16 USC 824a-3 (PURPA 1978)

§ 824a–3

TITLE 16—CONSERVATION

(C) the various procedures that might be
used in case of an emergency outage to minimize the public disruption and economic loss
that might be caused by such an outage and
the cost effectiveness of such procedures.
Such study shall be completed and submitted to
the President and the Congress not later than 18
months after November 9, 1978. Before such submittal the Secretary shall provide an opportunity for public comment on the results of such
study.
(2) The study under paragraph (1) shall include
consideration of the following:
(A) the cost effectiveness of investments in
each of the components involved in providing
adequate and reliable electric service, including generation, transmission, and distribution
facilities, and devices available to the electric
consumer;
(B) the environmental and other effects of
the investments considered under subparagraph (A);
(C) various types of electric utility systems
in terms of generation, transmission, distribution and customer mix, the extent to which
differences in reliability levels may be desirable, and the cost-effectiveness of the various
methods which could be used to decrease the
number and severity of any outages among the
various types of systems;
(D) alternatives to adding new generation facilities to achieve such desired levels of reliability (including conservation);
(E) the cost-effectiveness of adding a number
of small, decentralized conventional and nonconventional generating units rather than a
small number of large generating units with a
similar total megawatt capacity for achieving
the desired level of reliability; and
(F) any standards for electric utility reliability used by, or suggested for use by, the
electric utility industry in terms of cost-effectiveness in achieving the desired level of reliability, including equipment standards, standards for operating procedures and training of
personnel, and standards relating the number
and severity of outages to periods of time.
(b) Examination of reliability issues by reliability councils
The Secretary, in consultation with the Commission, may, from time to time, request the reliability councils established under section
202(a) of the Federal Power Act [16 U.S.C. 824a(a)
of this title] or other appropriate persons (including Federal agencies) to examine and report
to him concerning any electric utility reliability issue. The Secretary shall report to the Congress (in its annual report or in the report required under subsection (a) of this section if appropriate) the results of any examination under
the preceding sentence.
(c) Department of Energy recommendations
The Secretary, in consultation with the Commission, and after opportunity for public comment, may recommend industry standards for
reliability to the electric utility industry, including standards with respect to equipment,
operating procedures and training of personnel,
and standards relating to the level or levels of

Page 1322

reliability appropriate to adequately and reliably serve the needs of electric consumers. The
Secretary shall include in his annual report—
(1) any recommendations made under this
subsection or any recommendations respecting
electric utility reliability problems under any
other provision of law, and
(2) a description of actions taken by electric
utilities with respect to such recommendations.
(Pub. L. 95–617, title II, § 209, Nov. 9, 1978, 92 Stat.
3143.)
CODIFICATION
Section was enacted as part of the Public Utility
Regulatory Policies Act of 1978, and not as part of the
Federal Power Act which generally comprises this
chapter.
DEFINITIONS
For definitions of terms used in this section, see section 2602 of this title.

§ 824a–3. Cogeneration and small power production
(a) Cogeneration and small power production
rules
Not later than 1 year after November 9, 1978,
the Commission shall prescribe, and from time
to time thereafter revise, such rules as it determines necessary to encourage cogeneration and
small power production, and to encourage geothermal small power production facilities of not
more than 80 megawatts capacity, which rules
require electric utilities to offer to—
(1) sell electric energy to qualifying cogeneration facilities and qualifying small power
production facilities 1 and
(2) purchase electric energy from such facilities.
Such rules shall be prescribed, after consultation with representatives of Federal and State
regulatory agencies having ratemaking authority for electric utilities, and after public notice
and a reasonable opportunity for interested persons (including State and Federal agencies) to
submit oral as well as written data, views, and
arguments. Such rules shall include provisions
respecting minimum reliability of qualifying cogeneration facilities and qualifying small power
production facilities (including reliability of
such facilities during emergencies) and rules respecting reliability of electric energy service to
be available to such facilities from electric utilities during emergencies. Such rules may not authorize a qualifying cogeneration facility or
qualifying small power production facility to
make any sale for purposes other than resale.
(b) Rates for purchases by electric utilities
The rules prescribed under subsection (a) of
this section shall insure that, in requiring any
electric utility to offer to purchase electric energy from any qualifying cogeneration facility
or qualifying small power production facility,
the rates for such purchase—
(1) shall be just and reasonable to the electric consumers of the electric utility and in
the public interest, and
1 So

in original. Probably should be followed by a comma.

Page 1323

TITLE 16—CONSERVATION

(2) shall not discriminate against qualifying
cogenerators or qualifying small power producers.
No such rule prescribed under subsection (a) of
this section shall provide for a rate which exceeds the incremental cost to the electric utility
of alternative electric energy.
(c) Rates for sales by utilities
The rules prescribed under subsection (a) of
this section shall insure that, in requiring any
electric utility to offer to sell electric energy to
any qualifying cogeneration facility or qualifying small power production facility, the rates
for such sale—
(1) shall be just and reasonable and in the
public interest, and
(2) shall not discriminate against the qualifying cogenerators or qualifying small power
producers.
(d) ‘‘Incremental cost of alternative electric energy’’ defined
For purposes of this section, the term ‘‘incremental cost of alternative electric energy’’
means, with respect to electric energy purchased from a qualifying cogenerator or qualifying small power producer, the cost to the electric utility of the electric energy which, but for
the purchase from such cogenerator or small
power producer, such utility would generate or
purchase from another source.
(e) Exemptions
(1) Not later than 1 year after November 9,
1978, and from time to time thereafter, the Commission shall, after consultation with representatives of State regulatory authorities, electric
utilities, owners of cogeneration facilities and
owners of small power production facilities, and
after public notice and a reasonable opportunity
for interested persons (including State and Federal agencies) to submit oral as well as written
data, views, and arguments, prescribe rules
under which geothermal small power production
facilities of not more than 80 megawatts capacity, qualifying cogeneration facilities, and
qualifying small power production facilities are
exempted in whole or part from the Federal
Power Act [16 U.S.C. 791a et seq.], from the Public Utility Holding Company Act,2 from State
laws and regulations respecting the rates, or respecting the financial or organizational regulation, of electric utilities, or from any combination of the foregoing, if the Commission determines such exemption is necessary to encourage
cogeneration and small power production.
(2) No qualifying small power production facility (other than a qualifying small power production facility which is an eligible solar, wind,
waste, or geothermal facility as defined in section 3(17)(E) of the Federal Power Act [16 U.S.C.
796(17)(E)]) which has a power production capacity which, together with any other facilities located at the same site (as determined by the
Commission), exceeds 30 megawatts, or 80 megawatts for a qualifying small power production
facility using geothermal energy as the primary
energy source, may be exempted under rules
2 See

References in Text note below.

§ 824a–3

under paragraph (1) from any provision of law or
regulation referred to in paragraph (1), except
that any qualifying small power production facility which produces electric energy solely by
the use of biomass as a primary energy source,
may be exempted by the Commission under such
rules from the Public Utility Holding Company
Act 2 and from State laws and regulations referred to in such paragraph (1).
(3) No qualifying small power production facility or qualifying cogeneration facility may be
exempted under this subsection from—
(A) any State law or regulation in effect in
a State pursuant to subsection (f) of this section,
(B) the provisions of section 210, 211, or 212 of
the Federal Power Act [16 U.S.C. 824i, 824j, or
824k] or the necessary authorities for enforcement of any such provision under the Federal
Power Act [16 U.S.C. 791a et seq.], or
(C) any license or permit requirement under
part I of the Federal Power Act [16 U.S.C. 791a
et seq.] any provision under such Act related
to such a license or permit requirement, or the
necessary authorities for enforcement of any
such requirement.
(f) Implementation of rules for qualifying cogeneration and qualifying small power production facilities
(1) Beginning on or before the date one year
after any rule is prescribed by the Commission
under subsection (a) of this section or revised
under such subsection, each State regulatory
authority shall, after notice and opportunity for
public hearing, implement such rule (or revised
rule) for each electric utility for which it has
ratemaking authority.
(2) Beginning on or before the date one year
after any rule is prescribed by the Commission
under subsection (a) of this section or revised
under such subsection, each nonregulated electric utility shall, after notice and opportunity
for public hearing, implement such rule (or revised rule).
(g) Judicial review and enforcement
(1) Judicial review may be obtained respecting
any proceeding conducted by a State regulatory
authority or nonregulated electric utility for
purposes of implementing any requirement of a
rule under subsection (a) of this section in the
same manner, and under the same requirements,
as judicial review may be obtained under section
2633 of this title in the case of a proceeding to
which section 2633 of this title applies.
(2) Any person (including the Secretary) may
bring an action against any electric utility,
qualifying small power producer, or qualifying
cogenerator to enforce any requirement established by a State regulatory authority or nonregulated electric utility pursuant to subsection
(f) of this section. Any such action shall be
brought only in the manner, and under the requirements, as provided under section 2633 of
this title with respect to an action to which section 2633 of this title applies.
(h) Commission enforcement
(1) For purposes of enforcement of any rule
prescribed by the Commission under subsection
(a) of this section with respect to any operations

§ 824a–3

TITLE 16—CONSERVATION

of an electric utility, a qualifying cogeneration
facility or a qualifying small power production
facility which are subject to the jurisdiction of
the Commission under part II of the Federal
Power Act [16 U.S.C. 824 et seq.], such rule shall
be treated as a rule under the Federal Power Act
[16 U.S.C. 791a et seq.]. Nothing in subsection (g)
of this section shall apply to so much of the operations of an electric utility, a qualifying cogeneration facility or a qualifying small power
production facility as are subject to the jurisdiction of the Commission under part II of the Federal Power Act.
(2)(A) The Commission may enforce the requirements of subsection (f) of this section
against any State regulatory authority or nonregulated electric utility. For purposes of any
such enforcement, the requirements of subsection (f)(1) of this section shall be treated as a
rule enforceable under the Federal Power Act [16
U.S.C. 791a et seq.]. For purposes of any such action, a State regulatory authority or nonregulated electric utility shall be treated as a person
within the meaning of the Federal Power Act.
No enforcement action may be brought by the
Commission under this section other than—
(i) an action against the State regulatory
authority or nonregulated electric utility for
failure to comply with the requirements of
subsection (f) of this section 3 or
(ii) an action under paragraph (1).
(B) Any electric utility, qualifying cogenerator, or qualifying small power producer may petition the Commission to enforce the requirements of subsection (f) of this section as provided in subparagraph (A) of this paragraph. If
the Commission does not initiate an enforcement action under subparagraph (A) against a
State regulatory authority or nonregulated
electric utility within 60 days following the date
on which a petition is filed under this subparagraph with respect to such authority, the petitioner may bring an action in the appropriate
United States district court to require such
State regulatory authority or nonregulated
electric utility to comply with such requirements, and such court may issue such injunctive
or other relief as may be appropriate. The Commission may intervene as a matter of right in
any such action.
(i) Federal contracts
No contract between a Federal agency and any
electric utility for the sale of electric energy by
such Federal agency for resale which is entered
into after November 9, 1978, may contain any
provision which will have the effect of preventing the implementation of any rule under this
section with respect to such utility. Any provision in any such contract which has such effect
shall be null and void.
(j) New dams and diversions
Except for a hydroelectric project located at a
Government dam (as defined in section 3(10) of
the Federal Power Act [16 U.S.C. 796(10)]) at
which non-Federal hydroelectric development is
permissible, this section shall not apply to any
hydroelectric project which impounds or diverts
3 So

in original. Probably should be followed by a comma.

Page 1324

the water of a natural watercourse by means of
a new dam or diversion unless the project meets
each of the following requirements:
(1) No substantial adverse effects
At the time of issuance of the license or exemption for the project, the Commission finds
that the project will not have substantial adverse effects on the environment, including
recreation and water quality. Such finding
shall be made by the Commission after taking
into consideration terms and conditions imposed under either paragraph (3) of this subsection or section 10 of the Federal Power Act
[16 U.S.C. 803] (whichever is appropriate as required by that Act [16 U.S.C. 791a et seq.] or
the Electric Consumers Protection Act of 1986)
and compliance with other environmental requirements applicable to the project.
(2) Protected rivers
At the time the application for a license or
exemption for the project is accepted by the
Commission (in accordance with the Commission’s regulations and procedures in effect on
January 1, 1986, including those relating to environmental consultation), such project is not
located on either of the following:
(A) Any segment of a natural watercourse
which is included in (or designated for potential inclusion in) a State or national wild
and scenic river system.
(B) Any segment of a natural watercourse
which the State has determined, in accordance with applicable State law, to possess
unique natural, recreational, cultural, or
scenic attributes which would be adversely
affected by hydroelectric development.
(3) Fish and wildlife terms and conditions
The project meets the terms and conditions
set by fish and wildlife agencies under the
same procedures as provided for under section
30(c) of the Federal Power Act [16 U.S.C.
823a(c)].
(k) ‘‘New dam or diversion’’ defined
For purposes of this section, the term ‘‘new
dam or diversion’’ means a dam or diversion
which requires, for purposes of installing any
hydroelectric power project, any construction,
or enlargement of any impoundment or diversion structure (other than repairs or reconstruction or the addition of flashboards or similar adjustable devices) 4
(l) Definitions
For purposes of this section, the terms ‘‘small
power production facility’’, ‘‘qualifying small
power production facility’’, ‘‘qualifying small
power producer’’, ‘‘primary energy source’’, ‘‘cogeneration facility’’, ‘‘qualifying cogeneration
facility’’, and ‘‘qualifying cogenerator’’ have the
respective meanings provided for such terms
under section 3(17) and (18) of the Federal Power
Act [16 U.S.C. 796(17), (18)].
(m) Termination of mandatory purchase and sale
requirements
(1) Obligation to purchase
After August 8, 2005, no electric utility shall
be required to enter into a new contract or ob4 So

in original. Probably should be followed by a period.

