18 Cfr 11.10

Federal Energy Regulatory Commission
unless some other date is fixed in the
license.
[51 FR 24318, July 3, 1986]

§ 11.8 Adjustment of annual charges.
All annual charges imposed under
this subpart continue in effect as fixed
unless changed as authorized by law.
[51 FR 24318, July 3, 1986]

Subpart B—Charges for
Headwater Benefits

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SOURCE: Order 453, 51 FR 24318, July 3, 1986,
unless otherwise noted.

§ 11.10 General provision; waiver and
exemptions; definitions.
(a) Headwater benefits charges. (1) The
Commission will assess or approve
charges under this subpart for direct
benefits
derived
from
headwater
projects constructed by the United
States, a licensee, or a pre-1920 permittee. Charges under this subpart will
amount to an equitable part of the annual costs of interest, maintenance,
and depreciation expenses of such headwater projects and the costs to the
Commission of determining headwater
benefits charges. Except as provided in
paragraph (b) of this section, the owner
of any non-Federal downstream project
that receives headwater benefits must
pay charges determined under this subpart.
(2) Headwater benefits are the additional electric generation at a downstream project that results from regulation of the flow of the river by the
headwater, or upstream, project, usually by increasing or decreasing the release of water from a storage reservoir.
(b) Waiver and exemptions. The owner
of a downstream project with installed
generating capacity of 1.5 MW (2000
horsepower) or less or for which the
Commission has granted an exemption
from section 10(f) is not required to pay
headwater benefits charges.
(c) Definitions. For purposes of this
subpart:
(1) Energy gains means the difference
between the number of kilowatt-hours
of energy produced at a downstream
project with the headwater project and
that which would be produced without
the headwater project.

§ 11.10
(2) Generation means gross generation
of electricity at a hydroelectric
project, including generation needed
for station use or the equivalent for direct drive units, measured in kilowatthours. It does not include energy used
for or derived from pumping in a
pumped storage facility.
(3) Headwater project costs means the
total costs of an upstream project constructed by the United States, a licensee, or pre-1920 permittee.
(4) Separable cost means the difference
between the cost of a multiple-function
headwater project with and without
any particular function.
(5) Remaining benefits means the difference between the separable cost of a
specific function in a multiple-function
project and the lesser of:
(i) The benefits of that function in
the project, as determined by the responsible Federal agency at the time
the project or function was authorized;
or
(ii) The cost of the most likely alternative single-function project providing the same benefits.
(6) Joint-use cost means the difference
between the total project cost and the
total separable costs. Joint-use costs
are allocated among the project functions according to each function’s percentage of the total remaining benefits.
(7) Specific power cost means that portion of the headwater project costs
that is directly attributable to the
function of power generation at the
headwater project, including, but not
limited to, the cost of the electric generators, turbines, penstocks, and substation.
(8) Joint-use power cost means the portion of the joint-use cost allocated to
the power function of the project.
(9) Section 10(f) costs means the annual interest, depreciation, and maintenance expense portion of the jointuse power cost, including costs of nonpower functions required by statute to
be paid by revenues from the power
function.
(10) Party means:
(i) The owner of a non-Federal downstream hydroelectric project which is
directly benefited by a headwater
project constructed by the United

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§ 11.11

18 CFR Ch. I (4–1–19 Edition)

States, a licensee, or a pre-1920 permittee;
(ii) The owner of a headwater project
constructed by the United States, a licensee, or a pre-1920 permittee;
(iii) An operating agency of, or an
agency marketing power from, a headwater project constructed by the
United States; or
(iv) Any party, as defined in
§ 385.102(c) of this chapter.
(11) Final charge means a charge assessed on an annual basis to recover
section 10(f) costs and which represents
the final determination of the charge
for the period for which headwater benefits are assessed. Final charges may
be established retroactively, to finalize
an interim charge, or prospectively.
(12) Interim charge means a charge assessed to recover section 10(f) costs for
a specified period of headwater benefits
pending determination of a final
charge for that period.
(13) Investment cost means the sum of:
(i) Project construction costs, including cost of land, labor and materials,
cost of pre- and post-authorization investigations, and cost of engineering,
supervision, and administration during
construction of the project; and
(ii) Interest during construction.

§ 11.11 Energy gains method of determining headwater benefits charges.
(a) Applicability. This section applies
to any determination of headwater
benefits charges, unless:
(1) The Commission has approved
headwater benefits charges pursuant to
an existing coordination agreement
among the parties;
(2) The parties reach, and the Commission approves, a settlement with respect to headwater benefits charges,
pursuant to § 11.14(a) of this subpart; or
(3) Charges may be assessed under
§ 11.14(b).
(b) General rule—(1) Summary. Except
as provided in paragraph (b)(3) of this
section, a headwater benefits charge
for a downstream project is determined
under this subpart by apportioning the
section 10(f) costs of the headwater
project among the headwater project
and all downstream projects that are

P = Cp ×

En
E j + Ed

In which:
P = annual payment to be made for headwater benefits received by a downstream
project,
Cp = annual section 10(f) cost of the headwater project,
En = annual energy gains received at a downstream project, or group of projects if
owned by one entity,
Ed = annual energy gains received at all
downstream projects (except those specified in § 11.10(b) of this chapter), and
Ej = portion of the annual energy generated
at the headwater project assigned to the
joint-use power cost.

(3) If power generation is not a function of the headwater project, section
10(f) costs will be apportioned only
among the downstream projects.
(4) If the headwater project is constructed after the downstream project,
liability for headwater benefits charges
will accrue beginning on the day on
which any energy losses at the downstream project due to filling the headwater reservoir have been offset by
subsequent energy gains. If the headwater project is constructed prior to
the downstream project, liability for
headwater benefits charges will accrue
beginning on the day on which benefits
are first realized by the downstream
project.
(5) No final charge assessed by the
Commission under this subpart may
exceed 85 percent of the value of the
energy gains. If a party demonstrates,

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EC14NO91.093

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[Order 453, 51 FR 24318, July 3, 1986, as
amended by Order 699, 72 FR 45324, Aug. 14,
2007]

not exempt from or waived from headwater benefits charges under § 11.10(b)
of this chapter, according to each
project’s share of the total energy benefits to those projects resulting from
the headwater project.
(2) Calculation; headwater benefits formula. The annual headwater benefits
charge for a downstream project is derived by multiplying the section 10(f)
cost by the ratio of the energy gains
received by the downstream project to
the sum of total energy gains received
by all downstream projects (except
those projects specified in § 11.10(b) of
this chapter) plus the energy generated
at the headwater project that is assigned to the joint-use power cost, as
follows: