4).

7-FD-g.24 – Comment on Draft Application

Resource agencies and Indian tribes have 90 days from the date the developer provides the copy of the draft application to comment on the application. 18 CFR 4.38(c)(5).

7-FD-g.25 – Is there a Substantive Dispute that Must be Resolved?

The developer will be required to participate in further review if the written comments provided in response to the draft application indicate that a resource agency or Indian tribe has a substantive disagreement with the developer’s conclusions regarding resource impacts or its proposed protection, mitigation, or enhancement measures. 18 CFR 4.38(c)(6).

7-FD-g.26 to 7-FD-g.27 – Provide Written Notice of Joint Meeting on Dispute

The developer must hold a joint meeting with the disagreeing resource agency or Indian tribe and other agencies with similar or related areas of interest, expertise, or responsibility no later than 60 days from the date of the written comments of the disagreeing agency or Indian tribe. The meeting will allow all parties to discuss and to attempt to reach agreement on any plan for environmental protection, mitigation, or enhancement measures. 18 CFR 4.38(c)(6)(i). The developer must provide written notice of the meeting to FERC at least 15 days prior to the meeting. The notice must indicate the time, place, and agenda of the issues to be discussed at the meeting. 18 CFR 4.38(c)(6)(iii).

7-FD-g.28 to 7-FD-g.29 – Have the Parties Reached an Agreement?

The developer and any disagreeing agency or Indian tribe may conclude a joint meeting with a document embodying any agreement among them regarding environmental protection, mitigation, or enhancement measures and any issues that are unresolved. 18 CFR 4.38(c)(7).


7-FD-g.30 – Application for FERC License and Associated Documents

The developer seeking an exemption must file an application with FERC for a FERC license, accompanied by a transmittal letter certifying that at the same time copies of the application are being mailed to the resource agencies, Indian tribes, other government offices, and consulted members of the public. 18 CFR 4.38(d)(1). A developer may submit an application for a FERC License if:

  • It has provided resources agencies with the documents required under 18 CFR 4.38(c)(4); and
  • It has complied with meeting requirements in the event of a substantive disagreement with any resource agency. 18 CFR 4.38(c)(9).

The developer must describe all disagreements with a resource agency or Indian tribe on technical or environmental protection, mitigation, or enhancement measures in the application. 18 CFR 4.38(c)(10). The developer must include an Exhibit E in the application that indicates they have met all consultation requirements, and it should include a summary of the consultation process and:

  • Any resource agency’s or Indian tribe’s letters containing comments, recommendations, and proposed terms and conditions;
  • Any letters from the public containing comments and recommendations;
  • Notice of any remaining disagreement with a resource agency or Indian tribe on the need for or manner of a study, and information on any environmental protection, mitigation, or enhancement measure, including the developer’s reasons for disagreement;
  • Evidence of any waivers obtained from resource agencies;
  • Evidence of all attempts to consult with a resource agency or Indian tribe, copies of related documents showing the attempts, and documents showing the conclusion of the second stage of consultation;
  • An explanation of how and why the project would, would not, or should not, comply with any relevant comprehensive plan and a description of any relevant resource agency or Indian tribe determination regarding the consistency of the project with any such comprehensive plan;
  • A description of how the developer’s proposal addresses the significant resource issues raised at the joint meeting; and
  • A list containing the name and address of every federal, state, and interstate resource agency and Indian tribe with which the developer consulted.

18 CFR 4.38(f).

7-FD-g.31 - Application for FERC Licensing Exemption

The developer must also file an application for a FERC licensing exemption.

Small Conduit Exemption Any application for a conduit exemption must include the following:

  • An introductory statement;
  • Exhibit A, describing the small conduit hydroelectric facility and proposed mode of operation;
  • Exhibit E, an environmental report that must reflect pre-filing consultation requirements. Commensurate with the scope and degree of environmental impact, it must include a description of the project’s environmental setting, the expected environmental impacts, and a description of alternative means of obtaining an equivalent amount of power;
  • Exhibit F, a set of drawings showing the project structures and equipment, including plan, evaluation, profile, and section views of the power plant and other principal structures;
  • Exhibit G, a general location map that shows the physical structures, the proposed project boundary, and land ownership by parcel;
  • Appendix containing evidence that the developer has the necessary real property interests in the lands to develop and operate the project;
  • Identification of all potentially affected Indian tribes;
  • Fish and wildlife agency reimbursement fees must accompany filed applications.

18 CFR § 4.92; 18 CFR 4.302.

10MW Exemption An application for exemption for a small hydroelectric project of 10 MW or less must also include the following:

  • Introductory statement;
  • Exhibit A describes the small hydroelectric project and its proposed mode of operation;
  • Exhibit E is the environmental report and must reflect pre-filing consultation requirements;
  • Exhibit F is a set of drawings showing the project structures and equipment;
  • Exhibit G provides a general location map that must show the location of the physical structures and their relationship to the water body and identifiable landmarks, land ownership information, and a proposed project boundary;
  • Identification of all Indian tribes potentially affected;
  • Appendix containing evidence that the developer has the necessary real property interests in any nonfederal lands 18 CFR § 4.107;
  • Fish and wildlife agency reimbursement fees must accompany filed applications.

18 CFR 4.107.

7-FD-g.32 to 7-FD-g.33 – Is the Application Accepted for Filing?

FERC may accept or reject any application for an exemption. The developer may be required to provide additional information. If the application is not accepted for filing, then the developer must initiate the FERC licensing process.

FERC Hydropower Overview:
7-FD-e

7-FD-g.34 – Provide Notice of Application for Exemption

FERC must provide notice of the application for an exemption to interested agencies and Indian tribes when the application is accepted for filing. 18 CFR § 4.93(b) or 18 CFR § 4.105(b)(1).

7-FD-g.35 – Comment on Application

Resource agencies, Indian tribes, and the public will have 90 days from the date the developer submits the application to comment. 18 CFR § 4.38(c)(5).

7-FD-g.36 - Develop Exemption Conditions

Under section 30(c) of the FPA, the U.S. Fish and Wildlife Service (FWS), NOAA Fisheries, and state fish and wildlife agencies may issue mandatory terms and conditions for hydropower projects that are exempt from the FERC licensing process in order to prevent the loss of, or damage to, fish or wildlife resources. 16 USC 823a(c).

Under section 10(j) of the FPA, the U.S. Fish and Wildlife Service (FWS), the National Oceanic and Atmospheric Administration’s National Marine Fisheries Service (NOAA Fisheries), and state fish and wildlife agencies may issue recommendations, which FERC must consider, for the protection, mitigation, and enhancement of fish and wildlife that might be affected by a hydropower project. 16 USC 803(j).

If a hydropower project may affect the passage of fish species present within the project area (or species planned for introduction into the area), Section 18 of the FPA further authorizes the FWS and NOAA to prescribe mandatory fish passage improvements to ensure the safe, timely, and effective passage of fish. 16 USC 811.

U.S. Fish and Wildlife Service

U.S. Fish and Wildlife Service License Conditions and Recommendations:
7-FD-o

NOAA Fisheries

NOAA Fisheries License Conditions and Recommendations:
7-FD-p

State Fish and Wildlife Agencies

California


The California Department of Fish & Wildlife (CDFW) is California’s state agency dedicated to the conservation, protection, and management of fish, wildlife, and native plant species, and the habitat necessary to support biologically sustainable populations of those species. California Department of Fish and Wildlife: Federal Energy Regulatory Commission (FERC) Hydroelectric Projects. The CDFW participates in the FERC licensing process by (in addition to consulting with other federal, state, and tribal resource management agencies involved in the FERC licensing process, such as the California State Water Resources Control Board (SWRCB)) reviewing proposed hydropower projects and issuing to FERC either mandatory terms and conditions or a defensible set of recommendations designed to protect, mitigate damage to, and enhance fish and wildlife resources. 16 USC 803. For more information, see:


State Fish and Wildlife License Conditions and Recommendations:
12-CA-a (1)

Colorado


The Colorado Parks and Wildlife (CPW) is the state agency charged with the management of Colorado’s wildlife and wildlife areas. The CPW participates in the FERC licensing process by (in addition to consulting with other federal, state, and tribal resource management agencies involved in the FERC licensing process) reviewing proposed hydropower projects and issuing to FERC either mandatory terms and conditions or recommendations designed to protect, mitigate damage to, and enhance fish and wildlife resources. 16 USC 803. The Colorado Wildlife Commission encourages an approach that (considering the potential impacts to wildlife, wildlife habitat, and the potential for habitat fragmentation) balances energy development with wildlife conservation. Colorado Wildlife Commission Policy: Energy Development in Colorado.