Page 1325

TITLE 16—CONSERVATION

ligation to purchase electric energy from a
qualifying cogeneration facility or a qualifying small power production facility under this
section if the Commission finds that the qualifying cogeneration facility or qualifying small
power production facility has nondiscriminatory access to—
(A)(i) independently administered, auction-based day ahead and real time wholesale markets for the sale of electric energy;
and (ii) wholesale markets for long-term
sales of capacity and electric energy; or
(B)(i) transmission and interconnection
services that are provided by a Commissionapproved regional transmission entity and
administered pursuant to an open access
transmission tariff that affords nondiscriminatory treatment to all customers; and (ii)
competitive wholesale markets that provide
a meaningful opportunity to sell capacity,
including long-term and short-term sales,
and electric energy, including long-term,
short-term and real-time sales, to buyers
other than the utility to which the qualifying facility is interconnected. In determining whether a meaningful opportunity to
sell exists, the Commission shall consider,
among other factors, evidence of transactions within the relevant market; or
(C) wholesale markets for the sale of capacity and electric energy that are, at a
minimum, of comparable competitive quality as markets described in subparagraphs
(A) and (B).
(2) Revised purchase and sale obligation for
new facilities
(A) After August 8, 2005, no electric utility
shall be required pursuant to this section to
enter into a new contract or obligation to purchase from or sell electric energy to a facility
that is not an existing qualifying cogeneration
facility unless the facility meets the criteria
for qualifying cogeneration facilities established by the Commission pursuant to the
rulemaking required by subsection (n) of this
section.
(B) For the purposes of this paragraph, the
term ‘‘existing qualifying cogeneration facility’’ means a facility that—
(i) was a qualifying cogeneration facility
on August 8, 2005; or
(ii) had filed with the Commission a notice
of self-certification, self recertification or
an application for Commission certification
under 18 CFR 292.207 prior to the date on
which the Commission issues the final rule
required by subsection (n) of this section.
(3) Commission review
Any electric utility may file an application
with the Commission for relief from the mandatory purchase obligation pursuant to this
subsection on a service territory-wide basis.
Such application shall set forth the factual
basis upon which relief is requested and describe why the conditions set forth in subparagraph (A), (B), or (C) of paragraph (1) of this
subsection have been met. After notice, including sufficient notice to potentially affected qualifying cogeneration facilities and
qualifying small power production facilities,

§ 824a–3

and an opportunity for comment, the Commission shall make a final determination within
90 days of such application regarding whether
the conditions set forth in subparagraph (A),
(B), or (C) of paragraph (1) have been met.
(4) Reinstatement of obligation to purchase
At any time after the Commission makes a
finding under paragraph (3) relieving an electric utility of its obligation to purchase electric energy, a qualifying cogeneration facility,
a qualifying small power production facility, a
State agency, or any other affected person
may apply to the Commission for an order reinstating the electric utility’s obligation to
purchase electric energy under this section.
Such application shall set forth the factual
basis upon which the application is based and
describe why the conditions set forth in subparagraph (A), (B), or (C) of paragraph (1) of
this subsection are no longer met. After notice, including sufficient notice to potentially
affected utilities, and opportunity for comment, the Commission shall issue an order
within 90 days of such application reinstating
the electric utility’s obligation to purchase
electric energy under this section if the Commission finds that the conditions set forth in
subparagraphs (A), (B) or (C) of paragraph (1)
which relieved the obligation to purchase, are
no longer met.
(5) Obligation to sell
After August 8, 2005, no electric utility shall
be required to enter into a new contract or obligation to sell electric energy to a qualifying
cogeneration facility or a qualifying small
power production facility under this section if
the Commission finds that—
(A) competing retail electric suppliers are
willing and able to sell and deliver electric
energy to the qualifying cogeneration facility or qualifying small power production facility; and
(B) the electric utility is not required by
State law to sell electric energy in its service territory.
(6) No effect on existing rights and remedies
Nothing in this subsection affects the rights
or remedies of any party under any contract
or obligation, in effect or pending approval before the appropriate State regulatory authority or non-regulated electric utility on August
8, 2005, to purchase electric energy or capacity
from or to sell electric energy or capacity to
a qualifying cogeneration facility or qualifying small power production facility under this
Act (including the right to recover costs of
purchasing electric energy or capacity).
(7) Recovery of costs
(A) The Commission shall issue and enforce
such regulations as are necessary to ensure
that an electric utility that purchases electric
energy or capacity from a qualifying cogeneration facility or qualifying small power production facility in accordance with any legally
enforceable obligation entered into or imposed
under this section recovers all prudently incurred costs associated with the purchase.
(B) A regulation under subparagraph (A)
shall be enforceable in accordance with the

