FERC Order Hydrokinetic Preli. Permit

UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
Before Commissioners: Joseph T. Kelliher, Chairman;
Suedeen G. Kelly, Marc Spitzer,
Philip D. Moeller, and Jon Wellinghoff.
Reedsport OPT Wave Park, LLC

Project No. 12713-000

ORDER ISSUING PRELIMINARY PERMIT
(Issued February 16, 2007)
1.
This order grants the request of Reedsport OPT Wave Park, LLC (Reedsport) for a
preliminary permit to study the proposed 50-megawatt (MW) Reedsport OPT Wave Park
Project No. 12713, to be located in the Pacific Ocean about three miles offshore of
Douglas County, Oregon.
Background
2.
On July 14, 2006, Reedsport filed an application, pursuant to section 4(f) of the
Federal Power Act (FPA),1 to study the Reedsport OPT Wave Park Project. According to
Reedsport, the proposed project would consist of 200 power buoys having a total
installed capacity of 50 MW, a proposed 2.6-mile-long transmission line, and appurtenant
facilities. The project is estimated to have an annual generation of 153.3 gigawatt hours,
which would be sold to a local utility.
3.
The Commission issued public notice of the application. Timely motions to
intervene were filed by Umpqua Watersheds, Inc., the State of Oregon, and Portland
General Electric Company.2
4.
On October 17, 2006, National Marine Fisheries Service of the Department of
Commerce’s National Oceanic and Atmospheric Administration (NMFS) filed a notice of
1
2

16 U.S.C. § 797(f) (2000).

Because these motions were timely and unopposed, they were granted 15 days
after they were filed. See 18 C.F.R. § 385.214(c) (2006).

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late intervention. While our regulations provide that the Department of Commerce,
among other federal, state, and tribal entities, can become party to a proceeding upon
filing a notice of intervention, the regulations also provide that if the entity does not file
the notice within the intervention period established in the proceeding, the entity then
must follow the otherwise-applicable procedures for motions to intervene.3 We therefore
treat the “notice” as a motion for late intervention. This means that the NMFS must show
good cause why the time limitation for interventions should be waived.4 Here, NMFS
asserts that it became aware of the proceeding after the intervention deadline because it
didn’t receive personal notice of the proceeding and it is too understaffed to “catch”
every public notice issued by the Commission. It states that, given the early stage of the
proceeding, granting late intervention will not prejudice any party or disrupt the
proceeding. NMFS avers that, given its statutory role in protecting marine mammals and
anadromous fish, no other party can represent its interests and, further, that since that it
will have to be consulted in the course of project development, its participation in the
early stages of this proceeding is crucial.
5.
While we sympathize with NMFS’ staffing difficulties (an issue facing many
entities involved in administrative proceedings), we cannot accept that as an excuse for
missing deadlines, nor do the FPA or our regulations require that NMFS be served
notices of applications for preliminary permits. Thus, NMFS is responsible for reviewing
our public notices and intervening timely, like any other entity. However, we agree that
NMFS’ late intervention will not prejudice any party or disrupt the proceeding, and that
NMFS, as an agency with jurisdiction over resources that could be affected by the
proposed project, has a unique interest in the proceeding. We will therefore grant NMFS’
motion.
6.
In addition to the motions to intervene, comments were filed by the U.S.
Department of the Interior (Interior), City of Reedsport, the Lower Umpqua Hospital
District, Kathryn van der Horst, Donald C. and Jeanne M. Tucker, and the Oregon Parks
and Recreation Department. None of the commenters opposes issuance of the permit.
Discussion
7.
Section 4(f) of the FPA authorizes the Commission to issue preliminary permits
for the purpose of enabling prospective applicants for a hydropower license to secure the

3

See 18 C.F.R. § 385.214(a)(2) (2006).

4

See 18 C.F.R. § 385.214(b)(3) (2006).