State Fish and Wildlife License Conditions and Recommendations:
12-CO-a (2)

New York

The New York State Department of Environmental Conservation (DEC) is the state agency charged with the management of New York’s fish, wildlife, and marine resources. The New York Division of Fish, Wildlife, and Marine Resources (DFWMR), a division of the DEC, participates in the FERC licensing process by (in addition to consulting with other federal, state, and tribal resource management agencies involved in the FERC licensing process) reviewing proposed hydropower projects and issuing to FERC either mandatory terms and conditions or recommendations designed to protect, mitigate damage to, and enhance fish and wildlife resources. 16 USC 803. For more information, see:

State Fish and Wildlife License Conditions and Recommendations:
12-NY-a

Vermont


The Vermont Agency of Natural Resources (ANR) is Vermont’s state agency with primary responsibility for protecting Vermont’s environment, natural resources and wildlife. ANR actively participate in FERC licensing and exemption processes by (in addition to consulting with other resource management agencies and reviewing Water Quality Certification applications) working collaboratively to issue to FERC mandatory conditions or recommendations designed to protect, mitigate damage to, and enhance Vermont’s fish and wildlife resources. 16 USC 803. ANR reviews the potential impacts on fish or wildlife species from a proposed hydropower project and issues conditions and recommendations.

State Fish and Wildlife License Conditions and Recommendations:
12-VT-a

7-FD-g.37 - Demonstrate Compliance with 401 Water Quality Certification

Section 401 of the Clean Water Act (CWA) (33 U.S.C § 1251 et seq.) requires developers to demonstrate compliance with the CWA’s water quality certification requirements if the project may result in any discharge into the navigable waters of the U.S. Under section 401(a)(1) of the CWA (33 U.S.C. § 1341), states have the authority to review and approve, condition, waive, or deny a 401 WQC.

7-FD-g.38 – Does FERC Grant the Exemption?

FERC may approve or deny a request for an exemption.

7-FD-g.39 – Exemption from FERC Licensing

If FERC determines that the application meets all necessary requirements, then they will issue an order granting the exemption. All exemptions contain standard terms and conditions that must be complied with.

Any exemption granted by FERC for a small conduit hydroelectric facility is subject to standard terms and conditions outlined in 18 CFR § 4.94(a)-(g). Such terms and conditions include, for example:

  • The exemption does not confer any right to use or occupy any federal lands that may be necessary for the development or operation of the project. 18 CFR § 4.94(d).
  • FERC may require that the exempt facilities be modified in structure or operation or may revoke the exemption in order to best develop, conserve, and utilize in the public interest the water resources of the region. 18 CFR § 4.94(e).
  • FERC may revoke the exemption if, in the application process, material discrepancies, inaccuracies, or falsehoods were made by or on behalf of the developer. 18 CFR § 4.94(f).

Similar terms and conditions are attached to exemptions for 10MW or less hydroelectric facilities under 18 CFR § 4.106.

FERC may impose further terms and conditions on any exemption in order to:

  • Protect the quality or quantity of the related water supply for agricultural, municipal, or industrial consumption;
  • Otherwise protect life, health, or property;
  • Avoid or mitigate adverse environmental impact; or
  • Conserve, develop, or utilize in the public interest the water power resources in the region.

18 CFR § 4.93(c) or or 18 CFR § 4.105(b)(2).

7-FD-g.40 to 7-FD-g.41 –Convert Exemption Application into a License Application

If FERC denies a small conduit hydropower exemption, the developer may convert the exemption application into an application for FERC licensing. The developer must provide FERC a written Notice of Intent to Convert Exemption Application into a License Application within 30 days after the denial. 18 CFR § 4.93(d).

For small hydroelectric power projects, the developer’s application for an exemption is processed and considered as part of the related application for a FERC license, or amendment of a FERC license, so no notice of intent to convert the exemption into a license application is required. 18 CFR § 4.105(a).

FERC Hydropower Overview:
7-FD-e




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