§ 824a–3

TITLE 16—CONSERVATION

provisions of law applicable to enforcement of
regulations under the Federal Power Act (16
U.S.C. 791a et seq.).
(n) Rulemaking for new qualifying facilities
(1)(A) Not later than 180 days after August 8,
2005, the Commission shall issue a rule revising
the criteria in 18 CFR 292.205 for new qualifying
cogeneration facilities seeking to sell electric
energy pursuant to this section to ensure—
(i) that the thermal energy output of a new
qualifying cogeneration facility is used in a
productive and beneficial manner;
(ii) the electrical, thermal, and chemical
output of the cogeneration facility is used fundamentally for industrial, commercial, or institutional purposes and is not intended fundamentally for sale to an electric utility, taking into account technological, efficiency, economic, and variable thermal energy requirements, as well as State laws applicable to
sales of electric energy from a qualifying facility to its host facility; and
(iii) continuing progress in the development
of efficient electric energy generating technology.
(B) The rule issued pursuant to paragraph
(1)(A) of this subsection shall be applicable only
to facilities that seek to sell electric energy pursuant to this section. For all other purposes, except as specifically provided in subsection
(m)(2)(A) of this section, qualifying facility
status shall be determined in accordance with
the rules and regulations of this Act.
(2) Notwithstanding rule revisions under paragraph (1), the Commission’s criteria for qualifying cogeneration facilities in effect prior to the
date on which the Commission issues the final
rule required by paragraph (1) shall continue to
apply to any cogeneration facility that—
(A) was a qualifying cogeneration facility on
August 8, 2005, or
(B) had filed with the Commission a notice
of self-certification, self-recertification or an
application for Commission certification
under 18 CFR 292.207 prior to the date on which
the Commission issues the final rule required
by paragraph (1).
(Pub. L. 95–617, title II, § 210, Nov. 9, 1978, 92 Stat.
3144; Pub. L. 96–294, title VI, § 643(b), June 30,
1980, 94 Stat. 770; Pub. L. 99–495, § 8(a), Oct. 16,
1986, 100 Stat. 1249; Pub. L. 101–575, § 2, Nov. 15,
1990, 104 Stat. 2834; Pub. L. 109–58, title XII,
§ 1253(a), Aug. 8, 2005, 119 Stat. 967.)
REFERENCES IN TEXT
The Federal Power Act, referred to in subsecs. (e),
(h), (j)(1), and (m)(7)(B), is act June 10, 1920, ch. 285, 41
Stat. 1063, as amended, which is classified generally to
this chapter (§ 791a et seq.). Part I of the Federal Power
Act is classified generally to subchapter I (§ 791a et
seq.) of this chapter. Part II of the Federal Power Act
is classified generally to this subchapter (§ 824 et seq.).
For complete classification of this Act to the Code, see
section 791a of this title and Tables.
The Public Utility Holding Company Act, referred to
in subsec. (e), probably means the Public Utility Holding Company Act of 1935, title I of act Aug. 26, 1935, ch.
687, 49 Stat. 803, as amended, which was classified generally to chapter 2C (§ 79 et seq.) of Title 15, Commerce
and Trade, prior to repeal by Pub. L. 109–58, title XII,
§ 1263, Aug. 8, 2005, 119 Stat. 974. For complete classification of this Act to the Code, see Tables.