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data and perform the acts required by FPA section 9,5 which in turn sets forth the
material that must accompany an application for license. The purpose of a preliminary
permit is to preserve the right of the permit holder to have the first priority in applying for
a license for the project that is being studied.6 Because a permit is issued only to allow
the permit holder to investigate the feasibility of a project while the permittee conducts
investigations and secures necessary data to determine the feasibility of the proposed
project and to prepare a license application, it grants no land-disturbing or other property
rights.7
8.
The City of Reedsport supports the proposed project, as does the lower Umpqua
Hospital District, which sees the project as providing local economic and national energy
supply benefits. The Tuckers also support the project, on the assumption that its impacts
on marine life will be studied. Umpqua Watersheds states that it encourages the use of
alternative sources of energy. Ms. Van der Horst requests that safety systems be put in
place to ameliorate any negative impacts should one of the project buoys break loose.
The Oregon Parks and Recreation Department asks the Commission to be mindful that
the project’s proposed transmission line may traverse ocean shore areas subject to the
Department’s jurisdiction. Interior, while not raising any specific issues about the
project, notes generally that, while it is supportive of the development of environmentally
sound alternative energy technologies, the project has the potential to adversely impact
resources of interest to Interior. Interior asks that the permittee be required to consult
with the U.S. Fish and Wildlife Service (FWS) and other relevant agencies throughout
the term of the permit, that the Commission consult with FWS under the Endangered
Species Act (ESA), and that the Commission issue the permit for study only, and not to
allow the installation of any buoys.

5

16 U.S.C. § 802 (2000).

6

See, e.g., Mt. Hope Waterpower Project LLP, 116 FERC ¶ 61,232 at P 4 (2006)
(“The purpose of a preliminary permit is to encourage hydroelectric development by
affording its holder priority of application (i.e., guaranteed first-to-file status) with
respect to the filing of development applications for the affected site.”)
7

Thus, a permit holder can only enter lands it does not own with the permission of
the landholder, and is required to obtain whatever environmental permits federal, state,
and local authorities may require before conducting any studies. See, e.g., Three Mile
Falls Hydro, LLC, 102 FERC ¶ 61,301 at P 6 (2003); see also Town of Summersville,
W.Va. v. FERC, 780 F.2d 1034 (D.C. Cir. 1986) (discussing nature of preliminary
permits).

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9.
As noted above, a preliminary permit does not authorize a permittee to
undertake any construction or to enter onto lands owned by others. Therefore, Interior’s
concern that the Commission might allow the placement of buoys under the preliminary
permit is misplaced. As discussed below, the Commission expects the permittee to
engage in prefiling consultation, including consultation with FWS during the permit term.
While the Commission expects the permittee to investigate whether endangered species
might be affected by the proposed project and to discuss such matters in its prefiling
consultation, it would be premature for the Commission to begin ESA consultation with
FWS prior to a development application being filed.8 Before that time, there would be no
proposed federal action regarding which to consult.
10.
Contemporaneous with the issuance of this order, the Commission is issuing a
notice of inquiry seeking comments on how it should treat applications for preliminary
permits to study hydropower projects involving proposals to utilize wave, current, and
instream new technology methods to develop hydropower.9 In the notice of inquiry, the
Commission poses three possible alternatives and states that, pending the outcome of the
notice of inquiry proceeding, it is adopting in the interim a “strict scrutiny”approach.
Under that approach, the Commission will process new technology preliminary permit
applications with a view toward limiting the boundaries of the permits, to prevent sitebanking and to promote competition. Further, to ensure that permit holders are actively
pursuing project exploration, the Commission will carefully scrutinize the reports that
permit holders are required to file on a semi-annual basis,10 and would, where sufficient
progress was not shown, consider canceling the permit. Stricter scrutiny could entail
requirements such as reports on public outreach and agency consultation, development of
study plans, and deadlines for filing a notice of intent to file a license application and a
preliminary application document.
11.
This is the first instance in which the Commission is applying its interim policy.
During the course of the permit, the Commission expects that the permittee will carry out
prefiling consultation and study development leading to the possible development of a
8

The Commission also expects the permittee to consider safety issues, such as
those raised by Ms. Van der Horst, as it develops a license application.
9

See Preliminary Permits for Wave, Current, and Instream New Technology
Hydropower Projects, Notice of Inquiry and Interim Statement of Policy, 118 FERC
¶ 61,112 (2007).
10

As a standard condition in all preliminary permits, the Commission requires the
permit holder to file progress reports every six months.

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license application. The prefiling process begins with preparation of a Notice of
Intent (NOI) and Pre-Application Document (PAD) pursuant to sections 5.5 and 5.6 of
the Commission’s Regulations.11 The permittee must use the Integrated Licensing
Process unless the Commission grants a request to use an alternative process (Alternative
or Traditional Licensing Process). Such a request must accompany the NOI and PAD
and set forth specific information justifying the request.12 Should the permittee file a
development application, notice of the application will be published, and interested
persons and agencies will have an opportunity to intervene and to present their views
concerning the project and the effects of its construction and operation.
12.
Under our interim policy, we are conditioning this permit to closely monitor the
progress of the permittee’s activities. In addition to the six-month progress reports we
have hitherto required of permittees, we are also requiring the permittee to file, within
45 days of the effective date of this permit, a schedule of activities to be carried out under
the permit and target dates for completion of these activities. At a minimum, this will
include filing of the NOI and PAD within one year of permit issuance, along with any
request to use the traditional or alternative licensing process. The PAD must include the
time frame for consulting with federal, state, and local agencies, tribes, non-governmental
organizations, and any other interested entities; and a preliminary list of issues identified
and necessary studies related to these issues. If the periodic progress reports required by
Article 4 of this permit do not show significant progress, or if the permittee fails to
comply with any other conditions, the permit may be cancelled.
13.
A preliminary permit is not transferable. The named permittee is the only entity
entitled to the priority of application for license afforded by this preliminary permit. In
order to invoke permit-based priority in any subsequent licensing competition, the named
permittee must file an application for license as the sole applicant, thereby evidencing its
intent to be the sole licensee and to hold all proprietary rights necessary to construct,
operate, and maintain the proposed project. Should any other parties intend to hold
during the term of any license issued any of these proprietary rights necessary for project
purposes, they must be included as joint applicants in any application for license filed. In
such an instance, where parties other than the permittee are added as joint applicants for
license, the joint application will not be eligible for any permit-based priority.13

11

18 C.F.R. §§ 5.5 and 5.6 (2006).

12

See 18 C.F.R. § 5.3 (2006).

13

See City of Fayetteville, 16 FERC ¶ 61,209 (1981).

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The Commission orders:
(A) The late motion to intervene, filed on October 17, 2006, by the National
Marine Fisheries Service of the Department of Commerce’s National Oceanic and
Atmospheric Administration, is granted.
(B) A preliminary permit is issued to Reedsport OPT Wave Park, LLC for a
period effective the first day of the month in which this permit is issued, and ending
either 36 months from the effective date or on the date that a development application
submitted by the permittee has been accepted for filing, whichever occurs first.
(C) This preliminary permit is subject to the terms and conditions of Part I of the
Federal Power Act and related regulations. The permit is also subject to Articles 1
through 4, set forth in the attached standard form P-1.
(D) The permittee, in addition to the six-month progress reports required under
Article 4, shall file the following:
Within 45 days of the effective date of the permit, a schedule of
activities proposed by the permittee during the three-year permit term,
leading to the filing of a development application. At a minimum, this shall
include filing, within one year of the effective date of this permit, a notice
of intent to file a license application (NOI) and preliminary application
document (PAD), accompanied by, if desired, a request to use the
Traditional Licensing Process or Alternative Licensing Process. The PAD
shall include a time frame for consulting with federal, state, and local
agencies, tribes, non-governmental organizations, and any other interested
entities; and for developing and filing a preliminary list of issues identified
and studies related to these issues needed to develop a license application.
By the Commission.
(SEAL)

Magalie R. Salas,
Secretary.

Project No. 12713-000

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FEDERAL ENERGY REGULATORY COMMISSION
TERMS AND CONDITIONS OF
PRELIMINARY PERMIT
Article 1. The purpose of the permit is to maintain priority of application for a
license during the term of the permit while the permittee conducts investigations and
secures data necessary to determine the feasibility of the proposed project and, if said
project is found to be feasible, prepares an acceptable application for license. In the
course of whatever field studies the Permittee undertakes, the Permittee shall at all time
exercise appropriate measures to prevent irreparable damage to the environment of the
proposed project. All test sites shall be restored as closely as possible to their original
condition and to the satisfaction of the Commission's authorized representative or, where
federal lands are affected, to the satisfaction of the agency administering such lands.
Article 2. The permit is not transferable and may, after notice and opportunity for
hearing, be canceled by order of the Commission upon failure of the Permittee to
prosecute diligently the activities for which a permit is issued, or for any other good
cause shown.
Article 3. The priority granted under the permit shall be lost if the permit is
canceled pursuant to Article 2 of this permit, or if the Permittee fails, on or before the
expiration date of the permit, to file with the Commission an application for license for
the proposed project in conformity with the Commission's rules and regulations then in
effect.
Article 4. At the close of each six-month period from the effective date of this
permit, the permittee shall file four copies of a progress report with the Secretary, Federal
Energy Regulatory Commission, 888 First Street, N.E., Washington, D.C. 20426; and
shall serve a copy on the interveners in this proceeding. The report shall describe, for
that report period, the nature and timing of what the permittee has done under the prefiling requirements of 18 CFR §§ 4.38 and 5 and other applicable regulations; and,
where studies require access to and use of land not owned by the permittee, the status of
the permittee's efforts to obtain permission therefor.