Page 1326

The Electric Consumers Protection Act of 1986, referred to in subsec. (j)(1), is Pub. L. 99–495, Oct. 16, 1986,
100 Stat. 1243. For complete classification of this Act to
the Code, see Short Title of 1986 Amendment note set
out under section 791a of this title and Tables.
This Act, referred to in subsecs. (m)(6) and (n)(1)(B),
is Pub. L. 95–617, Nov. 9, 1978, 92 Stat. 3117, as amended,
known as the Public Utility Regulatory Policies Act of
1978. For complete classification of this Act to the
Code, see Short Title note set out under section 2601 of
this title and Tables.
CODIFICATION
Section was enacted as part of the Public Utility
Regulatory Policies Act of 1978, and not as part of the
Federal Power Act which generally comprises this
chapter.
August 8, 2005, referred to in subsec. (n)(1)(A), was in
the original ‘‘the date of enactment of this section’’,
which was translated as meaning the date of enactment
of Pub. L. 109–58, which enacted subsecs. (m) and (n) of
this section, to reflect the probable intent of Congress.
AMENDMENTS
2005—Subsecs. (m), (n). Pub. L. 109–58 added subsecs.
(m) and (n).
1990—Subsec. (e)(2). Pub. L. 101–575 inserted ‘‘(other
than a qualifying small power production facility
which is an eligible solar, wind, waste, or geothermal
facility as defined in section 3(17)(E) of the Federal
Power Act)’’ after first reference to ‘‘facility’’.
1986—Subsecs. (j) to (l). Pub. L. 99–495 added subsecs.
(j) and (k) and redesignated former subsec. (j) as (l).
1980—Subsec. (a). Pub. L. 96–294, § 643(b)(1), inserted
provisions relating to encouragement of geothermal
small power production facilities.
Subsec. (e)(1). Pub. L. 96–294, § 643(b)(2), inserted provisions relating to applicability to geothermal small
power production facilities.
Subsec. (e)(2). Pub. L. 96–294, § 643(b)(3), inserted provisions respecting a qualifying small power production
facility using geothermal energy as the primary energy
source.
EFFECTIVE DATE OF 1986 AMENDMENT
Section 8(b) of Pub. L. 99–495 provided that:
‘‘(1) Subsection (j) of section 210 of the Public Utility
Regulatory Policies Act of 1978 (as amended by subsection (a) of this section) [16 U.S.C. 824a–3(j)] shall
apply to any project for which benefits under section
210 of the Public Utility Regulatory Policies Act of 1978
are sought and for which a license or exemption is issued by the Federal Energy Regulatory Commission
after the enactment of this Act [Oct. 16, 1986], except as
otherwise provided in paragraph (2), (3) or (4) of this
subsection.
‘‘(2) Subsection (j) shall not apply to the project if
the application for license or exemption for the project
was filed, and accepted for filing by the Commission,
before the enactment of this Act [Oct. 16, 1986].
‘‘(3) Paragraphs (1) and (3) of such subsection (j) shall
not apply if the application for the license or exemption for the project was filed before the enactment of
this Act [Oct. 16, 1986] and accepted for filing by the
Commission (in accordance with the Commission’s regulations and procedures in effect on January 1, 1986, including those relating to the requirement for environmental consultation) within 3 years after such enactment.
‘‘(4)(A) Paragraph (3) of subsection (j) shall not apply
for projects where the license or exemption application
was filed after enactment of this Act [Oct. 16, 1986] if,
based on a petition filed by the applicant for such
project within 18 months after such enactment, the
Commission determines (after public notice and opportunity for public comment of at least 45 days) that the
applicant has demonstrated that he had committed
(prior to the enactment of this Act) substantial monetary resources directly related to the development of

Page 1327

TITLE 16—CONSERVATION

the project and to the diligent and timely completion
of all requirements of the Commission for filing an acceptable application for license or exemption. Such petition shall be publicly available and shall be filed in
such form as the Commission shall require by rule issued within 120 days after the enactment of this Act.
The public notice required under this subparagraph
shall include written notice by the petitioner to affected Federal and State agencies.
‘‘(B) In the case of any petition referred to in subparagraph (A), if the applicant had a preliminary permit and had completed environmental consultations
(required by Commission regulations and procedures in
effect on January 1, 1986) prior to enactment, there
shall be a rebuttable presumption that such applicant
had committed substantial monetary resources prior to
enactment.
‘‘(C) The applicant for a license or exemption for a
project described in subparagraph (A) may petition the
Commission for an initial determination under paragraph (1) of section 210(j) of the Public Utility Regulatory Policies Act of 1978 [16 U.S.C. 824a–3(j)(1)] prior
to the time the license or exemption is issued. If the
Commission initially finds that the project will have
substantial adverse effects on the environment within
the meaning of such paragraph (1), prior to making a
final finding under that paragraph the Commission
shall afford the applicant a reasonable opportunity to
provide for mitigation of such adverse effects. The
Commission shall make a final finding under such paragraph (1) at the time the license or exemption is issued.
If the Federal Energy Regulatory Commission has notified the State of its initial finding and the State has
not taken any action described in paragraph (2) of section 210(j) before such final finding, the failure to take
such action shall be the basis for a rebuttable presumption that there is not a substantial adverse effect on
the environment related to natural, recreational, cultural, or scenic attributes for purposes of such finding.
‘‘(D) If a petition under subparagraph (A) is denied,
all provisions of section 210(j) of the Public Utility Regulatory Policies Act of 1978 [16 U.S.C. 824a–3(j)] shall
apply to the project regardless of when the license or
exemption is issued.’’
Amendment by Pub. L. 99–495 effective with respect
to each license, permit, or exemption issued under this
chapter after Oct. 16, 1986, see section 18 of Pub. L.
99–495, set out as a note under section 797 of this title.
CALCULATION OF AVOIDED COST
Pub. L. 102–486, title XIII, § 1335, Oct. 24, 1992, 106 Stat.
2984, provided that: ‘‘Nothing in section 210 of the Public Utility Regulatory Policies Act of 1978 (Public Law
95–617) [16 U.S.C. 824a–3] requires a State regulatory authority or nonregulated electric utility to treat a cost
reasonably identified to be incurred or to have been incurred in the construction or operation of a facility or
a project which has been selected by the Department of
Energy and provided Federal funding pursuant to the
Clean Coal Program authorized by Public Law 98–473
[see Tables for classification] as an incremental cost of
alternative electric energy.’’
APPLICABILITY OF 1980 AMENDMENT TO FACILITIES
USING SOLAR ENERGY AS PRIMARY ENERGY SOURCE
Pub. L. 100–202, § 101(d) [title III, § 310], Dec. 22, 1987,
101 Stat. 1329–104, 1329–126, provided that:
‘‘(a) The amendments made by section 643(b) of the
Energy Security Act (Public Law 96–294) [amending
this section] and any regulations issued to implement
such amendment shall apply to qualifying small power
production facilities (as such term is defined in the
Federal Power Act [16 U.S.C. 791a et seq.]) using solar
energy as the primary energy source to the same extent such amendments and regulations apply to qualifying small power production facilities using geothermal energy as the primary energy source, except
that nothing in this Act [see Tables for classification]
shall preclude the Federal Energy Regulatory Commis-

§ 824a–3

sion from revising its regulations to limit the availability of exemptions authorized under this Act as it
determines to be required in the public interest and
consistent with its obligations and duties under section
210 of the Public Utility Regulatory Policies Act of 1978
[this section].
‘‘(b) The provisions of subsection (a) shall apply to a
facility using solar energy as the primary energy
source only if either of the following is submitted to
the Federal Energy Regulatory Commission during the
two-year period beginning on the date of enactment of
this Act [Dec. 22, 1987]:
‘‘(1) An application for certification of the facility
as a qualifying small power production facility.
‘‘(2) Notice that the facility meets the requirements
for qualification.’’
STUDY AND REPORT TO CONGRESSIONAL COMMITTEES ON
APPLICATION OF PROVISIONS RELATING TO COGENERATION, SMALL POWER PRODUCTION, AND INTERCONNECTION AUTHORITY TO HYDROELECTRIC POWER FACILITIES

Section 8(d) of Pub. L. 99–495 provided that:
‘‘(1) The Commission shall conduct a study (in accordance with section 102(2)(C) of the National Environmental Policy Act of 1969 [42 U.S.C. 4332(2)(C)]) of
whether the benefits of section 210 of the Public Utility
Regulatory Policies Act of 1978 [16 U.S.C. 824a–3] and
section 210 of the Federal Power Act [16 U.S.C. 824i]
should be applied to hydroelectric power facilities utilizing new dams or diversions (within the meaning of
section 210(k) of the Public Utility Regulatory Policies
Act of 1978).
‘‘(2) The study under this subsection shall take into
consideration the need for such new dams or diversions
for power purposes, the environmental impacts of such
new dams and diversions (both with and without the
application of the amendments made by this Act to sections 4, 10, and 30 of the Federal Power Act [16 U.S.C.
797, 803, 823a] and section 210 of the Public Utility Regulatory Policies Act of 1978 [16 U.S.C. 824a–3]), the environmental effects of such facilities alone and in combination with other existing or proposed dams or diversions on the same waterway, the intent of Congress to
encourage and give priority to the application of section 210 of Public Utility Regulatory Policies Act of
1978 to existing dams and diversions rather than such
new dams or diversions, and the impact of such section
210 on the rates paid by electric power consumers.
‘‘(3) The study under this subsection shall be initiated within 3 months after enactment of this Act [Oct.
16, 1986] and completed as promptly as practicable.
‘‘(4) A report containing the results of the study conducted under this subsection shall be submitted to the
Committee on Energy and Commerce of the United
States House of Representatives and the Committee on
Energy and Natural Resources of the United States
Senate while both Houses are in session.
‘‘(5) The report submitted under paragraph (4) shall
include a determination (and the basis thereof) by the
Commission, based on the study and a public hearing
and subject to review under section 313(b) of the Federal Power Act [16 U.S.C. 825l(b)], whether any of the
benefits referred to in paragraph (1) should be available
for such facilities and whether applications for preliminary permits (or licenses where no preliminary permit
has been issued) for such small power production facilities utilizing new dams or diversions should be accepted by the Commission after the moratorium period
specified in subsection (e). The report shall include
such other administrative and legislative recommendations as the Commission deems appropriate.
‘‘(6) If the study under this subsection has not been
completed within 18 months after its initiation, the
Commission shall notify the Committees referred to in
paragraph (4) of the reasons for the delay and specify a
date when it will be completed and a report submitted.’’

§ 824a–4

TITLE 16—CONSERVATION

MORATORIUM ON APPLICATION OF THIS SECTION TO NEW
DAMS
Section 8(e) of Pub. L. 99–495 provided that: ‘‘Notwithstanding the amendments made by subsection (a)
of this section [amending section 824a–3 of this title], in
the case of a project for which a license or exemption
is issued after the enactment of this Act [Oct. 16, 1986],
section 210 of the Public Utility Regulatory Policies
Act of 1978 [16 U.S.C. 824a–3] shall not apply during the
moratorium period if the project utilizes a new dam or
diversion (as defined in section 210(k) of such Act) unless the project is either—
‘‘(1) a project located at a Government dam (as defined in section 3(10) of the Federal Power Act [16
U.S.C. 796(10)]) at which non-Federal hydroelectric
development is permissible, or
‘‘(2) a project described in paragraphs (2), (3), or (4)
of subsection (b) [set out as a note above].
For purposes of this subsection, the term ‘moratorium
period’ means the period beginning on the date of the
enactment of this Act and ending at the expiration of
the first full session of Congress after the session during which the report under subsection (d) [set out as a
note above] has been submitted to the Congress.’’
DEFINITIONS
For definitions of terms used in this section, see section 2602 of this title.

§ 824a–4. Seasonal diversity electricity exchange
(a) Authority
The Secretary may acquire rights-of-way by
purchase, including eminent domain, through
North Dakota, South Dakota, and Nebraska for
transmission facilities for the seasonal diversity
exchange of electric power to and from Canada
if he determines—
(1) after opportunity for public hearing—
(A) that the exchange is in the public interest and would further the purposes referred to in section 2611(1) and (2) of this
title and that the acquisition of such rightsof-way and the construction and operation of
such transmission facilities for such purposes is otherwise in the public interest,
(B) that a permit has been issued in accordance with subsection (b) of this section
for such construction, operation, maintenance, and connection of the facilities at the
border for the transmission of electric energy between the United States and Canada
as is necessary for such exchange of electric
power, and
(C) that each affected State has approved
the portion of the transmission route located in each State in accordance with applicable State law, or if there is no such applicable State law in such State, the Governor has approved such portion; and
(2) after consultation with the Secretary of
the Interior and the heads of other affected
Federal agencies, that the Secretary of the Interior and the heads of such,1 other agencies
concur in writing in the location of such portion of the transmission facilities as crosses
Federal land under the jurisdiction of such
Secretary or such other Federal agency, as the
case may be.
The Secretary shall provide to any State such
cooperation and technical assistance as the
1 So

in original. Comma probably should be deleted.

Page 1328

State may request and as he determines appropriate in the selection of a transmission route.
If the transmission route approved by any State
does not appear to be feasible and in the public
interest, the Secretary shall encourage such
State to review such route and to develop a
route that is feasible and in the public interest.
Any exercise by the Secretary of the power of
eminent domain under this section shall be in
accordance with other applicable provisions of
Federal law. The Secretary shall provide public
notice of his intention to acquire any right-ofway before exercising such power of eminent domain with respect to such right-of-way.
(b) Permit
Notwithstanding any transfer of functions
under the first sentence of section 301(b) of the
Department of Energy Organization Act [42
U.S.C. 7151(b)], no permit referred to in subsection (a)(1)(B) may be issued unless the Commission has conducted hearings and made the
findings required under section 202(e) of the Federal Power Act [16 U.S.C. 824a(e)] and under the
applicable execution order respecting the construction, operation, maintenance, or connection at the borders of the United States of facilities for the transmission of electric energy between the United States and a foreign country.
Any finding of the Commission under an applicable executive order referred to in this subsection shall be treated for purposes of judicial
review as an order issued under section 202(e) of
the Federal Power Act.
(c) Timely acquisition by other means
The Secretary may not acquire any rights-ofday 2 under this section unless he determines
that the holder or holders of a permit referred to
in subsection (a)(1)(B) of this section are unable
to acquire such rights-of-way under State condemnation authority, or after reasonable opportunity for negotiation, without unreasonably delaying construction, taking into consideration
the impact of such delay on completion of the
facilities in a timely fashion.
(d) Payments by permittees
(1) The property interest acquired by the Secretary under this section (whether by eminent
domain or other purchase) shall be transferred
by the Secretary to the holder of a permit referred to in subsection (b) of this section if such
holder has made payment to the Secretary of
the entire costs of the acquisition of such property interest, including administrative costs.
The Secretary may accept, and expend, for purposes of such acquisition, amounts from any
such person before acquiring a property interest
to be transferred to such person under this section.
(2) If no payment is made by a permit holder
under paragraph (1), within a reasonable time,
the Secretary shall offer such rights-of-way to
the original owner for reacquisition at the original price paid by the Secretary. If such original
owner refuses to reacquire such property after a
reasonable period, the Secretary shall dispose of
such property in accordance with applicable provisions of law governing disposal of property of
the United States.
2 So

in original. Probably should be ‘‘rights-of-way’’.